Britvic Soft Drinks Ltd. v. Acsis Technologies
| Citation | 265 F.Supp.2d 1179 |
| Decision Date | 31 March 2003 |
| Docket Number | No. CIV.A.01-2243-CM.,CIV.A.01-2243-CM. |
| Parties | BRITVIC SOFT DRINKS LTD., Plaintiff, v. ACSIS TECHNOLOGIES, INC., Defendant. |
| Court | U.S. District Court — District of Kansas |
Pending before the court are plaintiff Britvic Soft Drinks Ltd.'s Motion for Partial Summary Judgment (Doc. 88) and Motion for Summary Judgment on Defendant's Counterclaims (Doc. 90). As set forth below, plaintiffs Motion for Partial Summary Judgment is denied and plaintiffs Motion for Summary Judgment on Defendant's Counterclaims is granted.
This court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiff asserts seven causes of action arising from defendant's alleged breach of a Software Maintenance and Support Agreement (hereinafter "the Support Agreement") entered into by the parties on May 23, 2000. Plaintiff claims defendant breached the Support Agreement by failing to provide plaintiff with a software key that plaintiff needed to operate the version of defendant's software to which plaintiff was a licensee. Defendant brings counterclaims for misrepresentation and breach of the covenant of good faith and fair dealing, arising from plaintiffs alleged breach of an agreement reached by the parties on April 10, 2001 (hereinafter "the 2001 Agreement"). Defendant claims that, in the 2001 Agreement, the parties agreed to settle their dispute regarding the Support Agreement, and that plaintiff violated the 2001 Agreement by bringing this lawsuit. The parties stipulate that Kansas law governs the 2000 and 2001 agreements.
The Support Agreement, drafted by defendant, was effective for a three-year term, after which it could be renewed automatically on a yearly basis (Def.'s Exh. to Consolidated Mem. in Opp'n, Exh. 3, ¶ Under the Support Agreement, plaintiff was to pay an annual fee to defendant on or before April 30 in order to obtain services and a software key for the following year. In December' 2000, defendant notified plaintiff that on the April 30, 2001 anniversary date, defendant would only be required to provide; a software key for Version 4.0 of the software, which was a more recent version of the software than Version 3.28, which plaintiff had been using. In a letter dated March 19, 2001, attorneys for defendant informed plaintiff of defendant's position that defendant was no longer required to provide telephone support or software keys to plaintiff for Version 3.28.
The Support Agreement does not contain language stating that software keys will be provided only for the current release of the software. Rather, the agreement provides that "[o]nce payment for the Annual Software Maintenance & Support Fee as listed in Appendix A has been received by ACSIS, an annual software license key (that allows Licensee to use the Software) will be issued to Licensee." Further, it provides that "On or at any time after the expiration of this Agreement, ACSIS may raise fees for support services, software maintenance, manuals and/or any other goods and services at ACSIS's sole discretion." (Id. at 19). Appendix A does not specify a version number of the software covered by the Support Agreement.
In support of its argument that it was required to provide a key only for Version 4.0, defendant cites Paragraph 7 of the Support Agreement, which provides in relevant part: "Telephone support will be provided only for the current release of ACSIS Field Service 400 software modules listed herein under Appendix A of this Agreement, and for the previous release of such modules for a period of 180 days from the general availability of a new release." (Id. at ¶ 7) (emphasis added). Defendant also stated that it believed the Support Agreement required it to provide a key only for the most recent version of the software based upon the Agreement itself, "the `sunsetting' of previous software versions inherent in the business relationships created by the [Support Agreement], and a general policy in place that software customers be on the most current version of the software to receive support and software keys." (Def.'s Consolidated Mem. in Opp., at 6).
After defendant informed plaintiff it was required to provide a key only for Version 4.0, the parties began to discuss three proposals by defendant that would enable plaintiff to obtain the software key for Version 3.28. On April 11, 2001, the parties entered into an escrow agreement which the parties signed on April 11, 2001. The Escrow Agreement provides, in part, that:
A. On or about May 23, 2000, ACSIS and Britvic entered into [the Support Agreement].
B. Under [the Support Agreement], ACSIS is to provide Britvic ongoing maintenance and support with respect to certain software which ACSIS has licensed to Britvic (the "Software"), in exchange for certain consideration to be paid by Britvic.
C. The parties are in dispute with respect to their rights under [the Support Agreement].
D. Britvic considers it essential to its business to ensure that the Software continues to function after April 30, 2001.... [T]he parties wish to deposit certain items to be held in escrow by Escrow Agent and then disbursed upon the occurrence of certain events to enable continued use of the Software.
E. ACSIS, Britvic and Escrow Agent now wish to execute and deliver this Escrow Agreement in order to effectuate the payment of funds and the issuance of certain items, as described in Exhibit A.
(Suggestions in Supp. of Pl.'s Mot. Summ. J. on Def.'s Countercls., Exh. F).
The Escrow Agreement then stated that plaintiff would provide the escrow agent with software keys that would work for Version 3.28 from April 21-May 20, 2001, and from May 21-June 20, 2001; ten-year software keys for Versions 3.28 and 4.0; and source code for Versions 3.28 and 4.0. The Escrow Agent was required to disburse these items upon receipt of three installments of $189,933.34 and payment of a $92,000 software support fee. (Id. at 2). Finally, the Escrow Agreement provided that (Id. at 3). Both parties fully performed under the Escrow Agreement—plaintiff paid all monies due and defendant provided the software keys and source code.
The Escrow Agreement contains no language expressly indicating that it constitutes a release by plaintiff of its right to bring any claims against defendant. Defendant never requested a release or settlement from plaintiff, because, according to defendant, defendant thought that a release was unnecessary because plaintiff had not brought a claim under the Support Agreement at that time. Further, plaintiff never told defendant that plaintiff was releasing its claims, and defendant never inquired whether plaintiff was releasing its claims. Defendant's chief operating officer James Birch, stated he assumed the Escrow Agreement was a settlement of the dispute that had arisen regarding the Support Agreement. Further, defendant states it would not have entered into the Escrow Agreement if it had believed it would effect less than a full resolution of its claims. Specifically, Mr. Birch stated he believed that defendant was obtaining a release of claims under the Support Agreement due to the content of e-mails and other forms of correspondence between the parties.
Finally, the court notes that there is no other agreement that either of the parties contends constituted a settlement and release of any claim under the Support Agreement. Both parties were represented by counsel during the signing of the Escrow Agreement.
Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact" and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Id, (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). An issue of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Id, (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505).
The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Id. at 670-71. In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party's claim. Id, at 671 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
Once the movant has met this initial burden, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256, 106 S.Ct 2505; see Adler, 144 F.3d at 671 n. 1 (). The nonmoving party may not simply rest upon its pleadings to satisfy its burden. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. Rather, the nonmoving party must "set forth specific facts that would be...
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