CRMSuite Corp. v. Gen. Motors Co.
| Decision Date | 01 March 2022 |
| Docket Number | 8:20-cv-762-WFJ-AAS |
| Parties | CRMSUITE CORPORATION, a Florida corporation, Plaintiff, v. GENERAL MOTORS COMPANY, a Delaware corporation; GENERAL MOTORS, LLC; a Delaware limited liability company; and GENERAL MOTORS HOLDINGS LLC, a Delaware limited liability company, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on Defendants General Motors Company, General Motors, LLC, and General Motors Holdings LLC's (collectively, “GM”) Motion for Summary Judgment, Dkt. 110. Plaintiff CRMSuite Corporation filed a response, Dkt. 120. The Court received cogent oral argument from the parties on February 16, 2022, followed by invited supplemental filings, Dkts. 133 & 134. Upon careful consideration, the Court grants Defendants' motion.
As set forth in this Court's previous order, Dkt. 71, this case arises from a dispute between Plaintiff and GM regarding GM's Dealer Technology Assistance Program/Dealer Vendor Management Program (“DTAP/DVMP”). Through DTAP/DVMP, GM certifies third-party vendors' customer relationship management (“CRM”) software products. Dkt. 53 ¶ 15. CRM software allows dealers to manage customer leads, including those generated through dealers' websites. Id. ¶ 10. A list of DTAP/DVMP-certified CRM products that are available for purchase by GM dealers is displayed on GM's Dealer Vendor Advisor website. Id. ¶ 16. Unless a GM dealer purchases a CRM software product from a GM-approved vendor GM will not provide customer leads, related data, or performance bonuses to the dealer. Id. ¶ 18.
To become a GM-approved vendor, a CRM vendor must meet several technical standards and requirements. Dkt. 53-1 at 3. Among these requirements is the vendor's need to integrate a connector server to act as a data communications pipeline between its CRM software and GM's computer network. Dkt. 53 ¶ 19. GM uses this pipeline to deliver the leads, data, and bonuses to dealers. Id. ¶¶ 18-19. A vendor must also pay a recurring fee to GM to participate in the vendor program. Id. ¶ 20. While all CRM vendors must use a pipeline and pay a vendor fee, other certification requirements differ depending on the level of certification a vendor pursues. Id. ¶¶ 21-22. GM offers two certification levels: basic and premium. Id. ¶ 21. Unlike basic-level certification, premium-level certification allows the vendor's dealer customers to receive subsidies from GM to cover the cost of purchasing the CRM product. Id. However, obtaining premium certification requires substantial time and expense, as a vendor must add eight additional functions to its software product. Id. ¶ 22. Adding these eight functions, which are unique to GM's systems, requires vendors to work with GM's information technology (“IT”) staff and participate in testing and demonstrations of the functions. Id. ¶¶ 22-23.
In addition to obtaining certification under DTAP/DVMP, a vendor seeking to participate in GM's vendor program must enter into a DTAP/DVMP contract with GM. See Dkt. 53-1. The DTAP/DVMP contract requires vendors to adhere to the aforementioned certification criteria. Id. at 3.
Plaintiff is a Florida-based corporation that provides CRM software to automobile dealers, including dealers who sell GM vehicles. Id. ¶¶ 10, 12. Plaintiff states that its CRM product, CRMSuite, was DTAP/DVMP-certified and available for dealers to purchase through GM's vendor program from 2016 until 2020. Id. ¶ 25. Plaintiff's CRMSuite product was originally owned by iMagic Lab LLC (“iMagic”), which called the product “Dealer CRM.” Id. ¶ 26; see Dkt. 53-2. iMagic's CEO was Richard Keith Latman, who is also Plaintiffs CEO and president. Dkt. 111 ¶¶ 2, 19; Dkt. 121 ¶¶ 2, 19. iMagic created a pipeline and obtained premium-level certification for its Dealer CRM product. Dkt. 53 ¶¶ 27, 31. In August 2013, iMagic also executed a freely assignable DTAP/DVMP contract. Dkt. 53-1. The iMagic contract had an initial term of five years and gave GM the option to renew the contract for two additional one-year terms by providing written notice to iMagic ninety days prior to the expiration of either the initial term or first renewal term. Id. §§ I, XV. The certified Dealer CRM product was available for purchase through GM's vendor program beginning in 2013. Dkt. 53 ¶ 31.
In 2015, iMagic transferred its rights under the DTAP/DVMP contract, including its Dealer CRM product and pipeline, to Plaintiff. Id. ¶ 32. After the transfer, Plaintiff changed the Dealer CRM product name to CRMSuite. Id. ¶ 33. GM updated the Dealer Vendor Advisor website to reflect the product's name change at Mr. Latman's request. Id. ¶¶ 35-37. Plaintiff used iMagic's transferred pipeline for its CRMSuite product until 2018. Id. ¶ 40.
In November 2017, Plaintiff entered into a reseller agreement with Dominion Dealer Services, LLC (“Dominion”). Id. ¶ 41. At this time, Dominion already had a DTAP/DVMP contract with GM that covered its DTAP/DVMP- certified CRM product called Autobase. Dkt. 111 ¶¶ 56-57; Dkt. 121 ¶¶ 56-57. Under the reseller agreement, Plaintiff exclusively licensed to Dominion the “right to market, sell, distribute and/or sublicense” Plaintiff's CRM software-“referred to as CRMSuite”[1]-for a five-year term under a white label.[2] Dkt. 79-9 ¶¶ 2.1(a, e), 7.1. The reseller agreement's “cross-over date” upon which Plaintiff could no longer market, sell, distribute, and/or sublicense CRMSuite was April 18, 2018. Dkt. 111 ¶¶ 48-49; Dkt. 121 ¶¶ 48-49. Plaintiff retained the right to support subscriptions of its existing CRMSuite dealer customers. Dkt. 111 ¶ 46; Dkt. 121 ¶ 46. Dominion agreed to incorporate the language “powered by CRMSuite” in the name of the white label product, ultimately calling the product “Vision powered by CRMSuite.” Dkt. 53 ¶ 42; Dkt. 121 ¶ 59. Per the terms of the reseller agreement, Dominion was to pay Plaintiff a license fee of $5 million, and Plaintiff agreed to perform original equipment manufacturer (“OEM”) integrations at Dominion's request for no extra cost. Dkt. 79-9 ¶¶ 3.4, 5.1.
The parties agree that, roughly one month after executing the reseller agreement, Dominion asked GM whether it could replace its certified Autobase product with a white label version of Plaintiff's CRM software. Dkt. 111 ¶ 64; Dkt. 121 ¶ 64.
Shortly after, in January 2018, GM initiated a DTAP change request to update Dominion's DTAP/DVMP contract to allow Dominion to work with subcontractors. Dkt. 111 ¶ 67; Dkt. 121 ¶ 67; Dkt. 111-4 at 235-36. GM also updated Dominion's DTAP/DVMP contract to cover the new “Dominion Vision” product. Dkt. 111 ¶ 71; Dkt. 121 ¶ 71.
Because Dominion already had a pipeline for Autobase, Plaintiff shifted its CRMSuite product customers to Dominion's pipeline. Dkt. 53 ¶¶ 44-45. By sharing this pipeline, Plaintiff and Dominion could avoid maintaining two separate pipelines and only needed to pay one vendor fee to GM. Id. ¶¶ 45-48. GM approved Plaintiff and Dominion's pipeline-sharing arrangement, and Dominion paid the shared vendor fees. See Id. ¶¶ 49-51; Dkt. 53-3; Dkt. 53-4. Plaintiff alleges that in exchange for approving the shared vendor fee and pipeline arrangement, GM required Plaintiff to upgrade its CRMSuite product to include the eight additional functions required of premium-level products. Dkt. 53 ¶ 56.
Plaintiff asserts that, around this time, GM renewed the assigned iMagic DTAP/DVMP contract for the first additional one-year term. Id. ¶ 55. Plaintiff also contends that GM later renewed the iMagic contract for the second additional one-year term. Id. ¶ 62. GM maintains that it never renewed the iMagic contract after the initial term, as it found Mr. Latman, CEO of both iMagic and Plaintiff, “difficult to work with and not forthright.” Dkt. 111 ¶¶ 25-26. The parties agree, however, that the iMagic contract was no longer in effect after March 31, 2018. Dkt. 110 at 4; Dkt. 128-1 at 10.
In early 2018, Plaintiff states that it began working with Dominion's assistance to integrate the eight premium-level functions into its CRMSuite product. Dkt. 53 ¶¶ 49, 63. According to Plaintiff, GM's IT staff repeatedly promised Plaintiff during telephonic meetings and in emails that its CRMSuite product would be certified at the premium level following the completed integration of the eight functions. Id. ¶¶ 58-61. Plaintiff also claims that a Dominion employee, John Hardacre, acted with apparent authority to make affirmative promises of certification on GM's behalf. Id. ¶¶ 50-52. GM counters that it never represented that it would certify Plaintiffs CRMSuite product, nor did Mr. Hardacre act as its agent. Dkt. 110 at 10, 13 n.14. GM further asserts that the entities were not integrating the CRMSuite product but were instead integrating Dominion's white label Vision product. Id. at 12.
Conflict arose between GM and Plaintiff in early 2020 when Plaintiff and Dominion agreed to terminate their reseller agreement. Dkt. 53 ¶¶ 68, 71. Dominion informed GM of this termination and the agreement between Dominion and Plaintiff for Vision customers to become direct customers of Plaintiff s CRMSuite product, which would no longer be exclusively licensed to Dominion. Id. ¶¶ 69-70.
GM thereafter cut off all communication with Plaintiff and canceled the remaining testing scheduled for premium-level functions still needing validation. Dkt. Id. ¶¶ 71-80. At that point, GM's IT staff had only tested and approved one of the eight required functions. Dkt 111 ¶¶ 84-85; Dkt. 121 ¶¶ 84-85. GM also contacted Plaintiffs dealer customers to inform them that Plaintiffs CRMSuite product was not...
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