Docmagic, Inc. v. Mortgage P'Ship of Am.
| Decision Date | 17 June 2011 |
| Docket Number | Case No. 4:09CV1779MLM |
| Parties | DOCMAGIC, INC., Plaintiff, v. THE MORTGAGE PARTNERSHIP OF AMERICA, L.L.C., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Before the court is the Motion for Summary Judgment on Count I of Defendant's Counterclaim and Motion for Summary Judgment on All Counts Within Plaintiff's First Amended Complaint filed by The Mortgage Partnership of America, L.L.C. (referred to herein as "Lenders One"). Doc. 59. DocMagic filed a Response. Doc. 66. Lender's One Filed a Reply. Doc. 68. DocMagic filed a Sur-Reply. Doc. 72. The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). Doc. 11.
The court may grant a motion for summary judgment if "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The substantive law determines which facts are critical and which are irrelevant. Only disputes over facts that might affect the outcome will properly preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is not proper if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. See also Fenny v. Dakota, Minn. & E.R.R. Co.,327 F.3d 707, 711 (8th Cir. 2003) ().
A moving party always bears the burden of informing the court of the basis of its motion. Celotex, 477 U.S. at 323. Once the moving party discharges this burden, the nonmoving party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not the "mere existence of some alleged factual dispute." Anderson, 477 U.S. at 247. The nonmoving party may not rest upon mere allegations or denials of his pleading. Anderson, 477 U.S. at 256. "Factual disputes that are irrelevant or unnecessary" will not preclude summary judgment. Id. at 248.
In passing on a motion for summary judgment, the court must view the facts in the light most favorable to the nonmoving party, and all justifiable inferences are to be drawn in its favor. Id. at 255; Raschick v. Prudent Supply, Inc., 830 F.2d 1497, 1499 (8th Cir. 1987). The court's function is not to weigh the evidence, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. However, "[t]he mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient." Id. at 252. With these principles in mind, the court turns to an analysis of Lender One's Motion.
The parties entered into a written contract on October 31, 2008, which states, among other things, that Lenders One provides "mortgage products and services, related products and services on a cooperative basis to the Members" of a cooperative alliance of "certain mortgage loan originators"; that DocMagic is a "provider of mortgage loan document preparation software used in thepreparation of, among other things, pre-disclosures and closing documents ('Products and Services')"; that DocMagic desired "to provide the Products and Services to the Members" of the cooperative alliance and "desire[d] to engage the services of [Lenders One] ... for the sole purpose of assisting [DocMagic] in marketing and selling its Products and Services to the Members"; and that Lenders One desired to assist DocMagic in doing so. Doc. 20-2 at 1. The contract is for a three year period commencing November 1, 2008, and terminating October 31, 2011. Doc. 20-2, ¶1. Pursuant to the contract, Lenders One was to supply DocMagic "with a list of all current Members," "refer, market and promote the Products and Services to Members," and "encourage Members to purchase and use the Products and Services from DocMagic." Doc. 20-2, ¶ 2.
The contract further provides that Lenders One was, "in its sole discretion, [to] determine its own marketing strategy; provided, however, that [DocMagic] [would] have the right to review and approve (which review and approval will not be unreasonably withheld, delayed, or conditioned) the content of any marketing piece that reference[d] [DocMagic's] Products and Services." Doc. 20-2, ¶ 2. The contract provided that DocMagic would discount certain Products and Services which were sold to members during the term of the contract. The specific discounted price for these Products and Services was set forth in the contract. Doc. 20-2, ¶ 4. The Contract states that DocMagic "shall participate in not more than two (2) Lenders One membership conferences per year" and that for each conference which DocMagic attended it would pay Lenders One a $2,000 sponsorship fee. Doc. 202, ¶ 6.
"In consideration of Lenders One's Marketing Efforts and other services provided to and for the benefit of DocMagic," the contract provides that DocMagic is to "pay Lenders One ten percent (10%) of all DocMagic's revenue received from the purchase of' DocMagic's mortgage loan closing packages and pre-closure packages "only by the Members during the Term (the 'Marketing Fee')."Doc. 20-2, ¶ 5. Prior to entering into the parties' contract, DocMagic had established business relationships with, and had previously provided Products and Services to some Members, although the exact number of such Members is disputed. Doc. 20, ¶ 14; Doc. 40, ¶ 14.
Lenders One hosts Members' conferences twice each year. In March 2009, it held one conference in San Diego, California, which DocMagic attended. It also held a conference in August 2009, in Washington , D.C. Lenders One informed DocMagic in June 2009 that it would not be allowed to attend the August 2009 conference unless it cured its alleged default.
An e-mail, dated March 25, 2009, to DocMagic from Luke A. Pille, Director of National Programs for Lenders One, states Mr. Pille "would like to recommend [a] weekly or biweekly call between L1 and DocMagic to review items" including "upcoming new member visits," "Lenders One prospects," and "Symposiums with prospects." Mr. Pille further stated that he was Pl. Ex. 9. Mr. Pille testified that he did not implement weekly or bi-weekly telephone conferences and that Lenders One did not initiate mail or e-mail campaigns on behalf of DocMagic. Pl. Ex. 1 at 135. He also testified that Lenders One did the following to promote DocMagic's Products: it sent out an e-mail announcement, issued a press release, placed a blurb on Lenders One's website, included DocMagic on Lender One's PowerPoint presentations, advised Lenders One regional managers that DocMagic was a vendor, and conducted random Member reviews. Pl. Ex. 1 at 84-86.
An e-mail, dated May 15, 2009, from Mr. Pille to Steve Ribultan of DocMagic states that the contract executed by the parties required DocMagic to provide Lenders One "with monthly reportingand revenue sharing" and that "[s]ince the inception of the agreement, [Lenders One] ha[d] only received one report and one check." Def. Ex. V. Don Iannitti, DocMagic's president, testified that DocMagic inadvertently paid Lenders One a marketing fee for orders placed by Pre-Existing Customers due to an accounting error. Pl. Ex. 3 at 16.
An e-mail, dated May 20, 2009, from Mr. Pille to Mr. Ribultan states that Mr. Pille reviewed the reports that Mr. Ribultan sent and "they [were] not accurate" as they Def. Ex. W. Mr. Pille noted that DocMagic's November and December 2008 reports were "correct" and he asked that Mr. Ribultan provide a "corrected report ASAP." Def. Ex. W.
A letter titled "Notice of Default," dated June 15, 2009, to DocMagic from Lenders One's attorney states, among other things, that DocMagic had "failed to timely perform as required by the contract." Def. Ex. R. Specifically, this letter states that DocMagic "failed to provide monthly reports of all products and services purchased by Members during the term" and that it "failed to pay the required Marketing Fee for all products purchased by its Members." Def. Ex. R (emphasis in original). Additionally, the letter states that "perhaps DocMagic ha[d] misinterpreted the contract to apply only to new customers" and that "DocMagic's interpretation is contrary to the clear, unequivocal language of the contract and contrary to its performance in 2008." Def. Ex. R.
An e-mail, dated July 27, 2009, from Mr. Pille to Mr. Ribultan states that Mr. Pille "really need[ed] to know what [DocMagic's] plans [were] regarding the current agreement." Pl. Ex. 14. Mr. Pille further stated that he "really d[i]dn't think we can have you at our conference unless you cure with us." Pl. Ex. 14.
An e-mail, dated July 30, 2009, from Mr. Pille to Mr. Iannitti regarding the "Upcoming Lenders One Conference," states that Def. Ex. 16.
Alan Brisbane, DocMagic's Director of Operations, testified that DocMagic's agreement to reduce the amount of revenue it would have otherwise generated from the sale of its Products to Pre-Existing Customers was predicated upon its belief that those losses would be offset by new business received. Pl. Ex. 2 at 34, 36. Mr....
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