Earley Info. Sci., Inc. v. Omega Eng'g, Inc.
| Decision Date | 05 May 2021 |
| Docket Number | Civil Action No. 19-10364-FDS |
| Parties | EARLEY INFORMATION SCIENCE, INC., Plaintiff, v. OMEGA ENGINEERING, INC., Defendant. |
| Court | U.S. District Court — District of Massachusetts |
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
This is a lawsuit arising out of a contract for data-organization services. In 2017, Omega Engineering, Inc., retained Earley Information Science, Inc., to organize and migrate product data to modernize Omega's e-commerce platform. For reasons disputed by the parties, that effort was largely unsuccessful. Earley has sued Omega for breach of contract and several related claims. Omega has asserted counterclaims arising out of the same contract. Jurisdiction is based on diversity of citizenship.
Omega has moved for summary judgment as to Earley's claims for unfair trade practices under Massachusetts and Connecticut law.
For the following reasons, that motion will be granted.
The following facts are as set forth in the record and are undisputed except as noted.
Omega Engineering, Inc., is a Connecticut-based corporation that produces, distributes, and sells engineering products. (Def. SMF ¶¶ 1, 3-4; Vorih Dec. ¶ 3).1 In 2016, Omega asked Earley Information Science, Inc., to assess its external website to determine its suitability as an e-commerce platform. (Def. SMF ¶ 6). Earley made recommendations to modernize and improve Omega's e-commerce capabilities. (Id. ¶ 7). Those recommendations included implementing Product Information Management ("PIM") to collect and manage data related to Omega's products. (Id. ¶ 8).
Omega then retained Earley to perform the PIM-implementation work. (Id. ¶ 10). That work was divided into two phases, each of which was memorialized in a separate Statement of Work. (Id.). Phase 1, which spanned approximately three months, was completed in April 2017. (Id.). Phase 2 was significantly broader in scope, duration, and cost. (Id.; see also Huber Dec. Ex. 1 ("Phase 2 Statement of Work")). It was scheduled to last approximately one year and to cost more than $2 million. (Def. SMF ¶ 10).
In late 2017 or early 2018, Omega began to have concerns about the progress of the work. (Def. SMF ¶ 19; Brolet Dep. 28-29; Wiener 30(b)(6) Dep. at 157).2 Kathleen Wiener, Director of Global Master Data Management for Omega (and Omega's 30(b)(6) deponent), testified that she first "came to the conclusion that Earley had not done some or all of what it was supposed to do under the [Statement of Work]" during the "end of February [or] early March." (Wiener 30(b)(6) Dep. at 157). On March 13, 2018, employees from Omega and Earley met todiscuss the progress of the work. (Def. SMF ¶ 21; Schweizer Dep. at 152-55; Schweizer Dep. Ex. 10, at 1). At that meeting, according to Chantal Schweizer, a consultant at Omega, Wiener "was very concerned with gap fill and wanted to know why it [had not] been brought to her attention that gap fill [was not] as near 100% as she was expecting it to be." (Schweizer Dep. Ex. 10, at 1). Wiener also indicated that she believed that there might be a "need to start from scratch." (Id.).
About one week later, on March 21, employees from Omega and Earley held another meeting. (Anthony Dec. ¶ 7). At that meeting, according to Earley's Vice President of Delivery Michael Anthony, "Omega's representatives expressed dissatisfaction with the status of the Project but also admitted that Omega was at fault for certain problems and delays." (Id.).
The next day, the parties reconvened. (Def. SMF ¶ 25). Earley had prepared a PowerPoint presentation titled "EIS PIM Implementation Phase 2 Close-Out Discussion." (Ali Dep. Ex. 32 ("Close-Out Meeting Presentation") at 1). The parties discussed the work completed thus far by Earley. (Anthony Dec. ¶ 10; Close-Out Meeting Presentation at 2). They further discussed Omega's concerns and the work remaining for Phase 2. (Anthony Dec. ¶ 10; Close-Out Meeting Presentation at 3). According to Anthony, they "agreed upon a 'punch list' of the remaining deliverables that [Earley] would provide to Omega to complete the work that [Earley] would be doing on the Project." (Anthony Dec. ¶ 10). Anthony further states that Earley "made it 100% clear" to Omega that, upon completion of that work, it would be delivering "33% of the individual product level data," rather than 100% of that data. (Id.; see also Close-Out Meeting Presentation at 6).3
According to Anthony, "Omega's representatives clearly stated that after [Earley] completed the agreed-upon punch list tasks, Omega would pay [Earley] the remaining amount owed to it under the PIM Phase 2 [Statement of Work]." (Anthony Dec. ¶ 12). By this time, Omega had paid Earley about $1.85 million on the Phase 2 Statement of Work, which had a cap of approximately $2 million. (Huber Dec. Ex. 6; Ali Dep. 175-77; Phase 2 Statement of Work at 19). Earley subsequently "dedicated significant time and resources to completing those tasks," which it contends it finished in April 2018. (Anthony Dec. ¶¶ 12, 18).
Approximately two weeks after the close-out meeting, on April 4, 2018, Omega issued a purchase order for $150,000. (Anthony Dec. Ex. F ("April 4, 2018 Purchase Order")). The parties dispute the reason for that order. Omega contends that it was generated "[a]s part of the schedule of purchase orders contemplated in the PIM Phase 2 [Statement of Work]." (Def. SMF ¶ 31). It notes that $150,000 was "the approximate amount remaining" under that Statement of Work. (Id.). Michael Ali, Omega's Chief Information Officer, testified that he believed that the purchase order "would have . . . been generated as part of [the] schedule" under the Phase 2 Statement of Work. (Ali Dep. at 178; see also id. at 179). He had sent an e-mail shortly before the close-out meeting stating that Omega "owe[d] roughly $150K against the original $2.003M contract" and that Omega "would expect to pay that $150K once [it] receive[d] the final deliverables (still to be agreed [to] . . .)." (Huber Dec. Ex. 6). Likewise, Wiener testified that the $150,000 purchase order was "part of the overarching [Statement of Work]" and "all that was left of the balance of the PO for the entire contract." (Wiener 30(b)(6) Dep. at 145; see also id. at 146 ()).
Earley disputes that the purchase order was issued to cover the balance remaining under the Phase 2 Statement of Work. (Pl. Resp. to Def. SMF ¶¶ 31-32, 34). It contends that the order "equaled neither the remaining amount owed to [Earley] (approximately $180,000) nor the amount of the [Statement of Work] less purchase orders issued to date ($145,689.80)." (Id. ¶ 32). It further contends that the order "was issued and delivered to [Earley], when [Earley] was in the middle of completing the punch list tasks, as a further inducement to continue working on the punch list tasks, in the belief that it was going to get paid upon completion." (Id. ¶ 34; see also Anthony Dec. ¶ 17 ()).
Omega decided to not pay that purchase order. (Wiener 30(b)(6) Dep. at 144-45).4 That decision was made by Wiener, Ali, and Joe Vorih, who was Omega's Chief Executive Officer at that time. (Id.). According to Wiener, they made that decision "because of the amount of work that was required for [Omega] to do to just even foundationally get the work done." (Id. at 145).
On June 21, 2018, Dino Eliopulos, a Managing Director at Earley, e-mailed Ali concerning the status of outstanding invoices. (Anthony Dec. Ex. G, at 5). In response, Ali stated that Omega was disputing the charges because certain work that Omega had contracted with Earley to complete had to be completed by other vendors and because Omega did not receive certain deliverables it believed were to be provided under the Statement of Work. (Id.). According to Anthony, that response was "the first time that Mr. Ali had told [Anthony] or anyone else at [Earley] that Omega would not be paying [Earley] any further amounts." (Anthony Dec. ¶ 19). Anthony also states that "around this time, [he] learned that Omega's position was not only that it expected [Earley] to 'just walk away' without being paid the remaining amounts owed to it under the various purchase orders that had been issued by Omega, but that Omega was threatening to sue [Earley] for hundreds of thousands of dollars in damages that [Earley] had supposedly caused, if [Earley] did not 'walk away.'" (Id. ¶ 23). Anthony, Eliopulos, and Ali set up a meeting for the following week that apparently did not resolve the dispute. (Anthony Dec. Ex. H).
In summer of 2018, Seth Earley, President of Earley, had lunch with Ali to discuss the disputed invoices. (Def. SMF ¶ 38; Ali Dep. at 197, 199). Ali told Earley that he believed that there were problems with Earley's work that justified Omega's withholding payment. (Ali Dep. at 198; Earley Dep. at 127 ()). He informed Earley that Omega "didn't get all the deliverables." (Ali Dep. at 198-99). Earley told Ali that he was not aware there were any issues. (Earley Dep. at 126-27). At the end of the lunch, according to Ali, he and Earley "agreed to disagree" about whether Earley completed the work and whether the remaining payment was due. (Ali Dep. at 201).
On January 7, 2019, Earley sued Omega in Massachusetts Superior Court. The complaintasserted six causes of action: (1) breach of contract, (2) promissory estoppel, (3) unjust enrichment, (4) negligent misrepresentation, (5) intentional misrepresentation, and (6) unfair...
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