SIS, LLC v. Stoneridge Holdings, Inc.
| Decision Date | 20 August 2020 |
| Docket Number | Civil Action No. 1:17-cv-01816-SDG |
| Parties | SIS, LLC, Plaintiff, v. STONERIDGE HOLDINGS, INC.; ERIC NEWELL; and, SCOTT BOEDIGHEIMER, Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
This case is before the Court on Defendants' Motion for Summary Judgment [ECF 99]; Plaintiff's Motion for Leave to File Matters Under Seal [ECF 121]; and, Defendants' Motion to Strike Plaintiff's Second Kershteyn Declaration [ECF 132]. Following a careful review of the record, and with the benefit of oral argument, Defendants' Motion for Summary Judgment is DENIED IN PART AND GRANTED IN PART. Specifically, Defendants' Motion for Summary Judgment is denied as to Counts I and VI, and granted as to the remaining counts. Further, Plaintiff's Motion for Leave to File Matters Under Seal is GRANTED and Defendants' Motion to Strike Plaintiff's Second Kershteyn Declaration is DENIED.
As a preliminary matter, Plaintiff failed to file a response to Defendants' Statement of Material Facts [ECF 99-2], as required by the Local Rules. Pursuant to LR 56.1(B)(2)(a):
This Court will deem each of the movant's facts as admitted unless the respondent: (i) directly refutes the movant's fact with concise responses supported by specific citations to evidence (including page or paragraph number); (ii) states a valid objection to the admissibility of the movant's fact; or (iii) points out that the movant's citation does not support the movant's fact or that the movant's fact is not material or otherwise has failed to comply with the provisions set out in L.R. 56.1(B)(1).
Defendants' reply brief even pointed to Plaintiff's failure to respond [ECF 104, at 2], but Plaintiff never sought leave of Court to file an out-of-time response. Consequently, all of the facts in Defendants' statement of facts are deemed to be admitted to the extent they are properly supported by admissible evidence. BMU, Inc. v. Cumulus Media, Inc., No. 1:07-CV-3141-TCB, 2009 WL 10670253, at *1 (N.D. Ga. May 7, 2009) (quoting LR 56.1(B)(2)(a)(2)), aff'd, 366 F. App'x 47 (11th Cir. 2010) (); compare Fed. R. Civ. P. Advisory Notes, 2010 Amendments, Subdivision (e) ().
The supported and undisputed facts in this action are as follows. Prior to 2014, APi Group, Inc. ("APi") started the process to replace its various software systems with an Enterprise Resource Planning ("ERP") software system, such as Microsoft Dynamics AX.1 SIS submitted, and eventually won, a proposal for APi to adopt Microsoft Dynamics AX (the "Project").2 Stoneridge has extensive experience with Microsoft Dynamics AX and has been recognized by Microsoft as an expert in the field.3 In February 2014, SIS approached Stoneridge to work on the Project.4 The parties began negotiating a deal for Stoneridge's work on the Project shortly thereafter. On the Stoneridge side, the negotiations between the two companies included Defendants Eric Newell, President, and Scott Boedigheimer, Vice President of Business Development.5 On the SIS side, thenegotiations included SIS partners S. Max Thomas, Ravi Kannan, Mark Richmond, Mark Kershteyn, and Mark Klein.6
On April 2, 2014, a Stoneridge employee performed a demonstration for APi as part of SIS's final sales presentation to APi.7 On April 8, SIS asked Stoneridge to provide training to SIS employees on the payroll function within Microsoft Dynamics AX.8 On April 10, Stoneridge executed a Mutual Confidentiality Agreement ("MCA") with SIS "in order to discuss the APi project in more detail."9
On May 13, SIS sent the first draft of a standard SIS Subcontract Services Agreement ("SSA") to Stoneridge for review.10 On May 15, 2014, APi formally selected SIS as its partner for the initial phases of the Project.11 SIS informed Stoneridge of APi's decision on May 20.12 In a series of emails on May 28, SIS provided Stoneridge a copy of the Work Order from APi and stated that the Projectwas scheduled to begin in June 2014 and, therefore, SIS and Stoneridge needed to get their agreements in place.13
SIS and APi signed a Professional Services Agreement and a Work Order on June 20.14 Those agreements expressly provided that APi was only obligated to continue with SIS through the initial, analysis phase of the Project.15 After that phase, APi had sole discretion to decide whether to continue with SIS for the implementation phase of the Project.16
On May 29, Stoneridge asked SIS if it could draft "the consulting dollars and hours" on its Statement of Work ("SOW") template, which would then reference the SSA SIS had previously provided to Stoneridge.17 On May 30, Stoneridge provided the first draft SOW to SIS.18 The SOW references the SSA as the master document.19 Stoneridge's draft proposed three full time employees at 3,200 hourseach.20 On June 12, SIS responded to the May 30 SOW and indicated, for the first time, that it would not commit to employing Stoneridge personnel full-time.21
On June 27, Stoneridge provided a revised SOW, which included a guaranteed average of 140 hours for a four week period, and a revised SSA.22 In the email, Stoneridge emphasized that SIS's change to the SOW that stated it could not guarantee 40 hours a week was a "substantial change to [Stoneridge's] understanding of the agreement" and "[i]n order to move forward with this partnership, [Stoneridge] need[s] to have assurances that [it] would get an average of 35 per week for [its] dedicated resources on the project."23 Following this June 27 email, SIS internally discussed the possibility that it might need to execute the project without Stoneridge.24 Nevertheless, on July 3, SIS requested Stoneridge's presence for the APi kickoff event during the week of July 14.25 On July 7, SISconfirmed that Stoneridge's attendance at the kickoff event would be billable to SIS.26
On July 8, SIS sent new drafts of the SSA and SOW to Stoneridge, noting its hope that the parties could get the agreements "agreed upon and executed quickly."27 The revisions included a one-year non-solicitation provision.28 On July 11, 2014, Stoneridge sent SIS two emails regarding the July 8 SOW. The first asked for clarification regarding the amount of hours listed for Stoneridge employees under Appendix A.29 The second noted the outstanding items remaining for negotiation.30
Following the first July 11 email, Richmond sent an email to Thomas and Kannan discussing other possibilities for filling the roles currently being negotiated with Stoneridge.31 Nevertheless, SIS responded to Stoneridge's concerns on July 11, confirming the number of hours in Appendix A and notingthat it would try to work through the other concerns raised.32 On July 14, SIS sent Stoneridge a revised SSA and SOW.33 In the email, SIS noted that it had "primarily agreed to the changes [Stoneridge] requested."34 The July 14 SOW provided for two Stoneridge employees who would work as full time team members on the Project.35
SIS alleges, and Stoneridge disputes, that the parties agreed to all material terms as written in the July 14 SOW during a call on July 21, 2014.36 Following the call, Thomas emailed Stoneridge stating, "Here are the signed and cleaned up agreements for your signature."37 However, he mistakenly did not attach theagreements.38 Thomas sent another email on July 22 attaching the SSA and SOW signed by SIS.39 These agreements contained the same terms as the July 14 drafts.
The July 22 SOW provides that "Delivery of consulting services will commence upon signature by both parties."40 SIS alleges that it "assumed the Agreement and corresponding [SOW] were promptly executed by Defendants or soon would be."41 It is undisputed that Stoneridge never signed the agreements.
On July 29, Stoneridge submitted an invoice for work done for SIS on July 23, 24, and 25.42 The parties dispute whether the work listed on that invoice was in performance of the Project. In Newell's Supplemental Declaration, he notes that a Stoneridge employee, Wally Carr,43 began work on July 23 "at the specific request of SIS" to set up a Configuration Tracker that Stoneridge had "recommended SIS use on the APi implementation."44 Newell claims that the Configuration Trackeris "a general tool . . . without any specific value to a customer until information has begun to be entered into it" and the set up was "performed directly for SIS, for its benefit—and not as part of an implementation for APi Group."45 Carr's Declaration also states that he assisted SIS in setting up the Configuration Tracker for SIS's benefit and not as part of the implementation for APi.46
On August 4, 2014, Stoneridge informed SIS via email that it did not intend to move forward with the Project.47 In the email, Newell states:
Thomas forwarded...
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