Springbrook Software, Inc. v. Douglas Cnty.

• Decision Date: 13 May 2015
• Docket Number: 13-cv-760-slc
• Parties: SPRINGBROOK SOFTWARE, INC., Plaintiff, v. DOUGLAS COUNTY and CITY of SUPERIOR, Defendants.
• Court: U.S. District Court — Western District of Wisconsin

SPRINGBROOK SOFTWARE, INC., Plaintiff, v. DOUGLAS COUNTY and CITY of SUPERIOR, Defendants.

13-cv-760-slc

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN

May 13, 2015

OPINION AND ORDER

In this civil action for damages, Springbrook Software, Inc. has sued Douglas County and the City of Superior for breach of contract, breach of good faith and fair dealing, unjust enrichment and quantum meruit after defendants stopped paying fees owed under an agreement for the purchase of Springbrook's financial system software. Douglas County and the City of Superior have counterclaimed, asserting causes of action for misrepresentation, fraudulent inducement, false advertising, breach of the covenant of good faith and fair dealing and unjust enrichment. Diversity jurisdiction is present under 28 U.S.C. § 1332.

Before the court is Springbrook's motion for summary judgment, dkt. 50. Springbrook seeks judgment dismissing defendants' counterclaims in their entirety, as well as judgment in its favor on its breach of contract claim.

For the reasons discussed below, I am granting Springbrook's motion for summary judgment on its claim that defendants breached the contract by failing to pay invoices when due. I am also granting Springbrook's motion with respect to defendants' counterclaims, with one exception: defendants' counterclaim for breach of the duty of good faith and fair dealing. Although this claim appears to have little merit and it is not even clear that defendants actually are seeking to litigate it, this court cannot grant summary judgment on this counterclaim because Springbrook has failed to present any grounds for the court to do so. In the interests ofefficiency, I am directing defendants to show cause why their sole unresolved claim should proceed to trial. Because this appears to be a tenuous claim and because the court is entering summary judgment on every other claim, I am striking the trial date, to be reset if necessary after the parties have been heard on this issue.

UNDISPUTED FACTS

I note at the outset that many of defendants' proposed findings of fact and responses to plaintiff's proposed findings of fact contain legal contentions or additional facts that are not responsive to the fact proposed by plaintiff. See, e.g., Defendants' Proposed Findings of Fact, dkt. 73, Nos. 18, 28, 38; Responses to Plt.'s Proposed Findings of Fact Nos. 17, 18, 22-25, 32-39, 89-109. In accordance with this court's Procedure to be Followed on Motions for Summary Judgment, I have disregarded any new facts that are not directly responsive to the proposed fact as well as any legal arguments disguised as "facts." See Procedure, at 8, ¶4, attached to Pretrial Conference Order, dkt. 15.

For the purpose of deciding Springbrook's motion for summary judgment, I find the facts set out below to be material and undisputed. Although most of these facts are drawn from the parties' proposed findings and responses, I have included a few additional facts from the record for narrative purposes.

I. The Parties

Plaintiff Springbrook Software, Inc. is an Oregon corporation that provides licensed software applications, technology solutions and professional services to local governments,utilities and special districts. Defendant Douglas County is a Wisconsin municipal corporation located in Superior, Wisconsin. Defendant City of Superior is an incorporated Wisconsin city located within Douglas County.

II. Pre-Contract

In 2010, defendants Douglas County and the City of Superior sought to replace their outdated financial system software with a new system that was better equipped to meet their needs. Douglas County was particularly interested in finding new highway department software that could be used to report certain mandated information to the Wisconsin Department of Transportation.

In January 2011, Douglas County and the City of Superior issued a formal Request for Proposals ("RFP"), seeking bidders from qualified firms "to supply and install Financial System Software." RFP, attached to Aff. of Melissa Lauritch, dkt. 51, exh. 1, at 2. The RFP stated: "The City and the County will collaborate with the selected vendor to create an installation plan, configure and implement the replacement system for the current software, convert all data and services to the new environment, and transfer knowledge and skills to system users." Id. According to the RFP, the bidder's software systems should, "at a minimum," have the ability to perform various tasks within the following categories: Financial Management, Payroll/Human Resources Management, Grant Management, Community Development and Inventory Management. Id. at 14. Additional modules that were "desirable" included Fleet Management, Utility Management, and Building Permit and Code Enforcement. Id. Section 10 of the RFP, titled "Essential Functionality," listed 361 specifications within each of these general categories that were "either required or desirable" by the County and City. Bidders were instructed to use a Vendor Response Key to indicate the degree to which they could meet the specification with or without modifications to each bidder's existing software product, and the additional cost, if any, that would result from customization. Id. at 20.

Around this time, Springbrook was developing a one-page flyer to promote the work it had done on its software that was specific to the needs of Wisconsin county highway departments, work done by Springbrook with assistance from the Wisconsin Department of Transportation. On January 24, 2011, Springbrook's product manager, Bert Lowry, emailed Doug Meek at the state Department of Transportation to ask if Meek "would object to [Springbrook] including verbiage like 'We worked closely with Doug Meek at the Wisconsin Department of Transportation to ensure our software meets the needs of Wisconsin county highway departments?'" Meek responded the next day, stating: "I don't object to your referencing working with me, but I don't think that 'working closely' is accurate." Meek asked that Springbrook send him a draft document prior to release or let him know how Springbrook had ended up phrasing this thought. Lowry replied that he would be happy to share a draft document and would use Meek's name only in a manner that Meek approved.

On February 9, 2011, Springbrook responded to the RFP stating that it was submitting a bid to "[c]reate an installation and replacement plan for Financial System Software, configure and implement the replacement for the current software, convert all data and services to the new environment, and transfer knowledge and skills to system users," along with one year of maintenance services. Aff. of Melissa Lauritch, dkt. 55, exh. 1 at 12. Using the VendorResponse Key, Springbrook responded "F" to 305 of the 361 Essential Functionality items, indicating that the item would be "Fully provided 'out of the box' for no additional charge." However, Springbrook added this caveat: "Many questions and requirements are listed in short summary format only, and therefore can be interpreted differently than intended. The following is our best effort to respond based on understanding of each stated requirement." RFP Response, Section 9.0. Springbrook indicated that each project would have four major phases: Planning and Conversion; Installation and Setup; System Parallel; and Go-live Transition Support.

Springbrook's 261-page RFP Response included a one-page advertisement titled "Highway Department Solutions" in which Springbrook stated that it had "worked closely with the Wisconsin Department of Transportation to develop a highway department solution that is fully compliant with state requirements." The flyer did not mention Meek by name.

III. The County and City Choose Springbrook and Enter into a Contract

The City and County received five proposals in response to the RFP. All were evaluated by a seven-person committee from the City and the County finance departments. The committee reviewed each proposer's qualifications, including what modules they provided, the software reporting capabilities, the essential functions of the software, compatibility with the current system, the experience and technical support provided by the firm, and the cost. IT staff also reviewed the submissions to ensure they would be suitable for the City and County's specific needs. The committee determined that Springbrook's proposal best met the criteria, and the price was within budget.

On October 5, 2011, Springbrook and Douglas County entered into a Master Client Agreement (the "Agreement"). The Agreement speaks for itself and its contents are undisputed. For ease of reference, I am setting forth three portions of the Agreement in the facts. First, Section 2, titled "Scope of Agreement," states:

This Agreement states the terms and conditions pursuant to which Vendor will provide Products to the Client. These general terms and conditions may be supplemented by the Product Addenda attached hereto and identified in Table A. Client understands that all or certain portions of the Products sold or licensed under this Agreement may be provided by a third party service provider. Any Client specific changes to the Products will require an addendum as defined under section 11.3.

Any rights of Client provided under this Agreement shall also extend to the City of Superior, WI (Superior), and Superior will be subject to all of the restrictions, limitations and conditions provided in this Agreement. Client will have the same responsibility to Vendor for the actions and omissions of Superior as Client would have if they were Client's actions or omissions.

The Agreement, along with various addenda and exhibits, was signed by Douglas County Administrator Andrew Lisak. The addenda included a Professional Services exhibit, a Software License Agreement Addendum, a Software Maintenance Addendum and a "Douglas County, WI - Order Form."

Section 7 of the Software License Agreement...