Workplace Techs. Research v. Project Mgmt.
| Decision Date | 20 October 2021 |
| Docket Number | 18cv1927 JM (MSB) |
| Parties | WORKPLACE TECHNOLOGIES RESEARCH, INC., Plaintiff, v. PROJECT MANAGEMENT INSTITUTE, INC., Defendant. PROJECT MANAGEMENT INSTITUTE, INC., Counter-Claimant, v. WORKPLACE TECHNOLOGIES RESEARCH, INC., Counter-Defendant. |
| Court | U.S. District Court — Southern District of California |
ORDER ON MOTIONS FOR SUMMARY JUDGMENT
Presently before the court are Plaintiff/Counter-Defendant Workplace Technologies Research, Inc. (“WTRI”)'s Motion for Summary Judgment (Doc. No. 188) and Defendant/Counter-Claimant Project Management Institute, Inc. (“PMI”)'s Motion for Summary Judgment, or in the alternative, Partial Summary Judgment (Doc. No. 190). Pursuant to Local Rule 7.1(d)(1), the court finds the matters presented appropriate for resolution without oral argument. Having considered the Parties' arguments, the evidence, and the law, the court rules as follows.
This action arises out of an unsuccessful endeavor between WTRI and PMI to jointly develop educational project management software.[1]
A. Development Agreement
On September 8, 2015, WTRI and PMI executed a “Software Technology Development and Purchase Agreement” setting forth the Parties' agreement to develop an “immersive, ‘accelerated learning' technology platform.” (Doc. No. 158-9, Ex. 1 (“Development Agreement”)). The platform was to be “derived from existing technology developed by WTRI” that would be “further enhanced with project management specific content” the Parties would jointly develop. Development Agreement, Ex. A.
The Development Agreement proposed the development of five initial “Alpha” versions of software-“Alpha 1” through “Alpha 5”-followed by a “Charlie” version production build. Id. at §§ 2.5; 5. A Software Development Plan was attached as Exhibit B to the Development Agreement. Id., Ex. B. The plan described the “schedule” and “responsibilities” of the WTRI and PMI teams. Id.
The project was to be “developed in accordance with the product description and specifications to be mutually agreed to by the Parties” known as “Acceptance Criteria.” Id. at § 5.1. The “Acceptance Criteria” were laid out as seventy-nine requirements set forth in Exhibit A of the Development Agreement. Id., Ex. A at 10-27. Under the Development Agreement, each “Alpha” and “Charlie” version of software was subject to review and testing upon delivery to determine whether the software met the “applicable Acceptance Criteria[.]” Id. at § 5.2.
The Development Agreement provided that WTRI would develop the project with PMI's collaboration in exchange for payment of up to $4, 000, 000. Id. at §§ 1.1; 2.5. PMI was to make an initial non-refundable payment of $1, 000, 000 to be used by WTRI to seek matching funds from the National Science Foundation (“NSF”). Id. at § 2.5(a). If PMI chose to accept the “Alpha 5” version of the software, PMI would make a second payment to WTRI totaling $1, 000, 000. Id. at § 2.5(b). WTRI would then develop the “Charlie” version production build. Id. at § 2.5(c). If PMI accepted the “Charlie” version delivered by WTRI, PMI would make a third $1, 000, 000 payment upon delivery and a final $1, 000, 000 payment a year after the date of acceptance. Id. at §§ 2.5(c) and (d).
The Development Agreement provided terms by which PMI could choose to reject the “Alpha 5” or “Charlie” versions of the software project if these versions failed to meet “applicable Acceptable Criteria.” Id. at § 2.5. Even if rejected, PMI could still elect to retain ownership of these versions. Id. at §§ 2.5(b) and (c). If PMI elected to do so, it would be obligated to make various monetary payments to WTRI. Id. If PMI elected not to retain ownership, it would no longer be obligated to make any further payments to WTRI. Id.
B. First Amendment to Development Agreement
On November 29, 2016, PMI and WTRI signed an agreement to accelerate the acceptance testing schedule for the “Alpha 5” version of the software to be completed by December 1, 2016. (Doc. Nos. 190-3 at 2). Subsequently, on November 30, 2016, the Parties executed a First Amendment to the Development Agreement. (Doc. No. 158-9, Ex. 3 (“First Amendment”)). The First Amendment provided that if PMI elected to reject and retain the “Alpha 5” version of the software, the Parties would enter into a Services Agreement within thirty days in lieu of monetary payment to WTRI. First Amendment at § 5.3. C. Election to Retain Alpha 5 Software and Services Agreement
On December 2, 2016, Victor Carter-Bey, the Director of Certification for PMI, e-mailed Lia DiBello, the Chief Executive Officer and Director of Research for WTRI, to confirm PMI had evaluated the “Alpha 5” software and was electing to reject and retain ownership of this version. (Doc. No. 158-9, Ex. 4).
On December 15, 2016, the Parties signed a Services Agreement memorializing the Parties' agreement to perform a pilot study. (Doc. No. 158-9, Ex. 5 (“Services Agreement”)). The Services Agreement was to become effective “on the date that PMI notifies WTRI that it will reject and retain ownership of the fifth (version) Alpha Software received from WTRI[.]” Services Agreement at 1. Pursuant to the Services Agreement, WTRI would “collaborate with PMI to design and develop a structured research program to conduct experimental testing” of the software. Id. at § 2.2. The Services Agreement included an “Activity Chart”-attached as Exhibit C. Id., Ex. C. The chart “identifie[d] specific outputs and deliverables” and denoted whether PMI, WTRI, or both were responsible for these tasks. Id., Ex. C at Section B-“Activity Chart.”
D. Termination
On June 18, 2018, WTRI's counsel sent a “Notice of Termination” to Mark Langley, PMI's President and CEO, purporting to: (1) terminate the Development Agreement for cause pursuant to Section 9.4; (2) declare the Services Agreement void; and (3) terminate the Services Agreement pursuant to Section 6.2 “[o]ut of an abundance of caution.” (Doc. No. 190-21 at 10, 11-12).
On August 16, 2018, Joseph Cahill, PMI's Senior Vice President of Finance and Administration responded: (1) setting forth PMI's understanding the Development Agreement had already been terminated when PMI rejected and retained ownership of the “Alpha 5” software; and (2) acknowledging the termination of the Services Agreement. (Doc. No. 190-22 at 2-3). WTRI filed the instant lawsuit shortly thereafter.
On August 20, 2018, WTRI filed its initial Complaint in this action. (Doc. No. 1). On October 25, 2018, WTRI filed a First Amended Complaint asserting causes of action for: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) fraudulent misrepresentation; and (4) tortious interference with prospective business relations. (Doc. No. 12). The court subsequently granted PMI's motion to dismiss WTRI's First Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 24 at 15-25).
On April 2, 2019, WTRI filed a Second Amended Complaint asserting the same four causes of action. (Doc. No. 25). On August 13, 2019, the court granted in-part and denied-in-part PMI's Motion to Dismiss WTRI's Second Amended Complaint. (Doc. No. 32). Specifically, the court denied PMI's motion as to WTRI's breach of contract claim and claim for breach of the implied covenant of good faith and fair dealing with respect to the Development Agreement. Id. at 18. The court granted PMI's motion as to WTRI's claim for breach of the implied covenant of good faith and fair dealing with respect to the Services Agreement and WTRI's fraudulent misrepresentation and tortious interference claims. Id.
On August 27, 2019, WTRI filed a Third Amended Complaint asserting the same four causes of action. (Doc. No. 37).[2] On January 22, 2020, the court granted PMI's motion to dismiss WTRI's fraud and tortious interference claims without leave to amend. (Doc. No. 42 at 4, 8). The court subsequently denied WTRI's motion for leave to file a Fourth Amended Complaint. (Doc. No. 111).
On February 19, 2020, PMI filed its Answer and Counterclaims against WTRI for: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) federal and state statutory trade secrets misappropriation. (Doc. Nos. 46 and 47).
On May 24, 2021, WTRI filed a motion for summary judgment (Doc. No. 126) and its Daubert motions (Doc. No. 128). PMI timely filed three Daubert motions (Doc. No. 132, 134, 136) and a motion for summary judgment (Doc. No. 135). On May 25, 2021, PMI belatedly filed: (1) a separate motion for partial summary judgment on its counterclaims (Doc. No. 139); (2) the declaration of Eric J. Bakewell in support of its summary judgment motions with accompanying exhibits; (Doc. No. 145); and (3) a fourth Daubert motion (Doc. Nos. 137, 146).
On June 9, 2021, the court struck PMI's multiple motions for summary judgment and related supporting documents and directed PMI to file a single, consolidated summary judgment motion. (Doc. No. 154). On June 16, 2021, PMI refiled a single, consolidated motion for summary judgment. (Doc. No. 158).[3]
Rule 56 of the Federal Rules of Civil Procedure provides that “[a] party may move for summary judgment, identifying each claim or defense - or the part of each claim or defense - on which summary judgment is sought.” Fed.R.Civ.P 56(a). “The court shall grant summary judgment 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.” Id.
Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S....
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