The opinion of the court was delivered by: JOHN JONES, District Judge
THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:
Currently pending before the Court is Defendant RegScan, Inc.'s
("RegScan" or "Defendant") Motion for Summary Judgment. (Rec.
Doc. 81) ("the Motion").
This Court has diversity jurisdiction over the instant action
pursuant to 28 U.S.C. § 1332 (2005).
For the following reasons, we will deny the Motion in part and
grant the Motion in part.
PROCEDURAL HISTORY AND STATEMENT OF RELEVANT FACTS:
This action is between Plaintiff Con-Way Transportation
Services, Inc. ("Plaintiff" or "Conway"), a Michigan-based
subsidiary of CNF, Inc., a California corporation and Defendant RegScan, Inc., a Pennsylvania
corporation. In May of 2000, the parties entered into a Licensing
Agreement (the "Agreement") pursuant to which Defendant was to
modify a computer software program ("the software") created by
Plaintiff. The essence of the software was to facilitate
regulatory compliance of trucking companies dealing in hazardous
In March 3, 2003, Plaintiff filed a complaint (doc. 1) against
Defendant with this Court, alleging breach of contract (Counts I
and II), Misuse of Proprietary Information (Count III) and Unjust
Enrichment (Count V). Plaintiff also demanded an Accounting from
Defendant to determine its damages (Count IV). (Rec. Doc. 1). In
a companion state court action, Defendant sought declaratory
relief as to the invalidity of the Agreement, alleging that
Plaintiff failed to provide and/or misrepresented the software
Defendant was to modify. On January 1, 2004, this Court entered
an Order (doc. 46) staying the instant action until resolution of
the companion state action. On August 6, 2004, Judge Anderson of
the Lycoming County Court of Common Pleas found against Defendant
on all claims of misrepresentation and contract invalidity. (Rec.
At the heart of this action is Defendant's allegation that
Plaintiff's software was "useless," forcing Defendant to develop
a different computer software program from "scratch." (Rec. Doc.
82 at 1-2). Defendant seeks to avoid performance under the Agreement on the grounds of non-occurrence
of a condition precedent to Defendant's performance. Defendant
alleges that the existence of viable, modifiable software was a
condition precedent to its performance of software development
and payment of licensing fees to Plaintiff. It is Defendant's
contention that since the software was "useless" and
unmodifiable, it was impossible for Defendant to perform under
the Agreement. Further, Defendant alleges that it became aware of
the software's defects only after signing the Agreement with
In strong contrast, Plaintiff alleges that Defendant possessed
the software prior to signing agreement and is therefore charged
with the knowledge of the software's components. Although
Plaintiff admits that the software was not ready for "field use"
when provided to Defendant, Plaintiff denies Defendant's
allegations that the software did not perform as represented or
required. Moreover, Plaintiff alleges that the parties performed
under the Agreement for a year and a half before Defendant
stopped paying licensing fees to Plaintiff in February of 2002.
Both Defendant and Plaintiff have fully briefed the Motion and
it is therefore ripe for our review.
Summary judgment is appropriate if "there is no genuine issue
as to any material fact and . . . the moving party is entitled to judgment
as a matter of law." FED .R. CIV. .P. 56(c); see also Turner
v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir. 1990). The
party moving for summary judgment bears the burden of showing
"there is no genuine issue for trial." Young v. Quinlan,
960 F.2d 351, 357 (3d Cir. 1992). Summary judgment should not be
granted when there is a disagreement about the facts or the
proper inferences which a fact finder could draw from them. See
Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d
Initially, the moving party has a burden of demonstrating the
absence of a genuine issue of material fact. Celotex Corporation
v. Catrett, 477 U.S. 317, 323 (1986). This may be met by the
moving party pointing out to the court that there is an absence
of evidence to support an essential element as to ...