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Computer Support, Inc. v. Booker Transportation Services

September 9, 2009

COMPUTER SUPPORT, INC., PLAINTIFF
v.
BOOKER TRANSPORTATION SERVICES, INC., DEFENDANT



The opinion of the court was delivered by: Chief Judge Kane

MEMORANDUM

Pending before the Court is Defendant Booker Transportation Services, Inc.'s motion for summary judgment on all of Plaintiff's claims. The motion has been fully briefed and is ripe for disposition. For the reasons that follow, the motion will be granted in part and denied in part.

I. FACTUAL BACKGROUND

Computer Support, Inc. ("Computer Support"), sells software that allows transportation companies to run their day-to-day operations, and maintains its sole place of business in Mechanicsburg, Pennsylvania. Booker Transportation Services, Inc., ("Booker"), is a trucking company located in Texas. In 1997, Booker entered into a contract with Computer Support and purchased software that enabled Booker to manage its operations, including dispatching and coordinating the transportation of cargo. The software also allowed Booker to manage a range of its other business matters, including payroll, accounts receivable, personnel, accounting, maintenance, fuel, mileage, and other records relevant to its operations. Computer Support provided technical assistance and other support to Booker with respect to the trucking company's use of the software. The 1997 contract required the parties to bring any actions arising out of the contract within two years of the date the cause of action arose. (Doc. No. 16, Ex. O. ¶ 1.23.)

Computer Support and Booker worked closely together to address issues that arose from the software. (Statement of Facts, ¶ 8.) In this regard, Computer Support had its own username that it used in order to access Booker's software and database. (Id. ¶ 9.) Upon accessing Booker's software and database, Computer Support could view the number of users accessing the software. (Id. ¶ 10.) Computer Support provided assistance to Booker on approximately a weekly basis. (Id. ¶ 11.)

In 2002, prior to a software upgrade, Booker provided Computer Support with a copy of its database, which included the usernames set up to access the software. (Id. ¶ 12.) By 2002, the number of usernames set up to access the software had grown to 28. (Id. ¶ 13.) Additionally, by 2005, Booker's president and co-owner, Dennis Cowley, had segmented Booker's operations into several additional companies that performed activities that Booker previously performed. (Id. ¶ 14.) The additional companies include Booker Transportation Brokerage LLC, Sallee, Inc., Dodge City Express, LLC, Dedicated Express, Container Services, and Combs Refrigeration LLC (collectively, the "Additional Companies"). (Id. at ¶ 15.) The Additional Companies constitute separate legal entities, in which Booker holds no ownership interest and over which Booker exercises no legal control. (Plaintiff's Counterstatement of Facts, ¶ 15.)

Computer Support had customer service representatives who were responsible for communicating with and assisting Computer Support's customers, including Booker. (Def. Statement of Material Facts, ¶ 16.) Conrad Kadel, a Computer Support customer service representative assigned to Booker, knew that each of the Additional Companies had been added to the software and he assisted each of the additional companies prior to March 12, 2006.*fn1 (Id. ¶ 17.) Mr. Kadel attested that on more than one occasion he was informed that a new company had been created and added to the software. (Id. ¶ 18.) In addition, Lisa Dingman, a part-owner of Computer Support who served as its account representative manager through 2006 was also aware that Booker had set up multiple companies in the software, and she personally saw multiple companies when she accessed Booker's software.*fn2 (Id. ¶ 19, 20.)

In addition, Computer Support's invoices and time records specifically refer to the Additional Companies prior to March 12, 2006, although Computer Support contends that this fact does not "automatically signify" that a separate legal entity was accessing Computer Support's software.*fn3 (Id. ¶ 21; Plaintiff's Counterstatement of Facts, ¶ 21.) Computer Support's employees maintained time records of the activities they performed, and these time records refer to the Additional Companies on a number of occasions prior to March 12, 2006, though Computer Support contends that this fact does not signify that the company was cognizant that the Additional Companies were actually separate legal entities accessing Computer Support's software. (Defendant's Statement of Facts ¶¶ 22, 23; Plaintiff's Counterstatement of Facts ¶¶ 22, 23.) In a number of instances, one or more of the Additional Companies is referred to by name on internal Computer Support documents (Defendant's Statement of Facts ¶¶ 24-29; Plaintiff's Counterstatement of Facts ¶¶ 24-29), and the notations occasionally identified specific concerns that one or more of the Additional Companies were having with respect to income statements or tax deductions (Defendant's Statement of Facts ¶¶ 27, 28; Plaintiff's Counterstatement of Facts ¶¶ 27, 28).

Also prior to March 12, 2006, Computer Support issued invoices to Booker that reference several of the Additional Companies.*fn4 (Defendant's Statement of Facts ¶ 31.) It is undisputed that Computer Support's customer service representatives are responsible for completing the description fields on Computer Support's invoices, and its president, Fred Nichols, checks the control totals (i.e., amounts) on the invoices before sending them to Computer Support's customers. (Defendant's Statement of Facts ¶ 30; Plaintiff's Counterstatement of Facts ¶ 30.) Computer Support double-checked the invoices for accuracy and in none of the invoices did Computer Support seek to charge any additional amount for the Additional Companies or for work performed for them.*fn5 (Defendant's Statement of Facts ¶ 32.)

As consideration for providing Booker with assistance with the software, Computer Support charged Booker an annual fee of $7,000 ever year for ten years. (Defendant's Statement of Facts ¶ 33; Plaintiff's Counterstatement of Facts ¶ 33.) The invoices charging this annual fee did not refer to "users" or otherwise indicate that the annual support payment was based on the number of users. (Id. at ¶ 34.) According to Plaintiff, Computer Support invoiced Booker for "an amount that was related to the contract, but it was an incorrect dollar value." (Plaintiff's Counterstatement of Facts ¶ 34.) At no time during the companies' ten-year relationship did Computer Support ever ask Booker how many users were accessing the software. (Defendant's Statement of Facts ¶ 35; Plaintiff's Counterstatement of Facts ¶ 35.) By accessing Booker's software, Computer Support would have been able to determine the number of users who accessed the software. (Defendant's Statement of Facts ¶ 36; Plaintiff's Counterstatement of Facts ¶ 36.) Computer Support's customer service representatives accessed information identifying the number of users in Booker's software throughout the time of Lisa Dingman's employment with Computer Support. (Defendant's Statement of Facts ¶ 37; Plaintiff's Counterstatement of Facts ¶ 37.) At no point during the companies' ten-year relationship did Computer Support invoice Booker for annual support in an amount actually listed in the 1997 contract, (Defendant's Statement of Facts ¶ 38), and at no point did Booker bring to Computer Support's attention the fact that it was being billed $1,000 more than the original support fee set forth in the contract (Plaintiff's Counterstatement of Facts ¶ 38).

In November 2007, following a software upgrade, Booker contacted Computer Support regarding problems that several users were encountering when trying to access the software. (Defendants' Statement of Facts ¶ 39; Plaintiff's Counterstatement of Facts ¶ 39.) In connection with responding to this inquiry, Fred Nichols informed Booker that there would be an increase in the annual fee for support under the contract based upon the number of users.*fn6 (Defendant's Statement of Facts ¶ 40; Doc. No. 15, Ex. M, email from Fred Nichols dated Nov. 8, 2007). In this same correspondence, Mr. Nichols informed Booker that there would be "no additional charges for the 5 companies on system."*fn7 (Id. ¶ 41.) Also in this email, Mr. Nichols advised Booker that, because the contract was silent on the issue, it did not allow for Computer Support to charge Booker for the Additional Companies that used the software.*fn8 (Id. ¶ 42.)

Approximately two months later, on January 3, 2008, Booker informed Computer Support that it was discontinuing its participation in the annual support program for the software and was switching to a new software vendor. (Id. ¶ 43.) In response, in a letter dated January 9, 2008, Computer Support asserted that it should have billed Booker more during their ten-year relationship for the Additional Companies and the number of users that utilized the software, and sent Booker an invoice for $444,505. (Id. ¶ 44.)

II. STANDARD OF REVIEW

Booker has moved for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, which provides that "[t]he judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The substantive law identifies which facts are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id. at 248-49.

The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the nonmoving party's claims, "the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Group. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is appropriate.

Celotex, 477 U.S. at 322. Summary judgment is also appropriate if the non-moving party provides merely colorable, conclusory, or speculative evidence. Anderson, 477 U.S. at 249. There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id. at 252; see also, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In making this determination, the Court must "consider all evidence in ...


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