United States District Court, E.D. Pennsylvania
E.K. PRATTER UNITED STATES DISTRICT JUDGE.
sophisticated commercial entities are embroiled in a breach
of contract and unjust enrichment dispute. The plaintiff,
Financial Software Systems, is a Pennsylvania company that
develops and licenses financial risk-management software. The
defendant, Questrade, a Canadian brokerage firm, provides an
online trading platform for investors.
2011, Financial agreed to provide software services for
Questrade's trading platform over a five-year period.
After Questrade refused to pay invoices in 2016, Financial
brought an action in state court for breach of contract.
Questrade removed the case to this Court and filed a motion
to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(2). The gist of Questrade's motion is it lacks
sufficient contacts with Pennsylvania to be subject to the
specific personal jurisdiction of a Pennsylvania-based court.
Questrade assumed long-term obligations to a Pennsylvania
corporation, which included repeated communications and
payments into Pennsylvania, this Court has personal
jurisdiction over Questrade. Questrade's motion to
dismiss is denied.
Financial Software Systems is a Pennsylvania corporation that
developed Spectrum Systems (“Spectrum”)
risk-management software that facilitates online trading in
foreign currency. Resp. Oppo. Mot. Dismiss, Ex. 1, Decl.
¶¶ 3, 5. Financial's website states that its
headquarters are in Pennsylvania, with sales and support
Questrade is an online trading platform based in Ontario,
Canada. It does not market to U.S. customers, owns no real
property in Pennsylvania, does not pay taxes in Pennsylvania,
and is not registered with the Pennsylvania Department of
Questrade's Contacts - or Lack Thereof - with
the facts relating to Questrade's contacts with
Pennsylvania fall into three buckets: (1) the facts
surrounding the parties' initial negotiations (contract
formation), (2) the substance of the contract (contract
terms), and (3) the parties' conduct during the life of
the contract (contract performance).
2011, Questrade searched online for vendors that could help
facilitate its customers' ability to trade in the foreign
exchange market. Mot. Dismiss, Ex. B ¶¶
13-14. After consulting the marketing materials
of a “short list” of vendors, Questrade sought
five proposals and received three responses, including one
from Financial. Id. ¶¶ 15-19.
prepared and submitted its initial proposal in Pennsylvania.
In the ensuing negotiations, Questrade sent multiple emails
and made numerous phone calls to Financial's headquarters
in Pennsylvania. Resp. Oppo. Mot. Dismiss, Ex. 1, Decl.
¶¶ 7-8. But Questrade officials never physically
visited Financial's Pennsylvania location. Mot. Dismiss,
Ex. B ¶ 22. Financial representatives, on the other
hand, visited Toronto for in-person meetings with Questrade
twice in mid-2011. Id. ¶¶ 21, 24.
August 2011, negotiations between Questrade and Financial
culminated in an agreement for a five-year term. Mot.
Dismiss, Ex. E ¶ 6. Of particular importance here,
Financial agreed to provide services, such as trainings,
which were to be performed remotely (from any of
Financial's support locations, including those in
Pennsylvania) or at Questrade's Toronto offices.
Id. ¶ 9.
agreement also imposed limits on Questrade's use of
Financial's Spectrum software. For example, Questrade
personnel were permitted to access Spectrum “only . . .
from Questrade's offices in Canada.” Mot. Dismiss,
Ex. E ¶ 7(a).
the agreement stated that it would be governed by New York
law. Mot. Dismiss, Ex. D ¶ 19(c). It did not contain a
forum-selection clause but specified that notices to
Financial must be sent to Financial's headquarters in
Horsham, Pennsylvania. Id. ¶ 17.
first four years of the agreement, from 2011 to 2015,
proceeded smoothly. During this period, Financial employees
in Pennsylvania fielded requests for support over the phone
and online. Resp. Oppo. Mot. Dismiss, Ex. 1, Decl.
¶¶ 11-12. Virtually all of the support from
Financial to Questrade came from Financial's headquarters
in Horsham, Pennsylvania. Id. ¶ 15.
Additionally, Questrade made several payments to Financial
that were handled by Financial's accounts office based in
Pennsylvania. Id. ¶ 10.
Payment Dispute Leading to this Lawsuit
2015, Questrade contacted Financial in Horsham seeking to
modify the termination provisions of the agreement, but
Financial rejected the outreach. Compl. ¶ 11. In early
2016, Financial issued invoices totaling over $160, 000,
which Questrade has refused to pay. Resp. Oppo. ...