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Truefit Solutions, Inc. v. Bodies Done Right, LLC

United States District Court, W.D. Pennsylvania

December 26, 2019




         On February 1, 2019, Plaintiff/Counterclaim-Defendant Truefit Solutions, Inc., (“Truefit”) filed a Complaint (hereinafter “Complaint, ” Doc. 1) against Defendant/Counterclaim-Plaintiff Bodies Done Right, LLC (hereinafter, “BDR”). On April 12, 2019, BDR filed an Answer, Affirmative Defenses, Counterclaims and Jury Demand, (hereinafter, “Answer and Counterclaims, ” Doc. 13), raising counterclaims against Truefit. On May 3, 2019, Truefit filed a Motion to Dismiss some of those counterclaims, (hereinafter “Motion to Dismiss, ” Doc. 16), and BDR timely filed a Response in Opposition (hereinafter, “Response, ” Doc. 21). On June 6, 2019, Truefit filed a Reply in support its Motion to Dismiss, (hereinafter, “Reply, ” Doc. 24).

         After consideration of all briefing and documents filed by the parties, [1] Truefit's Motion to Dismiss (Doc. 16) will be granted in part and denied in part.

         A. BACKGROUND

         As the Court writes mainly for the parties, it assumes familiarity with the facts in this case. When disagreement exists, the Court, as it must at this juncture, accepts the well-pleaded facts set out in BDR's counterclaims against Truefit. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (A district court “must accept all of the [pleading's] well-pleaded facts as true, but may disregard any legal conclusions.”).

         1. The parties' business relationship

         BDR was in the process of developing an interactive fitness application that “provided end users with wellness and physical therapy services.” (Answer and Counterclaims at ¶ 81.) BDR had previously engaged a service provider to assist with this development, but that relationship was “incredibility negative, economically detrimental, and did not provide BDR with a viable nor usable product.” (Id. at ¶ 82.)

         While BDR was looking for a new service provider, it was contacted by a Truefit employee, on August 9, 2016, who indicated that Truefit is a “software product development firm with design, research, and engineering services.” (Id. at ¶ 83; cf. Complaint at ¶ 9.) From that date forward until the end of 2016, Truefit and BDR engaged in information sharing and negotiation around services that Truefit would provide to BDR. (Answer and Counterclaims at ¶¶ 84-90.) In connection with determining whether to engage in a business relationship, BDR shared summaries about its product and patents, gave Truefit credentials to its then-existing website, shared the faulty code draft of BDR's previous service provider, and provided Truefit with other confidential information. (Id.) BDR claims that the information it shared put Truefit in a “position of trust and expertise upon which BDR relied, ” that Truefit “promised and guaranteed that Truefit could provide a unified platform that would handle both wellness and therapy services, ” and that Truefit wanted to be a “ ‘long-term technology partner as [BDR] continue[s] to grow and develop the product.'” (Id. at ¶¶ 88, 89, 91.) At the end of 2016, BDR purchased a prototype application from Truefit for around $200, 000. (Id. at ¶ 90.)

         The parties' business relationship continued in 2017, although BDR contends that it soured almost immediately after it signed two written documents drafted by Truefit.[2] (Id. at ¶ 90.) BDR alleges that after it signed those documents, Truefit immediately changed the scope of the work it had promised to perform. (Id. at ¶ 95.) Specifically, BDR claims that Truefit falsely stated that the key deliverable, a unified platform for therapy and wellness, was not possible. (Id.) BDR avers that this was not in response to any work or work-related issues Truefit came across in development of the application, but rather was part of a “trap” and “scheme” by Truefit to “justify extracting hundreds of thousands of dollars from BDR, which BDR would be forced to pay under duress.” (Id. at ¶¶ 93-95.)

         BDR avers that that Truefit's scheme worked: “BDR began to pay the fees that Truefit demanded” and negotiated with Truefit in order to get “Truefit back on track to the agreed-upon unified therapy and wellness program.” (Id. at ¶ 98.) As the weeks went by, BDR claims that it had “no actual product or code to show for the hundreds of thousands of dollars spent on Truefit.” (Id. at ¶ 99.) BDR alleges it does not even have access to the “prototype that BDR bought and purchased from Truefit at the inception of the relationship” because Truefit disabled BDR's access to the prototype. (Id. at ¶ 102.) BDR claims significant damages as a result of Truefit's conduct, including loss of confidence from investors and associates who splintered off from BDR. (Id. at ¶¶ 101, 103.)

         2. Written documents related to the parties' business relationship[3]

         In February of 2017, the parties agree that Truefit provided BDR with two written documents for signature: A Master Services Agreement (hereinafter, “MSA, ” Doc. 1-1) and a Proposal for “BDR 2.0 - Unified Therapy and Wellness Platform” (hereinafter, “Unified Proposal, ” Doc. 23). The Statement of Background on the first page of the MSA states that “Client wishes to engage Truefit to render services with respect to the Client's business, and Truefit is willing to render such services upon the terms and conditions set forth below.”

         The MSA sets out at Section 1.1 the following:

Truefit agrees to provide to Client, under the terms and conditions hereof, the mutually agreed upon services on one or more proposed statements of work, in each case signed and dated by the Parties, [4]which shall become part of this Agreement (each a “Proposal”).

(MSA at 1.) The term of MSA is defined at Section 2.1, and reads as follows: “This Agreement shall commence on the Effective Date.” (Id.) The MSA provides terms for payment (Section 4) and a warranty (Section 7.1) which states, in part that “Truefit warrants that the Truefit Deliverables shall be performed or developed in a professional and workmanlike manner, and in accordance with standard industry practices.” (Id. at 2, 4). A section entitled “Authorization” provides that: “The person(s) signing this Agreement on behalf of each Party hereby individually warrant that they have the full legal power to execute the Agreement on behalf of their respective Party and to bind and obligate such Party with respect to all provisions contained herein. (Id. at 6.) There is an integration clause at Section 9.7, which specifies that the MSA, along with any Proposals hereunder, are the entire agreement of the parties. (Id.)

         The first lines of the MSA, which contain blank spaces for the “Client” and the date, are incomplete, and there is no date anywhere on the MSA. (See generally id.) Despite a signature line being available for Truefit, the final page of the MSA provided to the Court is not signed by Truefit. (Id. at 7.)

         The Unified Proposal has a cover page, which is dated February 7, 2017. (Unified Proposal at 1.) The Unified Proposal provides that “Payments are due according to the terms defined in our MSA.” (Id. at 8.) On the final page of the Unified Proposal, under the word “Approval, ” is the following: “This proposal is covered by our Master Services Agreement, executed separately, which outlines the complete terms and conditions of our relationship.” (Id. at 9.) The Unified Proposal is signed by BDR, but it is not signed by Truefit. Indeed, there is no line upon which Truefit is to sign. (Id.)

         In August of 2017, Truefit drew up another proposal, “BDR 2.0 - Wellness 1 AMENDMENT to original Wellness Features from v1.1, February 9, 2017, ” to modify the scope of Truefit's work. (Complaint at ¶ 24; Doc. 23-1.) This agreement was never executed by either party. (Id.)

         B. ...

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