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Samia Companies LLC v. MRI Software LLC

United States District Court, D. Massachusetts

October 9, 2014

SAMIA COMPANIES LLC, Plaintiff,
v.
MRI SOFTWARE LLC, Defendant

Page 386

For Samia Companies LLC, Plaintiff, Counter Defendant: Robert Finnegan, LEAD ATTORNEY, Brighton, MA.

For MRI Software LLC, Defendant, Counter Claimant: William L. Boesch, LEAD ATTORNEY, Sugarman, Rogers, Barshak & Cohen, Boston, MA; Patrick J. Hannon, Sugarman, Rogers, Barshak & Cohen, P.C., Boston, MA.

Page 387

MEMORANDUM & ORDER

Nathaniel M. Gorton, United States District Judge

This case arises out of an alleged breach of a July 2009 Master License & Services Agreement (" Agreement" ) between plaintiff Samia Companies LLC (" plaintiff" or " Samia" ) and defendant MRI Software LLC (" defendant" or " MRI" ). Plaintiff is one of the largest real estate management firms in Boston, Massachusetts and defendant is a software company in the business of computer-based real estate management. MRI was formerly known as Intuit Real Estate Solutions (" Intuit" ).

Under the Agreement, plaintiff agreed to purchase computer software, consulting services and technical support services from the defendant. Samia alleges that MRI breached the Agreement, misrepresented the software components and capabilities, converted Samia's funds and conducted unfair or deceptive acts or practices in violation of Mass. Gen. Laws ch. 93A.

Three of the ten Counts in the complaint were dismissed after defendant filed a motion to dismiss. Defendant now moves for summary judgment on all remaining counts. For the reasons that follow, the motion will be allowed, in part, and denied, in part.

I. Background

A. The Agreement

In July, 2009, Samia and Intuit entered into a Master License & Services Agreement. The contract called for Intuit 1) to license and deliver to Samia a number of software programs for performing accounting and administrative functions in the real estate management business, 2) to provide professional consulting services during the implementation of the software, 3) to provide any software updates, or " Software Maintenance Services," for a period of one year and 4) to provide technical support services, or " Application and Technical Support," on an as-needed and pay-as-you-go basis.[1]

The Agreement contained a limited express warranty stating:

[MRI] warrants that for a period of thirty (30) days (the " Warranty Period" ) following Delivery by [MRI] to Client, any Licensed Program...will conform in all material respects with the applicable Documentation (" Warranty Criteria" ) provided to Client by [MRI]. In the event that Client determines that any Licensed Program...as delivered to Client by [MRI] fails to conform to the Warranty Criteria and Client delivers to [MRI] notice of such failure within the Warranty Period...[MRI] shall repair or replace the specific non-conformities as soon as practicable at no additional charge to the Client. The foregoing warranty states Client's sole and exclusive remedy...

The Agreement defines " Delivery" of the software to occur on the date that Intuit provides Samia with the Licensed Programs set forth in Schedule A in person, via common carrier or made available for Samia to download, whichever date is the earliest.

B. Subsequent developments and alleged breach

Installation and implementation of Intuit's software programs onto Samia's computer system began in September, 2009.

Page 388

During that period, Samia reguested that the software be capable of generating certain custom documents. The parties agreed that the reguest was outside the scope of the Agreement so Intuit drafted a proposed work authorization No. 27661 (" custom documents proposal" ) in October, 2009 to customize the software to perform Samia's desired functions.

In January, 2010, Intuit was acguired by investors and later was re-constituted as defendant MRI. Samia asserts that software development, installation and training on software components ceased during the transition period. It alleges that communications with MRI became particularly frustrating and difficult because of personnel changes at MRI.

Nonetheless, Samia launched the new software in March, 2010. It then signed the custom documents proposal which was incorporated into the original Agreement. MRI completed work on the custom documents project the following month. Samia believed that the software had certain defects, however, and decided to hire an outside IT consultant, Chris Patten, to modify the customizations. In August, 2010, Samia informed MRI that the document-generating programs were fully functional and that based on what it had paid Mr. Patten for his services, Samia was only willing to pay one-half of the fees MRI had invoiced for its customization work.

Another source of friction between the parties related to the Tax Form 1099-INT, a document that Samia was required to provide to certain tenants for tax return purposes. At the outset of the installation process, Samia had noticed that the software was incapable of performing functions related to Form 1099-INT. Samia insisted that Intuit's sales representative had promised that the software could perform those functions and that it would not have licensed the software otherwise. Intuit denied making such a promise but sent Samia a proposed work authorization No. 27736 (" 1099-INT functions proposal" ) in November, 2009 to do the 1099-INT customization work for $9,000. Samia did not sign the 1099-INT functions proposal and contended that the work should be done for free because the Intuit sales representative had promised that functionality in the software.

The relationship between Samia and MRI continued to deteriorate and Samia began withholding payment on invoices for consulting services in order to leverage MRI to perform the 1099-INT customization without charge.

Samia then filed the instant case against MRI, alleging that MRI 1) failed to provide certain software components that were promised as part of the Agreement, 2) failed to complete the development of certain work required under the contract, 3) improperly terminated technical support for which Samia had paid and 4) sold Samia dysfunctional system components.

Since filing the lawsuit, Samia has continued to use MRI's software in its business but has done so without any technical support or software maintenance agreement with MRI.

II. Procedural History

In November, 2011, Plaintiff filed its complaint in Suffolk Superior Court, asserting claims against defendant MRI for breach of contract (Counts I, III, V and VIII), negligent misrepresentation (Counts II, IV, VI and IX), conversion (Count VII) and unfair or deceptive acts or practices in violation of Mass. Gen. Laws ch. 93A (Count X).

Defendant removed the case to this Court the following month and, in February, 2012, moved to dismiss all claims in the ...


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