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Atlantis Services, Inc. v. Asigra, Inc.

United States District Court, D. Massachusetts

October 23, 2017

ATLANTIS SERVICES, INC., Plaintiff,
v.
ASIGRA, INC. Defendant.

          ORDER

          DAVID H. HENNESSY, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the court on Defendant Asigra, Inc.'s (“Asigra”) Motion for Judgment on the Pleadings. (Docket #12). Plaintiff Atlantis Services, Inc. (“Atlantis”) has filed a response, (Docket #17), and a hearing on the motion was held on August 4, 2017, (Docket #19). Also before the court is Asigra's Motion to Strike the Affidavit of Paul Pathiakis, (Docket #23), to which Atlantis filed a response, (Docket #24). Both matters are now ripe for adjudication. For the reasons that follow, Asigra's Motion to Strike (Docket #23) is ALLOWED, and Asigra's Motion for Judgment on the Pleadings (Docket #12) is ALLOWED IN PART AND DENIED IN PART. Judgment shall be entered in favor of Asigra on count VII of the complaint.

         I. BACKGROUND

         On April 15, 2014, plaintiff Atlantis Services, Inc. (“Atlantis”), a Massachusetts corporation based in Uxbridge, Massachusetts and defendant, Asigra, Inc. (“Asigra”), a Canadian corporation located in Toronto, Ontario, entered into an agreement whereby Atlantis would provide computer software services to Asigra. (Docket #1 at ¶¶ 3-5). In exchange, Asigra agreed to pay Atlantis $125.00 per work hour. (Id. at ¶ 6). The scope of services to be provided appear to have been set out orally and is captured in a document entitled Asigra Large System Project Deliverable, which details a conversation between the parties outlining the specifications of a software product to be designed by Atlantis. (Id. at ¶ 5, Exhibit A).

         Project completion was initially anticipated to take 2000 hours, referred to as “one work year.” (Docket #1 at ¶ 6). However, this time frame was continuously shortened by Asigra throughout the project lifetime. (Id. at ¶ 7). During a May 8, 2014 phone call, Aram Farajun, CEO and principal owner of Asigra, asked Paul Pathiakis, the CEO of Atlantis, whether Atlantis could accelerate the development time.[1] (Id. at ¶ 8, Docket #22 at ¶ 4). In response, Atlantis told Asigra that the only way to complete the project on an accelerated schedule would be to use code from Atlantis' own appliance product (the “Appliance Code”).[2] (Docket #1 at ¶ 8). In what it contends in its motion papers is an additional contract, during this phone call, Atlantis granted Asigra a limited right-to-use its Appliance Code and agreed to setup a call center for product support provided that Asigra pay all invoices and agree to pay Atlantis to service the product. (Id. at ¶¶ 9-11; Docket #17 at 1).

         By June 7, 2014, Atlantis completed the project using its code and Asigra “took delivery and accepted the project as conforming.” (Docket #1 at ¶¶ 13, 15). On June 20, 2014, Atlantis sent Asigra its final invoice itemizing its fees and requesting payment. (Id. at ¶¶ 16-17). In discussions regarding payment, Asigra acknowledged the accuracy of the debt and agreed to pay the invoice provided Atlantis assign Asigra the rights to its code. (Id. at ¶¶ 17-18). Atlantis refused to assign its rights to the code, limited or otherwise, absent Asigra's performance of the purported second agreement. (Docket #1 at ¶ 19).

         On May 11, 2016, Atlantis filed suit against Asigra alleging claims of breach of contract (count I), misappropriation of intellectual property (count II), trade secret misappropriation (count III), common law misappropriation (count IV), unfair and deceptive practices (count V), unjust enrichment (count VI), and copyright infringement (count VII). (Docket #1). Atlantis asserts that Asigra has copied substantial portions of the Appliance Code program, distributed works containing material copied from the Appliance Code, and created derivative works based on the Appliance Code. (Id. at ¶ 21). On November 18, 2016, Asigra moved for judgment on the pleadings on all counts other than count I. (Docket #12).

         II. STANDARD OF REVIEW

         Pursuant to Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings “[a]fter the pleadings are closed - but early enough not to delay trial.” A court reviews motions for judgment on the pleadings under a standard that is essentially the same as that for a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), except that “[a] Rule 12(c) motion, unlike a Rule 12(b)(6) motion, implicates the pleadings as a whole.” Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54-55 (1st Cir. 2006). Facts contained in the pleadings are viewed in the light most favorable to the nonmovant, and all reasonable inferences are drawn in its favor. Zipperer v. Raytheon Co., 493 F.3d 50, 53 (1st Cir. 2007). In reviewing a motion under Rule 12(c), the court may consider “documents the authenticity of which are not disputed by the parties; documents central to the plaintiff's claim; and documents sufficiently referred to in the complaint. Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007) (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993)) (alterations omitted). “Judgment on the pleadings is proper ‘only if the uncontested and properly considered facts conclusively establish the movant's entitlement to a favorable judgment.'” Zipperer, 493 F.3d at 53 (quoting Aponte-Torres, 445 F.3d at 54).

         III. ANALYSIS

         A. Motion to Strike

         On August 4, 2017, the court held a hearing on Asigra's Motion for Judgment on the Pleadings. (Docket #19). At the hearing, the court established a brief chronology of the parties' relationship. (Docket #20 at 3-9). Missing from this chronology was the exact date of the telephone conversation between the parties during which the alleged second contract was formed. (Id. at 5-6). Neither party was able to provide this date at the hearing, although it was agreed that, by necessary implication, the conversation must have occurred prior to project's completion date of June 7, 2014. (Id. at 8-9). Hence, the court asked the parties to submit an affidavit or stipulation establishing when this telephone call occurred, and indicated that this filing would be part of the record that the court would consider on the motion. (Id. at 39, 42-43).

         On August 23, 2017, Atlantis filed an affidavit by Pathiakis. (Docket #22). In the first five paragraphs of the affidavit, Pathiakis describes his relationship with Atlantis; details the terms of the original contract; and states that, on May 8, 2014, when asked by Farajun if he could accelerate the development time, he agreed to incorporate the Appliance Code into Asigra's product. (Id. at ¶¶ 1-5). Asigra does not seek to strike these statements. (Docket #23). Nor does Asigra challenge the last two statements in the affidavit which note that Pathiakis' telephone service provider is T-Mobile. (Docket #22 at ¶¶ 12-13; Docket #23). Asigra does challenge the remaining statements of the affidavit and asks that they be stricken. (Docket #23 at 1).

         The statements at issue seek to describe the content of the alleged second contract. (Docket #22 at ¶¶ 6-11). The court never requested this information and the parties did not seek leave, nor did the court grant it, to file additional evidence addressing this matter. For that reason alone, the contested portions of the affidavit are properly stricken. The court also notes that these statements do not conform with paragraph 10 of the complaint, in which Atlantis alleges that “[t]he limited right to use was contingent upon Asigra paying Atlantis' invoices and granting Atlantis all the servicing revenue of the new products.” (Docket #1 at ¶ 9) (emphasis added). In his affidavit, Pathiakis states that “the consideration for the second contract was to be a Master Service Agreement for servicing the System for Asigra” and that “[p]ayment for the initial work for hire contract was separate and distinct from the income we were expecting to derive under the Master Service Agreement.” (Docket #22 at ¶¶ 7, 11). Leave has not been granted to amend the complaint, and the court specifically ...


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