Bisk Education, Inc. v. Aspect Software, Inc. (In re Aspect Software Parent, Inc.)

578 B.R. 718
CourtUnited States Bankruptcy Court, D. Delaware
DecidedSeptember 6, 2017
DocketCase No. 16-10597 (MFW); Adv. No. 16-51510 (MFW)
StatusPublished
Cited by3 cases

This text of 578 B.R. 718 (Bisk Education, Inc. v. Aspect Software, Inc. (In re Aspect Software Parent, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bisk Education, Inc. v. Aspect Software, Inc. (In re Aspect Software Parent, Inc.), 578 B.R. 718 (Del. 2017).

Opinion

AMENDED MEMORANDUM OPINION1

Mary F. Walrath, United States Bankruptcy Judge

Before the Court is the Second Partial Motion to Dismiss the Amended Corn-[721]*721plaint, filed by Aspect Software, Inc. (the “Debtor”). The Debtor seeks to dismiss the claims for fraudulent inducement, negligent misrepresentation, and unjust enrichment with prejudice pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure, incorporated by Rules 7012 and 7009 of the Federal Rules of Bankruptcy .Procedure, For the reasons set forth below, the Second Partial Motion to Dismiss will be denied.

I. BACKGROUND

Bisk Education, Inc. (“Bisk”) provides online interactive education services, including web-based certificate and degree programs for various universities. Bisk’s web-based business requires a customer relations management (“CRM”) system to manage its customer interactions and data. In 2014, Bisk sought to upgrade its CRM system from an on-premises platform to a cloud-based platform and considered various companies to provide this service.

The Debtor provides workforce optimization solutions, among other CRM services. Bisk contends that the Debtor actively marketed its services to Bisk in 2013 and began to market more aggressively in 2014 after learning of Bisk’s intention to upgrade its CRM system. The Debtor claimed to be able to provide various cloud-based, hosted and hybrid CRM solutions to facilitate customer service in real time on multiple technology platforms.

Between July and December 2014, Bisk communicated regularly with the Debtor’s marketing team to discuss Bisk’s needs regarding the development and implementation of the CRM system. In September 2014, Bisk met with the Debtor’s marketing team, which proposed to customize and implement a next-generation, cloud-based CRM system. The parties met again in October 2014 to discuss the Debtor’s ability to integrate the necessary work optimization components with a CRM platform. Bisk subsequently agreed to hire the Debtor and on December 30, 2014, the parties executed a Product and Service Agreement (the “PSA”) containing, inter alia, a negotiated Expertise Clause, Merger Clause, and Limitation of Liability Clause. In conjunction with the PSA, the parties executed three Statements of Work, which required the Debtor to provide project management and other professional services associated with the implementation of the CRM system over eight to ten weeks. Bisk advanced approximately $3 million to the Debtor pursuant to the agreements.

Bisk contends that, instead of providing a next-generation cloud-based CRM system, the Debtor caused unreasonable delay and failed to timely implement a functional CRM platform, which resulted in additional and unnecessary costs to Bisk. As a result, Bisk notified the Debtor that it was terminating the PSA on August 8, 2015. On September 23, 2015, the Debtor sent a letter to Bisk memorializing the parties’ communications regarding the problems with the project and the Debtor’s resulting termination.

II. PROCEDURAL HISTORY

On March 9, 2016, the Debtor filed a chapter 11 petition. (D.I. 1.) On May 24, 2016, Bisk filed a proof of claim based on fraud and breach of contract theories. On August 2, 2016, the Debtor moved for a more definite statement of the claims contained in Bisk’s proof of claim. (D.I. 451.) On September 1, 2016, the Court denied [722]*722the motion for a more definite statement, but entered an Order directing Bisk to file an adversary complaint to liquidate its proof of claim. (D.I. 502.)

On October 14, 2016, Bisk commenced the instant adversary proceeding, asserting claims for fraud in the inducement, negligent misrepresentation, breach of contract, breach of express warranties, and unjust enrichment. (Adv. D.I. 1.) Bisk seeks allowance of its proof of claim in an amount equal to its damages (to be determined by the Court), prejudgment interest, attorneys’ fees and costs.

On November 23, 2016, the Debtor filed a Partial Motion to Dismiss, contending that the fraudulent inducement, negligent misrepresentation, and unjust enrichment claims failed to state a claim for relief pursuant to Rule 12(b)(6). (Adv. D.I. 5.) The Debtor argued that the tort claims were barred by the parties’ contract as a matter of law and that equitable relief was not an appropriate remedy. The Debtor further contended that Bisk failed to plead its fraud claims with particularity as required by Rule 9(b). (Id.) The Debtor also filed a counterclaim against Bisk, seeking $878,124.26. (Adv. D.I. 4.)

On January 6, 2017, Bisk filed a Motion for Leave to Amend the Complaint, which was granted. (Adv. D.I. 24.) The Amended Complaint was filed on March 24, 2017. (Adv. D.I. 33.)

On March 21, 2017, the Debtor filed a Second Partial Motion to Dismiss pursuant to Rules 12(b)(6) and 9(b), renewing the arguments from its prior motion to dismiss. (Adv. D.I. 31.) A notice of completion of briefing was filed on April 18, 2017, and the matter is now ripe for decision. (Adv. D.I. 44.)

III. JURISDICTION

The Court has jurisdiction over this adversary proceeding, which involves the allowance of Bisk’s timely filed claim. 28 U.S.C. §§ 1334 & 157(b)(2)(B). See In re Tribune Media Co., C.A. No. 16-226(GMS), 2017 WL 2622743, at *4 (D. Del. June 16, 2017) (“The Supreme Court has consistently held that by simply filing a proof of claim, which triggers the ‘allowance and disallowance of claims[ ]’ [under] § 157(b)(2)(B), a creditor consents to the entry of final orders as to that claim.... Stern did nothing to upset that precedent—if anything[,] it further solidified it.”). The Debtor has not objected to the Court’s exercise of jurisdiction over this adversary proceeding. See Local Bankruptcy Rule 7012-1.

IV. DISCUSSION

A. Standard of Review .

1. Rule 12(b)(6)

A Rule 12(b)(6) motion challenges the sufficiency of the factual allegations in a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). See Advanced Cardiovascular Sys., Inc. v. SciMed Life Sys., Inc., 988 F.2d 1157, 1160 (Fed. Cir. 1993) (“The purpose of [Rule 12(b)(6) ] is to allow the court to eliminate actions that are fatally flawed in their legal premises and destined to fail, and thus to spare litigants the burdens of unnecessary pretrial and trial activity.”).

To survive a motion to dismiss, a complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Bell Atl. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the conduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The claim need not provide [723]

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578 B.R. 718, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bisk-education-inc-v-aspect-software-inc-in-re-aspect-software-deb-2017.