CRMSuite Corporation v. General Motors Company

CourtDistrict Court, M.D. Florida
DecidedMarch 10, 2021
Docket8:20-cv-00762
StatusUnknown

This text of CRMSuite Corporation v. General Motors Company (CRMSuite Corporation v. General Motors Company) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CRMSuite Corporation v. General Motors Company, (M.D. Fla. 2021).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

CRMSUITE CORPORATION, a Florida corporation,

Plaintiff,

v. Case No. 8: 20-cv-762-WFJ-AAS

GENERAL MOTORS COMPANY, a Delaware corporation; GENERAL MOTORS LLC, a Delaware limited liability company; and GENERAL MOTORS HOLDINGS LLC, a Delaware limited liability company,

Defendants. ___________________________________/ ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Before the Court is General Motors’ (“GM”) Motion to Dismiss, Dkt. 59, Plaintiff CRMSuite’s Third Amended Complaint, Dkt. 53. For the reasons below, the Motion is granted in part and denied in part. I. BACKGROUND As the Court recounted in its previous order, this case concerns GM’s Dealer Technology Assistance Program (“DTAP”). Through this program, GM certifies third-party vendors who provide software products to GM auto dealerships. CRMSuite is a Florida-based software developer that provides customer relationship management (CRM) software to multi-brand auto dealerships around the country, many of which sell GM vehicles. Id. ¶¶ 10–12. CRMSuite filed this

lawsuit after, in its opinion, it was wrongfully terminated from GM’s vendor program. A. GM’s Dealer Technology Assistance Program (DTAP).

GM requires its dealerships to use CRM products certified through the DTAP program. Id. ¶¶ 15–19. CRM products certified through the program must meet GM’s specific technical standards. Dkt. 53-1 at 3. These include security and performance criteria, but most importantly, vendors must integrate their software

with GM’s systems through a connector server, which acts as a data communications pipeline between GM’s computer systems and the CRM software. Dkt. 53 ¶ 19. GM delivers sales leads and performance bonuses to the CRM

software and ultimately the dealerships through this pipeline. Id. ¶ 18. Without a pipeline, dealers will not receive leads or bonuses. Id. GM offers two tiers of CRM certification: basic and premium. Id. ¶ 21. The main difference between the two levels from the vendor’s perspective is that

premium certification requires the vendor to add several functions to its software that are unique to GM’s systems. Id. ¶ 23. Adding these functions is a time- consuming and costly process that requires coordination with GM’s information

technology (IT) staff and rounds of testing and performance demonstrations. Id. ¶ 22. From the dealers’ perspective, the main difference between the two levels is that GM will subsidize the cost of using a premium product. Id. ¶ 21.

Vendors of an approved product enter a DTAP contract with GM under which the vendor agrees to adhere to GM’s certification criteria. See Dkt. 53-1. The vendor then begins paying GM a recurring fee to participate in the program.

Dkt. 53 ¶ 20. In exchange, GM lists the vendor’s product on its Dealer Vendor Advisor website, where dealers can then purchase it along with the other certified CRM products listed on the site. Id. ¶ 16; Dkt. 53-1. B. Factual Allegations and Legal Claims in the Third Amended Complaint

CRMSuite states it became a DTAP-certified vendor in 2016 and remained as such until its termination from the program in the spring of 2020. Dkt. 53 ¶ 25. It gained certified status through an agreement with another certified vendor, iMagic Lab LLC. Id. ¶¶ 26–32. iMagic’s CRM product, Dealer CRM, was

approved for participation in the vendor program, and in August 2013 iMagic entered a DTAP contract with GM.1 See id. ¶ 28. CRMSuite CEO Richard Latman signed the contract on behalf of iMagic and was apparently the CEO of both iMagic and CRMSuite at the time. See Dkt. 53-1 at 13. The contract was for an

initial term of five years and gave GM the option to renew the agreement for two

1 A copy of the contract is attached to the Third Amended Complaint. See Dkt. 53-1 (“Dealer Technology Assistance Program (DTAP) Agreement”). additional one-year terms by providing iMagic with written notice of renewal 90 days before the expiration of the initial term or the expiration of the first renewal

term. Dkt. 53-1 (DTAP Agreement, §§ I, XV). In 2015, iMagic transferred the rights to its pipeline, its Dealer CRM software, and its DTAP contract to CRMSuite.2 Dkt. 53 ¶ 32. After the assignment,

CRMSuite renamed iMagic’s software “CRMSuite,” and GM updated the product name on the vendor site at Latman’s request. Id. ¶¶ 33, 35–37. CRMSuite continued using the iMagic pipeline until March 2018. Id. ¶ 40. In November 2017, CRMSuite entered a reseller relationship with Dominion

Dealer Services, LLC. Id. ¶ 41. As part of the arrangement, Dominion received the right to sell CRMSuite’s software under a new product label called “Vision powered by CRMSuite.” Id. ¶ 42. Dominion planned for the new Vision product to

replace its own CRM product, Autobase. Id. ¶¶ 42–44. For convenience, CRMSuite shifted its customers to Dominion’s pipeline. That way CRMSuite and Dominion would not have to maintain two pipelines and could pay one vendor fee to GM. Id. ¶¶ 45–48.

2 At this stage the Court recites these facts as Plaintiff has alleged them. Many of them are in dispute. Since filing the Third Amended Complaint, CRMSuite has produced an “Asset Purchase, Sale, and Transfer Agreement” between it and iMagic. Under the agreement, iMagic assigned to CRMSuite all its rights under contracts it was party to that were assignable without a third party’s consent, and CRMSuite agreed to assume all iMagic’s duties under those same contracts. Dkt. 70-1 at 3 (§ 1.2(a)). GM approved this shared pipeline arrangement. See Dkt. 53 ¶¶ 49–51; Dkts. 53-3; 53-4. But in exchange for the two vendors paying a single fee, GM mandated

that CRMSuite upgrade its software to include the eight additional functions required of premium-level products. Dkt. 53 ¶ 56. Around this same time, GM allegedly renewed for the first additional one-year term the DTAP contract iMagic

had assigned to CRMSuite.3 Id. ¶ 55. With Dominion’s assistance, CRMSuite began adding and integrating the new premium-level functions, several of which were in turn approved by GM’s IT staff. Id. ¶¶ 60–61. Throughout the process of upgrading its software, CRMSuite

claims that GM’s IT staff repeatedly promised, during telephonic meetings and in emails, that its software would be approved at the premium level once the required upgrades were completed. Id. ¶ 58–61. During the integration process, GM also

renewed CRMSuite’s DTAP contract for a second time. Id. ¶ 62. Sometime in early 2020, Dominion and CRMSuite agreed to end their business relationship. See id. ¶¶ 67–68. Dominion informed GM of this and that it would be transferring its Vision customers to CRMSuite. Id. ¶¶ 69–70. After

learning this, GM cut off all communication with CRMSuite and canceled testing for the functions still needing validation. Id. ¶¶ 71–80. GM also contacted

3 CRMSuite has not produced any written renewal agreement or any other written agreement between it and GM. CRMSuite’s dealer customers to inform them that CRMSuite was not a certified product and would not be certified in the future. Id. ¶ 76. GM also instructed its

dealers to cancel their contracts with CRMSuite and switch to a DTAP-certified provider in order to keep receiving sales leads and bonuses. Id. ¶ 89. CRMSuite’s efforts to reconcile its relationship with GM failed, and its

software went offline when Dominion closed its pipeline in May 2020. Id. ¶¶ 70– 77, 134. Based on these alleged facts, CRMSuite’s Third Amended Complaint asserts four counts: (Count I) a violation of the Florida Deceptive and Unfair Trade

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