DataCARD CORPORATION v. SOFTEK, INC.

645 F. Supp. 2d 722, 2007 U.S. Dist. LEXIS 55075, 2007 WL 2199124
CourtDistrict Court, D. Minnesota
DecidedJuly 27, 2007
DocketCivil 07-321 (DWF/AJB)
StatusPublished
Cited by8 cases

This text of 645 F. Supp. 2d 722 (DataCARD CORPORATION v. SOFTEK, INC.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DataCARD CORPORATION v. SOFTEK, INC., 645 F. Supp. 2d 722, 2007 U.S. Dist. LEXIS 55075, 2007 WL 2199124 (mnd 2007).

Opinion

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, United States District Judge.

INTRODUCTION

In this breach-of-contract case, Plaintiff DataCard Corp. (“DataCard”) alleges that Defendant Softek, Inc. (“Softek”) failed to pay for goods and services that DataCard delivered pursuant to an agreement between the parties. This matter is before the Court pursuant to Softek’s Motion to Dismiss for Lack of Jurisdiction or, in the Alternative, Motion for Transfer of Venue. For the reasons set forth below, the Court denies Softek’s motion.

BACKGROUND

DataCard is a Delaware corporation with its principal place of business in Minnetonka, Minnesota. 1 DataCard designs, develops, and implements card issuance programs, including equipment, printers, software, and related supplies. Softek is a Puerto Rican corporation with its principal place of business in San Juan, Puerto Rico. Softek designs, develops, and implements automated information technology systems.

The relevant facts regarding this lawsuit began in February 2002, at which time the Puerto Rico Department of Health issued a request for proposals for the design and implementation of a healthcare smart-card program (the “Smart-Card Project”). The Smart-Card Project would allow citizens of Puerto Rico to obtain a smart card 2 that would contain identification and healthcare information about the cardholder and assist in the administration of the national healthcare program in Puerto Rico. The Smart-Card Project was divided into two phases — a Pilot Program and the “roll-out” phase. The Pilot Program involved implementing the Smarl^Card Project at three to four selected sites in Puerto Rico. The roll-out phase called for implementation of the SmarNCard Project to the entire island of Puerto Rico.

Both Softek, DataCard, and other companies attended a pre-bid meeting in February 2002 at the Department of Health offices in San Juan, Puerto Rico. At that meeting, Softek representative and project locator, José Guzmán, met Datacard’s Distribution Manager for Latin America, Di-mas Cecilio. Guzmán and Cecilio met again at a conference and discussed the possibility of working together on the Smart-Card Project. Thereafter, Softek submitted a proposal for the design and implementation of the Smart-Card Project. According to the proposal, Softek would be the prime contractor, and Maxi-mus, Inc. (“Maximus”) and DataCard would be subcontractors. In May 2002, the Puerto Rican government awarded Softek the contract for the Pilot Program. As the prime contractor, Softek worked with Maximus who, in turn, purchased printers from DataCard and integrated the software it had developed into the purchased printers.

After successful completion of the Pilot Program, the Puerto Rican government issued a request for proposals to implement the roll-out phase of the Smart-Card Project. Thereafter, Softek asked Data-card if DataCard would be able to provide *727 the printers, supplies, and software necessary to implement the roll-out phase. In September 2003, Guzmán and another Softek representative, Victor Salaman, traveled to Minnesota to meet with DataCard to discuss this possibility and payment issues.

Following this meeting, Softek selected DataCard to provide the printers, supplies, and software for the roll-out phase of the SmarWCard Project, thereby eliminating Maximus from the process. The parties then heavily negotiated a contract (the “Subcontract Agreement”) setting forth their respective obligations. 3 The parties executed the Subcontract Agreement on or about April 16, 2004. Specifically, Softek executed the Subcontract Agreement in Puerto Rico, and then faxed the agreement to DataCard, who then executed the Subcontract Agreement in Minnesota.

Pursuant to the Subcontract Agreement, DataCard agreed to manufacture and deliver printers and related supplies to Softek and to provide hardware maintenance for the printers. The Subcontract Agreement provides that it is governed by the laws of Puerto Rico and also contains a non-exclusive forum-selection clause, which states, “[t]he parties hereby expressly submit to the non-exclusive jurisdiction of and venue in the United States District Court for the District of Puerto Rico.” (Aff. of Liz Wallace (“Wallace Aff”), Ex. 4, ¶ 13.11.) In addition, the Subcontract Agreement contains an integration clause, which states, “[tjhis Agreement, including the Exhibits attached hereto, represents the complete agreement between the parties with respect to the subject matter hereof and supersedes any contemporaneous or prior written or oral understandings or agreements with respect hereto[J” (Id. ¶ 13.5.)

Two Exhibits to the Subcontract Agreement also contain forum-selection clauses. First, the Software Maintenance Agreement (“SMA”) contains an exclusive forum-selection clause in favor of Puerto Rico and further provides that it will be governed by the laws of Puerto Rico. 4 Second, DataCard and Softek entered into an End User Software License Agreement, dated April 23, 2004, which contains a nonexclusive forum-selection clause in favor of Minnesota and provides that it is governed under the laws of Minnesota. 5

In addition to executing the Subcontract Agreement, the parties also entered into various other agreements over the course of their relationship that contained forum-selection clauses. Specifically, on March 12, 2004, Softek submitted a purchase order to DataCard to purchase printers and supplies in connection with the Smart-Card Project. Pursuant to the purchase *728 order, Softek executed Datacard’s Sales Order Form/Purchase Agreement, which included a non-exclusive forum-selection clause in favor of Minnesota. 6 Additionally, on March 18, 2004, DataCard and Softek entered into a Mutual Confidential Non-Disclosure Agreement, which contained an exclusive forum-selection clause in favor of Puerto Rico. 7 Further, on April 29, 2004, DataCard, Softek, the Puerto Rico Health Insurance Administration, and the Puerto Rico Department of Health entered into a Mutual Confidential Non-Disclosure Agreement (“Second Mutual Confidential Non-Disclosure Agreement”), which contained a non-exclusive forum-selection clause in favor of Puerto Rico. 8

On January 24, 2007, DataCard filed this lawsuit alleging breach of contract under the Subcontract Agreement. Specifically, DataCard alleges that it fully performed its obligations to provide certain printers, supplies, and maintenance under the Subcontract Agreement, but that Softek has refused to pay for the printers, supplies, and maintenance. Softek now moves the Court to dismiss the claim against it pursuant to the exclusive forum-selection clause in the SMA in favor of Puerto Rico and, alternatively, for lack of personal jurisdiction. Alternatively, Softek moves the Court for an order transferring venue to the United States District Court for the District of Puerto Rico.

DISCUSSION

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645 F. Supp. 2d 722, 2007 U.S. Dist. LEXIS 55075, 2007 WL 2199124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/datacard-corporation-v-softek-inc-mnd-2007.