Deere & Company v. XAPT Corporation

District Court, C.D. Illinois·Decided May 6, 2020·No. 4:19-cv-04210·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF ILLINOIS ROCK ISLAND DIVISION

DEERE & COMPANY, Plaintiff,

v. Case No. 4:19-cv-04210-SLD-JEH

XAPT CORPORATION, Defendant.

Order Now before the Court are Plaintiff Deere & Company’s Motion for Leave to File Plaintiff’s Second Amended and First Supplemental Complaint, Memorandum of Law, and Request for Ruling (Doc. 43) and Defendant XAPT Corporation’s Motion to Stay Discovery Pending Resolution on Defendant’s Motion to Dismiss (Doc. 36). The Motions are fully briefed and for the reasons set forth below, the Plaintiff’s Motion is GRANTED and the Defendant’s Motion is DENIED AS MOOT. I The Plaintiff filed its original Complaint on October 18, 2019 against Defendant XAPT Corporation (XAPT), and thereafter filed its Amended Complaint (Doc. 5) on October 23, 2019. In the Amended Complaint, the Plaintiff brought claims against XAPT for breach of contract, fraudulent inducement, and reformation. The Plaintiff alleged that it determined in 2013 that it could better serve its dealers by developing a single, fully integrated “Dealer Business System” (DBS) for purchase by all of its dealers in key markets. (Doc. 5 at pg. 4 ¶17). Thus, it determined it needed a platform on which the system would be built, and a developer to create and implement the system as well as provide ongoing support. (Doc. 5 at pg. 5 ¶21). From the inception of Deere’s relationship with XAPT1 via a telephone call in December 2015 and consistently over the next almost two years prior to contract execution, Deere consistently described its development needs: a global DBS template, customizable by region, including more than three hundred enumerated capabilities, data migration from Deere’s prior systems, full integration among its applications, and initial roll-out to dealers in seven countries. (Doc. 5 at pg. 6 ¶25). Four principal contracts between the Plaintiff and Defendant governed the creation and development of the Global DBS: a Master Services Agreement (MSA); a Work Order Template – Global Template; a Work Order – Governance; and XAPT Subscription Delivery Agreement. (Doc. 5 at pg. 10 ¶41). The Plaintiff further alleges that after contract execution, gaps to produce the global DBS multiplied exponentially and the Defendant failed to deliver project deliverables, it produced code riddled with errors, and it racked up costs. (Doc. 5 at pg. 15). The Plaintiff then invested in training XAPT in an effort to support XAPT, but post-training, gaps increased, quality did not improve, and XAPT sought a $10 million increase in the contract price to deliver the same product. (Doc. 5 at pgs. 16-17). On December 12, 2019, the parties jointly moved to stay this matter so that they could mediate this case, and the Court granted their motion and stayed the case to no later than February 5, 2020. On February 24, 2020, Defendant XAPT filed its Motion to Dismiss (Doc. 24). On March 4, 2020, the Court adopted the parties’ discovery plan which includes a deadline of July 10, 2020 to amend the

1 Deere alleged XAPT “styles itself a ‘global leading provider of Microsoft Dynamics ERP business solutions’ that ‘provides a full complement of business consulting services, including implementation and integration, for mid-size and enterprise organizations globally.’” (Doc. 5 at pg. 3 ¶12). pleadings and join additional parties. The next day, March 5, 2020, the Defendant filed its Motion to Stay Discovery Pending Resolution on Defendant’s Motion to Dismiss (Doc. 36). On March 27, 2020, the Plaintiff filed its Response (Doc. 41) to the Defendant’s Motion to Dismiss and its Motion for Leave to File Plaintiff’s Second Amended and First Supplemental Complaint, Memorandum of Law, and Request for Ruling (Doc. 43) (Motion to Amend). In its Motion to Amend now before the Court, the Plaintiff seeks to join additional parties as defendants – XAPT Kft, XAPT Solutions2, and Cosmo Consult3 – and to add additional claims that arose from the conduct of XAPT, XAPT Kft, XAPT Solutions, and Cosmo Consult. II A The Plaintiff properly seeks leave to file its amended complaint pursuant to Federal Rule of Civil Procedure 15 given that the deadline to amend pleadings and add parties has not yet passed. Rule 15(a)(2) provides in relevant part that the Court should freely give leave to a party to amend its pleading “when justice so requires.” FED. R. CIV. P. 15(a)(2). However, leave to amend may be denied where there is undue delay, bad faith on the movant’s part, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party if the amendment is allowed, or futility. Bausch v. Stryker Corp., 630 F.3d 546, 562 (7th Cir. 2010) (citations omitted). Here, Defendant XAPT argues the Plaintiff’s Motion to Amend should be denied as amendment would be futile. Specifically, XAPT argues: 1) the amendment is futile because Deere cannot allege compliance with Section 15.6.1

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