MicroBilt Corp. v. Fidelity National Information Services, Inc. (In re MicroBilt Corp.)

484 B.R. 56, 2012 Bankr. LEXIS 5731, 57 Bankr. Ct. Dec. (CRR) 94
CourtUnited States Bankruptcy Court, D. New Jersey
DecidedDecember 11, 2012
DocketBankruptcy No. 11-18143 (MBK); Adversary No. 12-01167 (MBK)
StatusPublished
Cited by7 cases

This text of 484 B.R. 56 (MicroBilt Corp. v. Fidelity National Information Services, Inc. (In re MicroBilt Corp.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MicroBilt Corp. v. Fidelity National Information Services, Inc. (In re MicroBilt Corp.), 484 B.R. 56, 2012 Bankr. LEXIS 5731, 57 Bankr. Ct. Dec. (CRR) 94 (N.J. 2012).

Opinion

MEMORANDUM OF LAW

MICHAEL B. KAPLAN, Bankruptcy Judge.

I. Introduction

This matter is before the Court upon the motions (“Motions”) of Chex Systems, Inc. [59]*59(“Chex”), and Certegy Ltd., (“Certegy”) (collectively “Defendants”) seeking to dismiss the Plaintiffs’ (defined below) Second Amended Adversary Complaint (“Complaint”) and compel arbitration, consistent with the Federal Arbitration Act, 9 U.S.C. § 1, et seq. Alternatively, Defendants submit that the Complaint should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6), incorporated in adversary proceedings pursuant to Fed. R. Bankr.P. 7012, for failure to state claims upon which relief can be granted. For the reasons set forth below, the Court determines that all of the claims asserted in the Complaint are subject to binding arbitration, and thus grants the Motions, without prejudice, to allow the parties to pursue arbitration in the appropriate forum.

II. Jurisdiction

The Court has jurisdiction over this contested matter under 28 U.S.C. §§ 1334(a) and 157(a) and the Standing Order of the United States District Court dated July 10, 1984, as amended September 18, 2012, referring all bankruptcy cases to the bankruptcy court. By prior analysis, the Court has determined that Counts Three and Four (claims based on violations of the automatic stay) are core, within the meaning of 28 U.S.C. § 157(b)(2), while Counts One and Two (claims based on tortious interference) are non-core. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. The following constitutes the Court’s findings of fact and conclusions of law as required by Fed. R. Bankr.P. 7052.1

III. Procedural History

MicroBilt, Inc. and CL Verify, LLC (“Plaintiffs” or “Debtors”) are engaged in risk management information for small and medium sized businesses and are providers of alternative data for non-traditional lenders. MicroBilt provides online access to consumer and commercial credit bureau data with automated deci-sioning and collection services primarily to small and medium sized enterprises. Such enterprises use MicroBilt data and tools to facilitate credit originations, collect receivables, make lending decisions, screen employees, select tenants and manage business risk. MicroBilt provides these services (a) directly to the business, (b) by private label, and (c) by co-branded relationships. With its PRBC Consumer Report, and as the exclusive provider of the FICO Expansion Score, the Debtors provide alternative credit data to businesses that want to offer credit and financial services to the approximately 110 million underserved and under-banked individuals in the United States. The Debtors also sell proprietary comparative private-company financial information with its “Integra Data” on more than 4.5 million privately held companies collected from 32 governmental and nongovernmental sources along with analytic tools. Integra users are lenders, CPAs, investment firms, valuation professionals and venture capitalists who use the data to value and benchmark the financial performance of non-public firms.

In August 2010, MicroBilt acquired CL Verify, a supplier of credit related information to on-line payday loan companies. CL Verify contains some legacy assets and liabilities from previous acquisitions. The majority of CL Verity’s operating assets and liabilities have been absorbed by Mi-croBilt, and pursuant to the recently confirmed Fourth Amended Plan of Reorgani[60]*60zation, CL Verify is to be merged and consolidated into the Reorganized Debtor MicroBilt.

On February 16, 2012, Plaintiffs commenced this adversary proceeding by filing a three-count Adversary Complaint against Defendants Fidelity National Information Systems, Inc. (“FIS”), Chex, and Certegy. FIS is a Georgia corporation with a principal place of business in Jacksonville, Florida. Chex is a Minnesota corporation with a principal place of business in Woodbury, Minnesota. FIS wholly owns and controls Chex and does business as “Chex Systems, Inc.” Certegy is a business entity formed pursuant to the laws of the United Kingdom, with a principal place of business in England. Certegy is in the business of providing United Kingdom public records, historical consumer payment information, and related products and services.

In Counts One and Two, MicroBilt alleges that FIS and Chex tortiously interfered with existing and prospective contractual relationships. In Count Three, MicroBilt alleges that the Defendants violated the automatic stay provisions of the Bankruptcy Code, 11 U.S.C. § 362. On March 19, 2012, FIS and Chex filed a Rule 12(b)(6) motion to dismiss the Adversary Complaint. After entertaining oral argument on April 23, 2012, the Court denied the motion to dismiss, in material part, without prejudice to Plaintiffs’ amplification of the facts in an amended complaint. On April 24, 2012, Plaintiffs filed a First Amended Adversary Complaint adding the identities of the prospective end users lost due to the Defendants’ alleged conduct. FIS and Chex filed a joint Answer on May 9, 2012. Certegy filed an Answer on August 14, 2012. Thereafter, on June 22, 2012, FIS and Chex sought a determination as to whether the claims in the First Amended Adversary Complaint were to be treated as “core” or “non-core,” and also moved the District Court to withdraw the reference of this adversary proceeding. On July 16, 2012, the Court entertained oral argument and rendered a decision on the core/non-core issue. FIS and Chex’ motion to withdraw the reference remains pending before the District Court.

On August 6, 2012, MicroBilt moved to amend the First Amended Adversary Complaint to add a proposed fourth count against FIS and Chex, alleging more recent violations of the automatic stay. On October 1, 2012, the Court approved the filing of the Second Amended Adversary Complaint. On October 15, 2012, FIS filed an answer to the Complaint (as defined above). On that same date, Chex and Certegy filed the within Motions.

IV. Factual Background

MicroBilt and Chex have a long-standing contractual relationship in which Chex sells financial information (“Information”) to MicroBilt, who then resells the Information to end users, including lenders such as credit unions, payday lenders, and auto dealerships. MicroBilt also resells the Information through sales agents to then-end users. A dispute arose under that long-standing contractual relationship with Chex which resulted in substantial litigation.

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484 B.R. 56, 2012 Bankr. LEXIS 5731, 57 Bankr. Ct. Dec. (CRR) 94, Counsel Stack Legal Research, https://law.counselstack.com/opinion/microbilt-corp-v-fidelity-national-information-services-inc-in-re-njb-2012.