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Tempworks Software, Inc. v. Careers Usa, Inc.

United States District Court, D. Minnesota

May 21, 2014

TempWorks Software, Inc., a Minnesota corporation, Plaintiff,
v.
Careers USA, Inc. a Florida corporation, Defendant.

John H. Reid, Esq., TempWorks Software, Inc., Eagan, MN, counsel for plaintiff.

Brian Dranoff, Esq., Jennifer O. Johnson, Esq., Careers USA, Boca Raton, FL and Terrance J. Wagener, Esq. and Messerli & Kramer, P.A., Minneapolis, MN, counsel for defendant.

ORDER

DAVID S. DOTY, District Judge.

This matter is before the court upon the motion by defendant Careers USA, Inc. (Careers USA) to dismiss or, in the alternative, to transfer venue. Based on a review of the file, record and proceedings herein, and for the following reasons, the motion is denied.

BACKGROUND

This contract dispute arises out of the provision of software by TempWorks Software, Inc. (TempWorks) to Careers USA. TempWorks, a Minnesota corporation, markets software products to staffing agencies. Compl. ¶ 1. Careers USA, a Florida corporation, provides staffing services to third-party businesses. Id . ¶ 2.

In June 2013, TempWorks and Careers USA executed a contract (Agreement), pursuant to which TempWorks licensed software to Careers USA. Id . ¶ 6. Under the heading of "Satisfaction Guarantees, " the Agreement provided that

[d]uring the first 180 days following the installation of the Software and completion of any initial conversion or enhancement projects and for 90 days following the Live Date, [1] if [TempWorks] does not adequately and timely correct a problem with the Software or if the Software does not otherwise perform adequately, in [Careers USA's] sole discretion, [Careers USA] may elect to terminate this Agreement... for a 100% refund of any and all fees paid by [Careers USA] to [TempWorks]....

Compl. Ex. A, at 6. Careers USA paid TempWorks an initial fee of $31, 250 upon execution of the Agreement. See id. at 9. Careers USA agreed to make three further payments, each of $31, 250, upon the "live date" and thirty and ninety days thereafter. See id. at 10.

Thereafter, a dispute arose between TempWorks and Careers USA concerning TempWorks' travel expenses and billing rates. Compl. ¶¶ 17-18. Following continued disagreement, TempWorks emailed Careers USA and offered to terminate the Agreement. Id . ¶ 21. Careers USA declined to terminate the Agreement and TempWorks continued to perform according to it. Id . ¶¶ 22-23. Thereafter, Careers USA contacted TempWorks to complain about further problems with the software. Id . ¶ 24. On September 30, 2013, Careers USA informed TempWorks it had no concerns regarding the software or the status of the data conversion and installation. Id . ¶ 27. In a letter dated October 1, 2013, Careers USA terminated the Agreement, purporting to invoke the satisfaction guarantee. See Compl. Ex. B. As of that date, the initial conversion and enhancement work was not yet complete, and the "live date" had not occurred. Compl. ¶ 30.

On October 7, 2013, TempWorks filed suit, alleging anticipatory repudiation and breach of contract. Careers USA moves to dismiss or, in the alternative, to transfer venue.

DISCUSSION

I. Subject-Matter Jurisdiction

Federal courts are courts of limited jurisdiction, and subject-matter jurisdiction is a threshold inquiry for all actions. See Thomas v. Basham , 931 F.2d 521, 522 (8th Cir. 1991). A court must dismiss an action over which it lacks subject-matter jurisdiction. Fed.R.Civ.P. 12(h)(3). Diversity jurisdiction under 28 U.S.C. § 1332 requires that the matter in controversy exceed $75, 000, exclusive of interest and costs, and that complete diversity of citizenship exist between the parties. A party may challenge subject-matter jurisdiction on the face of the complaint or for the ...


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