United States District Court, D. Minnesota
Bisanz, Jr., Henson & Efron, P.A., and James G. Sawtelle,
Sherman & Howard, LLC, appeared for Plaintiff.
Gregory J. Stenmoe and Kristin M. Emmons, Briggs &
Morgan, P.A., appeared for Defendants.
N. ERICKSEN UNITED STATES DISTRICT JUDGE
matter involves a dispute between Plaintiff Ascente Business
Consulting ("Ascente") and Defendants DR myCommerce
("DRM") and Digital River, Inc., DRM's parent
company. Ascente paid DRM and Digital River nearly $250, 000
to design and build a web portal for its identity theft
business. The portal failed to work properly and Ascente
brought suit, alleging breach of contract, breach of good
faith, unjust enrichment, fraud, negligent misrepresentation,
gross negligence, and tortious interference with contract.
Defendants moved to dismiss all seven counts. For the reasons
set forth below, that motion is granted in part and denied in
is a Colorado-based limited liability company that provides
identity theft protection products to consumers. DRM is a
Minnesota-based software development company. Digital River
is its parent company.
2014, Ascente and DRM negotiated for DRM to develop a
consumer-facing web portal that would allow Ascente's
customers to purchase an identity-monitoring subscription
service online. Ascente and DRM entered into two agreements
in May of that year: the Statement of Work and the Publisher
Agreement. The Statement of Work set forth the project
specifications and provided that Ascente would pay $44, 822
to DRM for its web portal services. Under the Publisher
Agreement, DRM would share in ten percent of the revenue
generated by the web portal.
portal was to be completed by October 2014. That month, DRM
informed Ascente that DRM had exceeded its projected costs in
developing and building the web portal. On October 29, 2014,
the web portal went live. It did not work as anticipated, and
over the next two months, Ascente relayed a series of
concerns about the web portal to DRM. The parties met in
January 2015 to discuss these issues. At the meeting, DRM
allegedly informed Ascente that it would need an additional
$187, 336 to correct the web portal problems. Ascente agreed
to pay this amount, apparently based on assurances from DRM
that the completed portal would meet the specifications
originally set forth in the Statement of Work. DRM continued
to work on the portal. In May 2015, DRM notified Ascente that
it needed an additional $6, 700 to complete the project.
Ascente agreed to pay this amount - once again based on
DRM's alleged assurances that the portal would meet all
of the specifications. In June 2015, Ascente was forced to
push back the planned launch of its business-to-customer
("B to C") marketing campaign because of continued
defects with the portal.
2015, the parties executed a third agreement: the Software
Development Agreement. Under the terms of this contract,
Ascente formally agreed to pay $187, 336 - the additional
amount the parties had agreed to in January - in exchange for
a web portal that met the specifications set forth in an
appendix to the Software Development Agreement. By December
2015, Ascente had paid $243, 258 to DRM and Digital River -
the full amounts due under the Statement of Work and the
Software Development Agreement.
February 1, 2016, DRM allegedly sent Ascente a communication
that stated: "We've had some staffing changes in our
business, and the team that created the portal is no longer
with our company. Unfortunately we do not have any resources
that would be able to take this one, even if it were a small
simple change." Compl. ¶ 45. Ascente alleges that
DRM then "washed its hands of the project," that
they "refuse[d] to do any additional work" on it,
and that none of Ascente's money has been refunded
despite the fact that the portal does not work according to
specifications. Compl. ¶¶ 46-47. Ascente also
claims that DRM's failure to deliver a portal that met
specifications "hamstrung Ascente's efforts to grow
its business." Compl. ¶ 48.
filed this complaint in January 2018, alleging breach of
contract (against DRM only), breach of the covenant of good
faith and fair dealing (DRM only), unjust enrichment (DRM and
Digital River), fraud and fraudulent inducement (DRM and
Digital River), negligent misrepresentation (DRM and Digital
River), gross negligence (DRM and Digital River), and
tortious interference with contractual relationships (Digital
River only). Defendants moved to dismiss all seven counts.
Rule 12(b)(6), "a complaint must contain sufficient
factual matter, accepted as true, to 'state a claim to
relief that is plausible on its face.'" Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
"A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Id. "A pleading that
offers 'labels and conclusions' or 'a formulaic
recitation of the elements of a cause of action will not
do.'" Id. (quoting Twombly, 550
U.S. at 555 (1955)). Plausibility is assessed by
"draw[ing] on . . . judicial experience and common
sense." Id. at 679. Moreover, courts must
"review the plausibility of the plaintiffs claim as a
whole, not the plausibility of each individual
allegation." Zoltek Corp. v. Structural Polymer
Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010).
noted above, Ascente's complaint sets forth seven claims
against the Defendants. Two of those claims - breach of
contract and unjust enrichment - survive the motion to
dismiss. The other five do not.