Opinion
Civil No. 3:02-CV-0327-H
September 23, 2003
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant's Motion for Summary Judgment, filed August 29, 2003; Plaintiff's Response to Defendant's Motion for Summary Judgment, filed September 8, 2003; and Defendant's Reply, filed September 17, 2003. Upon review of the pleadings, briefs, and relevant authorities, the Court is of the Opinion for the reasons stated below that Defendant's Motion for Summary Judgment should be GRANTED in part and DENIED in part.
I. BACKGROUND
The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1332. Plaintiff i2 Technologies, Inc. ("i2"), is a Delaware Corporation with its principal place of business in Dallas County, Texas. (Am. Compl. at 1). Defendant DARC Corporation ("DARC") is an Illinois Corporation. ( Id.).
DARC specializes in Oracle Applications implementations, upgrades, customizations, and extensions. ( Id. at 176). Specifically, DARC developed and sells the ISIX software to facilitate data conversion to Oracle databases. ( Id.) It also offers the ISIX iDapter, another type of software, which converts different sets of data, such as data for accounts payable, human resources, and accounts receivable. ( Id.). There is one iDapter for each set of data. ( Id.). DARC also provides consulting services to help their customers install and configure the iDapters and writes custom code to modify the functionality of the iDapters and to add additional data elements. ( Id.).
Oracle Corporation is an enterprise software company that develops computer software to help customers manage their businesses and operations. (Def.'s App. at 173). Oracle Applications is database software developed by Oracle Corporation. (Pl.'s Br. at 1).
The case arises from an agreement between i2 and DARC for DARC to provide software and consulting services to convert i2's databases from Oracle Applications Release 11.0.3 to Oracle Applications Release 11i. (Def.'s App. at 178; Pl.'s App. at 1). DARC was initially hired by i2 in January 2001 to do a requirements analysis for converting all of i2's data into a single Oracle Applications platform. (Def.'s App. at 178). DARC submitted the "Proposal: Oracle Applications Global Strategy Assessment" on January 22, 2001, which described what DARC would do to determine how it believed the data conversion should be accomplished. (Def.'s App. 19-29, Pl.'s App. at 314). Based on that proposal, the parties executed a consulting services agreement, providing the business terms that would govern DARC's requirements analysis as set out in the January 22, 2001, proposal. (Pl.'s App. at 314). This consulting services agreement expired on February 28, 2001. (Def.'s App. 178).
It appears that i2 wanted to upgrade their database software to Oracle 11i, the newest version of Oracle Applications. However, the upgrade process for Oracle Applications requires that the data in the old version be converted to the new version of the software; it is not simply a matter of installing the new version, as it would be for upgrading Microsoft Word, for example. DARC was hired to do a technical evaluation to advise i2 what would need to be done to convert the data. (See Pl.'s App. at 313).
The title of each proposal has been shortened from "Professional Services Analysis Proposal for i2 Technologies" to "Proposal" for the sake of clarity for the reader.
As a result of the requirements analysis governed by the "Proposal: Oracle Applications Global Strategy Assessment" and the Consulting Services Agreement discussed above, DARC submitted the "Proposal: Oracle Applications Global Strategy Implementation" on January 31, 2001. (Def.'s App. 30-78). This proposal explored three alternative ways for i2 to accomplish the data conversion to Oracle 11i. (Def.'s App. at 30-78, 178). DARC recommended the alternative that proposed beginning an immediate data conversion to Oracle 11i using the ISIX software. (Def.'s App. at 42-45). In conjunction with submission of the written proposal, DARC made a presentation to i2 on February 6, 2001, to demonstrate the ISIX software and its functionality. (Def.'s App. at 306-353).
i2 agreed with DARC's recommendation to use the ISIX software to complete the data conversion. (PL's App. at 5). DARC then submitted a third proposal to i2, the "Professional Services Proposal for i2 Technologies: Oracle Applications, Release 11i Migration." (Def.'s App. at 79-103). DARC also submitted the "First Amendment to Consulting Agreement" and the "Software License and Maintenance Agreement." (Def.'s App. at 182). The "First Amendment to Consulting Agreement" amended the Consulting Services Agreement to add the third proposal, "Oracle Applications, Release 11i Migration," as an exhibit to the Consulting Agreement from January 2001, and extend DARC's performance from February 28, 2001, until February 28, 2002. (Def.'s App. 18). This proposal was never signed by the parties. (Def.'s App. 103, 490). i2 claims that although the proposal was not signed, it was accepted. (PL's App. at 5). DARC argues that this proposal is not operative and does not control the dispute between the parties because it was never signed. (Def.'s Br. at 6).
The parties engaged in lengthy negotiations between the end of February 2001 and April 2001. (Def.'s App. 300-01). These negotiations resulted in the Software License and Maintenance Agreement ("SLM Agreement") signed on April 3, 2001. (Def.'s App. at 300). The parties dispute whether the SLM Agreement includes the scope of work DARC was to perform for i2, or whether it only covered the provision of the ISIX software. (See Mot. at 5; PL's Br. at 6-7). It is undisputed that i2 bought the ISIX software after signing the SLM Agreement.
DARC began performing work for i2 related to the data conversion in March 2001, before the SLM Agreement was signed, and continued to perform work until June 25, 2001. (Def.'s App. at 188). i2 was unhappy with the performance of the ISIX software and DARC's services. (PL's App. at 7-8). i2 believed that the data conversion process was taking too long, longer than it believed i2 and DARC had agreed it would take. ( Id. at 8). Eventually, i2 fired DARC, calling DARC's consultants off the project and bringing in other consultants to complete the date conversion. ( Id. at 8-10).
i2 filed this case against DARC in this Court, claiming breach of contract, breach of warranty, negligent misrepresentation, and fraudulent inducement. (Am. Compl. at 2-7). First, claiming breach of contract, i2 alleges that the ISIX software and services DARC provided did not meet DARC's obligations under the SLM Agreement or the proposal. ( Id. at 3). Second, claiming breach of warranty, i2 alleges the "affirmations of fact, promises, and descriptions" DARC made to i2 were not met. ( Id. at 4). Third, claiming negligent misrepresentation, i2 alleges DARC gave false information about the character of the ISIX software and services DARC would provide to i2 to accomplish the data conversion. Finally, claiming fraudulent inducement, i2 alleges that DARC represented that the ISIX software could "1) validate the data to be converted, 2) provide reports of the data validation, and 3) perform the actual conversion process." ( Id. at 5). i2 also alleges that none of this would require writing separate conversion code; that the ISIX software would perform a "Delta Conversion," that DARC represented it had used the ISIX software to accomplish Oracle to Oracle data conversions before, and that DARC represented it had used the ISIX software "on complex and customized databases similar to the system at i2." ( Id.).
DARC denies i2's allegations and counterclaims for unpaid invoices. (Second Am. Answer and Original Countercl. at 2-6). DARC claims that the SLM Agreement is the only contract between the parties and that the only services DARC agreed to perform were installation and configuration provided on a time and materials basis under the SLM Agreement and the accompanying order forms. DARC denies that anything it said about the ISIX software was false.
DARC originally filed a Motion for Summary Judgment on i2's claims and on DARC's counterclaim on March 24, 2003. i2 filed a response and a Motion to Strike Dare's Motion for Summary Judgment on April 14, 2003. The Court granted i2's Motion to Strike on August 14, 2003, but allowed DARC an opportunity to file another Motion for Summary Judgment within the page limits set out in the Court's Scheduling Order of April 24, 2002. DARC filed this Motion for Summary Judgment on August 29, 2003.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where the facts and law as represented in the pleadings, affidavits, and other summary judgment evidence show that no reasonable trier of fact could find for the nonmoving party as to any material fact. FED.R.Civ.P. 56; Lujan v. National Wildlife Federation, 497 U.S. 871, 888 (1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Innovative Database Systs. v. Morales, 990 F.2d 217 (5th Cir. 1993). "The moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Properties, Inc. v. Potomac Ins. Co. of III., 140 F.3d 622, 625 (5th Cir. 1998) (citing Celotex, 477 U.S. at 322-25). If the movant fails to meet its initial burden, the motion must be denied, regardless of the nonmovant's response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
If the movant does meet its burden, the nonmovant must go beyond the pleadings and designate specific facts showing that a genuine issue of material fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998). A party opposing summary judgment may not rest on mere conclusory allegations or denials in its pleadings unsupported by specific facts presented in affidavits opposing the motion for summary judgment. FED. R. CIV. P. 56(e); Lujan, 497 U.S. at 888; Hightower v. Texas Hosp. Assn., 65 F.3d 443, 447 (5th Cir. 1995).
In determining whether genuine issues of fact exist, "[f]actual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists." Lynch, 140 F.3d at 625; see also Eastman Kodak v. Image Technical Services, 504 U.S. 451 (1992). However, in the absence of any proof, the Court will not assume that the nonmoving party could or would prove the necessary facts. Lynch, 140 F.3d at 625. A party must do more than simply show some "metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991).
III. ANALYSIS
A. Fraudulent Inducement
i2 alleges DARC fraudulently induced i2 to enter into contracts with DARC to purchase the ISIX software and to hire DARC to perform the data conversion to Oracle Applications Release 1 Ii. i2 claims that DARC oversold the ISIX software and misrepresented its capabilities. Specifically, i2 claims that DARC misrepresented that ISIX could convert data from one Oracle Application to another Oracle Application, that ISIX could validate the data converted, that ISIX could provide reports of data validation, that ISEX could perform the actual data conversion; that no custom code would have to be written, that ISK would be able to perform a "Delta Conversion", and that DARC had used ISIX to perform complex data conversions before.
DARC moves for summary judgment on i2's fraudulent inducement claim and alleges that it did not make any false representations to i2, that it did not know that any representations it made to i2 were false, that it had no intent to deceive i2, and that i2 cannot claim reliance on any representation not included in the SLM Agreement because of a valid disclaimer of reliance provision in the SLM Agreement. (Mot. at 12).
1. Elements of fraudulent inducement
Under Texas law, fraudulent inducement has six elements: 1) a material misrepresentation; 2) which was false; 3) which was either known to be false when made or was asserted without knowledge of its truth; 4) which was intended to be acted upon; 5) which was relied upon, and 6) which caused injury. Formosa Plastics Corp. USA v. Presidio Engineers and Contractors, 960 S.W.2d 41, 47-48 (Tex. 1998) (citing Sears, Roebuck Co. v. Meadows, 877 S.W.2d 281, 282 (Tex. 1994); and DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 688 (Tex. 1990), cert. denied 498 U.S. 1048, (1991)). The plaintiff must be able to present legally sufficient evidence on each of the elements. See id.
2. Disclaimers of Reliance under Texas Law
DARC argues that paragraph 18.11 of the SLM Agreement is an effective disclaimer of reliance and therefore negates the reliance element of fraudulent inducement in this case. (Def.'s. Br. at 8). The Supreme Court of Texas has held that "a release that clearly expresses the parties' intent to waive fraudulent inducement claims, or one that disclaims reliance on representations about specific matters in dispute, can preclude a claim of fraudulent inducement." Schlumberger Technology Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997). However, the Texas Supreme Court also emphasized that a disclaimer of reliance will not always bar a fraudulent inducement claim. Id. Schlumberger involved a settlement agreement between the Schlumberger Corporation and the Swansons. Id. at 174. Schlumberger and the Swansons were partners in a joint venture to mine diamonds on the ocean floor off the coast of South Africa. Id. Schlumberger wanted to withdraw from the joint venture but needed to buy out the Swansons' interest in the project to convince the other partners to buy Schlumberger's interest. Id. Schlumberger and the Swansons negotiated a buy-out, and, in exchange for the price paid by Schlumberger, "the Swansons relinquished all rights, claims, and interests in the offshore diamond project . . . and release[d] all causes of action against Schlumberger, known or unknown." Id. The Swansons specifically agreed in the release that "they were not relying on any statement or representation of Schlumberger . . ., that they were relying on their own judgment, and that they had been represented by counsel who had explained the entire contents and legal consequences of the release." Id.
Paragraph 18.11 reads:
18.11 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supercedes any prior negotiations, representations, or agreements with respect to the subject matter hereof. Neither party may rely upon any prior negotiations, representations, or agreements with respect to the subject matter hereof. Neither party may rely upon any verbal or written statement or representation and there are no other verbal or written agreements or undertakings changing or modifying the terms hereof or constituting and inducement [sic] to the making of this Agreement.
Later, the Swansons sued Schlumberger, claiming they were fraudulently induced into signing the contract and release and misled by Schlumberger about the value of the project. Id. In analyzing the release and whether it precluded the Swansons' fraudulent inducement claim, the Texas Supreme Court noted that the "sole purpose of the release was to end the dispute about the value of [the diamond mining project] between Schlumberger and the Swansons once and for all." Id. at 180. The Court discussed that the Swansons were sophisticated business players, that they were represented by counsel during the negotiations, and that the negotiations were conducted at arms length. Id. The Court concluded that, based on all of the facts and circumstances surrounding the release, it was clear the release was meant to apply to representations about the value of the project, "which, after all, was the very dispute that the release was supposed to resolve." Id. The Swansons were precluded from claiming reliance on Schlumberger's prior representations about the project's value. Id.
The factors the Texas Supreme Court discussed in Schlumberger are also present in the instant case. Both i2 and DARC are sophisticated business entities, familiar with the sale of software and consultation services. Negotiations over exactly what DARC would do for i2 were lengthy and eventually resulted in the SLM Agreement being signed by both parties. The disclaimer of reliance in the SLM Agreement clearly states that neither party may rely on prior negotiations, representations, or agreements relating to the subject matter in the SLM Agreement. (Def.'s App. at 10). Although there may be a fact issue regarding the services DARC was to provide to i2, the Court concludes that the parties clearly disclaimed reliance on prior negotiations and representations regarding the subject matter of the SLM Agreement and that the subject matter of the SLM Agreement is the ISIX software. (See Def.'s App. at 1). Because all of the misrepresentations i2 claims as the basis for its fraudulent inducement claim are related to representations about the ISDC software and its capabilities, the SLM Agreement, which includes the disclaimer of reliance, precludes the reliance element of i2's fraudulent inducement claim. Because i2 cannot now prove one of the elements of fraudulent inducement as a matter of law, the Court need not address whether the representations DARC made during the negotiations were false.
The SLM Agreement begins:
The Court GRANTS DARCs motion for summary judgment on i2's fraudulent inducement claim.
B. Negligent Misrepresentation
DARC moves for summary judgment on i2's negligent misrepresentation claim. Under Texas law, "a party may only maintain a tort action, other than fraudulent inducement, in addition to a breach of contract action if the tort action is independent of the contract action." Yzaguirre v. KCS Resources, Inc., 47 S.W.3d 532, 543 (Tex.App.-Dallas 2001, pet. denied, 66 S.W.3d 212 (Tex. 2000) (Owen dissenting)) (citing Southwestern Bell Telephone Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991)). To determine whether the tort action is independent of the contract action, the court looks to the nature of the damages claimed. Id. If the injury is an economic loss relating to the subject matter of the contract, no tort action is permitted. See id.
i2 makes claims for damages resulting from the delay in the data conversion to Oracle Applications 11i it claims were caused by DARC. (See Pl.'s Am. Compl. at 3). i2 claims it was forced to hire other consultants to complete the job DARC was hired to perform. (See id.). The Court concludes in the instant case that the damages sought by i2 are only economic in nature and are related to the subject matter of the SLM Agreement or of a contract for services (See Section C. infra), and, therefore, under Texas law, i2 cannot maintain an action for negligent misrepresentation.
The Court GRANTS DARC's motion for summary judgment on i2's negligent misrepresentation claim.
C. Breach of Contract
DARC moves for summary judgment on i2's breach of contract claim. DARC argues that the SLM Agreement is the only contract between DARC and i2 and that the SLM Agreement was not breached. (Def.'s Br. at 13). DARC also argues that i2 is precluded from asserting any of the earlier discussions surrounding the contract, such as the representations DARC made in the third proposal, "Oracle Applications, Release 11i Migration," or those made in the presentation about the ISIX software on February 6, 2001, as the basis for its breach of contract claim.
DARC also argues that i2 cannot claim breach of contract and breach of warranty at the same time. DARC cites two cases in support of this proposition: South-western Bell Telephone Co. v. FDP Corp., 811 S.W.2d 572, 576 (Tex. 1991), and Brooks, Tarlton, Gilbert, Douglas Kressler v. United States Fire Ins. Co., 832 F.2d 1358, 1375 (5th Cir. 1987). After a careful reading of the two cases, however, the Court finds that neither case clearly stands for the proposition that breach of contract and breach of warranty cannot be claimed in the same case. The cases recognize that the two actions are not the same and that breach of contract is not enough for a cause of action to lie pursuant to the Texas Deceptive Trade Practices and Consumer Protection Act.
Texas law allows the introduction of parol or extrinsic evidence, i.e., evidence of discussion that predate the acceptance of the contract, only when the terms of the contract are ambiguous. SeeHiller v. Manufacturers Product Research Group, 59 F.3d 1514, 1539 (5th Cir. 1995) (citing Hubacek v. Ennis State Bank, 371 S.W.2d 30, 31 (1958)). Paragraph 18.11 of the SLM Agreement provides that the SLM Agreement is the entire agreement between the parties and supercedes all other agreements as to the subject matter of the SLM Agreement. (Def.'s App. at 10). The meaning of the language in paragraph 18.11 is unambiguous.
See Footnote 4, supra, for full text.
However, the scope of services DARC was to provide is not clearly defined in the SLM Agreement. Paragraph 4.2, on which DARC relies to argue that the SLM Agreement also covers the services, reads only that DARC will "provide installation services under the terms and conditions of this Agreement or as specified in the applicable Work Order." (Def.'s App. at 3). Both parties agree that no Work Order was ever completed. The Court finds that the meaning of "installation services" as provided for in the SLM Agreement is ambiguous. Parol evidence is therefore admissible under Texas law to clarify the extent of services the parties agreed to in the SLM Agreement and whether there is another contract pertaining to the services. Under Texas law, "the question of whether an agreement was reached by the parties is generally a question of fact where the existence of the agreement is disputed." Preston Farm Ranch Supply, Inc. v. Bio-Zyme Enterprises, 625 S.W.2d 295, 298 (Tex. 1981) (citing Haws Garrett General Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d 607 (Tex. 1972); Keesey v. Old, 17 S.W. 928 (Tex. 1891)).
Paragraph 4.2 reads in full, "[DARC] will provide installation services under the terms and conditions of this Agreement or as specified in the applicable Work Order." (Def.'s App. at 3).
Section 14. Definitions, in the SLM Agreement, does not include a definition for "installation services," or for any other term related to services. (Def.'s App. 7-8).
The parties in the instant case dispute whether the services DARC provided for i2 were covered in the SLM Agreement or were contracted for separately from the SLM Agreement or fall under the scope of "installation services." However, there is no dispute that DARC did provide some services for i2 after the SLM Agreement was signed. (See PL's App. at 8; Def.'s App. at 190). The Court finds there is a fact issue as to the extent of the services covered by the SLM Agreement; whether there was another contract governing the provision of services; and whether DARC breached the contract for services, under either the SLM Agreement or another contract.
Therefore, the Court DENIES DARC's motion for summary judgment on the breach of contract claim because there is a fact issue as to the scope of services DARC agreed to provide.
D. Breach of Warranty
DARC moves for summary judgment on i2's breach of warranty claims. DARC argues that the SLM Agreement precludes i2 from asserting any warranties other than the limited warranties contained in the SLM Agreement. DARC also argues that it did not breach the limited warranties regarding the ISIX software and that it did not breach the limited warranties regarding the services provided. (Def.'s Br. at 15-16).
1. Express Warranties-ISIX
Paragraph 8.4 of the SLM Agreement, under Section 8 "Limitations of Warranty," provides that the ISIX software "is free of defects of material and workmanship under normal use" and "in its unaltered form, will operate in conformance with the Applicable Specifications and Documentation without Error." (Def.'s App. at 4) (capitalizations in original), In paragraph 8.5, DARC warrants that the ISIX software
"Paragraph 8.4 provides in full:
[DARC] warrants that the media is free from defects in materials and workmanship under normal use. [DARC] represents and warrants to [i2], that the Software, in its unaltered form, will operate in conformance with the Applicable Specifications and Documentation without Error, provided such software is used in a manner consistent with the appropriate combination of [i2] Provided Hardware and Software, which [DARC] approves and acknowledges are sufficient in every respect for purposes of effectively operating the Software, In the event that [i2] notifies [DARC] of an Error, [DARC] shall provide Correction to such Error.
(Def.'s App. at 4) (capitalizations in original). The SLM Agreement defines "Applicable Specifications" to mean "the functional and operational characteristics of the Software as described in [DARC's] then current published documentation." (Def.'s App. at 7). It defines "Error" to mean "a significant defect in the Software that prevents the Software from functioning in substantial conformity with the Applicable Specifications pertaining thereto." ( Id.)
does not contain any virus, timer, clock, counter, backdoor, or other limiting design, instruction, or routine that would erase data or programming, create the potential for a breach of security or confidentiality, or cause (or enable [DARC] to cause) [ISIX] or related equipment to become inoperable or otherwise incapable of being used in the full manner for which is [sic] was designed and created.
(Def.'s App. at 4). The parties do not argue that the SLM Agreement provided for any other express warranties regarding the ISIX software.(See Def.'s Br. at 15; Pl.'s Br. at 19).
The Court concludes that there is a fact issue regarding the warranties in paragraphs 8.4 and 8.5. DARC asserts that no express warranties regarding the ISIX software were breached. (Def.'s Br. at 15). i2 asserts that the software did not work at all (see Pl.'s Br. at 19) and offers summary judgment evidence supporting this proposition. (see Pl.'s Br. at 1-12). This is sufficient to create a fact issue. The Court DENIES DARC's motion for summary judgment on i2's breach of warranty claim regarding the express warranties in the SLM Agreement.
i2 offers evidence showing that DARC employees manually moved data from the old program into the new program, the task the ISIX software was meant to accomplish, as well as a sworn affidavit from one of its employees stating that the ISIX software did not work. (Pl.'s App. at 8). Neither party offers evidence of what the "functional and operational characteristics of the Software as described in [DARC's] then current published documentation" consisted of, but the Court will assume for the purposes of this motion and determining if a fact issue exists, that such evidence would include characteristics of data conversion.
2. Implied Warranties — ISIX
The SLM Agreement provides that there are no warranties except those provided in the SLM Agreement and that the software is sold "as is." (Def.'s App. at 5). Texas courts give effect to "as is" clauses and disclaimers of implied warranties. See Prudential Ins. Co. of Amer. v. Jefferson, 896 S.W.2d 156, 161 (Tex. 1995) (citing TEX. Bus. COM. CODE § 2.316(c)(1) (Vernon 1994)). In the face of the express disclaimer of implied warranties in the SLM Agreement, i2 cannot maintain an action based on the breach of any implied warranties of the ISIX software.
Paragraph 9.1 of the SLM Agreement reads:
EXCEPT FOR [DARC's] OBLIGATIONS UNDER SECTION 1.1 [sic] BELOW (NONINFRINGEMENT) AND SECTION 12 BELOW (CONFIDENTIALITY), [DARC] MAKES NO REPRESENTATIONS, WARRANTIES OR GUARANTEES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY USE OR ANY PARTICULAR PURPOSE WITH REGARD TO THE SOFTWARE AND DOCUMENTATION. [DARC] DOES NOT WARRANTY THAT THE OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE. EXCEPT AS SET FORTH IN SECTION 81. THROUGH 8.6 AND SECTION 11 BELOW, THE SOFTWARE AND DOCUMENTATION IS LICENSED TO [i2] ON AN `AS IS' BASIS.
(Def.'s App. at 5) (capitalization in original).
The Court GRANTS DARCs motion for summary judgment on the breach of warranty claim for implied warranties of the ISIX software.
3. Warranties for Services, if any
Because there is a fact issue regarding the provision of services, the Court concludes that there is also a fact issue on whether any warranties were made regarding the services DARC contracted to perform for i2. Therefore, the Court DENIES DARC's motion for summary judgment on the breach of warranty for any services performed by DARC. E. Damages
DARC moves for summary judgment on i2's exemplary and action damages claim. Because there are fact issues remaining, summary judgment on damages is not appropriate at this time. The Court DENIES DARC's motion for summary judgment on damages.
F. Counterclaim
DARC counterclaims for unpaid invoices. (Second Am. Answer and Original Countercl. at 6). DARC argues that summary judgment is appropriate on its counterclaim because it is entitled to summary judgment on i2's affirmative claims. Because the Court has not granted summary judgment on all of the claims brought by i2, the Court concludes that summary judgment is not appropriate on DARC's counterclaim. The Court DENIES DARC's motion for summary judgment on DARC's counterclaim.
IV. CONCLUSION
For the reasons stated above, Defendant's Motion for Summary Judgment is GRANTED as to claims of fraudulent inducement, negligent misrepresentation, and breach of implied warranty for the ISIX software. Defendant's Motion for Summary Judgment is DENIED for all remaining claims of breach of contract, breach of warranty, damages, and DARC's counterclaim.
SO ORDERED.
WITNESSETH:
WHEREAS, [DARC] owns or has the rights to certain computer software programs and documentation related thereto; and WHEREAS, [i2]desires to obtain certain rights, as hereinafter described, in said programs and their related documentation; and WHEREAS, [DARC] is willing to grant said rights to said programs and their related documentation to [i2]; Now, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto, intending to be legally bound by the provisions hereof, hereby agree as follows;
(Def.'s App. at 1).