BVS, Inc v. CDW Direct, LLC et al

Filing 109

ORDER denying as moot 66 Motion for Summary Judgment; denying as moot 67 Motion for Summary Judgment; denying as moot 68 Motion for Summary Judgment and granting 70 Motion for Summary Judgment. The Clerk of Court is directed to enter judgment in favor of Defendant CDW, Inc., and against BVS, Inc. Signed by Chief Judge Linda R Reade on 3/28/2013. (skm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION
BVS, INC.,
Plaintiff,
vs.

ORDER

CDW DIRECT, LLC,

11-CV-79-LRR

Defendant and Third-Party
Plaintiff,
vs.
ARROW ELECTRONICS, INC.,
TSSLINK, INC. and NET APP, INC.,
Third-Party Defendants.
__________________________________
NET APP, INC.,
Counter Claimant,
vs.
CDW DIRECT, LLC,
Counter Defendant.
TABLE OF CONTENTS
I.

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

II.

PROCEDURAL HISTORY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A.
B.
C.
D.

Arrow Motion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CDW Motion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net App Motion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TSSLink Motion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
4
5
5

III.

SUBJECT MATTER JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . 5

IV.

SUMMARY JUDGMENT STANDARD. . . . . . . . . . . . . . . . . . . . . . . . . 5

V.

RELEVANT FACTUAL BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . 6
A.
B.
C.
D.
E.

VI.

Parties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Course of Dealing Between BVS and CDW.. . . . . . . . . . . . . . . . . . 7
SAN Project Design. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Contract Formation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Installation and Implementation. . . . . . . . . . . . . . . . . . . . . . . . . 13

CDW MOTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
A.

B.
C.

D.

Breach of Contract Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
What are the terms of the contract?. . . . . . . . . . . . . . . . . .
a.
Are the Terms and Conditions part of the contract?. . .
i.
Parties’ arguments. . . . . . . . . . . . . . . . . . . .
ii.
Applicable law. . . . . . . . . . . . . . . . . . . . . . .
iii.
Application. . . . . . . . . . . . . . . . . . . . . . . . .
b.
Are oral promises part of the contract?.. . . . . . . . . . .
i.
Parties’ arguments. . . . . . . . . . . . . . . . . . . .
ii.
Applicable law. . . . . . . . . . . . . . . . . . . . . . .
iii.
Application. . . . . . . . . . . . . . . . . . . . . . . . .
2.
Did CDW breach the contract?. . . . . . . . . . . . . . . . . . . . .
Unjust Enrichment Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Breach of Warranty Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
Parties’ arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fraud and Fraudulent Nondisclosure Claims. . . . . . . . . . . . . . . .
1.
Parties’ arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
Applicable law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
a.
Effect of integration clause. . . . . . . . . . . . . . . . . . .
b.
Fraud pleading requirements. . . . . . . . . . . . . . . . . .
3.
Fraud claim.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
a.
Timing of installation and implementation. . . . . . . . .
b.
CDW’s technical competency. . . . . . . . . . . . . . . . . .
c.
Replication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d.
World-class solution. . . . . . . . . . . . . . . . . . . . . . . .
4.
Fraudulent nondisclosure claim.. . . . . . . . . . . . . . . . . . . .
a.
Applicable law.. . . . . . . . . . . . . . . . . . . . . . . . . . .
b.
Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i.
No-return policy. . . . . . . . . . . . . . . . . . . . . .
ii.
Lack of technical aptitude.. . . . . . . . . . . . . . .

2

15
16
16
16
17
20
22
22
22
24
26
27
29
29
29
32
32
32
32
33
35
35
36
37
37
39
39
40
40
41

VII.

REMAINING MOTIONS FOR SUMMARY JUDGMENT. . . . . . . . . . . . 41

VIII. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
I. INTRODUCTION
The matters before the court are Defendant CDW Direct, LLC’s (“CDW”) “Motion
for Summary Judgment” (“CDW Motion”) (docket no. 70), Third-Party Defendant Arrow
Electronics, Inc.’s (“Arrow”) “Motion for Summary Judgment” (“Arrow Motion”)
(docket no. 66), Third-Party Defendant Net App, Inc.’s. (“Net App”) “Motion for
Summary Judgment” (“Net App Motion”) (docket no. 67) and Third-Party Defendant
TSSLink, Inc.’s (“TSSLink”) “Motion for Summary Judgment” (“TSSLink Motion”)
(docket no. 68).
II. PROCEDURAL HISTORY
On July 19, 2011, BVS, Inc. (“BVS”) filed a Complaint (docket no. 2) against
CDW, Arrow and TSSLink, alleging breach of contract and unjust enrichment. On
February 13, 2012, BVS moved the court to dismiss the claims against Arrow and
TSSLink. See Motion to Dismiss (docket no. 27) at 2. On March 2, 2012, the court
dismissed Arrow and TSSLink from the instant action without prejudice. See March 2,
2012 Order (docket no. 31) at 1.
On April 16, 2012, BVS filed an Amended Complaint (docket no. 38) against
CDW. In the Amended Complaint, BVS alleges breach of contract (Count I), unjust
enrichment (Count II), breach of express warranty (Count III), breach of implied warranty
of merchantability (Count IV), breach of implied warranty of fitness for a particular
purpose (Count V), fraud (Count VI) and fraudulent nondisclosure (Count VII)1 against
CDW.

1

The Amended Complaint erroneously marks the fraudulent nondisclosure claim
as a second Count VI. Thus, the court will refer to the fraudulent nondisclosure claim as
Count VII.
3

On April 17, 2012, CDW filed a Third-Party Complaint (docket no. 41) against Net
App, Arrow and TSSLink. In the Third-Party Complaint, CDW alleges that Net App,
Arrow and TSSLink are liable to CDW for contribution and indemnity if CDW is found
liable to BVS (Count I), Net App is liable for contractual indemnity if CDW is found liable
to BVS (Count II), Arrow is liable for contractual indemnity if CDW is found liable to
BVS (Count III), Arrow breached its contract with CDW (Count IV) and TSSLink
breached its contract with Arrow, which CDW can enforce as a third-party beneficiary of
the contract (Count V).
On May 9, 2012, CDW filed an Answer (docket no. 45) to the Amended
Complaint, denying BVS’s claims and asserting affirmative defenses. On June 25, 2012,
Arrow filed an Answer (docket no. 50) to the Third-Party Complaint, denying CDW’s
claims. On that same date, Net App filed an Answer (docket no. 49) to the Third-Party
Complaint, denying CDW’s claims, asserting affirmative defenses and asserting a
counterclaim against CDW for attorneys’ fees and expenses. Also on that same date,
TSSLink filed an Answer (docket no. 48) to the Third-Party Complaint, denying CDW’s
claims and asserting affirmative defenses.
A. Arrow Motion
On December 13, 2012, Arrow filed the Arrow Motion. On January 7, 2013,
CDW filed a Resistance (docket no. 77) to the Arrow Motion. On January 14, 2013,
Arrow filed a Reply (docket no. 89) to CDW’s Resistance to the Arrow Motion. The
Arrow Motion is fully submitted and ready for decision.
B. CDW Motion
On December 14, 2012, CDW filed the CDW Motion. On January 8, 2013, BVS
filed a Resistance (docket no. 84) to the CDW Motion. On January 17, 2013, CDW filed
a Response (docket no. 92) to BVS’s Statement of Additional Material Facts (docket no.
84-1). On January 18, 2013, CDW filed a Reply (docket no. 94) to BVS’s Resistance to

4

the CDW Motion. In the CDW Motion, CDW requests the opportunity to present oral
argument. The court finds that oral argument is unnecessary. The CDW Motion is fully
submitted and ready for decision.
C. Net App Motion
On December 14, 2012, Net App filed the Net App Motion. On January 7, 2013,
BVS filed a Response (docket no. 75) to Net App’s Statement of Undisputed Material
Facts (docket no. 67-2). On that same date, CDW filed a Resistance (docket no. 76) to
the Net App Motion. On January 14, 2013, Net App filed a Reply (docket no. 87) to
CDW’s Resistance to the Net App Motion. The Net App Motion is fully submitted and
ready for decision.
D. TSSLink Motion
On December 14, 2012, TSSLink filed the TSSLink Motion. On January 7, 2013,
CDW filed a Resistance (docket no. 78) to the TSSLink Motion. On January 14, 2013,
TSSLink filed a Reply (docket no. 90) to CDW’s Resistance to the TSSLink Motion. In
the TSSLink Motion, TSSLink requests the opportunity to present oral argument. The
court finds that oral argument is unnecessary. The TSSLink Motion is fully submitted and
ready for decision.
III. SUBJECT MATTER JURISDICTION
The court has diversity jurisdiction over this case because complete diversity exists
between the parties and the amount in controversy exceeds $75,000. See 28 U.S.C.
§ 1332 (“The district courts shall have original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs,
and is . . . between citizens of different States . . . .”).
IV. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

5

Fed. R. Civ. P. 56(a). “A dispute is genuine if the evidence is such that it could cause a
reasonable jury to return a verdict for either party; a fact is material if its resolution affects
the outcome of the case.” Amini v. City of Minneapolis, 643 F.3d 1068, 1074 (8th Cir.
2011) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 252 (1986)), cert.
denied, 132 S. Ct. 1144 (2012). “[S]elf-serving allegations and denials are insufficient to
create a genuine issue of material fact.” Anuforo v. Comm’r, 614 F.3d 799, 807 (8th Cir.
2010).

“To survive a motion for summary judgment, the nonmoving party must

substantiate [its] allegations with sufficient probative evidence [that] would permit a finding
in [its] favor based on more than mere speculation, conjecture, or fantasy.” Barber v. C1
Truck Driver Training, LLC, 656 F.3d 782, 801 (8th Cir. 2011) (second alteration in
original) (quoting Putman v. Unity Health Sys., 348 F.3d 732, 733-34 (8th Cir. 2003))
(internal quotation marks omitted). The court must view the record in the light most
favorable to the nonmoving party and afford it all reasonable inferences. See Schmidt v.
Des Moines Pub. Sch., 655 F.3d 811, 819 (8th Cir. 2011).
V. RELEVANT FACTUAL BACKGROUND
Viewing the evidence in the light most favorable to the nonmoving parties and
affording them all reasonable inferences, the uncontested material facts are as follows.
A. Parties
BVS is an Iowa corporation with its principal place of business in Cedar Rapids,
Iowa. BVS provides on-line training to banks and credit unions. BVS provides its training
services over the internet through the BVS computer system. BVS’s main computer
system is located in Cedar Rapids, Iowa. BVS also has a disaster recovery system in
Omaha, Nebraska. Roy Karon owns BVS. At times material to the instant action, Gary
Praegitzer was the BVS information technology (“IT”) manager and Sean Reinhard
worked in the BVS IT department.
CDW is an Illinois limited liability company with its principal place of business in

6

Vernon Hills, Illinois. CDW is a reseller of technology products and services. CDW sells
products and services nationally through an internet-based retail business. CDW does not
manufacture technology products. At times material to the instant action, Amer Harb was
an account manager for CDW and was assigned to the BVS account. Samantha Aljets was
a project coordinator for CDW.
Net App is a Delaware corporation with its principal place of business in Sunnyvale,
California. Net App manufactures and sells technology products and services nationally.
At times material to the instant action, Ben Knorr was a sales engineer with Net App and
Michelle Schmidt was a customer service representative.
Arrow is a New York corporation with its principal place of business in Melville,
New York. Arrow sells components, services and solutions to resellers. Arrow is
authorized to sell and provide services related to Net App technology products. At times
material to the instant action, Cynthia Clark was a project manager with Arrow.
TSSLink is a California corporation with its headquarters in Sunnyvale, California.
TSSLink provides software implementation services and hardware services. TSSLink is
authorized to provide services related to Net App technology products. At times material
to the instant action, Matt Romo was a professional services engineer responsible for
performing software-based implementations of Net App software as well as hardwarebased installations of Net App hardware.
B. Course of Dealing Between BVS and CDW
Prior to the transaction at issue in the instant case, BVS had ordered products and
services from CDW on numerous occasions. BVS had an account with CDW to make
online purchases since at least 2006. BVS authorized Reinhard and Praegitzer to purchase
items for BVS. Reinhard and Praegitzer purchased items on behalf of BVS from CDW
in three different ways: (1) by placing online orders; (2) by requesting a quote from Harb
for a discounted price on an item and then purchasing the item at that price online; and (3)

7

by requesting a quote from Harb and then notifying Harb via telephone or email that BVS
would like to purchase the item at the quoted price, at which point a CDW employee
would access the BVS account and place the order. After BVS placed an order on the
CDW ordering system, the system sent a confirmation to BVS.
Every order confirmation, shipping confirmation, invoice and CDW packing list
referred to the CDW Terms and Policies or Terms and Conditions. Between 2007 and
2010, BVS received 269 order confirmations, 363 shipping confirmations and 363 invoices
from CDW. Every invoice had the Terms and Conditions printed on the back. In
addition, every time BVS went to the CDW web site to place an order, BVS could have
seen a link to the Terms and Conditions that is included at the bottom of every CDW web
page. The online Terms and Conditions contain all of the Terms and Conditions listed on
the back of the invoice, as well as additional terms.
C. SAN Project Design
In late 2010, BVS was looking to update several components of its computer
system, including its storage area network (“SAN”). BVS was unhappy with its existing
SAN from manufacturer ECM due to the poor customer service that BVS thought ECM
provided. BVS began looking for a new SAN solution that would store electronic data
from BVS’s Cedar Rapids location and regularly copy the data to BVS’s disaster recovery
site in Omaha.
At the time, Harb was the CDW account manager responsible for the BVS account.
BVS contacted CDW in the fall of 2010 to discuss options for a SAN solution. After
discussing options with Praegitzer, Harb set up a conference call with Knorr and Schmidt
of Net App to begin developing the SAN solution. Knorr and Schmidt also traveled to
Cedar Rapids to meet with BVS employees. Knorr was responsible for managing the Net
App hardware and software for the SAN solution, although he was not responsible for
managing the installation and implementation services.

8

Arrow was responsible for

providing installation and implementation services. CDW did not rely on its own solution
architects but instead relied on Net App and Arrow to architect and implement BVS’s SAN
solution.
D. Contract Formation
On December 3, 2010, CDW sent BVS a quote for hardware, software and services
for the SAN solution. On December 20, 2010, BVS sent CDW a purchase order for the
SAN solution, which incorporated the December 3, 2010 quote. The December 20, 2010
purchase order included hardware, software, training and support services, including six
“Arrow Provisioned Services.” Purchase Order, CDW’s Appendix (“CDW App’x”)
(docket nos. 70-2 through 70-8) at 209. The December 20, 2010 purchase order listed a
total purchase price of $225,000.33. Once CDW received the December 20, 2010
purchase order, Harb submitted the purchase order for credit approval. On December 21,
2010, CDW sent a purchase order to Arrow to fulfill the December 20, 2010 BVS
purchase order. On January 3, 2011, CDW sent BVS an invoice for the same hardware,
software and services listed in the December 3, 2010 quote and December 20, 2010
purchase order.2 The invoice listed a price of $225,000.24 for the Net App goods and
services and the Arrow provisioned services, plus an additional $733.67 in shipping costs,
amounting to a total purchase price of $225,733.91. Invoice, CDW App’x at 233-34.
On the back of the invoice, CDW listed several terms and conditions that were not
included in the December 3, 2010 quote or December 20, 2010 purchase order.
Specifically, the Terms and Conditions included the following:
THE TERMS AND CONDITIONS ARE LIMITED TO
THOSE CONTAINED HEREIN AND THE ADDITIONAL
TERMS AND CONDITIONS CONTAINED IN THE

2

The December 3, 2010 quote, December 20, 2010 purchase order and January 3,
2011 invoice did not include terms regarding project management by CDW or a project
completion date.
9

“TERMS AND CONDITIONS” LINK AT
WWW.CDW.COM INCORPORATED HEREIN BY
REFERENCE. ANY TERMS NOT DEFINED HEREIN
ARE DEFINED AT WWW.CDW.COM. . . .
....
Warranties
Customer understands that Seller is not the manufacturer of the
Products purchased by Customer hereunder and the only
warranties offered are those of the manufacturer, not Seller or
its Affiliates. In purchasing the Products, Customer is relying
on the manufacturer’s specifications only and is not relying on
any statements, specifications, photographs or other
illustrations representing the Products that may be provided by
Seller or its Affiliates. SELLER AND ITS AFFILIATES
HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES
EITHER EXPRESS OR IMPLIED, RELATED TO
PRODUCTS, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY
OF
TITLE,
ACCURACY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WARRANTY OF NONINFRINGEMENT, OR
ANY WARRANTY RELATING TO THIRD PARTY
SERVICES. THE DISCLAIMER CONTAINED IN THIS
PARAGRAPH DOES NOT AFFECT THE TERMS OF ANY
MANUFACTURER’S WARRANTY. Customer expressly
waives any claim that it may have against Seller or its
Affiliates based on any product liability or infringement or
alleged infringement of any patent, copyright, trade secret or
other intellectual property rights (each a “Claim”) with respect
to any Product and also waives any right to indemnification
from Seller or its Affiliates against any such Claim made
against Customer by a third party. Customer acknowledges
that no employee of Seller or its Affiliates is authorized to
make any representation or warranty on behalf of Seller or any
of its Affiliates that is not in this Agreement.
Seller warrants that the Services will be performed in a good
and workmanlike manner. Customer’s sole and exclusive
10

remedy and Seller’s entire liability with respect to this
warranty will be, at the sole option of Seller, to either (a) use
its reasonable commercial efforts to reperform or cause to be
reperformed any Services not in substantial compliance with
this warranty or (b) refund amounts paid by Customer related
to the portion of the Services not in substantial compliance;
provided, in each case, Customer notifies Seller in writing
within five (5) business days after performance of the
applicable Services. EXCEPT AS SET FORTH HEREIN OR
IN ANY STATEMENT OF WORK THAT EXPRESSLY
AMENDS SELLER’S WARRANTY, AND SUBJECT TO
APPLICABLE LAW, SELLER MAKES NO OTHER, AND
EXPRESSLY
DISCLAIMS
ALL
OTHER,
REPRESENTATIONS, WARRANTIES, CONDITIONS OR
COVENANTS, EITHER EXPRESS OR IMPLIED
(INCLUDING WITHOUT LIMITATION, ANY EXPRESS
OR IMPLIED WARRANTIES OR CONDITIONS OF
FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, DURABILITY, TITLE,
ACCURACY OR NON-INFRINGEMENT) ARISING OUT
OF OR RELATED TO THE PERFORMANCE OR NONPERFORMANCE OF THE SERVICES, INCLUDING BUT
NOT LIMITED TO ANY WARRANTY RELATING TO
THIRD PARTY SERVICES, ANY WARRANTY WITH
RESPECT TO THE PERFORMANCE OF ANY
HARDWARE OR SOFTWARE USED IN PERFORMING
SERVICES AND ANY WARRANTY CONCERNING THE
RESULTS TO BE OBTAINED FROM THE SERVICES.
THIS DISCLAIMER AND EXCLUSION SHALL APPLY
EVEN IF THE EXPRESS WARRANTY AND LIMITED
REMEDY SET FORTH HEREIN FAILS OF ITS
ESSENTIAL PURPOSE. CUSTOMER ACKNOWLEDGES
THAT NO REPRESENTATIVE OF SELLER OR OF ITS
AFFILIATES IS AUTHORIZED TO MAKE ANY
REPRESENTATION OR WARRANTY ON BEHALF OF
SELLER OR ANY OF ITS AFFILIATES THAT IS NOT IN
THIS AGREEMENT OR IN A STATEMENT OF WORK
EXPRESSLY AMENDING SELLER’S WARRANTY.

11

....
Limitation of Liability
UNDER
NO
CIRCUMSTANCES
AND
NOTWITHSTANDING THE FAILURE OF ESSENTIAL
PURPOSE OF ANY REMEDY SET FORTH HEREIN,
WILL SELLER, ITS AFFILIATES OR ITS OR THEIR
SUPPLIERS, SUBCONTRACTORS OR AGENTS BE
LIABLE FOR: (A) ANY INCIDENTAL, INDIRECT,
SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES
INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS,
BUSINESS, REVENUES OR SAVINGS, EVEN IF SELLER
HAS BEEN ADVISED OF THE POSSIBILITIES OF SUCH
DAMAGES OR IF SUCH DAMAGES ARE OTHERWISE
FORESEEABLE, IN EACH CASE, WHETHER A CLAIM
FOR ANY SUCH LIABILITY IS PREMISED UPON
BREACH OF CONTRACT, WARRANTY, NEGLIGENCE,
STRICT LIABILITY OR OTHER THEORY OF LIABILITY;
(B) ANY CLAIMS, DEMANDS OR ACTIONS AGAINST
CUSTOMER BY ANY THIRD PARTY; (C) ANY LOSS OR
CLAIM ARISING OUT OF OR IN CONNECTION WITH
CUSTOMER’S IMPLEMENTATION OF ANY
CONCLUSIONS OR RECOMMENDATIONS BY SELLER
OR ITS AFFILIATES BASED ON, RESULTING FROM,
ARISING OUT OF OR OTHERWISE RELATED TO THE
PRODUCTS OR SERVICES; OR (D) ANY
UNAVAILABILITY OF THE PRODUCT FOR USE OR
ANY LOST, DAMAGED OR CORRUPTED DATA OR
SOFTWARE. IN THE EVENT OF ANY LIABILITY
INCURRED BY SELLER OR ANY OF ITS AFFILIATES,
THE ENTIRE LIABILITY OF SELLER AND ITS
AFFILIATES FOR DAMAGES FROM ANY CAUSE
WHATSOEVER WILL NOT EXCEED THE LESSER OF:
(A) THE DOLLAR AMOUNT PAID BY CUSTOMER FOR
THE PRODUCT(S) GIVING RISE TO THE CLAIM OR
THE SPECIFIC SERVICES GIVING RISE TO THE CLAIM;
OR (B) $50,000.

12

Terms and Conditions, CDW App’x at 110.3 The CDW website contains additional terms
and conditions regarding warranties and limitation of liability. The website Terms and
Conditions state:
BY ACCEPTING DELIVERY OF THE PRODUCTS OR BY
ENGAGING THE CDW AFFILIATE IDENTIFIED ON THE
INVOICE, STATEMENT OF WORK OR OTHER CDW
DOCUMENTATION (“SELLER”) TO PROVIDE
PRODUCT OR PERFORM OR PROCURE ANY
SERVICES, CUSTOMER AGREES TO BE BOUND BY
AND ACCEPTS THESE TERMS AND CONDITIONS . . . .
Customer accepts these Terms and Conditions by making a
purchase from or placing an order with Seller or shopping on
Seller’s Website (the “Site”) or otherwise requesting products
(the “Products”) or engaging Seller to perform or procure any
Services . . . .
Terms and Conditions of Sales and Service Projects, CDW App’x at 111. Previous order
confirmations from CDW to BVS referred to the Terms and Conditions on the CDW
website, and the CDW website references the Terms and Conditions at the bottom of every
page.
On January 12, 2011, BVS sent CDW a check for $225,733.91, the price listed in
the invoice. The check referenced the January 3, 2011 invoice.
E. Installation and Implementation
BVS received the Net App goods listed in the invoice. Arrow hired TSSLink to
perform the Arrow provisioned services listed on the invoice, which included installation
and implementation of the SAN system. On February 7, 2011, a kickoff phone call was
held to discuss the work involved on the project, introduce the engineer and discuss

3

The Terms and Conditions are also listed on the back of the January 3, 2011
invoice at CDW App’x at 235. However, the copy provided at CDW App’x at 110 is a
clearer copy.
13

scheduling of the services. Aljets and Harb from CDW, Praegitzer from BVS, Romo from
TSSLink and Clark from Arrow participated in the kickoff phone call.
Arrow first proposed installing and implementing the system from January 27,
2011, to January 28, 2011. BVS declined to have the installation done during the proposed
dates, and the installation was rescheduled for March 1, 2011, to March 3, 2011. Arrow
also requested that Praegitzer fill out a configuration worksheet, which various Arrow and
CDW employees sent to Praegitzer at various times between January 27, 2011, and
February 23, 2011. Praegitzer completed the worksheet on February 25, 2011, although
he testified that he provided much of the information verbally and was waiting for access
to a database to acquire the remaining information.
Romo provided the Arrow provisioned services from March 1, 2011, through
March 3, 2011. On March 3, 2011, Romo filled out a project completion form, which
Praegitzer signed. The project completion form states that four services were complete
and a fifth service, the Snap Manager SQL migration service, was not complete. Romo
also performed the sixth Arrow provisioned service that was erroneously left off of his
project order documentation. Between March 3, 2011, and May 2011, Romo made
several attempts to complete the installation and implementation of the SAN system,
including several conference calls and web-based troubleshooting sessions.
On April 14, 2011, Praegitzer sent an email to Aljets at CDW, expressing his
frustration that the SAN system was not fully implemented and functioning properly. In
response, Knorr from Net App offered to send a Net App engineer to Cedar Rapids to get
the system working. BVS declined Knorr’s offer and, on May 19, 2011, BVS decided that
the system would not be able to function properly and attempted to send the hardware and
software back to CDW. However, CDW refused to take the system back.
VI. CDW MOTION
The court will consider each of BVS’s claims in the Amended Complaint and

14

determine whether summary judgment in favor of CDW is appropriate as to each claim.
A. Breach of Contract Claim
As an initial matter, the court shall apply Iowa law to the instant action.4 The
parties agree that BVS entered into a contract with CDW for the sale of goods and
services. The parties further agree that the contract was formed before CDW sent BVS
the invoice with the Terms and Conditions printed on the back. Thus, the parties agree
that the contract includes, at least, the December 20, 2010 purchase order. The court
agrees and finds that the purchase order represents BVS’s offer. Accepting the parties’
contention that the contract was formed before CDW sent BVS the invoice as true, the
court further finds that CDW accepted BVS’s offer when it sent a purchase order to Arrow
to fulfill BVS’s purchase order.
To establish a breach of contract claim, BVS must establish:
(1) the existence of a contract; (2) the terms and conditions of
the contract; (3) that it has performed all the terms and
conditions required under the contract; (4) the defendant’s
breach of the contract in some particular way; and (5) that
plaintiff has suffered some damages as a result of the breach.
Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998).
In this case, the parties agree that a contract exists but disagree as to the terms of the
contract and whether CDW failed to perform as required by the contract. Thus, the court

4

The court notes that the Terms and Conditions contain a choice-of-law provision,
which states that “these terms and conditions, . . . the services hereunder and any sale of
products hereunder will be governed by the laws of the State of Illinois, without regard to
conflicts of laws rules.” Terms and Conditions, CDW App’x at 110 (emphasis omitted).
However, in their briefs, both parties apply Iowa law. Therefore, because BVS and CDW
agree that the court should apply Iowa law in its analysis of the CDW Motion, the court
will apply Iowa law for the purposes of determining the existence of and interpreting the
contract between BVS and CDW. The court further notes that Iowa and Illinois have both
adopted the Uniform Commercial Code. See Iowa Code Chapter 554; Illinois Code
Chapter 810. Thus, relevant principles of contract law are the same in both jurisdictions.
15

will first address what the terms of the contract are and then turn to consider whether
CDW failed to perform any of the promises in the contract.
1.

What are the terms of the contract?

As noted above, the parties agree that the contract includes, at least, the December
20, 2010 purchase order. However, the parties disagree as to whether the Terms and
Conditions printed on the back of the January 3, 2011 invoice apply and whether the
contract includes any oral promises that CDW may have made. The court notes that the
December 3, 2010 quote, December 20, 2010 purchase order and January 3, 2011 invoice
provide the same list of items for CDW to deliver to BVS. However, the January 3, 2011
invoice also includes the Terms and Conditions printed on the back.
a.

Are the Terms and Conditions part of the contract?
i.

Parties’ arguments

CDW argues that the Terms and Conditions are part of the contract because: (1)
“they were part of the invoice price BVS paid in full”; and (2) “the parties had a course
of dealing that includes the Terms and Conditions.” Brief in Support of CDW Motion
(docket no. 72-1) at 23. In addition, CDW argues that the Terms and Conditions do not
“materially alter” the contract under Iowa Code section 554.2207(2)(b) and, therefore, the
Terms and Conditions are part of the contract.
In its Resistance to the CDW Motion, BVS argues that the Terms and Conditions
do not apply because CDW sent the Terms and Conditions after the parties had already
entered into the contract and, therefore, BVS did not accept them. In addition, BVS
argues that, “because the parties already had an agreement” when CDW sent the invoice
containing the Terms and Conditions, the Terms and Conditions are “proposals for
addition to the contract.”

Resistance to CDW Motion at 18 (citing Iowa Code

§ 554.2207(2)). According to BVS, these proposals materially alter the parties’ previous
contract under Iowa Code section 554.2207(2)(b) and, therefore, the Terms and Conditions
are not part of the contract.
16

ii.

Applicable law

The Iowa Supreme Court has held that, “[e]xcept when there is ambiguity, the
question of whether a written instrument . . . binds the parties in contract is a question of
law.” French v. Foods, Inc., 495 N.W.2d 768, 770 (Iowa 1993). “Under Iowa law, the
cardinal rule of contract construction is that the intent of the parties controls.” DeJong v.
Sioux Ctr., Iowa, 168 F.3d 1115, 1119 (8th Cir. 1999).
A court can consider evidence of prior course of dealings when interpreting a
contract, even if the contract is complete and unambiguous. See Iowa Code § 554.2202.
Iowa Code section 554.2202 provides, in relevant part:
Terms with respect to which the confirmatory memoranda of
the parties agree or which are otherwise set forth in a writing
intended by the parties as a final expression of their agreement
with respect to such terms as are included therein may not be
contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement, but may be explained or
supplemented . . . by . . . course of dealing.
Iowa Code § 554.2202. Official comment 1 to Iowa Code section 554.2202 states that this
section “definitely rejects . . . [t]he requirement that a condition precedent to the
admissibility of [course of dealing evidence] is an original determination by the court that
the language used is ambiguous.” Iowa Code § 554.2202, cmt. 1; accord C-Thru
Container Corp. v. Midland Mfg. Co., 533 N.W.2d 542, 545 (Iowa 1995) (holding that,
even though a contract stated that it “constitutes the entire agreement between [the parties]
and supersedes any and all prior agreements between them,” it may nonetheless be
“explained or supplemented by parol evidence” pursuant to U.C.C. section 2-202). In
addition, official comment 2 to Iowa Code section 554.2202 provides that “evidence of
course of dealing” is admissible to
supplement the terms of any writing stating the agreement of
the parties in order that the true understanding of the parties as
to the agreement may be reached. Such writings are to be read
on the assumption that the course of prior dealings between the
17

parties . . . w[as] taken for granted when the document was
phrased. Unless carefully negated they have become an
element of the meaning of the words used.
Iowa Code § 554.2202, cmt. 2. “Course of dealing” is defined as “a sequence of conduct
concerning previous transactions between the parties to a particular transaction that is fairly
to be regarded as establishing a common basis of understanding for interpreting their
expressions and other conduct.” Iowa Code § 554.1303(2).
Iowa Code section 554.2207 provides:
1. A definite and seasonable expression of acceptance or a
written confirmation which is sent within a reasonable time
operates as an acceptance even though it states terms additional
to or different from those offered or agreed upon, unless
acceptance is expressly made conditional on assent to the
additional or different terms.
2. The additional terms are to be construed as proposals for
addition to the contract. Between merchants such terms
become part of the contract unless:
...
b. they materially alter it.
Iowa Code § 554.2207. Whether an additional term “materially alter[s]” the terms of the
parties’ contract depends on whether the term “result[s] in surprise or hardship if
incorporated without express awareness by the other party.” Iowa Code § 554.2207, cmt.
4; see also All-Iowa Contracting Co. v. Linear Dynamics, Inc., 296 F. Supp. 2d 969, 979
(N.D. Iowa 2003) (holding that an additional term did not materially alter the contract
because the plaintiff “cannot profess to be surprised” by an additional term in an invoice
when the price quotation contained the identical term).
In Sudenga Industries, Inc. v. Fulton Performance Products, Inc., 894 F. Supp.
1235 (N.D. Iowa 1995), the court addressed a contract dispute after the defendant sold
allegedly defective goods to the plaintiff. After the plaintiff placed an order with the
18

defendant, the defendant shipped the goods and subsequently sent an invoice. Id. at 1236.
The court held that the terms on the back of the defendant’s invoice, which the defendant
sent after the parties reached an agreement and qualified as a “written confirmation,” were
enforceable because the “invoices were issued relatively contemporaneously with the
shipment of goods, . . . the parties’ dealings involved identical invoice provisions
throughout the parties’ relationship, . . . additional terms [we]re found in the invoices that
[we]re not in the purchase orders, and [the plaintiff] never exercised any opportunity to
delete these additional terms.” Id. at 1238. The court further noted that “courts have
quite consistently found that invoices sent contemporaneously with goods can qualify as
written confirmations under [U.C.C. section] 2-207.” Id. at 1238 n.3.
In All-Iowa Contracting Co., this court addressed a contract dispute after the
plaintiff ordered a product from the defendant. All-Iowa Contracting Co., 296 F. Supp.
2d at 973. Five days after the plaintiff placed the order, the plaintiff picked up the product
from the defendant’s warehouse and signed a customer order. Id. Later, the defendant
sent an invoice to the plaintiff with terms and conditions on the back. Id. When a dispute
arose between the parties, this court was asked to determine whether the terms and
conditions on the back of the invoice that the defendant sent after the parties had reached
an agreement, including a warranty disclaimer, were part of the contract. This court held
that, even though warranty disclaimers normally “materially alter” a contract under
U.C.C. section 2-207,5 the plaintiff “failed to create a genuine issue of material fact with
regard to whether it was actually ‘surprised’ by the warranty disclaimer,” id. at 979,
because, prior to placing its order with the defendant, the plaintiff received a price
quotation from the defendant that stated that it is subject to the defendant’s terms and
conditions, id. 973 n.5. Thus, the court held that, under the circumstances, the warranty
disclaimer was enforceable because it did not materially alter the terms of the parties’

5

Iowa Code section 554.2207 is nearly identical to U.C.C. section 2-207.
19

contract under U.C.C. section 2-207(2)(b). Id. at 979.
The court also finds the United States District Court for the District of Colorado’s
analysis in Avedon Engineering, Inc. v. Seatex, 112 F. Supp. 2d 1090 (D. Colo. 2000) to
be persuasive. The District Court for the District of Colorado applied Colorado Revised
Statute section 4-2-207, which is nearly identical to Iowa Code section 554.2207, to
determine whether an arbitration clause, an additional term included in a written
confirmation, was part of the parties’ contract. In evaluating whether the arbitration clause
materially altered the contract, the court stated that “[a] prior course of dealing and the
number of written confirmations exchanged between the parties is important to evaluate.”
Id. at 1094 (stating that “[s]urprise has both an objective and subjective element” and
occurs “‘when a term is included without the express awareness of the other party’”
(quoting Am. Ins. Co. v. El Paso Pipe & Supply Co., 978 F.2d 1185, 1191 (10th Cir.
1992))). The District Court for the District of Colorado held that because the boilerplate
language in the additional terms was the same language that had been included in prior
written confirmations that the plaintiff received from the defendant, there was no surprise
and the terms were enforceable. Id.
iii.

Application

The parties agree that Iowa Code section 554.2207 governs whether the Terms and
Conditions apply to their contract. At the outset, the court finds that the invoice that CDW
sent BVS qualifies as a “written confirmation” under Iowa Code section 554.2207(1). See
Iowa Code § 554.2207(1); Sudenga Indus., Inc., 894 F. Supp. at 1238 n.3 (noting that
courts have consistently found that invoices sent contemporaneously with goods can qualify
as written confirmations under U.C.C. section 2-207). In addition, the court finds that it
is appropriate to supplement the parties’ agreement with course of dealing evidence. See
Iowa Code § 554.2202(1).
The Terms and Conditions provided on the back of the invoice that CDW sent BVS
form “part of the contract unless . . . they materially alter it.” Iowa Code § 554.2207(2).
20

Whether the Terms and Conditions materially alter the contract depends on whether the
terms would result in “surprise” to BVS.6 Iowa Code § 554.2207, cmt. 4. Prior to this
dispute, BVS and CDW entered into hundreds of transactions. Furthermore, prior to this
dispute, BVS received the Terms and Conditions from CDW hundreds of times. See Harb
Affidavit, CDW App’x at 245 (stating that every order confirmation, shipping
confirmation and invoice contained a reference to the CDW Terms and Policies or Terms
and Conditions, and that BVS received 269 order confirmations, 363 shipping
confirmations and 363 invoices from CDW since 2007). The parties’ course of dealing
makes it clear that the Terms and Conditions apply to any transaction or agreement that
the parties entered into. See Avedon Eng’g, Inc., 112 F. Supp. 2d at 1094 (stating that
prior course of dealing “is important to evaluate” in determining whether additional terms
materially alter the contract).

The court finds that, because BVS and CDW have

completed hundreds of transactions incorporating the Terms and Conditions, BVS has
failed to show that it was surprised by the Terms and Conditions.

See All-Iowa

Contracting Co., 296 F. Supp. 2d at 979 (holding that the plaintiff could not show surprise
when the plaintiff had received the additional terms from the defendant prior to the
agreement); Avedon Eng’g, Inc., 112 F. Supp. 2d at 1094 (holding that additional terms
did not materially alter the parties’ contract because the parties had exchanged the terms
numerous times prior to the transaction at issue and, therefore, there was no surprise);
Sudenga Indus., Inc., 894 F. Supp. at 1238 (holding that the terms on the back of an
invoice sent after the parties entered into a contract were enforceable because the “invoices
were issued relatively contemporaneously with the shipment of goods, . . . the parties’
6

The court notes that BVS acknowledged the invoice and did not dispute the Terms
and Conditions. The purchase price listed in the December 20, 2010 purchase order is
$225,000.33, while the purchase price listed in the invoice is $225,000.24 plus $733.67
in shipping, totaling $225,733.91. BVS paid CDW $225,733.91, the price listed in the
invoice, on January 12, 2011. See Check, CDW App’x at 106. The check referenced the
January 3, 2011 invoice.
21

dealings involved identical invoice provisions throughout the parties’ relationship, . . .
additional terms [we]re found in the invoices that [we]re not in the purchase orders, and
[the plaintiff] never exercised any opportunity to delete these additional terms”).
Therefore, the court finds that the January 3, 2011 invoice and the Terms and
Conditions printed on the back are part of the contract.
b.

Are oral promises part of the contract?
i.

Parties’ arguments

CDW argues that oral promises are not part of the contract because “the plain
language of the contract excluded extrinsic and parol terms.” CDW Motion at 2. BVS
argues that the terms of the contract include oral promises that it alleges CDW’s sales
representatives made during the course of negotiating the purchase of the SAN solution,
including oral promises regarding “the very nature of the goods [and] services sold under
the purchase order.” Resistance to CDW Motion at 12. Specifically, BVS alleges that
CDW breached its oral promise to provide a “complete solution.” Id. at 13, 22.
ii.

Applicable law

Under Iowa law, “when an oral agreement precedes a written agreement on the
topic, ordinarily it will be found the oral discussion merged into the written agreement.”
Commercial Trust & Sav. Bank of Storm Lake v. Toy Nat’l Bank of Sioux City, 373
N.W.2d 521, 523 (Iowa Ct. App. 1985); see also Cemen Tech, Inc. v. Three D. Indus.,
LLC, 753 N.W.2d 1, 5-6 (Iowa 2008) (holding that the parties’ agreement was superseded
by a subsequent agreement that stated that it “comprises the entire agreement and
supersedes all prior understandings and representations (oral or written) between the
parties”); Starry v. Starry & Lynch, 234 N.W. 281, 284 (Iowa 1931) (holding that
“[s]tatements made in the course of negotiation were not contracts,” and such statements
were merged into the final written agreement). The “key question,” however, is the intent
of the parties. Commercial Trust & Sav. Bank of Storm Lake, 373 N.W.2d at 523.
“There must be an indication of intent that the second agreement replaces the first.” Id.;
22

see also S. Tex. Land Co. v. Sorensen, 202 N.W. 552, 553 (Iowa 1925) (finding that the
parties intended a subsequent written agreement to be the final expression when the parties
acted in compliance with the written terms).
“A fully integrated agreement is found where, based on the totality of the evidence,
the writing appears to be the final and complete expression of the agreement.” Horton v.
Uptown Partners, LP, No. 05-0982, 720 N.W.2d 192 (table), 2006 WL 1279044, at *5
(Iowa Ct. App. May 10, 2006) (citing Montgomery Props. Corp. v. Econ. Forms Corp.,
305 N.W.2d 470, 476 (Iowa 1981)).

“Determining whether an agreement is fully

integrated is a question of fact, to be determined from the totality of the evidence.” C&J
Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65, 85 (Iowa 2011). “When the parties adopt
a writing or writings as the final and complete expression of their agreement, the
agreement is fully integrated.” Id. “The presence of an integration clause is one factor
[the court] take[s] into account in determining whether an agreement is fully integrated.”
Id.
Iowa Code section 554.2202 states Iowa’s parol evidence rule, which provides that
terms to which the parties agree
or which are otherwise set forth in a writing intended by the
parties as a final expression of their agreement . . . may not be
contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement but may be explained or
supplemented . . . by evidence of consistent additional terms
unless the court finds the writing to have been intended also as
a complete and exclusive statement of the terms of the
agreement.
Iowa Code § 554.2202. The Iowa Supreme Court has held that the parol evidence rule
applies where a “contract contains an integration clause, where the parties were
sophisticated business persons represented by counsel and of equal bargaining strength, and
where terms of the alleged oral agreement reasonably would be expected to be included
in the . . . agreement.” Whalen v. Connelly, 545 N.W.2d 284, 291 (Iowa 1996)
23

(alteration in original) (quoting Montgomery Props. Corp., 305 N.W.2d at 476) (internal
quotation mark omitted). Under Iowa law, when a written agreement is fully integrated,
“the parol evidence rule prevents the receipt of any extrinsic evidence to contradict (or
even supplement) the terms of the written agreement.” Id. at 290 (citing Restatement
Second of Contracts § 213 (1981)); see also C&J Vantage Leasing Co., 795 N.W.2d at
85 (“When an agreement is fully integrated, the parol-evidence rule forbids the use of
extrinsic evidence introduced solely to vary, add to, or subtract from the agreement.”);
Levien Leasing Co. v. Dickey Co., 380 N.W.2d 748, 750 (Iowa Ct. App. 1985) (“A
contract with an integration clause typically represents the complete agreement of the
parties and any extrinsic evidence which varies, adds, or subtracts from its terms is barred
by the parol evidence rule.” (citing Kroblin v. RDR Motels, Inc., 347 N.W.2d 430, 433
(Iowa 1984))); Kroblin, 347 N.W.2d at 433 (“[T]he parol evidence rule excludes extrinsic
evidence which is solely offered for the purpose of varying, adding to, or subtracting from
a written agreement.”).
iii.

Application

As discussed above, the court finds that the Terms and Conditions are part of the
parties’ agreement. The Terms and Conditions include an integration clause, which
provides:
THE TERMS AND CONDITIONS ARE LIMITED TO
THOSE CONTAINED HEREIN AND THE ADDITIONAL
TERMS AND CONDITIONS CONTAINED IN THE
“TERMS AND CONDITIONS” LINK AT
WWW.CDW.COM INCORPORATED HEREIN BY
REFERENCE. ANY TERMS NOT DEFINED HEREIN
ARE DEFINED AT WWW.CDW.COM.
ANY
ADDITIONAL OR DIFFERENT TERMS OR CONDITIONS
IN ANY FORM DELIVERED BY YOU (“CUSTOMER”)
ARE HEREBY DEEMED TO BE MATERIAL
ALTERATIONS AND NOTICE OF OBJECTION TO THEM
AND REJECTION OF THEM IS HEREBY GIVEN.

24

BY ACCEPTING DELIVERY OF THE PRODUCTS OR BY
ENGAGING THE CDW AFFILIATE IDENTIFIED ON THE
INVOICE, STATEMENT OF WORK OR OTHER CDW
DOCUMENTATION (“SELLER”) TO PROVIDE
PRODUCT OR PERFORM OR PROCURE ANY
SERVICES, CUSTOMER AGREES TO BE BOUND BY
AND ACCEPTS THESE TERMS AND CONDITIONS
UNLESS CUSTOMER AND SELLER HAVE SIGNED A
SEPARATE AGREEMENT FOR THE PROVISION OF
PRODUCT OR PERFORMANCE OF SERVICES, IN
WHICH CASE THE SEPARATE AGREEMENT WILL
GOVERN.
Terms and Conditions, CDW App’x at 110.
The court finds that the Terms and Conditions are a “complete and exclusive
statement of the terms of the agreement” under Iowa Code section 554.2202, and,
therefore, the agreement is fully integrated. See C&J Vantage Leasing Co., 795 N.W.2d
at 85. The court reaches this conclusion because it finds that: (1) the parties intended the
invoice to represent the entire agreement because the Terms and Conditions printed on the
back of the invoice include an integration clause; (2) the parties acted in compliance with
the invoice when BVS paid CDW the price listed in the invoice rather than the price listed
in the purchase order, see S. Tex. Land Co., 202 N.W. at 553 (finding that the parties
intended a subsequent written agreement to be a final expression when the parties acted in
compliance with the written terms); and (3) the parties are sophisticated and of equal
bargaining strength, see Whalen, 545 N.W.2d at 291 (applying the parol evidence rule to
a contract with an integration clause and noting that the parties “were sophisticated
business persons . . . of equal bargaining strength” (quoting Montgomery Props. Corp.,
305 N.W.2d at 476)).7 Therefore, because the contract is a fully integrated agreement, the
7

The court notes that, although it finds that the invoice and accompanying Terms
and Conditions contain the exclusive set of the contract’s terms, the analysis would be the
same even if it were to find that the December 20, 2010 purchase order is also part of the
(continued...)
25

parol evidence rule applies and evidence of CDW’s alleged promise to provide BVS with
a “complete solution” is not part of the contract. See Iowa Code § 554.2202 (providing
that, if “the court finds the writing to have been intended . . . as a complete and exclusive
statement of the terms of the agreement,” the agreement cannot be supplemented “by
evidence of consistent additional terms”); see also Whalen, 545 N.W.2d at 291 (noting
that, under the parol evidence rule, a party cannot supplement a fully integrated agreement
with extrinsic evidence); Levien Leasing Co., 380 N.W.2d at 750 (“A contract with an
integration clause typically represents the complete agreement of the parties and any
extrinsic evidence which varies, adds, or subtracts from its terms is barred by the parol
evidence rule.”).
2.

Did CDW breach the contract?

Having determined the terms of BVS and CDW’s contract, the court now turns to
consider whether there is a genuine issue of material fact as to whether CDW breached the
contract, as BVS alleges in Count I of the Amended Complaint. CDW argues that the
court should grant summary judgment in its favor with respect to Count I because “CDW
indisputably delivered the goods and services specified in the written contract.” CDW
Motion at 2. In its Resistance to the CDW Motion, BVS contends that “at least two
genuine fact disputes exist on the issue of performance: (1) whether CDW provided the
goods [and] services listed in the quotation and purchase order; and (2) whether CDW
failed to provide the goods [and] services it promised to provide.” Resistance to CDW
Motion at 20-21. BVS does not claim that CDW failed to deliver any of the specific items

7

(...continued)
contract because the terms of the December 20, 2010 purchase order do not contradict the
invoice and Terms and Conditions in any material way. Thus, although the December 20,
2010 purchase order represents the offer, it appears that the invoice absorbs the terms in
the December 20, 2010 purchase order.
26

listed in the invoice.8 Rather, BVS claims that CDW breached its oral promise to provide
a “complete solution.” Resistance to the CDW Motion at 13, 22.
BVS identifies no specific good or service listed in the invoice that CDW failed to
provide or perform. Rather, BVS’s arguments appear to center on CDW’s alleged failure
to provide a “complete solution” and “to have the SAN operational no later than February
2011.” Id. at 21-22. Neither of those alleged promises are included in the contract.
Thus, because BVS does not allege that CDW failed to provide any of the specific goods
identified in the contract or that CDW failed to perform any of the specific services
identified in the contract, the court finds that there is no genuine issue of material fact as
to whether CDW breached the contract. Accordingly, the court shall grant the CDW
Motion to the extent it requests that the court grant summary judgment in CDW’s favor
on Count I.
B. Unjust Enrichment Claim
In Count II of the Amended Complaint, BVS alleges that “CDW will be unjustly
enriched unless it is ordered to return the full payment to BVS and otherwise compensate
BVS for its losses.” Amended Complaint ¶ 26. Under Iowa law, “[t]he requirements of
proof [for an unjust enrichment claim] are neither technical nor complicated. ‘[I]t is
essential merely to prove that a defendant has received money which in equity and good
conscience belongs to plaintiff.’” Iconco v. Jensen Constr. Co., 622 F.2d 1291, 1295 (8th
Cir. 1980) (third alteration in original) (quoting In re Estate of Stratman, 1 N.W.2d 636,
642 (Iowa 1942)).
To recover on the basis of unjust enrichment, [the plaintiff]
must show: (1) it conferred a benefit upon the [defendant] to
8

The court notes that the items listed in the December 20, 2010 purchase order are
identical to those listed in the invoice. The court further notes that BVS makes a general
assertion that CDW failed to provide the goods and services listed in the December 20,
2010 purchase order but does not identify anything specific in the December 20, 2010
purchase order that CDW failed to deliver.
27

its own detriment, (2) the [defendant] had an appreciation of
receiving the benefit, (3) the [defendant] accepted and retained
the benefit under circumstances making it inequitable for there
to be no return payment for its value, and (4) there is no at-law
remedy that can appropriately address the claim.
Iowa Waste Sys., Inc. v. Buchanan Cnty., 617 N.W.2d 23, 30 (Iowa Ct. App. 2000).
“Generally the existence of a contract precludes the application of the doctrine of unjust
enrichment.” Johnson v. Dodgen, 451 N.W.2d 168, 175 (Iowa 1990); see also Cy &
Charley’s Firestone, Inc. v. Running, 810 N.W.2d 25 (table), No. 11-0211, 2011 WL
6668039, at *6 (Iowa Ct. App. Dec. 21, 2011) (affirming the lower court’s dismissal of
the plaintiff’s unjust enrichment claim because a purchase agreement governed the parties’
dispute). But see Maasdam v. Estate of Maasdam, 24 N.W.2d 316, 320 (Iowa 1946)
(noting that a party may plead an implied contract claim such as unjust enrichment as an
alternative cause of action to an express contract claim).
At the outset, the court notes that the terms of the contract govern the underlying
dispute and, therefore, an unjust enrichment claim is not appropriate because any cause of
action that BVS has lies as a breach of contract claim. See Cy & Charley’s Firestone, Inc.,
2011 WL 6668039, at *6. Nonetheless, after considering the merits of this claim, the
court finds that the record supports a finding that BVS “conferred a benefit upon” CDW
and CDW “had an appreciation of receiving the benefit” because BVS paid CDW the
purchase price listed in the invoice. Iowa Waste Sys., Inc., 617 N.W.2d at 30. However,
the court finds that the record does not support a finding that CDW “accepted and retained
[BVS’s payment] under circumstances making it inequitable for there to be no return
payment for its value.” Id. As discussed above, CDW provided all goods and performed
all services listed in the invoice. Therefore, the court finds that BVS has failed to create
a genuine issue of material fact on its unjust enrichment claim and, therefore, the court
shall grant the CDW Motion to the extent it requests that the court grant summary
judgment in CDW’s favor on Count II.
28

C. Breach of Warranty Claims
1.

Parties’ arguments

Count III of the Amended Complaint alleges breach of express warranty. Count IV
of the Amended Complaint alleges breach of implied warranty of merchantability. Count
V of the Amended Complaint alleges breach of implied warranty of fitness for a particular
purpose. CDW argues that it cannot be liable under Counts III, IV and V because the
Terms and Conditions disclaim all express and implied warranties, CDW did not make any
express warranties and the Net App goods and services and the Arrow provisioned services
conformed to their respective warranties.
In its Resistance to the CDW Motion, BVS argues that “CDW breached warranties
relating to the SAN system, much in the same way it breached the overall contract.”
Resistance to CDW Motion at 24. BVS argues that CDW breached its express warranty
that “it would deliver, install, implement and configure the SAN [s]olution, including
training and knowledge transfer.” Id. BVS also argues that CDW breached the implied
warranty of merchantability for the same reasons CDW breached the contract. Finally,
BVS argues that CDW breached the implied warranty of fitness for a particular purpose
because CDW had reason to know of the particular purpose for BVS’s purchase of the
SAN solution and that “BVS was relying on CDW’s skill and judgment.” Id. at 26.
2.

Application

As discussed above, the court finds that the Terms and Conditions are part of the
contract. With respect to warranties, the Terms and Conditions provide:
Customer understands that Seller is not the manufacturer of the
Products purchased by Customer hereunder and the only
warranties offered are those of the manufacturer, not Seller or
its Affiliates. In purchasing the Products, Customer is relying
on the manufacturer’s specifications only and is not relying on
any statements, specifications, photographs or other
illustrations representing the Products that may be provided by
Seller or its Affiliates. SELLER AND ITS AFFILIATES
29

HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES
EITHER EXPRESS OR IMPLIED, RELATED TO
PRODUCTS, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY
OF
TITLE,
ACCURACY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WARRANTY OF NONINFRINGEMENT, OR
ANY WARRANTY RELATING TO THIRD PARTY
SERVICES. THE DISCLAIMER CONTAINED IN THIS
PARAGRAPH DOES NOT AFFECT THE TERMS OF ANY
MANUFACTURER’S WARRANTY. Customer expressly
waives any claim that it may have against Seller or its
Affiliates based on any product liability or infringement or
alleged infringement of any patent, copyright, trade secret or
other intellectual property rights (each a “Claim”) with respect
to any Product and also waives any right to indemnification
from Seller or its Affiliates against any such Claim made
against Customer by a third party. Customer acknowledges
that no employee of Seller or its Affiliates is authorized to
make any representation or warranty on behalf of Seller or any
of its Affiliates that is not in this Agreement.
Seller warrants that the Services will be performed in a good
and workmanlike manner. Customer’s sole and exclusive
remedy and Seller’s entire liability with respect to this
warranty will be, at the sole option of Seller, to either (a) use
its reasonable commercial efforts to reperform or cause to be
reperformed any Services not in substantial compliance with
this warranty or (b) refund amounts paid by Customer related
to the portion of the Services not in substantial compliance;
provided, in each case, Customer notifies Seller in writing
within five (5) business days after performance of the
applicable Services. EXCEPT AS SET FORTH HEREIN OR
IN ANY STATEMENT OF WORK THAT EXPRESSLY
AMENDS SELLER’S WARRANTY, AND SUBJECT TO
APPLICABLE LAW, SELLER MAKES NO OTHER, AND
EXPRESSLY DISCLAIMS ALL OTHER,
REPRESENTATIONS, WARRANTIES, CONDITIONS OR
COVENANTS, EITHER EXPRESS OR IMPLIED
(INCLUDING WITHOUT LIMITATION, ANY EXPRESS
OR IMPLIED WARRANTIES OR CONDITIONS OF
30

FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, DURABILITY, TITLE,
ACCURACY OR NON-INFRINGEMENT) ARISING OUT
OF OR RELATED TO THE PERFORMANCE OR NONPERFORMANCE OF THE SERVICES, INCLUDING BUT
NOT LIMITED TO ANY WARRANTY RELATING TO
THIRD PARTY SERVICES, ANY WARRANTY WITH
RESPECT TO THE PERFORMANCE OF ANY
HARDWARE OR SOFTWARE USED IN PERFORMING
SERVICES AND ANY WARRANTY CONCERNING THE
RESULTS TO BE OBTAINED FROM THE SERVICES.
THIS DISCLAIMER AND EXCLUSION SHALL APPLY
EVEN IF THE EXPRESS WARRANTY AND LIMITED
REMEDY SET FORTH HEREIN FAILS OF ITS
ESSENTIAL PURPOSE. CUSTOMER ACKNOWLEDGES
THAT NO REPRESENTATIVE OF SELLER OR OF ITS
AFFILIATES IS AUTHORIZED TO MAKE ANY
REPRESENTATION OR WARRANTY ON BEHALF OF
SELLER OR ANY OF ITS AFFILIATES THAT IS NOT IN
THIS AGREEMENT OR IN A STATEMENT OF WORK
EXPRESSLY AMENDING SELLER’S WARRANTY.
Terms and Conditions, CDW App’x at 110.
The court finds its holding in All-Iowa Contracting Co. to be persuasive on this
issue. See All-Iowa Contracting Co., 296 F. Supp. 2d at 978-79. In All-Iowa Contracting
Co., this court held that the plaintiff’s breach of warranty claims were barred because the
contract included terms and conditions that the defendant sent after the parties entered into
the contract and the terms and conditions barred the breach of warranty claims. Id. The
court enforced the warranty disclaimer in the terms and conditions and dismissed the
plaintiff’s breach of warranty claims. Id. at 979.
As discussed above, the court finds that the Terms and Conditions are part of the
contract between BVS and CDW. The court further finds that the warranties provision of
the Terms and Conditions is enforceable. Because CDW disclaimed all warranties in the
Terms and Conditions, the court finds that BVS’s breach of warranty claims are barred.

31

See id. Accordingly, the court shall grant the CDW Motion to the extent it requests that
the court grant summary judgment in CDW’s favor on Counts III, IV and V.
D. Fraud and Fraudulent Nondisclosure Claims
1.

Parties’ arguments

Count VI of the Amended Complaint alleges fraud because CDW “knowingly or
recklessly” made the following false representations to BVS: (1) that CDW would
“timely” furnish the SAN solution; (2) “[t]hat CDW had the skill, expertise and knowledge
. . . to furnish, install and configure a fully functional SAN [s]olution”; (3) “[t]hat the
SAN [s]olution provided could perform replication in the manner BVS requested”; and (4)
“[t]hat CDW would provide a world class solution that met BVS’[s] needs.” Amended
Complaint ¶ 49. Count VII of the Amended Complaint alleges fraudulent nondisclosure
because “CDW knowingly failed to disclose” two material facts: (1) its no-return policy;
and (2) its lack of technical aptitude. Id. ¶¶ 56, 57.
CDW argues that the court should grant summary judgment in its favor with respect
to the fraud and fraudulent nondisclosure claims because “there is insufficient evidence to
support any element of fraud based on BVS admissions.” CDW Motion at 2. In its
Resistance to the CDW Motion, BVS argues that the Amended Complaint sufficiently
alleges that CDW made fraudulent representations and fraudulent nondisclosures.
Additionally, BVS alleges that summary judgment is not appropriate because genuine
issues of material fact exist.
2.

Applicable law
a.

Effect of integration clause

As an initial matter, the court notes that, “[a]lthough the [Iowa Supreme Court]
ha[s] allowed fraudulent inducement claims to proceed despite an integration clause in a
contract, [it] has done so only with regard to misrepresentations concerning facts or
circumstances not included in the written contract.” Whalen, 545 N.W.2d at 294 (refusing
to allow the plaintiff to proceed with a fraudulent inducement claim where there was an
32

integration clause in the contract because the alleged representation involved matters
specifically addressed in the contract). However, “[w]hen a ‘fine-print, boiler-plate’
integration clause ‘was not intended to encompass’ the fraudulent representations or
omissions at issue, then the integration clause does not bar the fraud claims.” McIrvin v.
W. Side Unlimited Corp., No. 08-CV-127-LRR, 2010 WL 605651, at *10 (N.D. Iowa
Feb. 18, 2010) (quoting Robinson v. Perpetual Servs. Co., 412 N.W.2d 562, 567 (Iowa
1987)).

Accordingly, if the terms of the contract encompass the alleged

misrepresentations, evidence of the alleged misrepresentations is not permissible.
The court will assume, without deciding, that the contract does not fully address any
of the misrepresentations that BVS alleges in the Amended Complaint. Although it is
arguable that the fraud claims are barred because the alleged representations and omissions
involve matters specifically addressed in the invoice, CDW opted to argue that Rule 9(b)
and BVS’s own admissions foreclose the fraud claims. Rather than address the impact of
the integration clause on the fraud claims, the court deems it appropriate to address the
fraud claims on Rule 9(b) grounds and on the merits. Therefore, the court will consider
extrinsic evidence with respect to BVS’s fraud claims.
b.

Fraud pleading requirements

Federal Rule of Civil Procedure 9(b) requires a party alleging fraud to “state with
particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b). That is, the
plaintiff must plead “the who, what, when, where, and how.” Summerhill v. Terminix,
Inc., 637 F.3d 877, 880 (8th Cir. 2011). “‘[C]onclusory allegations that a defendant’s
conduct was fraudulent and deceptive are not sufficient to satisfy the rule.’” Drobnak v.
Andersen Corp., 561 F.3d 778, 783 (8th Cir. 2009) (alteration in original) (quoting
Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736, 746 (8th Cir. 2002)); see also
Murr Plumbing, Inc. v. Scherer Bros. Fin. Servs. Co., 48 F.3d 1066, 1069 (8th Cir. 1995)
(upholding the district court’s decision to grant the defendant’s motion for summary
judgment on mail and wire fraud claims because the plaintiff “failed to allege the elements
33

of mail and wire fraud with the required particularity” under Rule 9(b)); Schultz v. Ability
Ins. Co., No. C11-1020, 2012 WL 5285777, at *15 (N.D. Iowa Oct. 25, 2012) (granting
the defendant’s motion for summary judgment on a fraud claim where the allegations in
the “complaint [were] vague and conclusory” and failed to meet the heightened pleading
standard under Rule 9(b)).
“In order to recover on a fraud action at law in [Iowa], ‘a plaintiff must establish
. . . the following elements by a preponderance of clear, satisfying and convincing
evidence: (1) representation, (2) falsity, (3) materiality, (4) scienter, (5) intent to deceive,
(6) reliance, and (7) resulting injury and damage.’” Ltd. Flying Club, Inc. v. Wood, 632
F.2d 51, 54 (8th Cir. 1980) (quoting B&B Asphalt Co. v. T.S. McShane Co., 242 N.W.2d
279, 284 (Iowa 1976)). “Scienter and intent to deceive are closely related and ‘are shown
not only when the speaker has actual knowledge of the falsity of his representation but also
when he speaks in reckless disregard of whether his representations are true or false.’”
Beeck v. Aquaslide ‘N’ Dive Corp., 350 N.W.2d 149, 155 (Iowa 1984) (quoting Grefe v.
Ross, 231 N.W.2d 863, 867 (Iowa 1975)); see also Ltd. Flying Club, Inc., 632 F.2d at 55
(stating that a plaintiff can prove scienter “by showing that false representations were made
‘in reckless disregard of their truth or falsity’” (quoting B&B Asphalt Co., 242 N.W.2d
at 284)). “An honest belief in the truth of one’s statements . . . does not preclude a
finding of fraud. When a defendant makes a misrepresentation recklessly, with careless
disregard for whether it is true or false, he may be liable for fraud.” Beeck v. Kapalis,
302 N.W.2d 90, 95 (Iowa 1981).
The Iowa Supreme Court has held:
A mere statement of an honest opinion, as distinguished from
an assertion of fact will not amount to fraud, even though such
opinion be incorrect.
When the statements become
representations of fact, or the expression of opinion is
insincere and made to deceive or mislead[,] they may be
treated as fraudulent. Whether such is their quality and
character is ordinarily a jury question.
34

Hoefer v. Wis. Educ. Ass’n Ins. Trust, 470 N.W.2d 336, 340 (Iowa 1991) (quoting Int’l
Milling Co. v. Gish, 137 N.W.2d 625, 631 (Iowa 1965)). “A statement of intent to
perform a future act is actionable only when spoken with the existing intention not to
perform.” City of McGregor v. Janett, 546 N.W.2d 616, 619 (Iowa 1996). “Mere failure
of future performance cannot alone prove deceit; otherwise every breach of contract would
give rise to an action for fraud.” Id.
3.

Fraud claim

In Count VI of the Amended Complaint, BVS asserts that CDW made four
fraudulent misrepresentations: (1) that CDW would “timely” furnish the SAN solution;
(2) “[t]hat CDW had the skill, expertise and knowledge . . . to furnish, install and
configure a fully functional SAN [s]olution”; (3) “[t]hat the SAN [s]olution provided could
perform replication in the manner BVS requested”; and (4) “[t]hat CDW would provide
a world class solution that met BVS’[s] needs.” Amended Complaint ¶ 49. The court
shall examine each alleged misrepresentation in turn to determine whether it meets the
Rule 9(b) standard and, assuming it does, whether a genuine issue of material fact exists.
a.

Timing of installation and implementation

CDW argues that there is insufficient evidence to support BVS’s claim that CDW
fraudulently misrepresented the time frame in which the SAN solution would be
implemented. To support this argument, CDW relies on Praegitzer’s deposition. In the
deposition, Praegitzer states that he does not “remember [Harb] giving [him] a particular
date” in response to counsel’s question of whether Harb said that the project would be
“installed and running in mid-February or January.” Praegitzer Deposition, CDW App’x
at 300. In its Resistance to the CDW Motion, BVS does not provide the court with any
evidence to show that Harb or any other CDW representative promised that the project
would be implemented by a particular date.
The court finds that the Amended Complaint does not identify the “who, what,

35

when, where, and how,” as is required under Rule 9(b), see Summerhill, 637 F.3d at 880,
and therefore, the allegation does not meet the heightened pleading standard under Rule
9(b). Further, the court finds that BVS has failed to establish a genuine issue of material
fact with respect to any of the elements of fraud on this claim and shall grant the CDW
Motion to the extent it requests summary judgment in CDW’s favor on this portion of
Count VI.
b.

CDW’s technical competency

CDW argues that BVS fails to specify a person, place or time with respect to its
claim that CDW misrepresented its technical competency and, moreover, provides “no
evidence that CDW . . . in fact lacked the ability to deliver the products and services.”
Reply to Resistance to CDW Motion at 4. Additionally, CDW correctly points out that
the contract identifies Arrow as the party providing the services and, therefore, BVS
should bring allegations regarding technical competency against Arrow. In making its
arguments, CDW relies, in part, on Praegitzer’s statements at his deposition. At the
deposition, counsel asked Praegitzer whether Harb “intended to deceive [BVS] into
purchasing [the SAN] by making false statements that [Harb] knew were false.”
Praegitzer Deposition, CDW App’x at 292. In response, Praegitzer responded, “No, I
don’t.” Id. Counsel then asked whether “anyone else from CDW ma[d]e any false
statements with the intent to deceive [BVS],” to which Praegitzer responded, “No. I can’t
say with the intent to deceive [BVS], no.” Id.
In its Resistance to the CDW Motion, BVS argues that there is a genuine issue of
material fact with respect to this claim because CDW, through Harb, “made
representations about its qualifications and experience to manage the SAN” solution and
“assured BVS that CDW had the requisite technical and project management skill to handle
this mission critical project.” Resistance to CDW Motion at 28. BVS further claims that
these statements are false because “Harb had never sold a NetApp solution before . . .
[and] CDW presented Harb and Aljets as technically capable of managing the project, but
36

they clearly were out of their depth.” Id. Finally, BVS argues that the elements of
scienter and intent to deceive are present because Harb “possessed reckless disregard for
the truth, or falsely stated or implied the representations were based on personal
knowledge or investigation.” Id. at 29.
First, the court finds that BVS’s claim fails to comply with the heightened pleading
requirement in Rule 9(b) because, in the Amended Complaint, BVS provides nothing more
than a bare allegation and does not identify the “who, what, when, where, and how,” as
is required under Rule 9(b). See Summerhill, 637 F.3d at 880. Second, even if BVS
satisfied the Rule 9(b) pleading requirement, summary judgment is appropriate because the
record provides no evidence that CDW did not have the skill to complete its obligations
under the contract or that Harb or any other CDW representative made any material
misrepresentations about CDW’s technical competency with “reckless disregard” as to the
statement’s truth. Ltd. Flying Club, Inc., 632 F.2d at 55. Therefore, the court shall grant
the CDW Motion to the extent it requests summary judgment in CDW’s favor on this
portion of Count VI.
c.

Replication

CDW argues that the court should grant summary judgment in its favor with respect
to this claim because BVS does not identify who made the representation or when and,
thus, the claim is insufficient under Rule 9(b). In its Resistance to the CDW Motion, BVS
provides no additional support for this claim. The court finds that the allegation contained
in the Amended Complaint is not sufficient under Rule 9(b), and, thus, the court shall
grant the CDW Motion to the extent it requests summary judgment in CDW’s favor on this
portion of Count VI. See Fed. R. Civ. P. 9(b); see Summerhill, 637 F.3d at 880.
d.

World-class solution

CDW argues that the court should grant summary judgment in its favor with respect
to this claim because, in his deposition, Praegitzer stated that Harb did not use the phrase
“turnkey solution” to describe the SAN solution and “admitted to his belief that CDW was
37

not attempting to deceive him.” Brief in Support of CDW Motion at 8-9; see also
Praegitzer Deposition, CDW App’x at 262, 292. In its Resistance to the CDW Motion,
BVS argues that Praegitzer’s “testimony is not dispositive” and that “turnkey” is not the
critical word because this fraud claim rests on CDW’s alleged use of the word “solution.”
Resistance to CDW Motion at 30.
The court finds that the Amended Complaint does not identify the “who, what,
when, where, and how,” as is required under Rule 9(b), see Summerhill, 637 F.3d at 880,
and therefore, the allegation does not meet the heightened pleading standard under Rule
9(b). The Amended Complaint alleges that CDW misrepresented that it would provide a
“world class solution.” However, BVS fails to allege who made this representation and
when. Amended Complaint ¶ 49.
Alternatively, summary judgment is appropriate because the fraud claim fails on the
merits. In its Resistance to the CDW Motion, BVS provides some clarity and alleges that
Harb stated that BVS would provide a “solution.” Resistance to CDW Motion at 30.
Assuming, arguendo, that BVS is claiming that Harb’s alleged statement that CDW would
provide a “solution” constitutes a fraudulent misrepresentation, the court finds that this
allegation is not sufficient to support a fraud claim. Praegitzer stated in his deposition that
he could not recall whether Harb referred to the SAN as a “total solution” and that he did
not believe that Harb or anyone else at CDW made false statements with the intent to
deceive. Praegitzer Deposition, CDW App’x at 262, 292. Thus, although BVS alleges
that Harb made the misstatement, BVS does not provide any evidence in support of the
bare allegation in the Amended Complaint. Further, even if Harb did promise that BVS
would provide a “solution,” such a statement only supports a fraud claim if Harb made it
“with the existing intention” not to provide a “solution.” City of McGregor, 546 N.W.2d
at 619 (“Mere failure of future performance cannot alone prove deceit . . . .”). BVS does
not provide any evidence to support a finding that Harb promised a “solution” with the
existing intention not to provide one.
38

Based on the foregoing, the court finds that BVS has failed to allege a genuine issue
of material fact with respect to this claim. Therefore, the court shall grant the CDW
Motion to the extent it requests summary judgment in CDW’s favor on this portion of
Count VI.
4.

Fraudulent nondisclosure claim
a.

Applicable law

Under Iowa law, a representation need not be an affirmative misstatement to
constitute fraud. “[T]he concealment of or failure to disclose a material fact can constitute
fraud.” Clark v. McDaniel, 546 N.W.2d 590, 592 (Iowa 1996). “For concealment to be
actionable, the representation must relate to a material matter known to the party . . .
which it is his legal duty to communicate to the other contracting party . . . .” Id.
(alteration in original) (quoting Sinnard v. Roach, 414 N.W.2d 100, 105 (Iowa 1987)).
Fraudulent nondisclosure may occur “when one with superior knowledge, dealing with
inexperienced persons who rely on him or her, purposely suppresses the truth respecting
a material fact involved in the transaction.” Kunkle Water & Electric, Inc. v. City of
Prescott, 347 N.W.2d 648, 653 (Iowa 1984). “The threshold question in [a fraudulent
nondisclosure] case is whether the defendant owes the plaintiff a duty of care.” Lee Cnty.
Mental Health Ctr., Inc. v. Lee Cnty. Bd. of Supervisors, No. 99-0864, 2000 WL
1288873, at *5 (Iowa Ct. App. Sept. 13, 2000). “Whether such a duty exists is always
a question of law for the court.” Id.
A plaintiff alleging fraudulent nondisclosure must plead and prove the following:
“(1) [t]he defendant . . . concealed material facts; (2) the plaintiff lacks knowledge of the
true facts; (3) the defendant intended the plaintiff to act upon such representations; and (4)
the plaintiff did in fact rely upon such representations to his prejudice.” Estate of
Anderson v. Iowa Dermatology Clinic, PLC, 819 N.W.2d 408, 415 (Iowa 2012) (quoting
Christy v. Miulli, 692 N.W.2d 694, 702 (Iowa 2005)). A plaintiff alleging fraudulent
concealment “must prove the defendant did some affirmative act to conceal the plaintiff’s
39

cause of action independent of and subsequent to the liability-producing conduct.” Christy,
692 N.W.2d at 702.
b.

Application

In Count VII, BVS alleges that CDW concealed two material facts: (1) its no-return
policy; and (2) its lack of technical aptitude. The court shall examine each claim in turn
to determine whether it satisfies the heightened Rule 9(b) standard, and, assuming it does,
whether a genuine issue of material fact exists.
i.

No-return policy

In the Amended Complaint, BVS alleges that CDW’s failure to disclose that “some
or all of the component parts for the SAN [s]olution were subject to a no-return policy”
gives rise to a fraudulent nondisclosure claim. Amended Complaint ¶ 56. CDW argues
that the court should grant summary judgment in its favor with respect to this claim
because it had no duty to disclose the information and there is no evidence that CDW acted
recklessly or with the intent to deceive. In addition, CDW claims that such information
is not material and that CDW could not have acted with reckless disregard with respect to
this information because the parties did not discuss CDW’s return policy in negotiations.
First, the court finds that the Amended Complaint does not identify the “who, what,
when, where, and how,” as is required under Rule 9(b), see Summerhill, 637 F.3d at 880,
and, therefore, the allegation does not meet the heightened pleading standard under Rule
9(b).
Alternatively, the court finds that BVS has failed to show that CDW “did some
affirmative act to conceal” its no-return policy. Christy, 692 N.W.2d at 702. BVS has
also failed to show that CDW “purposely suppress[ed] the truth” and that the no-return
policy was a “material fact involved in the transaction.” Kunkle Water & Electric, Inc.,
347 N.W.2d at 653. Therefore, because BVS has failed to demonstrate a genuine issue
of material fact with respect to this claim, the court shall grant the CDW Motion to the
extent it requests summary judgment in CDW’s favor on this portion of Count VII.
40

ii.

Lack of technical aptitude

In the Amended Complaint, BVS also alleges that CDW’s failure to disclose that
“the primary employees it assigned to sell the SAN [s]olution and coordinate the
installation and implementation lacked technical aptitude” amounts to a fraudulent
nondisclosure. Amended Complaint ¶ 57. CDW argues that the court should grant
summary judgment in its favor with respect to this claim because BVS had equal
information and had no right to rely “on the representations or nondisclosures of a
nontechnical sales representative and project coordinator.” Brief in Support of CDW
Motion at 16.
The court finds that the Amended Complaint does not identify the “who, what,
when, where, and how,” as is required under Rule 9(b), see Summerhill, 637 F.3d at 880,
and, therefore, the allegation does not meet the heightened pleading standard under Rule
9(b). Therefore, because BVS has failed to demonstrate a genuine issue of material fact
with respect to this claim, the court shall grant the CDW Motion to the extent it requests
summary judgment in CDW’s favor on this portion of Count VII.
VII. REMAINING MOTIONS FOR SUMMARY JUDGMENT
In CDW’s Third-Party Complaint against Arrow, Net App and TSSLink, CDW
“seeks contribution and indemnity from and against [Arrow, Net App and TSSLink] for
costs and any judgment that may be entered against CDW arising from the BVS
Complaint.” Third-Party Complaint ¶ 8. Each claim in the Third-Party Complaint seeks
damages in the event that the court holds CDW liable to BVS. Because the court grants
summary judgment in favor of CDW on each claim in the Amended Complaint, the court
finds that it need not address the Arrow Motion, the Net App Motion and the TSSLink
Motion. The Arrow Motion, the Net App Motion and the TSSLink Motion shall be denied
as moot.

41

VIII. CONCLUSION
In light of the foregoing, IT IS HEREBY ORDERED THAT:
(1) Defendant CDW Direct, LLC’s Motion for Summary Judgment (docket no. 70)
is GRANTED;
(2)

Third-Party Defendant Arrow Electronics, Inc.’s Motion for Summary

Judgment (docket no. 66) is DENIED AS MOOT;
(3) Third-Party Defendant Net App, Inc.’s Motion for Summary Judgment (docket
no. 67) is DENIED AS MOOT;
(4) Third-Party Defendant TSSLink, Inc.’s Motion for Summary Judgment (docket
no. 68) is DENIED AS MOOT;
(5) The Clerk of Court is DIRECTED to enter judgment in favor of Defendant
CDW, Inc. and against BVS, Inc.
DATED this 28th day of March, 2013.

42