Liberty Bay Credit Union v. Open Solutions, Inc.

Filing 26

Judge Richard G. Stearns: ELECTRONIC ORDER entered dismissing 18 Motion to Dismiss (RGS, law3)Defendant's motion to dismiss allowed; Counts III and IV are dismissed without prejudice.

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 11-CV-10189-RGS
LIBERTY BAY CREDIT UNION
v.
OPEN SOLUTIONS, INC.
MEMORANDUM AND ORDER
ON PARTIAL MOTION TO DISMISS
September 7, 2011
STEARNS, D.J.
Liberty Bay Credit Union (Liberty Bay), a Massachusetts chartered credit union,
hired I.A. Systems in February of 2007 to create a software interface that would allow
Liberty Bay to import client member information. When I.A. Systems merged with
Open Solutions, Inc. (Open Solutions) in October of 2007, Open Solutions, a Delaware
corporation with its principal place of business in Connecticut, became the successor
in interest to the contract.
Liberty Bay brought this suit against Open Solutions in February of 2011,
alleging breach of contract, breach of the implied covenant of good faith and fair
dealing, unjust enrichment, and violation of Mass. Gen. Laws ch. 93A, § 11. On
August 10, 2011, Open Solutions moved to dismiss the unjust enrichment and Chapter
93A claims. On August 24, 2011, Liberty Bay filed an opposition.

“A mere breach of contract does not constitute an unfair or deceptive trade
practice under [Chapter] 93A, see [Ahern v. Scholz, 85 F.3d 774, 798 (1st Cir.1996)],
unless it rises to the level of ‘commercial extortion’ or a similar degree of culpable
conduct, Anthony’s Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 474 (1991).”
Commercial Union Ins. Co. v. Seven Provinces Ins. Co., Ltd., 217 F.3d 33, 40 (2000).
It is clear from the face of the Complaint that Liberty Bay has alleged no facts that give
rise to the mendaciously unfair and deceptive conduct chapter 93A is meant to protect
against. See also Guiffrida v. High Country Investor, Inc., 73 Mass. App. Ct. 225, 238
(2008) (“[B]usinesses seeking relief under Section 11 are held to a stricter standard than
consumers in terms of what constitutes unfair or deceptive conduct.”).

To satisfy

the five elements of unjust enrichment, a plaintiff must show: “(1) an enrichment, (2) an
impoverishment, (3) a relation between the enrichment and the impoverishment, (4) the
absence of justification and (5) the absence of a remedy provided by law.” LaSalle
Nat’l Bank v. Perelman, 82 F. Supp. 2d 279, 294-295 (D. Del. 2000) (citing Jackson
Nat’l Life Ins. Co. v. Kennedy, 741 A.2d 377, 393 (Del. Ch.1999)). Where a contract
governs the parties’ relationship, the contract provides the measure of the plaintiff’s
right and no action for unjust enrichment lies. McKesson HBOC, Inc. v. New York State
Common Retirement Fund, Inc., 339 F.3d 1087, 1091 (9th Cir. 2003). This principle
is simply an extension of the fifth element of the doctrine, that where a plaintiff has an
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adequate remedy at law, a claim of unjust enrichment is unavailable. See id., at 1093
(Delaware law); Massachusetts v. Pace, 616 F. Supp. 815, 822 (D. Mass.1985)
(Garrity, J.) (federal common-law); Santagate v. Tower, 64 Mass. App. Ct. 324, 329
(2005). Liberty Bay has pled facts that give rise only to a standard breach of contract
action; therefore, Liberty Bay has a complete remedy at law and its unjust enrichment
claim is inaptly brought. 1
The court notes that the two claims at issue are wholly equitable in nature. If
discovery should uncover facts beyond those pled sufficient to support a remedy in
equity, it is open to Liberty Bay to petition the court accordingly. See Fed. R. Civ. P.
15(a)(2).
ORDER
For the foregoing reasons, Counts III and IV are dismissed without prejudice.
SO ORDERED.
/s/ Richard G. Stearns
1

Liberty Bay does not claim that it made any payments to Open Solutions
outside the contract. Liberty Bay claims only that Open Solutions improperly sent it
maintenance invoices after the contract was terminated; invoices that it does not allege
it ever paid. Compl. ¶¶ 15-18. Liberty Bay does not challenge the contract’s validity
at the time it paid Open Solutions the deposit and other upfront fees. Compl. ¶ 8-11.
Cf. Tolliver v. Christina School Dist., 564 F. Supp. 2d 312, 315 (D. Del. 2008) (“A
claim of unjust enrichment may survive a motion to dismiss, however, when the validity
of the contract is in doubt or uncertain.”).
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UNITED STATES DISTRICT JUDGE

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