Wildfire Credit Union v. Fiserv, Inc.

Filing 41

ORDER Granting 33 MOTION to Amend Counterclaim, To Join Party as Counter-Plaintiff, and Directing Filing of Amended Counterclaim. (Amended Counterclaim due by 10/9/2015). Signed by District Judge Thomas L. Ludington. (Sian, M)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
WILDFIRE CREDIT UNION,
Plaintiff,
v.

Case No. 14-cv-14359
Honorable Thomas L. Ludington

FISERV, INC.,
Defendant.
_______________________________________/
ORDER GRANTING MOTION TO AMEND COUNTERCLAIM TO JOIN PARTY AS
COUNTER-PLAINTIFF AND DIRECTING FILING OF AMENDED COUNTERCLAIM
On July 23, 2015, Defendant Fiserv, Inc. filed a motion to amend its counterclaim and
join Open Solutions, LLC as a counterclaim plaintiff. See Def.’s Mot. Amend, ECF No. 33.
Fiserv, Inc. argues that they should be permitted to join Open Solutions as a counter-plaintiff
because Open Solutions also has a cause of action against Plaintiff Wildfire Credit Union for
breach of contract. Joining Open Solutions to Fiserv’s counterclaim would avoid the burdens of
duplicative litigation. Wildfire opposes Fiserv’s motion arguing that amending its counterclaim
would be futile because the counterclaim does not state a claim on which relief may be granted.
See Pl.’s Resp. Br., ECF No. 35.
Wildfire filed a five-count complaint against Fiserv, Inc. on November 13, 2014. ECF
No. 1. Wildfire’s complaint sought a declaratory judgment in Count I and alleged in Counts IIIV that Fiserv committed various torts related to non-contractual representations that Fiserv did
not fulfill. In Count V, Wildfire alleged breach of contract. Fiserv moved to dismiss Counts I-IV
of Wildfire’s complaint because they were all premised on alleged non-contractual promises and
representations by Fiserv. See Partial Mot. Dismiss, ECF No. 9. According to Fiserv, the Master

Agreement between the parties, which Wildfire alleges that Fiserv breached in Count V, contains
an integration clause prohibiting Wildfire from claiming it relied on any representations or
promises not contained in the contract. Fiserv also moved to strike the jury demand that Wildfire
made in its complaint because the Master Agreement also contains a waiver of both parties’ right
to have a jury decide disputes arising under the Master Agreement. See Mot. Strike Jury
Demand, ECF No. 11. On August 10, 2015, this Court issued an Opinion and Order dismissing
all non-contractual claims from Wildfire’s complaint and striking Wildfire’s jury demand. See
August 10, 2015 Op. & Order, ECF No. 37.
I.
Wildfire is a Michigan-based credit union principally located in Saginaw, Michigan.
Fiserv is a provider of financial services technology that “provid[es] account processing systems,
electronic payment processing, products and services, internet and mobile banking systems and
related solutions to a wide variety of financial institutions, including credit unions.” Def.’s Mot.
Dismiss 9, ECF No. 9.
Open Solutions, LLC is a twice-removed wholly-owned subsidiary of Fiserv, Inc. See
Def.’s Mot. Amend 7 n.1, ECF No. 33. Open Solutions is incorporated in Delaware and has its
principal place of business in Connecticut. Id.
Wildfire has alleged that Fiserv breached the Master Agreement when it did not deliver
an operational core-processing system by the date contemplated in the Agreement. Fiserv, in
turn, brought a counterclaim alleging Wildfire’s breach of contract seeking damages in the
amount of the early termination fees provided for in the Master Agreement and the incorporated
software schedules. Wildfire has argued that they do not owe Fiserv an early termination fee
because the conditions precedent to activating the early-termination provision of the Master

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Agreement and the incorporated software schedules were never met. In the alternative, Wildfire
argues that the software schedule related to the DNA core processing system is an independent
contract between Wildfire and Open Solutions, not between Wildfire and Fiserv. Thus, Wildfire
contends that it does not owe any early termination fees to Fiserv, if indeed it owes any.
Fiserv now seeks to join Open Solutions to its counterclaim for early termination fees
under the Master Agreement to coordinate and streamline the adjudication of the common issues.
II.
Under Federal Rule of Civil Procedure 20, persons may be joined as plaintiffs in an
action if: “(A) they assert any right to relief jointly, severally, or in the alternative with respect to
or arising out of the same transaction, occurrence, or series of transactions or occurrences; and
(B) any question of law or fact common to all plaintiffs will arise in the action.” Fed. R. Civ. P.
20. The joinder of persons as a party to a counterclaim is governed by Rule 20. See Fed. R. Civ.
P. 13(h). “Joinder is encouraged because it avoids multiple lawsuits involving similar or identical
issues.” Pasha v. Jones, 82 F.3d 418 (6th Cir. 1996) (citing Mosley v. General Motors Corp.,
497 F.2d 1330, 1332-33 (8th Cir. 1974)).
III.
Defendant/Counter-plaintiff Fiserv, Inc. seeks to join Open Solutions, LLC, a whollyowned corporate affiliate, to its counterclaim for breach of contract against Plaintiff/Counterdefendant Wildfire. See Def.’s Mot. Amend, ECF No. 33. Fiserv has attached a proposed
amended counterclaim to its motion that incorporates Open Solutions as a party to the
countersuit. See id. at Ex. 1. The amended counterclaim has very few revisions, largely just
incorporating Open Solutions into the factual allegations made in support of the breach of
contract claim. See id. Because there are no substantive amendments to the counterclaim that

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primarily joins an additional party, Rule 20 governs. Furthermore, because the factual and legal
allegations are wholly identical for both Fiserv and Open Solutions and because the two seek
relief in the alternative, joinder is appropriate.
Wildfire argues that Rule 15, governing the amendment of pleadings, is the appropriate
standard by which Fiserv’s motion should be analyzed. Although Fiserv technically seeks to
amend its pleading by incorporating Open Solutions as a complainant, it is, in actuality, only
joining an additional associated party. The more specific rules governing party joinder are found
in Rule 20. As explained above, this reading is made explicit by Rule 13(h) which provides that
“[r]ules 19 and 20 govern the addition of a person as a party to a counterclaim or crossclaim.”
Fed. R. Civ. P. 13(h).
IV.
Accordingly, it is ORDERED that Defendant Fiserv, Inc.’s Motion to Amend
Counterclaim naming Open Solutions, LLC as a Counter-Plaintiff, ECF No. 33, is GRANTED.
It is further ORDERED that Counter-Plaintiffs Fiserv, Inc. and Open Solutions, LLC are
DIRECTED to file their amended counterclaim on the Court’s docket on or before October 9,
2015.

Dated: September 29, 2015

s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge

PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on September 29, 2015.
s/Michael A. Sian
MICHAEL A. SIAN, Case Manager

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