Level One Technologies, Inc. v. Penske Truck Leasing Co., L.P. et al

Filing 268

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Penske's motion for summary judgment, [No. 130], is GRANTED in part. Upon revisiting the matter, Level One's unjust enrichment claim (Count VI) is DISMISSED.. Signed by District Judge Rodney W. Sippel on 5/14/18. (LGK)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
LEVEL ONE TECHNOLOGIES,
INC.,
Plaintiff,

)
)
)
)
v.
)
)
PENSKE TRUCK LEASING CO.,
)
L.P., and PENSKE LOGISTICS LLC, )
)
Defendants.
)

Case No. 4:14 CV 1305 RWS

MEMORANDUM & ORDER
Defendant Penske moves for summary judgment on Level One’s remaining
claims of breach of contract (Count I) and unjust enrichment (Count VI).
[No. 185]. I previously granted summary judgment on Level One’s lost volume
(subset of Count I), fraud (Count II), Negligent Misrepresentation (Count III), and
breach of duty of good faith and fair dealing (Count IV) claims. Before addressing
Penske’s current arguments, I will revisit my prior order and dismiss Level One’s
unjust enrichment claim (Count VI), because it covers the same subject matter as
the parties’ express contract.
BACKGROUND
Technology services company Level One claims that truck leasing company
Penske copied its transaction processing software Epay. Based on that claim, Level
One filed this suit against Penske in June 2014. As stated in Level One’s

complaint, the two companies signed a Services Agreement governing Penske’s
use of Epay. The Services Agreement also contained a Software Source Code and
Data Escrow Agreement, by which Penske agreed to the following:
[Penske] will not use, copy, or transfer any gained knowledge from the Epay
application data and Source Code for the purpose of developing identical or
similar version of Epay for Penske’s proprietary use as long as Level One is
both operational and is processing transactions under its continuing Services
Agreement with Penske.
(ECF No. 1-1 at 60).
In its second amended complaint, [No. 99]. Level One alleges that Penske
breached the Services Agreement by using Epay source code and other knowledge
gained from using Epay to develop the Penske Online Payment System (POPS).
Level One also alleges that Penske breached the Services Agreement by failing to
process an agreed amount of transactions through Epay. Based on these
allegations, Penske sought recovery under theories of breach of contract (Count I),
fraud (Count II), negligent misrepresentation (Count III), breach of the duty of
good faith and fair dealing (Count IV), misappropriation of trade secrets
(Count V), and unjust enrichment (Count VI).
On January 25, 2018, I granted Penske’s partial motion for summary
judgment, dismissing Count II, III, IV, and portions of Level One’s breach of
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contract claim (Count I) that alleged lost volume theories of recovery. [No. 197]. I
found that any purported promises concerning the volume of transactions that
Penske would process through Epay were not a part of the Services Agreement or
any other valid contract entered into between the parties. Penske now moves for
summary judgment on Level One’s remaining claims: breach of contract regarding
use of Epay source code (Count I) and unjust enrichment (Count VI).
LEGAL STANDARD
I can only grant summary judgment if the evidence, viewed in the light most
favorable to the nonmoving party, demonstrates (1) that there is no genuine issue
as to any material fact and (2) that the moving party is entitled to judgment as a
matter of law. Lynn v. Deaconess Med. Ctr., 160 F.3d 484, 486 (8th Cir. 1998)
(citing Fed. R. Civ. P. 56(c)). In this evaluation, I view all facts and factual
inferences in the light most favorable to the nonmoving party. Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The party
seeking summary judgment bears the burden of establishing that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a). Once the moving party has met this burden, the nonmoving
party may not rest on the allegations in its pleadings, but by affidavit or other
evidence, must set forth specific facts showing that a genuine issue of material fact
exists. Celotext Corp. v. Catrett, 477 U.S. 317, 323 (1986).
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ANALYSIS
In my prior order, (ECF No. 197), I denied Penske’s summary judgment
motion with respect to Level One’s unjust enrichment claim. I am persuaded,
however, to revisit my prior decision based on my discussion with parties during
the status conferences held on March 9, 2018, and April 6, 2018. I may revisit and
“may properly depart from an earlier holding . . . in an interlocutory ruling.” Lovett
v. Gen. Motors Corp., 975 F.2d 518, 522 (8th Cir. 1992). My prior decision
denying summary judgment on Level One’s unjust enrichment claim is an
interlocutory ruling. See Wright v. S. Arkansas Reg’l Health Ctr., Inc., 800 F.2d
199, 202 (8th Cir. 1986) (“[U]sually, a denial of summary judgment is not treated
as final.”). I now revisit that decision to determine if Level One’s unjust
enrichment claim can survive summary judgment.
“If [a] plaintiff has entered into an express contract for the very subject
matter for which he seeks recovery, unjust enrichment does not apply. . . .” R & R
Land Dev., L.L.C. v. Am. Freightways, Inc., 389 S.W.3d 234, 243 (Mo. Ct. App.
2012); See also Affordable Communities of Missouri v. Fed. Nat. Mortg. Ass’n,
714 F.3d 1069, 1077 (8th Cir. 2013) (“Unjust enrichment is an equitable remedy
based on the concept of a quasi-contract, and a plaintiff may not recover under
both an express contract and unjust enrichment.”). A plaintiff can plead
inconsistent and alternative theories of relief, including for “both breach of an
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express contract and unjust enrichment.” Franke v. Greene, No. 4:11CV1860 JCH,
2012 WL 3156577, at *5 (E.D. Mo. Aug. 2, 2012). At summary judgment,
however, “the issue is whether the unjust enrichment claim covers the same subject
matter as the [contract].” See, e.g., CoMentis, Inc. v. Purdue Research Found.,
765 F. Supp. 2d 1092, 1101–02 (N.D. Ind. 2011). If an express contract covers the
same subject matter, the unjust enrichment claim cannot survive summary
judgment. Affordable Communities of Missouri, 714 F.3d at 1077.
Level One argues that this limitation on recovering for unjust enrichment “is
narrowly construed” and only applies “when the damages sought . . . are expressly
covered and agreed to in the contract.” (ECF No. 143 at 34). None of Level One’s
cited cases state such a holding. In two of the cited cases, the Eighth Circuit held
that the district court properly dismissed an unjust enrichment count, without
purporting to narrow the above-mentioned limitation. See 32nd St. Surgery Ctr.,
LLC v. Right Choice Managed Care, 820 F.3d 950, 955-56 (8th Cir. 2016);
Affordable Cmty. of MO v. Fed. Nat. Mortg. Ass’n, 714 F.3d 1069, 1077 (8th Cir.
2013). Level One cites to six other cases where state and federal courts held that
the plaintiff could only recover for a breach of contract claim, not unjust
enrichment. See, e.g., Lowe v. Hill, 430 S.W.3d 346, 348 (Mo. Ct. App. 2014). But
Level One does not identify a single, specific ruling in those cases that narrows the
above-mentioned limitation to circumstances where the damages are expressly
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covered and agreed to. The rule remains that if Level One “has entered into an
express contract for the very subject matter for which [it] seeks recovery,” then it
cannot recover based on unjust enrichment. R & R Land Dev., L.L.C. v. Am.
Freightways, Inc., 389 S.W.3d 234, 243 (Mo. Ct. App. 2012).
Level One has entered into an express contract, i.e., the Software Source
Code and Data Escrow Agreement. That express contract states that Penske “will
not use, copy, or transfer any gained knowledge from the Epay application data
and Source Code for the purpose of developing identical or similar version of
[Epay] for Penske’s proprietary use . . . .” (ECF No. 1-1 at 60). Level One seeks
recovery for the exact same subject matter. Specifically, Level One alleges that
Penske “took Level One’s Protected Knowledge [in Epay] and used it to develop
its own system and implementing software . . . .” (ECF No. 1 at 23).
As a result, I find that Level One “has entered into an express contract
for the very subject matter for which [it] seeks recovery.” See R & R Land
Dev., L.L.C., 389 S.W.3d 234, 243. It cannot recover based on unjust
enrichment, and I will dismiss this claim.
Accordingly,

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IT IS HEREBY ORDERED that Penske’s motion for summary judgment,
[No. 130], is GRANTED in part. Upon revisiting the matter, Level One’s unjust
enrichment claim (Count VI) is DISMISSED.

______________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 14th day of May, 2018.

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