Endless River Technologies LLC vs. Trans Union LLC.

Filing 170

Memorandum Opinion and Order. The Court has thoroughly and exhaustively reviewed the briefs submitted by the parties, along with the evidence submitted in support thereof. Genuine issues of material fact persist which may be reasonably determ ined in favor of either party and can only be resolved by a jury, precluding summary judgment on a number of Endless River's causes of action. Accordingly, Trans Union's Motion for Partial Summary Judgment is hereby GRANTED IN PART and DE NIED IN PART. (ECF # 84 , # 85 ). The Court hereby dismisses Endless River's claim for Conversion (Count III). Trans Union's Amended Motion for Partial Summary Judgment as to Endless River's ODTPA claim is DENIED. (ECF # 117 , # 118 ). Endless River's Motion for Partial Summary Judgment is hereby GRANTED IN PART and DENIED IN PART. (ECF # 87 , # 88 -1). The Court hereby dismisses Trans Union's request for Declaratory Judgment (Count II of the Counterclaim ECF # 43 , #[1 16]). Endless River's claims for Breach of Contract (Count I), Trade Secret Misappropriation (Count II), Defamation (Count IV), Slander of Title (Count V), Tortious Interference with Business Expectancy (Count VI), Violations of the Ohio Decepti ve Trade Practices Act (Count VII) and Trans Union's Counterclaim for Breach of Contract (Count II) remain before the Court. Defendant's Motions to Strike the Declarations of Richard Bonitz (ECF # 91 and # 127 ) are hereby DENIED AS MOOT. Trial remains set for May 2, 2022 at 8:30 AM. IT IS SO ORDERED. Judge Donald C. Nugent on 2/1/2022. (M,S)

Case: 1:18-cv-00936-DCN Doc #: 170 Filed: 02/02/22 1 of 23. PageID #: 9752

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

ENDLESS RIVER TECHNOLOGIES LLC,

CASE NO.: l:18-CV-00936

Plaintiff,
JUDGE DONALD C. NUGENT
V.

TRANS UNION LLC,

MEMORANDUM OPINION AND
ORDER

Defendant.

This matter is before the Court on the Motion for Partial Summary Judgment ofDefendant,
Trans Union LLC ("Trans Union" or "Defendant") (ECF #84, #85), the Motion for Partial
Summary Judgment ofPlaintiff, Endless River Technologies LLC("Endless River" or "Plaintiff)

(ECF #87, #88), and Defendant's Amended Motion for Partial Summary Judgment.(ECF #117,

#118).' Also before the Court are Defendant's Motions to Strike the May 24, 2021 and June 25,
2021 Declarations ofRichard Bonitz.(ECF #91,#92;#126,#127).
I.

SUMMARY OF FACTS^

Endless River brings this suit alleging that Trans Union used its influence and market
power to convert and misappropriate ERT's intellectual property, disparage its reputation, and

tortiously interfere with prospective business partnerships. (ECF #87). The underlying dispute
stems from the alleged breach of an agreement made in 2014 between Endless River and Trans

' parties' docket filings in this matter are made pursuant to a Stipulated Protective Order(ECF #38). The Court's
The
citations in this Memorandum Opinion and Order make reference to both the redacted, publicly available and sealed
versions ofthe filings, where applicable.

^ The facts as stated in this Memorandum Opinion and Order are taken firom the Parties' submissions. Those material
facts that are controverted and supported by deposition testimony, affidavit, or other evidence are stated in the light
most favorable to the non-moving Party.

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Union to collaborate on the development and commercialization ofthe "Quote Exchange," a novel
method for insurers to provide competitive pricing to consumers online. {Id.).
Endless River argues the agreed upon terms are clear: the Quote Exchange intellectual
property was to remain in ERT's ownership unless and until Trans Union elected to buy out
Endless River at the project's completion, and if TU chose to terminate its involvement prior to
the end of 2018, Plaintiff would maintain ownership of the QE source code and repay TU for
development costs as specified by the terms.(ECF #97).
A. Quote Exchange Development

Endless River is a small consulting firm that provides business development, technical
operations support, and project services related to software development of products in the ecommerce space.(ECF #114,Tf 15). Endless River was formed in 2009 by Richard Bonitz,a former
Insurance.com executive, who sought to develop an idea he had to "streamline comparative

insurance price-quoting online," and collaborated with two former colleagues, Phil Wintering and
Ron Somich,to pursue his idea.(ECF #97; 5/27/2021 Decl. of R. Bonitz ECF #87-1).

After internal development,ERT began presenting the concept ofan online insurance-lead
marketplace to larger companies, a concept which eventually became the Quote Exchange

Program (the "QE Program" or "QE"), a platform designed to provide potential customers with
comparative quotes for insurance and financial services products, including auto insurance, from
a number of different carriers.(ECF #114,119). In January 2013, Endless River pitched the QE
Program to Mr. Geoff Hakel,then Group Vice President of Trans Union's insurance division.(G.

Hakel Dep., pp. 24:7-17). Mr. Hakel expressed interest in the project, and the parties spent several
months negotiating an agreement to develop and commercialize the QE.(Hakel Dep., pp. 26:1220; 94:3-12).

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B. Development Agreement and Contract for Services(the "Agreement")

On March 31, 2014, Endless River and Trans Union executed a Development Agreement

and Contract for Services (the "Agreement")pursuant to which the parties would develop the QE
Program.(EOF #113-1). Under the terms, TU would be responsible for funding development of
the source code for the platform and ERT would provide business development services, technical
operations support, and technical project services. In exchange, TU agreed to pay ERT $300,000
per year, which later increased to $450,000 per year. {Id.).
Section 2 ofthe Agreement,"Terms of Contract," provides:
The Period of Performance of this Contract shall be from January 1, 2014 to
December 31, 2018, inclusive. The foregoing notwithstanding, TU shall have
the right to terminate this Contract at any time upon 180 days prior written notice
to Provider. TU's obligation to pay consulting fees shall survive during the
notice period.In the event oftermination ofthis Agreement,intellectual property
rights to the Quote Exchange concept/platform shall revert to ERT as outlined
in Exhibit A.{Id. at 12).

Exhibit A of the Agreement outlines the parties' five phases of development for the QE

Program and defines obligations regarding Work Product^ and Intellectual Propertyduring the
various stages, culminating in Phase V, where:"[Endless River] agrees to transfer all intellectual

property and application rights to [Trans Union] at the conclusion ofthe buyout schedule set forth
herein."(ECF #113-1,Ex. A).

^ The Agreement defines "Ownership of Work Product," in pertinent part:"the entire right, title and interest in and to
all copyrights, patents, trade secrets, trademarks,trade names,and all other intellectual property rights associated with
any and all ideas, concepts,techniques, inventions, processes, or works of authorship including, but not limited to, all
materials in written or other tangible form developed or created by Provider during the course ofperforming the Work
for TU under this contract (collectively, the "Work Product") shall be determined pursuant to the terms set forth in
Exhibit A.(ECF #113-1,16).

"The Agreement defines"Intellectual Property Rights," in pertinent part: Except as otherwise described in Exhibit A,
nothing in this Contract shall be construed, by implication or otherwise,to grant any right or license to the other party
under any patent, invention, copyright, or any other intellectual property right, now or hereafter owned or controlled
by each party."(ECF #113-1,16.2).

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The parties completed Phase I, the Initial Business Development/Due Diligence, from
August 1, 2013 through January 31, 2014, and Phase II, which governed continued business
development through 2018, during which time ERT would be compensated an annual flat
consulting fee. Product Build, or Phase III, was triggered upon commitment from four insurance

carriers executing letters of intent to participate in the QE Program build. During Phase III, the

parties would continue to market the QE to insurance carriers while completing the build of the
platform. {Id., Ex. A,Phase III).

Phase III addresses ownership ofthe Quote Exchange upon termination ofthe Agreement,
providing:

Also, during Phase III and through 2018, should TU choose to terminate the
Contract and should ERT continue to market and monetize the TU developed
code, repayment of TU incurred development fees shall be paid to TU from
future ERT revenues generated over a time period not to exceed 36 months. In
this instance, the Quote Exchange platform source code developed hereunder
will revert to ERT ownership.
{Id., Ex. A,Phase III, emphasis added).

Phase IV governed Product Launch, during which time ERT would continue to assist with
business development and serve in an account management role to assist with attracting insurance

carriers to the platform. After the QE achieved cumulative net profitability,the terms specified TU
would receive 60% ofrevenue and ERT would receive 40% net of direct expenses contributed by
the parties. {Id., Ex. A,Phase IV).

Phase V, titled Full Transition to TU, was contingent on achieving cumulative profits,

requiring the QE Program reach profits in excess of $3 million. If this figure was achieved, the
Agreement allowed for TU to pvurchase ERT's interest in the QE over a five-year-period, during
which time ERT would transfer ownership to TU in increments of 20% ownership interest in a
subsidiary company formed for the purpose ofthe buyout. {Id., Ex. A.,Part V).

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At the end ofthis transfer, ifapplicable, Phase V provides:"TU will assume all intellectual
property and application rights in the Quote Exchange. In the event that TU abandons or

substantially curtails operations of the Quote Exchange prior to the conclusion of Phase V, all

intellectual property and application rights shall revert to ERT.(Id)}
After executing the Agreement, the parties obtained the requisite letters of intent from

insurers and moved forward with QE Program development.^ During this time. Endless River
alleges difficulties with Defendant's management style, and Trans Union cites technical

difficulties and challenges engaging selling and quoting carriers in order to ensure a competitive
marketplace. Despite these challenges, Endless River and Trans Union launched the Quote

Exchange in the Florida market in May 2016.'
C. Termination and Post-Termmation Communications

In September 2017, Trans Union raised concerns regarding the QE's underperformance of
original revenue projections, and on October 4, 2017, Defendant elected to terminate the

^ The Agreement also provides that ifTU terminated the Agreement because,in its sole discretion,the Quote Exchange
was not meeting expectations, TU would pay consulting fees during that 180-day period. Thereafter, ERT would
"retain intellectual property rights to the Quote Exchange concept as originally presented to TU by ERT, but nothing
[would] prevent TU from developing its own solutions using its residual knowledge, provided TU [did] not use any
information originally presented to Trans Union by ERT."(ECF #113-1).

^ Because the parties did not receive the requisite letters of intent as the deadline to do so approached, ERT and TU
amended the Agreement to allow until June 1, 2014 to receive five letters of intent, rather than four, as originally
required under the terms.

' in May 2016,Endless River filed U.S. Application No. 15/153,130 with the United States Patent and Trademark
Also
Office ("USPTO") titled "Quote Exchange System and Method for Offering Comparative Rates for an Insurance
Product."(ECF #84, Ex. 25).

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Agreement by formal letter, citing unmet project expectations.(ECF #97, Ex. 19).^ In its formal
communication, TU asked ERT to sign a termination agreement, which Plaintiff declined.^
Atthisjuncture,the parties' dispute regarding QE ownership took form;ERT alleges Trans

Union prohibited PlaintifFs access to the QE contained on TU's laptops and subsequent, alleged
misrepresentations made by TU to third-parties regarding the QE precipitated the filing of this
lawsuit. Endless River contends that while in discussions with TU regarding conditions for the

return oflaptops. Defendant disabled access and its "unilateral revocation prevented Endless River

from being able to "tap into [Endless River] materials...as the accoimts [wejre disabled..."(ECF
#97, Ex. 2). Endless River argues it demanded immediate access to the QE Program and source

code so it could continue to bring the product to market. ERT alleges TU refused to provide access

or copies of the QE Work Product and has not retumed or otherwise made the Work Product

available to date.(ECF #97, Ex. 8, Ex. A;Ex. 20; Ex. 7,182:12-183:12; Ex. 25).'°
After receiving Trans Union's notice of termination. Endless River adleges that it began

contacting third-parties with "strategic market knowledge and ability to commercialize the
program and keep Quote Exchange going," including LeadCloud and ITC.(ECF #97, Ex. 3; Ex.

^ TU cites, for example, that in November 2015,just before the March 2016 launch date, the QE was projected to
generate $5.4 million in revenue for 2016; by August 2016, it was only projected to generate $486,000 for the year.
(ECF #94; Somich Dep. 94:25-95:20). TU further explains that despite carrier interest, the QE continued to
underperform, especially in light of its more than $8 million investment in the QE, and determined termination was
appropriate.

' contends it paid ERT's consulting fees for 180 days afterward, per the terms of the Agreement, and the
TU
termination became effective on April 2, 2018. In the Termination Letter, Trans Union asserted that it owned "the
entire right, title and interest in and to the code TU developed for the Quote Exchange, including all documentation
and copies thereof[.]" The letter requested ERT execute and deliver documents evidencing assignment of its rights to
the code. ERT refused to execute the assignment, and on March 26, 2018, ERT sent TU a request that TU assign all
ofits right, title and interest in the code to ERT.(ECF #43,f 23-24)).
At this time. Trans Union maintained that it owned the QE source code and that ERT owned the Exchange concept

as presented by Mr. Wintering on behalfofERT in January 2013. TU maintains that ERT never "reaffirmed" its intent
to repay TU's development costs out of ERT's revenues. ERT alleges that Mr. Bonitz advised Mr. Hakel in email
communication that it intended to "continue promoting the product".

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27; Ex. 28). ERT claims both LeadCIoud and ITC expressed interest in working with Plaintiff on
the QE,and Endless River approached TU,advising ofits intent to continue work on the QE,and
inquired ifthe parties could draft ajoint statement notifying carriers, a request Defendant denied.
(ECF #97,Ex. 2-B; Ex. 7; Ex. 4).

Endless River alleges that Trans Union, unbeknownst to Plaintiff, communicated to
prospective carrier-recipients:
...that Trans Union was shutting down the Quote Exchange, that it apparently
had the unilateral right to do so, that Quote Exchange was Trans Union's
innovation, and that Trans Union was committed to continuing to develop such
innovative solutions in the future. Nowhere in this email is Endless River or its

right to continue the Quote Exchange ever mentioned. Indeed, Endless River did
not receive this email or leam of its contents until this litigation.

(ECF #97, p. 23).'' Plaintiff further alleges that at or around this time, TU pursued discussions
with LeadCIoud about the sale of the QE source code.'^ ERT maintains that TU, without
justification, made misrepresentations to third-parties, including LeadCIoud, regarding its
ownership and right to possess the QE source code and failed to otherwise notify potential carriers

ofPlaintiffs rights to the QE under the terms ofthe Agreement.'^

At this point, Endless River alleges Trans Union had already taken several steps to "ensure Endless River could not
exercise its right to monetize Quote Exchange," including sending stopped production notifications in October 2017
to companies actively participating the QE project, including LeadCIoud and ITC, advising the recipients TU was
pulling out of the Quote Exchange and no farther quoting activity within the platform would take place.(ECF #97,
citing "Stopped Production Notification, Ex. 32).
The email from E. Lebowitz, TU marketing executive, stated:

[T]he Trans Union Quote Exchange stopped production as of Wednesday, October 18, 2017. There will not be any
further quoting activity within the platform from this point forward. As part of the sun setting process, the Quote
Exchange Admin tool, IL addresses, URLs and phone numbers have all been deactivated...We are committed to
developing unique and innovative solutions that leverage Trans Union data for insurance marketing. We appreciate
your willingness to innovate along with us.(ECF #97, Ex. 32).

Plaintiff alleges on March 9,2018, Ms. Lebowitz emailed several senior TU employees recapping a dinner with
LeadCIoud's CEO and reportedly told Mr. Ocheltree that ERT "had the first right to purchase the code" and that TU
"didn't have an on-going relationship" with ERT.(ECF #97, Ex. 35; Ex. 7.).
ERT notes that TU has since admitted that Ms. Lebowitz statement to LeadCIoud's CEO indicating "ERT has a

right offirst refusal" was "misrepresenting the situation."(ECF #97, 234:2-235:12).

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II,

PROCEDRAUL HISTORY
A.

Lawsuit and Counterclaims

Endless River alleges that but-for Trans Union's interference and misrepresentations
concerning its ownership and control of the QE, ERT would have entered into business
relationships with both LeadCloud and ITC,and those alleged unjustified statements hastened the

filing ofthis matter before the Court. On April 24,2018,Endless River commenced its suit against
Trans Union,seeking damages and injunctive reliefto remedy Trans Union's alleged breach ofthe
Agreement and resulting harm,(the "Complaint", ECF #1).
Plaintiff amended its Complaint on October 11, 2018, and amended once more on August

18, 2021.(ECF #20, #21; ECF #113, Plaintiffs Second Amended Complaint (the "Amended

Complaint")ECF #113,#114).^"^ On September 1,2021,Trans Union filed its Answer to Plaintiffs
Second Amended Complaint, incorporating by reference and re-asserting its Counterclaims
against ERT for Breach of Contract(Count I) and Declaratory Judgment(Count II)(ECF #115,

#116; ECF #43).^^

In its Second Amended Complaint, Plaintiff alleges seven causes of action:
Count I: Breach of Contract;

Count II: Trade Secret Misappropriation (Defend Trade Secrets Act 18 U.S.C. § 1836 etseq.)
Count III: Conversion;
Count IV: Defamation;
Count V: Slander of Title;

Count VI: Tortious Interference with Business Expectancy; and

Count VII: Violations of Ohio Deceptive Trade Practices Act(ODTPA O.R.C.4165/ etseq.)
(ECF #113).
Defendant asserts the following Counterclaims against Plaintiff:

Count I: Breach of Contract: Trans Union alleges "Endless River has breached the Agreement by, among
other things, refusing to execute an assignment of any rights it claims in the Work Product, including the Quote
Exchange code, to Trans Union; by wrongfully asserting that it owns the Work Product developed by Trans Union
under the Agreement; by refusing to pay the development costs associated with development ofthe Quote Exchange;
and by asserting to third-parties that it owns the Work Product developed by Trans Union."(ECF #43,^ 33).

Count II: Declaratory Judgment: Trans Union seeks declaratory judgment from this Court that it has all
right, title and interest in the Work Product that Trans Union developed under the Agreement, that it can use such
information in the course of its business in a manner consistent with the terms of the Agreement, and that Endless
8

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B. Motions for Summary Judgment

Pursuant to Fed. R. Civ. P. 56, Defendant filed its Partial Motion for Summary Judgment,

moving for summary judgment on Counts II through VII ofthe Amended Complaint, and partial
summary judgment on ERT's Breach of Contract claim (Coimt I) and its Counterclaim for
Declaratory Judgment (Cormt II of the Counterclaim). (ECF #84, #85). Plaintiff filed an

Opposition(ECF #95,#97)and Defendant filed a Reply in Support.(ECF #129,#130).
Plaintiff moves for partial sxunmaryjudgment on its claim for Conversion(Coimt III ofthe

Amended Complaint)and on Defendant's Covmterclaim for Declaratory Judgment(Count II ofthe
Counterclaim), requesting the Court find that Plaintiff has a right to use, possess, market, and
monetize the QE Program.(ECF #87,#88-1). Defendant filed an Opposition(ECF #93,#94)and
Plaintiff filed a Reply in Support.(ECF #131).

On September 1, 2021, Trans Union filed an Amended Motion for Partial Summary

Judgment in order to address Endless River's ODTPA claim.(ECF #117, 118).^^ Endless River
filed an Opposition (ECF #120, #121) and Defendant filed a Reply in Support of its Amended
Motion as to Plaintiffs ODTPA claim.(ECF #128).
C. Motious to Strike the Declaratious of Richard Bouitz

On June 25, 2021, Trans Union filed a Motion to Strike the May 24, 2021 Declaration of

Richard Bonitz (ECF #91, #92; 5/24/2021 Bonitz Declaration ECF #87-1), arguing that the
Declaration, submitted in support of Plaintiffs Motion for Partial Summary Judgment, consists

River has no right, title or interest in the Work Product that Trans Union developed under the Agreement.(ECF #43,
1139).

Endless River originally filed its Deceptive Trade Practices claim xmder the Illinois Uniform Deceptive Trade
Practices Act ("IDTPA") 815 ILCS 510/ et seq. Plaintiff later sought leave to amend the Complaint to assert its
Deceptive Trade Practices Act claim imder Ohio law (the "ODTPA")instead of Illinois law, and the Court directed
Trans Union to amend its motion for partial summary judgment, if necessaiy, to address Plaintiffs amended claim.
(ECF #112).
9

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almost entirely ofinadmissible hearsay and assertions without record support, and seeks to create
a factual issue by contradicting earlier deposition testimony. ERT filed an Opposition to the
Motion arguing Defendant's Motion is without merit as Mr. Bonitz, the founder ofERT,testified

to admissible facts for which he had personal knowledge(ECF #105), and TU filed a Reply.(ECF
#107).
On October 18,2021, Defendant filed a Motion to Strike the June 25,2021 Declaration of

Richard Bonitz (ECF #126, #127; 6/25/2021 Declaration ECF #95-4) submitted in support of
ERT's Opposition to TU's Motion for Partial Summary Judgment.(ECF #94,#95). TU argues Mr.

Bonitz's June Declaration is largely inadmissible for reasons similar to its original motion,alleging
inadmissible hearsay, conclusory statements with no factual support, and testimony for the sole

purpose of creating the appearance of a genuine issue of material fact.(ECF #127). Defendant
takes particular issue with Mr. Bonitz's statements regarding confidentiality agreements with

third-parties, arguing the declarations are ERT's attempt to place impermissible conclusory and
speculative statements into evidence. Plaintifffiled an Opposition(ECF #134,#135)and TU filed

a Reply(ECF #136).!^
III.

STANDARD OF REVIEW

Summaryjudgment is appropriate when the court is satisfied "that there is no genuine issue
as to any material fact and that the moving party is entitled to ajudgment as a matter oflaw." Fed.

R. Civ. P. 56(a); Provenzano v. LCI Holdings, Inc., 663 F.3d 806 (6"* Cir. 2011). The burden of
showing the absence of any such "genuine issue" rests with the moving party:

[A] party seeking summary judgment always bears the initial responsibility of
informing the district court of the basis for its motion, and identifying those
Fed. R. Civ. P. 56(c)(4)requires a supporting or opposing affidavit to be made on personal knowledge, set out facts
that would be admissible in evidence, and show the affiant is competent to testify on the matters stated. The May 24,
2021 and June 25, 2021 declarations of Mr. Bonitz have only been considered to the extent admissible and were not
dispositive on any issue before the Court.
10

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portions of 'the pleadings, depositions, answers to interrogatories, and
admissions on file, together with affidavits, if any,' which it believes
demonstrates the absence of a genuine issue of material fact.
Celotex V. Catrett, All U.S. 317, 323 (1986). A fact is "material" only if its resolution will affect
the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., All U.S. 242, 248 (1986).
Determination of whether a factual issue is "genuine" requires consideration of the applicable
evidentiary standards. Although evidence may be presented in support of a summary judgment
motion, the moving party need not support its motion with affidavits or similar materials that
negate the non-mover's clami(s)ifthey can otherwise show an absence ofevidence supporting the

non-mover's case. Morris v. Oldham County Fiscal Court, 201 F.3d 784,788(6^ Cir. 2000). The
court Avill view the summary judgment motion in the light most favorable to the party opposing
the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574,587(1986).

Summary judgment should be granted ifa party who bears the burden ofproofat trial does
not establish an essential element oftheir case. Tolton v. American Biodyne, Inc.,48 F.3d 937,941

(6^ Cir. Ohio 1995)(citing Celotex, All U.S. at 322). Accordingly, "[t]he mere existence of a
scintilla of evidence in support of the plaintiffs position will be insufficient; there must be
evidence on which the jury could reasonably find for the plaintiff." Copeland v. Machulis,51 F.3d

476, 479 (6^ Cir. Much. 1996)(citing Anderson, All U.S. at 252). Moreover, if the evidence
presented is "merely colorable" and not "significantly probative," the court may decide the legal
issue and grant summaryjudgment.Anderson, All U.S. at 249-50(citations omitted).In most civil
cases involving summaiy judgment, the court must decide "whether reasonable jurors could find
by a preponderance ofthe evidence that the [non-moving party] is entitled to a verdict."Id. at 252.

Once the moving party has satisfied its burden of proof, the burden then shifts to the
nonmoving party. The nonmoving party may not simply rely on its pleadings, but must "produce

11

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evidence that results in a conflict of material fact to be solved by a jury." Cox v. Kentucky Dep't

ofTransp., 53 F.Sd 146,149(6"' Cb. Ky. 1995). Fed.R.Civ.P. 56(e)states:
When a motion for summary judgment is made and supported as provided in
this rule, an adverse party may not rest upon the mere allegations or denials of
the adverse party's pleading, but the adverse party's response, by affidavits or
as otherwise provided in this rule, must set forth specific facts showing that there
is a genuine issue for trial.
The Federal Rules identify the penalty for the lack of such a response by the nonmoving party as
an automatic grant ofsummary judgment, where otherwise appropriate. Id.
As a general matter, the district judge considering a motion for summary judgment is to

examine "[ojnly disputes over facts that might affect the outcome ofthe suit under governing law."
Anderson, All U.S. at 248. The court will not consider non-material facts, nor will it weigh
material evidence to determine the truth of the matter. Id. at 249. The judge's sole function is to

determine whether there is a genuine factual issue for trial; this does not exist unless "there is

sufficient evidence favoring the nonmoving party for ajmy to return a verdict for that party." Id.
In sum, proper summary judgment analysis entails "the threshold inquiry of determining
whether there is the need for a trial- whether, in other words, there are any genuine factual issue

that properly can be resolved only by a finder offact because they may reasonably be resolved in
favor of either party. Anderson, All U.S. at 250.
IV.

DISCUSSION

The Court has thoroughly and exhaustively reviewed the claims raised by Plaintiff and

Defendant;the parties' Partial Motions for Siunmary Judgment and the briefing responsive thereto;
and all supporting documentation, including deposition testimony and evidentiary materials
submitted by both parties.

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A. Breach of Contract(Count I)and Declaratory Judgment(Count II of
Counterclaim't

Trans Union seeks partial summary judgment on Plaintiffs Breach of Contract claim
(Count I), which alleges that TU has and continues to breach the parties' Agreement hy possessing
and controlling the Endless River Information, including the QE source code, without Plaintiffs
permission or consent, and further, for failing to promptly return ERT's Information, as required

under the terms.(ECF #114, Tf 61-66).'^ Trans Union argues summary judgment is appropriate
because it was the rightful owner of the QE Code at the time of termination, and thus had no
obligation to give the QE Code to Plaintiff.(ECF #85).

To succeed on a claim for breach of contract, a plaintiff must prove;(1)the existence of a

valid and enforceable contract;(2) substantial performance by the plaintiff;(3) a breach by the
defendant; and(4)resultant damages."Hongbo Han v. United Cont'I Holdings, Inc.,762 F.Sd 598,

600(y'^ Cir. 2014); citing Reger Dev., LLC v. Nat'l City Bank,592 F.Sd 759,764(7^ Cir. 2010).^^
Under Illinois law,"[t]he primary objective in construing a contract is to give effect to the parties'
intent at the time the contract was made, which is best determined by the plain language of the
contract." ESP Global, LLC v. Northwest Cmty. Hosp., 158 N.E.Sd 721, 726 (111. App. Ct. 2020)

(citation omitted). When the contract is clear and unambiguous, "the parties' intent must be
determined exclusively from the express language ofthe contract, giving the words employed then-

plain and ordinary meaning." Id. The interpretation ofimamhiguous contract terms is a question

oflaw. Echo, Inc. v. Whitson Co., 121 F.Sd 1099,1104(7^ Cir. 1997).

Trans Union argues it seeks summary judgment on ERT's Breach of Contract claim only to the extent that the
contract claim is based on ERT's alleged ownership of the QE Code. TU does not seek summary judgment on the
breach ofcontract claim to the extent that it is premised on ERT's claimed right of access to the QE Code. TU insists,
as argued in its Opposition to ERT's Motion for Partial Summary Judgment, that there exists a question offact as to
ERT's claimed right of access.(ECF #94,#130).
The Agreement is governed by Illinois law.(ECF #113-1,If 9).
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Section 2 ofthe Agreement provides that in the event oftermination,"intellectual property
rights to the Quote Exchange concept/platform shall revert to ERT as outlined in Exhibit A."(ECF
#113-1,^ 2). Exhibit A specifies, in pertinent part:
during Phase III and through 2018, should TU choose to terminate the Contract
and should ERT continue to market and monetize the TU developed code...in
this instance, the Quote Exchange platform source code developed hereunder
will revert to ERT ownership.

{Id., Ex. A,Phase III). Exhibit A further states, "[i]n the event that TU abandons or substantially
curtails operations of the Quote Exchange prior to the conclusion of Phase V, all intellectual
property and applications rights shall revert to ERT."{Id., Ex. A,Phase V).

The parties negotiated the terms and do not contest the validity of the Agreement. The
record shows Trans Union terminated the Agreement prior to the end of 2018. Upon termination

at this time, the language of the Agreement explicitly states that the Quote Exchange platform
source code was to revert to ERT ownership,and any arguments by Defendant asserting ambiguity
or ruicertainty with respect to the mechanism for or logistics of returning the QE source code to
ERT are without merit. {Id. at Ex. A,Phase III).

The Court finds the plain language ofthe Agreement is clear and imambiguous,and Trans
Union's request for Smnmary Judgment fails as a matter oflaw. Any factual issues that may exist
with respect to the remaining elements of Endless River's Breach of Contract claim are best
reserved for resolution by ajury.

Trans Union also seeks summaryjudgment on its Counterclaim for Declaratory Judgment,
wherein TU requests the Court find that it has all right, title, and interest in the Work Product that

Trans Union developed imder the Agreement and that Endless River has"no right, title or interest"
in the Work Product.(ECF #43, Tf 36-39). The terms of the Agreement define Work Product to
include:

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The entire right, title and interest in and to all copyrights, patents, trade secrets,
trademarks, trade names, and all other intellectual property rights associated
with any and all ideas, concepts, techniques, inventions, processes, or works of
authorship including, but not limited to, all materials in written or other tangible
form developed or created by Provider during the course ofperforming the Work
for TU under this Contract(collective, the "Work Product")shall be determined
pursuant to the terms set forth in Exhibit A.
Endless River also moves for summary judgment on TU's request for Declaratory Judgment,

arguing that, at a minimum, ERT has a clear and established right to use and possess the Quote
Exchange source code, pursuant to the terms of the Agreement, and thus TU's motion is without
merit.

While Trans Union indicates in its initial briefing that it seeks summary judgment on its
Counterclaim for Declaratory Judgment, TU fails to separately address its argument in support,

asking only that the Court issue an order finding that it owns the QE code and an order limiting

Plaintiffs recovery to actual damages. (ECF #85). Defendant's request for a declaration of
ownership does not comport with the clear and unambiguous language of the Agreement.
Accordingly, Summary Judgment is granted as a matter of law in favor of Endless River on
Defendant's counterclaim for Declaratory Judgment.
B. Conversion(Count III)

Trans Union moves for summary judgment on Endless River's claim for Conversion

(Count III) wherein ERT alleges TU wrongfully assumed unauthorized control and dominion by
restricting access to TU's computer devices containing ERT Information.(ECF #114,^ 79-89). In
order to prevail on a claim for conversion, a plaintiff must show:(1)plaintiffs ownership or right

to possess the property at the time ofthe conversion;(2)defendant's conversion by a wrongful act
or disposition of [pjlaintiffs property; and (3) damages." Kuvedina, LLC v. Cognizant Tech.
Solutions, 946 F. Supp. 2d 749,761 (S.D. Ohio 2013).

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Trans Union argues summary judgment is appropriate because Endless River's claim for
Conversion is duplicative of its claim for Breach of Contract, premised on the same alleged
obligations and breach contemplated by the terms of the Agreement. "The existence of a claim
soimding in contract generally excludes recovery under a theory of tort." Misny & Assocs. Co.,

L.P.A. V. Aylstock, Within, Kreis & Overhotltz, PLLC,No. 1:15-CV-681, 2016 WL 5231807, *3,

4(N.D. Ohio Sept. 20, 2016); citing Wolfe v. Continental Cas. Co., 647 F.2d 705, 710(6^ Cir.
1981).

A tort claim based upon the same actions as those upon which a claim ofcontract
breach is based will exist independently of the contract action only if the
breaching part also breaches a duty owed separately from that created hy the
contract,that is, a duty owned even ifno contract existed. Moreover,a tort claim
must allege damages that are separate and distinct from the damages result from
breach of contract.

Misny, *3,4(N.D. Ohio Sept. 2016); citing Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 115
Ohio App. 3d 137,151,684N.E.2d 1261,1270.
Endless River argues the Conversion claim stands on its own because it asserts non-

economic damages, including reputational harm and damage to good will. However, as plead,
ERT's claim is a reiteration of the same facts underlying its Breach of Contract Claim, and its
alleged non-economic damages do not satisfy Plaintiffs burden to articulate a breach of duty
distinct from that asserted in Coimt I ofthe Complaint. Further,the record contains no evidence at
this stage amounting to more than speculative non-economic damages, nor does it allege a causal
link to the alleged conversion. The Court agrees Plaintiffs claims are indistinguishable and
Summary Judgment is granted in favor of Defendant on ERT's claim for Conversion.
C. Trade Secret Misappropriation (Defend Trade Secrets Act)
(Count III

In Count II, Endless River argues that the Endless River Information, as defined hy the
Agreement, constitutes trade secrets under the Defend Trade Secrets Act(the "DTSA")18 U.S.C.

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Tf 1836 e? seq. and alleges that Trans Union violated the DTSA by, among other things, using the
Endless River Information for its commercial advantage and refusing to retiim or otherwise permit
ERT access to the Information.(ECF #114,f 67-78).

The DTSA provides a private claim of action for a party whose trade secrets are
misappropriated if those trade secrets are "related to a product or service used in, or intended for
use in, interstate or foreign commerce." 18 U.S.C. § 1836(b)(1). To prevail on a claim under the
DTSA,a plaintiff must show:(1)the existence of a protectable trade secret;(2) misappropriation
ofthe trade secret by defendant; and(3)that the trade secret is related to a product or service used
in interstate commerce. See Noco Co. v. CTEK, Inc., No. l:19-cv-00853,2020 WL 821485, at *6

(N.D. Ohio Feb. 18,2020).
Plaintiff contends Defendant's motion for summary judgment is premised on its evident

misimderstanding ofthe law by alleging ERT has failed to identify any protectable trade secret in
this matter. In support, ERT directs this Court to a six factor test delineated by the Ohio Supreme
Court to help determine whether particular information constitutes a trade secret:

(1) The extent to which the information is publicly known;(2) the extent to
which it is known to those inside the business;(3)the precautions the holder of
the trade secret takes to protect the information;(4) the value to the holder in
having the information;(5)the amoimt oftime and money expended in obtaining
and developing the information; and (6) the time and expense it would take
others to duplicate the information.

See Handel's Enter's, Inc. v. Schulenberg, 765 Fed Appx. 117, 122(6^ Cir. 2019). Trans Union
argues no aspect of the QE Program, including its concept, materials, or prospective customers,
constitutes a trade secret and thus summary judgment should be granted in its favor. ERT rebuts
TU's position, citing Ohio courts who have foimd that "source codes constitute trade secrets and

confidential business information." See Ohio A. Philip Randolph Inst. V. Householder, No. 1:18cv-357, 2019 WL 1002978, at *2 (S.D. Ohio Mar. 2, 2019); see also Apple, Inc. v. Samsung
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Electronics Co., Ltd., No. ll-CV-01846, 2012 WL 6115623, at *2 (N.D. Cal. Dec. 10, 2012).

Because the Court finds genuine issues of material fact exist as to more than one element of
Plaintiffs claim under the DTSA,Defendant's Motion for Summary Judgment on Plaintiffs claim
for Trade Secret Misappropriation under the DTSA is denied.
D. Defamation and Slander of Title(Counts IV and V)

In Counts IV and V of the Complaint, Endless River argues Trans Union is liable for a
number offalse, defamatory, and slanderous statements it made regarding ERT and its ownership
of the Endless River Information, including the Quote Exchange source code.(ECF #114; 90|
103; 104-110). Plaintiff contends that TU's statements to third-parties, in pertinent part, "falsely
publicized it owned Quote Exchange, that it had the unilateral right to cease Quote Exchange's

operation, that Quote Exchange was permanently terminated, and that Endless River had no right

to continue Quote Exchange after Trans Union pulled out ofthe Agreement."(ECF #97).^®
A claim for defamation under Ohio law requires: (1) a false and defamatory statement
concerning another;(2)an unprivileged publication to a third party;(3)fault amounting to at least
negligence on the part ofthe publisher; and(4)either actionability ofthe statement irrespective of
special harm(such as defamationper se)or the existence ofspecial harm caused by the publication.

See Fitzgerald v. Roadway Express, Inc., 262 F. Supp. 2d 849, 855 (N.D. Ohio 2003) (citing

Endless River identifies the following three specific statements as groimds for its Defamation claim:
•

Trans Union's October 2017 statement in its Stopped Production Notifications to recipients, including
LeadCloud and IXC, that "[t]here will not be any further quoting activity within the [Quote Exchange]
platform fi-om this point forward"(See, e.g. Ex. 32);

•

Ms. Lebowtiz's March 2018 statement to the LeadCloud CEO that Endless River has a right of first refusal
to buy the Quote Exchange code (Ex. 35); and

•

Ms. Lebowitz's March 2018 statement to the LeadCloud CEO that Trans Union shut down the Quote

Exchange and does not have an on-going relationship with Endless River.(Id).
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Akron-Canton Waste Oil, Inc. v. Safety-Kleen Oil Servs., Inc., 81 Ohio App.Sd 591, 601, 611

N.E.2d 955(9^ Dist. 1992).
Endless River argues its Slander of Title claim parallels its Defamation claim in that is
similarly hased in part on Ms.Lebowitz's asserted ownership ofthe Quote Exchange to LeadCloud
in March 2018 and Defendant's statements regarding ERT's alleged "right of first refusal." A

slander of title claim is "a defamation action in tort against one who falsely and maliciously

defames the property of another." Wolfe v. Bank ofNew York Mellon, No. 2:14-CV-00366. 2015
WL 12734085, at *8(S.D. Ohio Mar. 16,2015)(citations omitted). To state a claim for slander of

title, a plaintiff must prove: (1) there was a publication of a slanderous statement disparaging
claimant's title;(2)the statement was false;(3)the statement was made with malice or made with
reckless disregard for its falsity; and(4)the statement caused actual or special damages.Id.(citing
Green v. Lemarr, 139 Ohio App.3d 414(2000)).

Trans Union moves for summary judgment on both the Defamation and Slander of Title
claims, arguing that the statements are neither false nor defamatory; that TU had a qualified
privilege to make the statements, even if false; and that ERT caimot prove the requisite harm and

special damages to satisfy its claims. Based on its review of the record, the Court finds triable
issues exist as to whether TU made unjustified and actionable statements resulting in harm under
tort law, considerations most appropriate for a jury. Accordingly, TU's request for Summary
Judgment on Plaintiffs claims for Defamation and Slander of Title is denied.
E. Tortious Interference with Business Expectancy(Count VI)

Plaintiff alleges Trans Union intentionally and without privilege interfered with its
reasonable expectation of entering into valid business relationships with potential partners,
including LeadCloud and ITC.(ECF #114, Count VI

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111-120). "The tort of interference with

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business relationships...generally occur[s] when a person, without a privilege to do so,induces or
otherwise purposely causes a third person not to enter into or continue a business relationship with
another..." Re/Max Int'l, Inc. v. Smythe, Cramer Co.,265 F. Supp. 2d 882,890(N.D. Ohio 2003)
(citing (& B-Abell Elevator Co., Inc. v. Columbus/Central Ohio Bldg. & Constr. Trades Council,
73 Ohio St.3d 1,1995 Ohio 66,651 N.E.2d 1283,1294(1995).

In order to prevail on a claim for Tortious Interference with Business Expectancy, a
plaintiff must prove:(1) a business relationship; (2) the tortfeasor's knowledge thereof; (3) an
intentional interference causing a breach or termination of the relationship, and; (4) damages

resulting therefrom. Diamond Wine & Spirits, Inc. v. Dayton Heidelberg Distrib. Co., Inc., 148
Ohio App. 3d 596,604(3d Dist. 2002)."The main distinction between tortious interference with
a contractual relationship and tortious interference with a business relationship is that interference
with a business relationship includes intentional interference with prospective contractual

relations, not yet reduced to a contract." Id.\ citing Lapping v. Hm Health Services, Trumbull App.
No. 2000-T-0061,2001 Ohio 8723.

Here, Trans Union argues summaryjudgment in its favor is appropriate because at no time
over the course ofits relationship with ERT was Defendant the but-for cause ofa failed relationship
between ERT and a prospective business partner. TU further argues that any statements it made

regarding the QE Program source code and ownership rights are privileged and protected as true,
pursuant to the terms of the Agreement. Endless River argues TU's position ignores facts in
evidence which demonstrate that LeadCloud expressed interest in the QE in January 2018 and was
participating in negotiations with ERT,but ultimately was dissuaded by Trans Union's comments
that the QE had been shut down and that Plaintiff had a right offirst refusal.

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The record contains evidence of Trans Union's knowledge of third-party interest in ERT

and the QE Program, and evidence it made potentially misleading statements regarding ERT's
rights and ownership status. Because genuine issues of material fact exist as to whether Trans
Union intended interference and whether ERT suffered damages as a result, TU's Motion for
Summary Judgment on ERT's claim for Tortious Interference with Business Expectancy is denied.
F. Ohio Deceptive Trade Practices Act(the "ODTPA")
(Count VII)

In Count VII of the Amended Complaint, Endless River alleges Trans Union violated the

Ohio Deceptive Trade Practices Act(the"ODTPA")hy falsely asserting ownership over the Quote
Exchange source code and by making misleading and disparaging statements about ERT and its

ownership status to third-party vendors, including LeadCloud and ITC.(ECF #114, Tf 121-127).
ERT further alleges that Trans Union's statements and omissions of material fact resulted in loss

of potential business partnerships and profits.(ECF #120).
The ODTPA provides that an entity engages in deceptive trade practices when it, among
other things:

(1) Passes off goods or services as those of another;(2) Causes likelihood of
confusion or misunderstanding as to the source, sponsorship, approval, or
certification of goods or services; (3) Causes likelihood of confusion or
misunderstanding as to affiliation, coimection, or association with, or
certification by, another; ...(10)Disparages the goods, services, or business of
another by false representation offact...
Ohio Rev. Code Ann §4165.02(A)(1),(2),(3) and (10). In order to prevail on a claim under the
ODTPA,a plaintiff must prove:
(a) The defendant made a false statement or a statement which is misleading;
(b) The statement actually deceived or has the tendency to deceive a substantial segment
ofthe target audience;
(c) The deception is material in that it is likely to influence a purchasing decision; and
(d) The plaintiff has been or is likely to be injured as a result ofthe advertisement...

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J.P. Morgan Chase Bank, N.A. v. Safeco Ins. Co. ofAm., No. 02-12014, 2012 U.S. Dist. LEXIS

74570, at *14 (N.D. Ohio 2012); citing Int'I Diamond Exch. Jewelers, Inc. v. U.S. Diamond &
Gold Jewelers, Inc., 70 Ohio App. 3d 667,676,591 N.E.2d 881 (2d Dist. 1991).
As previously discussed by the Court, the record contains statements made by Defendant

which may reasonably be imderstood as suggesting, implying, or otherwise making reference to
the parties' disputed ownership status and access to the QE Program source code. While Trans

Union argues its statements are protected as true and Plaintiff fails to prove evidence showing it
made material misrepresentations, the Court finds genuine issues of material fact exist as to
whether TU's statements were of a damaging nature or otherwise constitute a violation imder the
ODTPA, an inquiry best suited for resolution by a jury. Accordingly, Defendant's Motion for
Summary Judgment as to Plaintiffs ODTPA claim is denied.
V.

CONCLUSION

The Court has thoroughly and exhaustively reviewed the briefs submitted by the parties,

along with the evidence submitted in support thereof. Genuine issues of material fact persist which
may be reasonably determined in favor of either party and can only be resolved by a jury,
precluding summary judgment on a number ofEndless River's causes of action.
Accordingly, Trans Union's Motion for Partial Summary Judgment is hereby GRANTED

IN PART and DENIED IN PART.(ECF #84, #85). The Court hereby dismisses Endless River's
claim for Conversion(Coxmt III). Trans Union's Amended Motion for Partial Summary Judgment
as to Endless River's ODTPA claim is DENIED.(ECF #117,#118).

Endless River's Motion for Partial Summary Judgment is hereby GRANTED IN PART

and DENIED IN PART.(ECF #87,#88-1). The Court hereby dismisses Trans Union's request for
Declaratory Judgment(Count II ofthe Counterclaim ECF #43,#116).

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Endless River's claims for Breach of Contract (Count I), Trade Secret Misappropriation
(Count II), Defamation (Count IV), Slander of Title (Count V), Tortious Interference with
Business Expectancy (Count VI), Violations of the Ohio Deceptive Trade Practices Act (Count
VII) and Trans Union's Counterclaim for Breach of Contract(Count II) remain before the Court.
Defendant's Motions to Strike the Declarations of Richard Bonitz(ECF #91 and #127)are
hereby DENIED AS MOOT.
Trial remains set for May 2, 2022 at 8:30 AM.
IT IS SO ORDERED.

DONALD C. NUGENT

Senior United States Distridt /udge

DATED:

23