Monday, May 18, 2015

Close but no cigar: "worked closely" claim is puffery

Springbrook Software, Inc. v. Douglas County, 2015 WL 2248449, No. 13–cv–760 (W.D. Wis. May 13, 2015) (magistrate judge)
Springbrook sued Douglas County and the City of Superior for breach of contract and related claims after they stopped paying fees owed under a contract for Springbrook’s financial system software for local governments. Defendants counterclaimed for misrepresentation, fraudulent inducement, false advertising, breach of the covenant of good faith and fair dealing and unjust enrichment. The magistrate judge granted Springbrook’s motion for summary judgment on the breach of contract claim and got rid of the counterclaims except for the counterclaim for breach of the duty of good faith and fair dealing.
Defendants issued a formal Request for Proposals seeking bidders from qualified firms “to supply and install Financial System Software.” Springbrook, meanwhile, was developing a one-page flyer to promote its work specific to the needs of Wisconsin county highway departments, which it had done with assistance from the Wisconsin Department of Transportation. Springbrook’s product manager emailed Doug Meek at the state Department of Transportation to ask if Meek “would object to [Springbrook] including verbiage like ‘We worked closely with Doug Meek at the Wisconsin Department of Transportation to ensure our software meets the needs of Wisconsin county highway departments?’” Meek responded: “I don’t object to your referencing working with me, but I don’t think that ‘working closely’ is accurate.” In response to Meek’s request, the product manager replied that he would be happy to share a draft document and would use Meek’s name only in a manner that Meek approved.
However, Springbrook’s RFP response to the City included a one-page ad, “Highway Department Solutions,” in which Springbrook stated that it had “worked closely with the Wisconsin Department of Transportation to develop a highway department solution that is fully compliant with state requirements.”  Springbrook won the contract, but the relationship broke down and the defendants stopped paying, resulting in a lawsuit.
The court found that defendants’ claim under the Wisconsin Deceptive Trade Practices Act survived the economic loss doctrine, but failed on other grounds.  Defendants alleged that the “worked closely” claim was false, and provided affidavits from the City and County finance directors declaring that the ad was the “tipping point and the reason Springbrook was selected.”
First, the judge found this testimony “not specific enough to create a genuine dispute on the element of causation,” since the only thing Springbrook allegedly misrepresented was the closeness of its working relationship with the Wisconsin DOT. “After all, Meek did not deny that he had worked with Springbrook; he took issue only with the adverb ‘closely.’” Neither affiant stated that she would have voted against awarding the bid to Springbrook if she had been told simply that Springbrook had “worked with” WisDOT, rather than “worked closely” with it.
Relatedly, “worked closely” was puffery.  “The adverb ‘closely’ is not a term of art and it can mean different things to different people.” It expressed “only Springbrook’s judgment as to the nature of the relationship, not a specific fact that can be substantiated or refuted.” Even Meek has acknowledged that the question was a matter of opinion by stating that “I would not characterize my involvement as ‘working closely’ with Springbrook ..... [l]imited emails and phone calls answering questions is not my definition of ‘working closely’” (emphasis added). This “difference of opinion” wasn’t enough to constitute false advertising.
By contrast, Springbook’s representation that it had a highway department solution that was “fully compliant” with state reporting requirements arguably could have been substantiated or refuted, but the City didn’t press its argument about this claim.

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