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Board of Education of the Township of Cherry Hill, Camden County v. Human Resource Microsystems

September 28, 2010

THE BOARD OF EDUCATION OF THE TOWNSHIP OF CHERRY HILL, CAMDEN COUNTY, PLAINTIFF,
v.
HUMAN RESOURCE MICROSYSTEMS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Jerome B. Simandle United States District Judge

OPINION

SIMANDLE, District Judge

I. INTRODUCTION

This matter is before the Court on Defendants' motion to dismiss the Complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P. [Docket Item 9]. As explained in today's Opinion, the Court finds that the motion should be converted to one for partial summary judgment as to Count I and granted with respect to that claim, but denied as to Count II.

II. BACKGROUND

Plaintiff, the Board of Education of the Township of Cherry Hill, brings this suit against two out-of-state corporations, Human Resource Microsystems Inc. and its alleged successor-in-interest BPO Management Services Inc.*fn1 The Complaint, which was removed from state court under 28 U.S.C. § 1441, is about the formation and voiding of a contract involving human resources software.

According to Plaintiff, on February 5, 2003, the Board of Education awarded a contract to Human Resource Microsystems to provide the Board with software to manage human resources issues. (Compl. ¶ 8.) The board made an initial payment on the contract in the amount of $84,370. (Id. ¶ 9.) However, on September 22, 2003, the contract was determined to be void after a rival software vendor, Keystone Information Systems, Inc., sued the Board in New Jersey Superior Court. (Id. ¶¶ 9-10.) The state court judgment also directed Human Resource Microsystems to return to the Board the contract deposit. (Id. ¶ 10.) See Final Order, Keystone Information Systems, Inc. v. Cherry Hill Board of Education, Docket No. L-3798-03 (N.J. Super. Ct., Camden County) (Sept. 22, 2003) ["Keystone Judgment"]. Human Resource Microsystems was not a party to that action, though they were notified of it. (Id. ¶ 9.) Because neither Human Resource Microsystems nor its successor have returned the $84,370, Plaintiff brings this suit to recover the funds paid to Human Resource Microsystems.

Defendants argue that California's statute of limitations bars the claims in the Complaint, and that California's statute applies because of the software license agreement's choice-of-law provision. The Agreement provides:

This Agreement shall be governed by the laws of the State of California and US Copyright laws. If any provision of this License Agreement in any way contravenes the Laws of the State or jurisdiction in which the License Agreement is to be performed, such provisions shall be deemed to be deleted, and if any term of this License Agreement shall be declared by final adjudication to be illegal or contrary to public policy, it shall not affect the validity of any other term or provision of this License Agreement.

(Defs.' Ex. B, at 3.) As to Count I of the Complaint, Plaintiff responds by arguing that this count is more properly characterized as a claim to enforce the state court's Keystone Judgment, supporting this claim with evidence of collaboration with respect to that action, and applying the separate statute of limitations that applies to enforcement actions. As to Count II, Plaintiff argues that the choice-of-law provision should not apply because the contract that the license agreement was in furtherance of is void.

III. DISCUSSION

A. Standard of Review

Dismissal under Rule 12(b)(6) is warranted when "accept[ing] all factual allegations as true and construe the complaint in the light most favorable to the plaintiff," Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008), the Complaint fails to present a plausible basis for relief (i.e. something more than the mere possibility of legal misconduct). See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1951 (2009). When the basis for dismissal is a statute of limitations, it must be apparent from the face of the Complaint that the statute bars the claim. See Brody v. Hankin, 145 Fed. App'x 768, 771-72 (3d Cir. 2005).

If a court considers evidence outside of the pleadings, it may convert the motion to dismiss into a motion under Rule 56, Fed. R. Civ. P, so long as the parties have sufficient notice. Butterbaugh v. Chertoff, 479 F. Supp. 2d 485, 490 (W.D. Pa. 2007) (citing In re Rockefeller Ctr. Props. Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999)). Summary judgment is appropriate when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2). A fact is ...


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