The opinion of the court was delivered by: Walls, Senior District Judge
Defendant Brulant, LLC*fn1 ("Brulant") moves for summary judgment on all claims against plaintiff Campmor, Inc. ("Campmor"). The plaintiff opposes the motion. Pursuant to Rule 78 of the Federal Rules of Civil Procedure, the motion is decided without oral argument. Defendant's motion for summary judgment is granted in part and denied in part.
FACTUAL AND PROCEDURAL BACKGROUND
The facts viewed in the light most favorable to the plaintiffs are: Campmor is a recreational equipment retailer that operates a retail store in Paramus, New Jersey. (Second Am. Compl. ¶ 3.) Campmor was founded in 1978 by Morton Jarashow. (Jarashow Cert. ¶ 2.) His son Dan Jarashow, the chief executive officer of the company, took primary management responsibility in 1981. (Id.) Over the years, Campmor supplemented its catalog sales by developing an internet retail business. (Second Am. Compl. ¶ 5.) Campmor states that by 2006 its revenue from website sales exceeded $60 million per year. (Id.) Until that time, support for Campmor's website was provided by Tachyon Solutions. But Campmor began looking for a larger, more sophisticated company to assist it in updating and improving its website in order to become more competitive. (Second Am. Compl. ¶¶ 28-29; Jarashow Cert. ¶ 4.) Campmor contacted IBM, which had made the WebSphere Commerce e-commerce platform its website used, and IBM recommended Brulant. (Id.)
On September 25, 2006, Brulant visited Campmor and gave a presentation about its services. (Second Am. Compl. ¶ 32; Jarashow Cert. ¶ 5.) During this presentation, Brulant represented itself as the "premier WebSphere Commerce partner in the United States," and said that it had "an extremely close relationship" with IBM that it could "leverage for Campmor." (Jarashow Cert., Ex. A.) Also during this presentation, Brulant recommended that Campmor upgrade its website from the 5.6.1 WebSphere platform to the new 6.0 platform. (Id. at ¶ 6.) Campmor chose not to upgrade at that time, but hired Brulant to improve its search engine optimization*fn2 ("SEO") and to maintain its 5.6.1 website. (Id. at ¶ 8.) Campmor entered into a Master Services Agreement ("MSA") with Brulant (Df. Ex. C), as well as a Statement of Work ("SOW") which specified the services to be performed. (Df. Ex. D.)
Campmor alleges that Brulant "intensified its drumbeat" regarding an upgrade to the 6.0 platform, insisting that Campmor's existing site was "rife with technical difficulties." (Jarashow Cert. ¶ 10.) This culminated in an August 16, 2007 presentation, during which Brulant identified numerous alleged defects with Campmor's 5.6.1 site. As example, Brulant said that the data on Campmor's site was "disorganized" and "inconsistent," the "custom code [was] poorly structured," and "error messages [were] excessive and bizarre." (Jarashow Cert., Ex. B at p. 4.) Brulant also warned that IBM may terminate its provision of free technical support for customers using the 5.6.1 platform. Brulant said that while no official "end of life" date had been set by IBM, October of 2008 was being discussed. (Id. at p. 15.) One of Brulant's principals, Doug Denton, followed up this presentation with an email to Dan Jarashow. In the email, he said that although the estimated fees through 2009 would be $757,700, the return on investment was "estimated to [be] cash flow positive in August of 2008 and result in additional profits of $2.2 million by the end of 2009. I have been conservative at every opportunity during the estimation process." (Jarashow Cert., Ex. D.)
In the fall of 2007, Brulant provided a proposed Statement of Work for the 6.0 upgrade. (Second Am. Compl. ¶ 44; Jarashow Cert., Ex. E.) Jarashow requested a simpler version that omitted language that he found superfluous and confusing, but retained the essential elements of the agreement. In January 2008, Brulant and Campmor executed a revised Statement of Work which provided for a launch date in September 2008. (Second Am. Compl. ¶ 70; Jarashow Cert., Ex. F.) Details of Brulant's "approach and assumptions" contained in the draft SOW were incorporated by reference. (Jarashow Cert., Ex. F at p. 2.) Jarashow was sent a "roadmap" of plans for the website's progress, which projected that the site would be created, tested and launched by September 15, 2008. (Jarashow Cert., Ex. H.)
Throughout the spring and summer of 2008, Jarashow was assured by Brulant that the project was on schedule. (Jarashow Cert. ¶ 32.) However, in September 2008, when the 6.0 site was supposed to go live, Brulant's Adam Cohen and Doug Denton visited Jarashow at Campmor's offices. (Id. at ¶ 33.) In short, Jarashow was told that the costs were exceeding the budget, and that the project was far from finished. (Id.; Second Am. Compl. ¶ 82.) Jarashow was shown a model of the 6.0 test site, and he was dismayed to find that the site did not have elements that he considered critical to the upgrade, including guided navigation and other enhancements. (Jarashow Cert. ¶ 35.) Due to Campmor's seasonal sales patterns, the next opportunity to launch the new site was March 2009. (Id. at ¶ 36.) Around January of 2009, Campmor began analyzing the 6.0 test and noticed that there was a critical and persistent issue with "shopping cart" errors, preventing customers from completing a purchase. (Id. at ¶ 37.) Despite these issues, Brulant assured Campmor that any remaining bugs would be worked out once the site went live. (Id. at ¶ 39.)
The site went live on March 25, 2009, and there were many problems. (Id. at ¶¶ 49-50.) The shopping cart errors persisted, and those customers who were not "bounced" at the shopping cart stage faced additional errors with credit card processing. (Id. at ¶ 41.) There were also critical errors with the OmniFind search function. Essentially, when customers used the "search box" on the website to find an item, the results were irrelevant and useless. (Id. at ¶ 45.) Basic left-hand navigation often resulted in error codes or improper internal search results. (Id. at ¶ 53.) There were also problems with search engine optimization, and Campmor noticed a "radical drop-off in traffic to the Campmor site." (Id. at ¶¶ 54-56.) Finally, Campmor discovered that instead of launching the WSC 6.0 Professional edition of WebSphere (the one Campmor contracted for), Brulant had installed WSC Enterprise edition, which is significantly more complex and expensive. (Id. at ¶ 59.)
On June 16, 2009, Jarashow met with representatives of Brulant and IBM in order to discuss the issues with the site. (Id. at ¶ 60.) At this meeting, Brulant promised to resolve the outstanding issues. According to Campmor, they did not fulfill this promise. (Id.) Campmor ultimately hired another company, Red Baritone, to correct the problems with its website. (Id. at ¶ 53.) Campmor claims that in 2009, it "lost tens of thousands of visitors per month from the preceding year." (Id. at ¶ 64.) Campmor also claims to have lost significant revenue in internet sales. (Id. at ¶¶ 61-63.) To date, Campmor has paid Brulant $1,567,707.88 for its work on upgrading to the 6.0 site, and has paid Red Baritone $417,900.00 to correct the problems caused by Brulant. (Id. at ¶ 72.)
Summary judgment is appropriate where the moving party establishes that "there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute between the parties will not defeat a motion for summary judgment unless it is both genuine and material. See Scott v. Harris, 550 U.S. 372, 380 (2007); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A factual dispute is genuine if a reasonable jury could return a verdict for the non-movant and it is material if, under the substantive law, it would affect the outcome of the suit. See Anderson, 477 U.S. at 248. The moving party must show that the non-moving party has failed to "set forth," by affidavits or otherwise, "specific facts showing that there is a genuine issue for trial." See Beard v. Banks, 548 U.S. 521, 529 (2006) (citing Fed. R. Civ. P. 56(e)).
Once the moving party has carried its burden under Rule 56, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts" in question. Scott, 550 U.S. at 380 (citing Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). At the summary judgment stage, the court's function is not to weigh the evidence and determine the truth of the matter, but rather to determine whether there is a genuine issue of fact for trial. See Anderson, 477 U.S. at 249. In so doing, the court must construe the facts and inferences in the light most favorable to the non-moving party. Curley v. Klem, 298 F.3d 271, 277 (3d Cir. 2002). To survive a motion for summary judgment, a non-movant must present more than a mere "scintilla of evidence" in his favor. Woloszyn v. Cnty. of Lawrence, 396 F.3d 314, 319 (3d Cir. 2005). The opposing party must set forth specific facts showing a genuine issue for trial. See Shields v. Zuccarini, 254 F.3d 476, 481 (3d Cir. 2001).
I.Breach of Contract Claim
Pursuant to the Master Services Agreement entered into by the parties on October 1, 2006, their dispute is governed by Ohio law. See Campmor, Inc. v. Brulant, LLC, Civ. No. 09-5465, 2010 WL 1381000, at *2-3 (D.N.J. Apr. 1, 2010). To prove a breach of contract claim under Ohio law, "a plaintiff must show 'the existence of a contract, performance by the plaintiff, breach by the defendant, and damage or loss to the plaintiff.'" Nilavar v. Osborn, 738 N.E.2d 1271, 1281 (Ohio Ct. App. 2000) (citation omitted).
There is clearly a dispute of material fact regarding Brulant's work on Campmor's website. Campmor alleges that the site had many problems and the end-result was not what they had contracted for. Brulant acknowledges that there were problems with the site, but argues that Campmor "was well aware that there would be issues when the site went 'live.'" (Df. Br. at 5.) Nonetheless, Brulant argues that summary judgment is warranted on the breach of contract claim because Campmor does not have an expert in web design (or some other expert competent to testify about the technical aspects of building a website). Campmor has retained two expert witnesses in this case: William Kerr, an economist, who will testify regarding damages, and Brian Cooper, who will testify regarding search engine optimization. Brulant argues that these experts were not hired to, nor did they attempt to, address Campmor's claim that Brulant's work was deficient and the "upgraded" website designed by Brulant "actually had a lower level of functionality than the original website that had been utilized by Campmor." (Second Am. Compl. ¶ 84.) As such, Brulant alleges that Campmor has "no admissible evidence that there was anything wrong with the fundamentals of the website created and designed by Brulant." (Df. Br. at 13.)
Brulant's argument loses the forest for the trees. "Absent a state or federal mandate requiring expert testimony to maintain a claim, the Federal Rules of Evidence are quite clear; Rule 702 states that if testimony from a qualified expert will assist the trier of fact the court 'may' allow such testimony." Legacy Healthcare Servs., Inc. v. Provident Found., Inc., No. 03-0515, 2007 WL 275974, at *3 (N.D. Ohio Jan. 26, 2007). Brulant has not cited a single case where expert testimony was required on a breach of contract claim. The Court finds that such testimony is not necessary.
Brulant argues that Jarashow and other Campmor executives are not experts in web design, and are unqualified to testify about their own contract. The Court disagrees. The issue, quite simply, is whether Brulant delivered what it promised in the contract. Campmor states that Brulant promised to create a website: 1) with all major components functioning properly, 2) that compared favorably to market leaders and made Campmor more competitive, and 3) that had improved Search Engine Optimization while maintaining rankings from Campmor's previous site. Jarashow and other Campmor employees who were involved with the website project can testify about their expectations, and how the end result fell short. As example, in Bertsch v. Lee's Granite, LLC, the plaintiffs hired the defendant to install a granite countertop and backsplash in their home. No. 09-0021, 2009 WL 4269938, at *1 (Ohio Ct. App. Nov. 20, 2009). They were unsatisfied with the result, sued for breach of contract, and the trial court entered judgment in their favor. Id. at *2. The defendant appealed, arguing that expert testimony was required regarding granite color number variation. Id. The appellate court upheld the judgment below, finding that "expert testimony was not required as the alleged defects were not highly technical or scientific in nature." Id. at *3. The plaintiffs were not experts in granite, but were competent to testify that they had not received what they contracted for. Id. This testimony was sufficient to support their claim. Id. Similarly, here, representatives of Campmor do not need to know how to build a website themselves in order to know that they did not receive what they expected.
Similarly, a jury will be able to understand the testimony. In 2011, the average juror can be expected to be familiar with the internet and websites. He or she knows whether a website is "user friendly," and can understand that something is wrong with a website when error messages occur, internal navigation takes you to the wrong place, search results are useless, or purchases cannot be completed. An issue that prevents a customer from buying an item is a devastating problem for a retail website; Jarashow does not need to have a degree in computer science to explain this, and jurors do not need one to understand it.
Moreover, there is evidence in the record, viewed in the light most favorable to the plaintiff, in which Brulant admits liability for breach. As example:
* In an April 29, 2009 internal Brulant email, Scott Young writes: "Between Campmor guys, I am pretty embarrassed on the quality of the site that we created for them. DJ [Dan Jarashow] has very valid points and I believe that his business will ...