ARMOUR Capital Management LP v. SS&C Technologies, Inc.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          JEFFREY ALKER MEYER UNITED STATES DISTRICT JUDGE

         Plaintiff ARMOUR Capital Management LP (ACM) and defendant SS&C Technologies, Inc. (SS&C) are embroiled in litigation over the failed implementation of financial services software that SS&C sold to ACM. In this latest round of their battle, SS&C moves for summary judgment on all of ACM's claims. Although I will grant SS&C's motion as to ACM's breach of contract claim, I will deny the motion as to ACM's remaining claims.

         Background

         ACM is a Florida-based registered investment advisor that focuses on mortgage-related securities. SS&C provides software and related services to the financial industry from its headquarters in Connecticut. I take the facts here from both parties' briefs and their Local Rule 56 statements of material fact.

         The origins of the parties' dispute dates to early 2014. SS&C was by this time an established provider of financial services software, including the CAMRA software that it had developed in 1988. See Doc. #177-1 at 2-3 (¶¶ 3-4, 6). ACM was then a 19-employee mortgage real estate investment trust (REIT). See Doc. #177-1 at 25 (¶ 65). ACM managed assets for the similarly-titled ARMOUR Residential REIT, Inc. (ARR), as well as for JAVELIN Mortgage Investment Corporation (which was later purchased by ARR). Id. at 7 (¶ 16).

         Although it had worked with some REITs in the past, SS&C announced in April 2014 that it would form a new group that would specialize in serving REITs. See Doc. #177-1 at 5 (¶ 13); Doc. #176-8 at 2. In May 2014, Jim Mountain, who held himself out as the CFO of both ARR and Javelin, contacted SS&C. Doc. #177-1 at 8 (¶ 21). He and his colleague Mark Gruber then met in June 2014 with SS&C representatives, including business development director Dennis Moore. Id. at 9 (¶¶ 22-23). At the meeting, SS&C presented a PowerPoint discussing various aspects of itself, its customers, and CAMRA, and Moore then followed up with Mountain and Gruber. Id. at 9-11 (¶¶ 23-31).

         Discussions between SS&C and the ARMOUR entities continued that summer and fall, including several “proofs of concept” to demonstrate tests of CAMRA on ARR's data. Id. at 11-12 (¶ 32). In late August 2014, SS&C met with ACM to show a PowerPoint purporting to demonstrate the first proof of concept of the CAMRA system and to introduce ACM to several SS&C CAMRA staffers. Id. at 12-14 (¶¶ 34, 37). Included in that group of staffers was SS&C professional services team member Shiv Sivadas. Id. at 13 (¶ 34). SS&C then discussed further aspects of CAMRA implementation with ACM information technology staff in September 2014. Id. at 14 (¶ 38).

         In mid-November 2014, SS&C provided ACM with a “Comprehensive Mortgage REIT Software and Operational Support Services Proposal, ” ibid. (¶ 39), which contained various details about the potential implementation of CAMRA, see Id. at 14-15 (¶¶ 39-41); Doc. #176-29 at 10, 13. By December 2014, Moore emailed Mountain, Gruber, and their colleague Joanna Terry to alert them that he and SS&C's Jeff Fecteau had been working “to prepare an implementation estimate for transitioning ARMOUR to our CAMRA solution.” Doc. #177-1 at 16 (¶ 43). Two days later, he sent ARR and ACM a “draft implementation budget, ” and SS&C then sent a revised proposal the following day. Id. at 16-17 (¶¶ 45-48). SS&C proposed a call with Mountain to discuss “what constitutes the ‘ordinary course of business.'” Id. at 17-18 (¶ 50). The parties have argued about the nature, meaning, and import of the statements by SS&C throughout these negotiations.

         ACM and SS&C finally concluded their negotiations and signed what they call the “Master Agreement” on December 19, 2014. Id. at 17 (¶ 51). The Master Agreement specifies certain limitations of consequence to this action, including the following clauses:

Section 6.7.4:

Entire Agreement. This Master Agreement (including any attachments and addenda hereto) contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the parties with respect thereto.

Sections 6.2.1 and 6.2.5:

Disclaimer. Except as set forth in this Master Agreement or a relevant attachment, SS&C makes no warranties, whether express, implied, or statutory, regarding or relating to the Software or Documentation. SS&C specifically disclaims all implied warranties of merchantability and fitness for a particular purpose with respect to the software and the Documentation.

No Other Warranty. Any written representation or warranty not expressly contained in this Master Agreement or a relevant Attachment or Work Request is not authorized or valid. No employee, agent, representative or affiliate of SS&C has authority to bind SS&C to any oral representations or warranty concerning the Software.

Section 6.2.2:

Exclusion of Consequential Damages and Absolute Limitation on SS&C's Liability. SS&C is not liable for any indirect, special, incidental or consequential damages of any kind, including without limitation, loss of profits, loss of use, business interruption, loss of data, or cost of cover in connection with or arising out of the furnishing, performance of any services under the Master Agreement, any Attachment or any Work Request, or use of the Software furnished hereunder . . . .

Section 6.2.3:

No Third Party Beneficiaries. SS&C shall have no contractual or other obligations or liability to (i) ARMOUR Residential REIT, Inc. or (ii) JAVELIN Mortgage Investment Corp. directly or as third party beneficiaries of this Master Agreement or any other agreement between SS&C and Client.

Id. at 18-19 (¶ 52).

         The Master Agreement had several attachments: Attachment B-1, which identified specific “Hosting, Process Automation and Data Management Services” that SS&C would provide; and “Work Request One, ” which identified specific “Initial Implementation Services.” Id. at 19 (¶ 53). Work Request One noted that SS&C would provide services “in support of Client's implementation of the Software, ” and listed “Assumptions, ” including a “Project Duration of 4-6 months” and an “Applicable Rate” that SS&C would “provide an estimated 1, 850 hours of support in relation to the services described . . . at a rate of $225 per person per hour.” Ibid. (¶ 54).

         Alongside its relationship with SS&C, ACM also maintained a relationship with ARR and Javelin. ACM provided services to both ARR and Javelin under what it calls “Management Agreements, ” which state that “[ACM] is authorized to retain, for and on behalf of the REIT, the services of third parties.” Id. at 20 (¶ 56). The agreements also provide that “costs and expenses related to the retention of third parties shall be the sole cost and expense of the REIT.” Ibid. The ...