Genesys Software Systems, Inc. v. Ceridian Corporation, et al.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-10773
Non-Argument Calendar
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D.C. Docket No. 1:14-cv-02658-MHC
GENESYS SOFTWARE SYSTEMS, INC.,
Plaintiff–Appellant,
versus
CERIDIAN CORPORATION,
CERIDIAN HCM, INC.,
CSIG MANAGEMENT, INC.,
WILLIAM SNYDER,
Defendants–Appellees,
DAVID A. FISCHER,
Defendant.
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Appeal from the United States District Court
for the Northern District of Georgia
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(November 22, 2016)
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Before WILLIAM PRYOR, JULIE CARNES, and FAY, Circuit Judges.
PER CURIAM:
Plaintiff Genesys Software Systems sued Defendants Ceridian, iHouse,
iHouse’s president William Snyder, and David Fischer, alleging copyright
infringement, among other claims. The district court granted summary judgment
to Defendants. Significantly, Plaintiff had released its claims in a previous
settlement agreement (“the Settlement Agreement”) with a third party, Lands’ End,
as to acts of Lands’ End’s agents. The court concluded that independent contractor
David Fischer, who was the only person to access Plaintiff’s software on Lands’
End’s mainframe after Lands’ End’s software license had expired, was an agent of
Lands’ End. That being so, the release in the prior settlement agreement precluded
any finding of liability in Plaintiff’s new action. We agree.
BACKGROUND I.
A. Facts
1. Lands’ End’s File Extractions
Plaintiff licenses software for managing payroll, benefits, taxes, and related
services. In January 1993, Plaintiff entered into a 20–year software license
agreement (“the Licensing Agreement”) with Lands’ End, effective January 19,
1993. Lands’ End used Plaintiff’s software to manage its employee data. In 2012,
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Lands’ End decided to transition from Plaintiff’s software to software produced by
Defendant Ceridian Corporation.
In making that transition, Lands’ End encountered difficulties extracting its
employee data files in a format that was compatible with Ceridian’s software.
Accordingly, Lands’ End asked Ceridian to identify a consultant who could assist
with data extraction. Ceridian suggested CSIG Management, doing business as
iHouse. iHouse had a relationship with David Fischer, an independent contractor,
who had extensive experience using Plaintiff’s software. Fischer was ultimately
selected for the job.
Fischer traveled to Lands’ End’s offices in Wisconsin. Lands’ End provided
Fischer with access to its mainframe computer and told Fischer where to find the
files that Lands’ End wanted extracted. Lands’ End directed Fischer to extract the
employee data files. Over the next several weeks, Fischer extracted Lands’ End’s
employee data files and provided those files directly to Lands’ End. After Fischer
returned to his home in Pennsylvania, Lands’ End requested that Fischer extract
additional files remotely. Lands’ End provided Fischer with remote access to its
mainframe to perform the requested extractions. Fischer ran these extractions from
May 2012 through March 2013, again providing the extracted files directly to
Lands’ End. At Lands’ End’s direction, Fischer stopped running the extractions in
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March 2013. Ceridian paid iHouse for the majority of Fischer’s work; Lands’ End
also paid a portion.
2. The Wisconsin Litigation
On January 17, 2013, Plaintiff filed a single-count declaratory judgment
action in the Western District of Wisconsin seeking a declaration as to the
Licensing Agreement’s expiration date. Complaint at 4–5, Lands’ End, Inc. v.
Genesys Software Sys., Inc., No. 13-cv-38 (W.D. Wis. Jan. 17, 2013), ECF No. 1.
Lands’ End filed counterclaims for breach of contract, injunctive relief,
conversion, and misappropriation of trade secrets. Id. at ECF No. 5. On July 3,
2013, the court held that the Licensing Agreement expired on January 19, 2013.
Id. at ECF No. 26.
Thereafter, on April 24, 2014 the parties entered into a settlement agreement
(“the Settlement Agreement”), under which Lands’ End agreed to pay Plaintiff
$90,000. As relevant here, the Settlement Agreement also included the following
pertinent terms:
WHEREAS, the Parties desire to settle any and all claims
between them arising out of or related to the Lawsuit[,] . . . the
Parties agree as follows:
4. Except as otherwise set forth herein, the Parties, intending to
be legally bound for themselves, and their respective parents
and subsidiaries, release and discharge each other, their past
and present principals, officers, directors, employees, agents,
attorneys, insurers, Related Entities, parents, subsidiaries,
successors, and assigns, from any and all actions, causes of
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action, claims, covenants, contracts, liabilities, demands, debts,
assessments, special assessments, suits, proceedings, damages,
and appeals, known or unknown, liquidated or unliquidated,
contingent or non-contingent, arising from or pertaining in any
way to all events, facts or occurrences from the beginning of the
World to the Effective Date of this Agreement. This release is
intended to serve and shall serve as a complete and total release
of all claims or any kind except for those obligations that are
expressly created by this Agreement.
5. As used in Section 4 hereof, the term “Related Entities”
expressly excludes any third party vendor or service providers
(e.g., iHouse, Ceridian Corporation, Ceridian HCM, Inc., etc.),
any employee of such third parties, or anyone other than the
entities and individuals listed above in Paragraph 4, but solely
with respect to any release of any claim that Genesys may
assert based solely on the acts, errors, or omissions of those
third parties and their employees and not based on the acts,
errors, or omissions of the entities and individuals listed above
in Paragraph 4. It is expressly agreed to and understood by
Lands’ End that a material aspect to the entry into this
Agreement by Genesys is that it has expressly preserved such
claims against third party vendors and service providers and
their employees. Notwithstanding the release granted in
Section 4 hereof, such release shall not apply to any individual
who is a former Lands’ End employee, if the claim asserted
against such individual arose after such individual left Lands’
End’s employ. (emphasis added).
After signing the Settlement Agreement, the parties filed a Stipulation of Dismissal
in the Western District of Wisconsin, thereby terminating the lawsuit. Id. at ECF
No. 85.
B. Procedural History
On August 18, 2014, Plaintiff sued Defendants Ceridian, iHouse, iHouse’s
president William Snyder, and David Fischer in the Northern District of Georgia,
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where Plaintiff’s parent company has its principal place of business. The
complaint asserted claims for copyright infringement, unfair competition, and
common law conspiracy. Each claim arose out of Plaintiff’s assertion that
Defendants had continued to use Plaintiff’s software after the expiration of the
Licensing Agreement “to perform various functions, including . . . data extraction
from the Genesys Software.” Defendants moved to dismiss all three claims and to
dismiss Plaintiff’s claims against Fischer for lack of personal jurisdiction. On
November 6, 2014, before the district court ruled on Defendants’ motion to
dismiss, Plaintiff voluntarily dismissed Fischer, who had performed the
extractions. The district court granted the remaining defendants’ motion to dismiss
with respect to the unfair competition and common law conspiracy claims, but
denied their motion as to the copyright infringement claim.
Defendants then moved for summary judgment on the copyright
infringement claim. They argued that the infringement claim was barred by the
release of claims in the Settlement Agreement. In particular, Defendants argued
that the only person or entity who accessed Plaintiff’s software after the expiration
of the Licensing Agreement was David Fischer, who was an “agent” of Lands’
End. Paragraph 4 of the Settlement Agreement released Lands’ End and its
“agents” from all claims by Plaintiff and thus barred Plaintiff’s copyright
infringement claim. In response, Plaintiff argued that the Licensing Agreement
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prohibited Lands’ End from ever allowing a third party to use the Plaintiff’s
software. But even if the Licensing Agreement had permitted such use, it had
expired before Defendants stopped using Plaintiff’s software. Moreover,
Defendants could not be described as “agents” of Lands’ End.
The district court granted summary judgment in favor of Defendants. The
court reasoned that there was no evidence that anyone other than Fischer accessed
the Plaintiff software. Further, Fischer was an “agent” of Lands’ End when he
accessed the software because he had acted at the direction of and for the benefit of
Lands’ End. Plaintiff appealed the district court’s grant of summary judgment in
favor of Defendants.
DISCUSSION II.
“We review de novo a district court’s grant of summary judgment, resolving
all reasonable factual disputes in favor of the non-moving party.” Liebman v.
Metro. Life Ins. Co., 808 F.3d 1294, 1298 (11th Cir. 2015). “Summary judgment
is appropriate if there are no genuine issues of material fact and a party is entitled
to judgment as a matter of law.” Gennusa v. Canova, 748 F.3d 1103, 1108 (11th
Cir. 2014) (citing Fed. R. Civ. P. 56(a); Bradley v. Franklin Collection Serv., Inc.,
739 F.3d 606, 608 (11th Cir. 2014)).
On appeal, Plaintiff argues that the district court impermissibly decided
issues of fact that should have been left to the jury. At bottom, Plaintiff argues that
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the district court erred in holding that (1) Fischer was an agent of Lands’ End and,
even if it did, that (2) paragraph 5 of the Settlement Agreement released
Defendants from liability for actions of Lands’ End’s agents.
A. The Scope of the Release1
Plaintiff argues that the parties to the Settlement Agreement did not intend to
release claims against Defendants arising out of Fischer’s accessing of Plaintiff’s
software and that it was improper for the district court to resolve this issue at the
summary judgment stage. We disagree.
Paragraph 4 of the Settlement Agreement contains a general release of
claims. It states that, among other parties, “agents” and “Related Entities” of
Lands’ End are “release[d] and discharge[d] . . . from any and all . . . liabilities.”
Paragraph 5, in turn, states: “As used in Section 4 [], the term ‘Related Entities’
expressly excludes any third party vendor or service providers (e.g., iHouse,
Ceridian Corporation, Ceridian HCM, Inc., etc.) . . . , but solely with respect to any
release of any claim that Genesys may assert based solely on the acts, errors, or
omissions of those third parties and their employees and not based on the acts,
errors, or omissions of the entities and individuals listed above in Paragraph 4.”
1 Before the district court, Defendants argued that Wisconsin law governs the contract
interpretation issues in this action, whereas Plaintiff argued that Georgia law governs. The
district court held that Wisconsin law applies, albeit noting “no meaningful distinction between
the application of Wisconsin or Georgia law to the issue at hand.” Plaintiff does not now dispute
the court’s decision. Accordingly, we also apply Wisconsin law.
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Thus, under ¶ 4, Lands’ End’s “agents” and “Related Entities” cannot be
held liable for any infringement that may have occurred prior to the date that the
Settlement Agreement was executed. Under ¶ 5, however, certain Related Entities,
including Defendants here, may be liable, “but solely with respect to . . . the acts,
errors, or omissions of [the Related Entities] . . . and not based on the acts, errors,
or omissions of the entities and individuals listed [] in Paragraph 4.” In short, the
release applies to acts or omissions attributable to “agents” of Lands’ End prior to
the date of the Settlement Agreement. Under ¶ 5, however, Defendants would not
have been released from liability based on infringing acts performed by an
individual not acting as an agent of Land’s End. Thus, we agree with the district
court’s conclusion that to the extent Fischer was acting as an agent of Lands’ End,
Defendants cannot be held liable for Fischer’s use of Plaintiff’s software after the
expiration of the Licensing Agreement.2
To the extent that Plaintiff argues that it never intended for the release to
apply to Fischer’s actions, Plaintiff’s argument fails. It is axiomatic that the best
indicator of contracting parties’ intentions is the language in the contract itself.
See Tufail v. Midwest Hosp., LLC, 833 N.W.2d 586, 592 (Wis. 2013). Here, the
contract is unambiguous, and Plaintiff’s contradictory subjective understanding is
2 The district court concluded, and Plaintiff does not dispute on appeal, that Fischer was the only
individual to access Plaintiff’s software after the expiration of the Licensing Agreement. Thus,
any liability Defendants might face would necessarily arise solely from Fischer’s use of the
software.
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of no moment. Id.; Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476,
484 (Wis. 2010). If Plaintiff’s subjective intentions are not adequately reflected in
the unambiguous language set out in ¶¶ 4 and 5 of the Settlement Agreement,
Plaintiff should have drafted a contract that better reflected its intentions.
B. Whether Fischer Was an Agent of Lands’ End
“‘Agency is the fiduciary relation which results from the manifestation of
consent by one person to another that the other shall act on his behalf and subject
to his control, and consent by the other so to act.’” James W. Thomas Constr. Co.,
Inc. v. Madison, 255 N.W.2d 551, 554 (Wis.1977) (quoting Restatement (Second)
of Agency § 1(1)); accord Romero v. West Bend. Mut. Ins. Co., 885 N.W.2d 591,
601–02 (Wis. 2016) (“Attorneys, for example, have a fiduciary obligation to their
clients, are subject to the control of clients, and can bind clients through their
actions.”).
The district court held that Fischer was operating as Lands’ End’s agent in
accessing Plaintiff’s software and thus concluded that Plaintiff’s claims against
Defendants arising out of Fischer’s accessing of Plaintiff’s software could not
proceed. The district court reasoned that “Lands’ End directed and controlled
Fischer’s access of the software, and Fischer provided the results of his access
directly to Lands’ End.”
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Before the district court, Plaintiff agreed that the interpretation of the release
clause in the Settlement Agreement was potentially case-dispositive and should be
decided by the district court as a matter of summary judgment based on those
undisputed facts that were before the district court. On appeal, however, Plaintiff
now argues that notwithstanding the above stipulation, the district court usurped
the jury’s fact-finding role by interpreting the release based on those same facts.
We disagree.
First, Plaintiff characterizes as a disputed material fact the district court’s
determination that Fisher acted as an agent of Lands’ End in extracting its
personnel files from its system. Because Ceridian paid part of Fisher’s
compensation,3 Plaintiff argues that Fisher was not Land’s end’s agent. Plaintiff’s
contention fails. First, the district court expressly acknowledged that Fischer was
compensated in part by Ceridian. The district court correctly concluded that
Fischer’s compensation scheme, however, did not create a genuine issue of
material fact as to whether Lands’ End controlled Fischer because an agent can be
beholden to more than one principal. See Restatement (Third) of Agency § 3.14.
The question, however, was whether Fisher’s work was subject to Land’s End
control and its consent to Fisher’s actions. The undisputed facts establish that it
was. Fisher extracted Land’s End’s data as the latter instructed him to do, and he
3 Plaintiff offers no evidence that Ceridian played any role in directing Fischer’s work.
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provided that data directly to Land’s End. He performed only those tasks that
Land’s End told him to do, and he stopped running data extractions when Land’s
End directed him to cease. Plaintiff has not pointed to any evidence to the
contrary.
Accordingly, the district correctly concluded that Fisher acted as the agent of
Lands’ End in performing his work. Further, as earlier noted, because Fisher was
the only person or entity to perform the file extractions at issue, his allegedly
infringing actions were performed by an agent of Land’s End, whose actions
triggered no additional liability, given the release clause of the Settlement
Agreement.
CONCLUSION III.
For the foregoing reasons, we AFFIRM the district court’s grant of
summary judgment to Defendants.
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