AnthroWare, L.L.C. v. AtWork Group, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:24-cv-00264-MR-WCM
ANTHROWARE, LLC, )
)
Plaintiff )
) MEMORANDUM OF
vs. ) DECISION AND ORDER
)
ATWORK GROUP, LLC, )
)
Defendant, )
)
vs. )
)
JON JONES and JASON STEWART, )
)
Third-Party Defendants. )
)
________________________________ )
THIS MATTER is before the Court on the Third-Party Defendants’
Motion to Dismiss [Doc. 30], the Plaintiff’s Motion for Judgment on the
Pleadings [Doc. 32], the Defendant’s Motion to Exclude [Doc. 48], the Third-
Party Defendants’ and Plaintiff’s joint Motion for Summary Judgment [Doc.
49], and the Defendant’s Motion for Summary Judgment [Doc. 50].
I. PROCEDURAL BACKGROUND
This case arises from a contract dispute between AnthroWare, the
Plaintiff software company, and AtWork Group, the Defendant staffing
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agency. On September 18, 2024, the Plaintiff initiated this action by filing a
Complaint against the Defendant in the Superior Court of Buncombe County,
North Carolina. [Doc. 1-1]. The Defendant filed Notice of Removal to this
Court on October 22, 2024. [Doc. 1]. On November 12, 2024, the Defendant
filed an Answer and asserted Counterclaims against the Plaintiff. [Doc. 10].
The Plaintiff filed an Amended Complaint on April 10, 2025. [Doc. 20].
The Defendant filed an Amended Answer and asserted Amended
Counterclaims against the Plaintiff on April 21, 2025. [Doc. 23]. The
Defendant also filed a Third Party Complaint against AnthroWare’s CEO Jon
Jones and President Jason Stewart on May 2, 2025. [Doc. 25]. On June 4,
2025, Jones and Stewart filed both a Motion to Dismiss the Third Party
Complaint [Doc. 30] and an Answer to the Third Party Complaint [Doc. 31],
and the Plaintiff filed a Motion for Judgment on the Pleadings in Part [Doc.
32]. The Defendant filed a Response to both motions on June 25, 2025,
[Doc. 36], and the Plaintiff and Third Party Defendants filed a Reply on July
2, 2025, [Doc. 40].
On October 9, 2025, the Defendant filed a Motion to Exclude the
opinions of Michael Potts, the Plaintiff’s expert. [Doc. 48]. That same day,
the Third-Party Defendants filed a Motion for Summary Judgment [Doc. 49],
the Plaintiff filed a Motion for Summary Judgment in Part [id.], and the
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Defendant filed a Motion for Summary Judgment [Doc. 50]. The parties
timely filed Responses [Docs. 51, 52, 53] and Replies [Docs. 54, 55, 56] to
each of the dispositive motions. Having been fully briefed, this matter is ripe
for adjudication.
II. STANDARD OF REVIEW
Summary judgment is appropriate if “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). “As the Supreme Court has
observed, ‘this standard provides that the mere existence of some alleged
factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact.’” Bouchat v. Baltimore Ravens Football Club,
Inc., 346 F.3d 514, 519 (4th Cir. 2003) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986)).
“Facts are material when they might affect the outcome of the case,
and a genuine issue exists when the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.” Ballengee v. CBS Broad., Inc.,
968 F.3d 344, 349 (4th Cir. 2020) (quoting News & Observer Publ’g Co. v.
Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010)). When
ruling on a motion for summary judgment, the Court does not “weigh the
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evidence or make credibility determinations.” Guessous v. Fairview Prop.
Invs., LLC, 828 F.3d 208, 216 (4th Cir. 2016) (quoting Jacobs v. N.C. Admin.
Off. of the Cts., 780 F.3d 562, 568-69 (4th Cir. 2015)). “Regardless of
whether he may ultimately be responsible for proof and persuasion, the party
seeking summary judgment bears an initial burden of demonstrating the
absence of a genuine issue of material fact.” Bouchat, 346 F.3d at 522. If
this showing is made, the burden then shifts to the nonmoving party, who
must convince the Court that a triable issue does exist. Id.
Where, as here, the parties each move for summary judgment, the
Court “must review each motion separately on its own merits to determine
whether either of the parties deserves judgment as a matter of law.”
Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (internal quotation
marks and citation omitted). In considering each of the motions for summary
judgment, the Court must view the pleadings and materials presented in the
“light most favorable” to the nonmovant and must “draw all reasonable
inferences” in the nonmovant’s favor. Adams v. UNC Wilmington, 640 F.3d
550, 556 (4th Cir. 2011).
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III. FACTUAL BACKGROUND
The forecast of evidence in this matter is documented and undisputed
except as specifically identified herein.
1. The Parties and the Software
AtWork is a professional staffing agency with a presence in one
hundred locations across thirty states. [Doc. 25 at 2-3]. For decades,
AtWork paid to use a web-based software platform called TempServ that was
designed to help staffing agencies manage their operations, including
several back-office functions critical to the staffing industry. [Id. at 3].
Eventually, AtWork acquired the company that owned TempServ. [Id. at 4].
After acquiring the company, AtWork wanted an outside consultant to
evaluate the TempServ product. [Id.]. In September 2021, AnthroWare—a
technical consulting, creative services, and software development firm—
submitted an evaluation proposal to AtWork. [Id.; Doc. 49-1 at 1; see also
Doc. 49-8 at 4-15]. AtWork ultimately selected AnthroWare to evaluate the
TempServ product and develop recommendations regarding its future use.
2. Master Services Agreement
AnthroWare and AtWork entered a Master Services Agreement
(“MSA”) on February 7, 2022. [Doc. 20-2 at 1, 8]. Under the MSA,
AnthroWare agreed “to provide technical consulting services” and “to plan
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work to be performed in specific periods of time, defined in associated
Statement(s) of Work.” [Id. at 2]. AtWork and AnthroWare agreed to “work
together to define which work will be performed in any given time period.”
[Id.]. They also agreed that if AnthroWare “fail[ed] to deliver its agreed upon
body of work in a given time period” due to a delay caused by AtWork, then
AnthroWare would “not be held liable for that delay.” [Id.].
AnthroWare agreed that its services would “be performed in a diligent
ethical, and workmanlike manner and in accordance with the schedules and
parameters set forth by [AtWork],” and that the “content, style, form, and
format of any work product of the Services [would] be consistent with the
requirements of [AtWork].” [Doc. 20-3 at 1]. Additionally, AnthroWare
warranted that the “employees performing the Services [would] have
sufficient expertise, training and experience performing such services.” [Id.].
The MSA provided that AnthroWare’s work would be “billed as hourly
(time and materials) work.” [Id.]. Accordingly, AnthroWare agreed that its
“Invoices shall reflect hours actually worked and recorded in [AnthroWare’s]
time tracking tool,” and “[a]n accounting of all hours worked may be provided,
if requested by [AtWork].” [Doc. 20-4 at 1]. However, AnthroWare admits
that it “did not maintain time sheets” for any of the work that it performed for
AtWork under the MSA. [Doc. 55-1 at 4, 7].
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Additionally, the MSA provided that all intellectual property made by
AnthroWare pursuant to work performed under the MSA “shall be the
property of [AtWork].” [Doc. 20-2 at 2]. However, the MSA also provided that
“all work and IP produced by [AnthroWare] while rendering the Services is
the property of [AnthroWare] until final payment is received.” [Id. at 3]. The
parties subsequently entered three Statements of Work under the MSA.
3. SOW-1
Contemporaneously with entering into the MSA, the parties executed
SOW-1, their first Statement of Work under the MSA. [Doc. 49-1 at 163].
Under SOW-1, AnthroWare agreed to evaluate the TempServ software and
develop a “plan for designing and rebuilding the TempServ product.” [Id. at
159]. In exchange for that service, AtWork agreed to pay a $25,000 monthly
retainer to AnthroWare for four months. [Id. at 162]. Pursuant to its work
under SOW-1, AnthroWare recommended building a new product to replace
the TempServ software. [Doc. 50-1 at 3].
4. SOW-2, 2.1, and 2.2
On April 22, 2022, while AnthroWare’s work under SOW-1 was
ongoing, AnthroWare and AtWork executed SOW-2, a second Statement of
Work under the MSA. [Doc. 49-1 at 174]. The purpose of SOW-2 was to
develop a thorough understanding of the TempServ product, document the
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product’s features, and lay the groundwork for the development of a
replacement product. [Doc. 50-6 at 6-10]. To that end, AnthroWare agreed
to provide AtWork a senior software developer for forty hours per week, along
with a project manager for approximately four hours per week, to “document
institutional knowledge” about the TempServ software, “map data” in
preparation for data migration into a new software product, and “set up the
‘new build’ for success and help sunset the current system safely and
effectively.” [Doc. 49-1 at 169-70]. In exchange for that service, AtWork
agreed to pay a $18,144 monthly retainer to AnthroWare for an estimated
duration of twelve months. [Id. at 173].
On March 7, 2023, the parties executed a change order, SOW-2.1, that
increased the project manager’s commitment to sixteen hours per week and
raised the monthly retainer to $23,126.04 for the two remaining months of
the project’s twelve-month duration. [Id. at 183, 185-86]. On April 24, 2023,
the parties agreed to another change order, SOW-2.2, that extended the
duration of the project by three months, through July 2023. [Id. at 190, 197-
98]. Even though not documented with a change order, after July 2023
AtWork paid the $23,126.04 retainer for an additional two months for a
continuation of the work provided pursuant to SOW-2, 2.1, and 2.2. [Doc. 20
at 5; Doc. 50-6 at 6].
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5. SOW-3 and 3.1
On May 26, 2022, just prior to the expiration of SOW-1, AnthroWare
and AtWork executed SOW-3, the “TempServ 2.0 Build,” a third Statement
of Work under the MSA. [Doc. 20-5 at 1-2, 7]. According to SOW-3’s “project
summary,” AnthroWare agreed to build “a minimum viable product to
supplant TempServ.” [Id. at 2]. The minimum viable product would “include
both functionality that is derived (and updated) from the current system, as
well as functions that are happening outside the current system,” based on
a “functionality list” that was developed after months of research. [Id.].
SOW-3 contained only one “High Level Deliverable[ ]”: to “[p]rovide a
product development team allocated to build the next evolution of the
TempServ product.” [Id. at 4]. The project was “structured to work with a
product team of 5.5 FTE”—i.e., a full-time equivalent of five and a half
employees. [Id. at 4]. AtWork agreed to pay AnthroWare “a monthly
recurring retainer” of $144,837 for the 5.5 FTE product team, on the
understanding that a “change order” against SOW-3 would be required if
AnthroWare needed “to adjust the 5.5 FTE product team allocation or change
deliverables or timeline.” [Id. at 6]. The contract “estimated that the
Deliverables in this SOW will take approximately sixteen (16) months to
complete,” and the initially scheduled release date for the new product was
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in November 2023. [Id.; Doc. 10-9 at 2]. Additionally, SOW-3 provided that
any additions, amendments or modifications to SOW-3’s “terms (and
attached Services Specifications, Software Specifications, and Scope of
Work) must be in writ[ing] and designated as further Exhibits to the Contract
herein and signed by authorized representations of the parties to be valid.”
[Doc. 20-5 at 7].
Upon the execution of SOW-3, AnthroWare began building a software
product to replace TempServ, and AtWork began paying $144,837 each
month to AnthroWare. [Doc. 51-2 at 34-51]. To document progress on the
project, AnthroWare provided AtWork nearly weekly updates between May
26, 2022 and June 13, 2024. [Doc. 49-3 at 18-110]. Between May 26, 2022
and December 14, 2022, AnthroWare represented that the “Product Build”
was fully “on track.” [Id. at 18-42]. From January 12, 2023 through June 28,
2023, AnthroWare represented that the product build’s timeline was “at risk”
but that the rest of the project was still “on track.” [Id. at 43-65].
By the summer of 2023, due to AtWork’s concern about the project’s
progress, AtWork had engaged UHY Consulting Inc. (“UHY”) and Darin
Berkley, an independent contractor, to assist AnthroWare with certain
aspects of the project. [Doc. 50-9 at 10]. In early June 2023, AnthroWare
and UHY agreed that a significant function of the new TempServ product—
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the “cash application”—should be offloaded onto a separate platform rather
than built by AnthroWare. [Doc. 50-3 at 37, 39, 48; Doc. 50-10 at 2-4].1
AnthroWare first shared that recommendation with AtWork between June 5
and June 7, 2023, but AtWork did not immediately make a decision regarding
the recommendation. [Doc. 50-9 at 4; Doc. 50-11 at 2]. On June 23, 2023,
AnthroWare prepared SOW-3.1, a proposed change order intended to
extend the project’s completion date by four months to March 31, 2024.
[Doc. 20-6 at 1-2]. Despite the pending recommendation to offload the cash
application, AnthroWare continued to include the cash application in the
functionality list incorporated into SOW-3.1. [Doc. 50-1 at 4; Doc. 50-4 at 47;
Doc. 50-8 at 5; Doc. 50-9 at 4, 10]. On June 26, 2023, during a meeting
between AnthroWare, UHY, and Darin Berkley, AnthroWare President Jason
Stewart represented that AnthroWare was “90 percent of the way” to “Version
0.5” of the new product and had completed the payroll, invoicing, and taxes
parts of that version, with the exception of integrating the taxes part into the
payroll part. [Doc. 53-3 at 4]. On July 5, 2023, AnthroWare and AtWork
executed SOW-3.1, which effected a change in the timeline only. [Doc. 20-
1 The parties disagree about who initially made this recommendation. AnthroWare
contends that UHY initially made this recommendation. [Doc. 50-3 at 37, 48]. AtWork
and Cory McNeley, the Director of UHY, contend that AnthroWare initially made this
recommendation. [Doc. 50-1 at 4; Doc. 50-9 at 7; Doc. 50-10 at 2-3].
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6 at 2, 7-8]. AtWork contends that it agreed to extend the project’s timeline
in reliance on AnthroWare’s representations regarding its progress on the
product. [Doc. 53 at 6].
AnthroWare subsequently represented that the product build was
again fully “on track” between July 6, 2023 and October 16, 2023. [Doc. 49-
3 at 66-78]. Between October 19 and November 9, 2023, AnthroWare
represented that the product build’s timeline, budget, and functional
requirements document were “at risk” but that the build’s scope, and the build
overall, were still “on track.” [Id. at 79-82].
In November 2023, AtWork accepted AnthroWare and UHY’s
recommendation to offload the cash application and related functions to a
separate platform, and AtWork engaged UHY and Crestwood, another
vendor, to develop that aspect of the project. [Doc. 50-1 at 4-5; Doc. 50-3 at
39, 49; Doc. 50-11 at 2]. The parties disagree about the extent to which this
decision reduced the scope of AnthroWare’s work under SOW-3. AtWork
contends that the cash application represented twenty-five percent of the
original project. [Doc. 50-1 at 4]. AnthroWare contends that the cash
application represented as little as four or five percent of the original project.
[Doc. 50-4 at 48].
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6. Revised Payment Schedule and SOW-3.2
On November 27, 2023, soon after accepting the recommendation to
offload the cash application, AtWork informed AnthroWare that it was “highly
concerned” about the state of the project. [Doc. 51-2 at 78]. Specifically,
AtWork stated that because the “cash application and related functions were
included in the [minimum viable product],” AtWork no longer believed that
AnthroWare could deliver the minimum viable product contracted for in
SOW-3 and 3.1. [Id. at 78-79]. As a result, AtWork proposed revising its
monthly payment schedule to account for work that was part of SOW-3 and
3.1 but was being reallocated to third-party vendors at additional cost to
AtWork. [Id. at 79]. Following AtWork’s initial proposal, the parties
negotiated the terms of a revised payment schedule. [Id. at 55-79].
The parties settled on a framework for the payment schedule in late
December. On December 21, 2023, AnthroWare proposed a payment
schedule that involved reduced payments between December 2023 and July
2024. [Id. at 58-60]. Under AnthroWare’s proposal, AtWork would pay
AnthroWare $100,000 each month between December 2023 and March
2024, $43,741 each month between April 2024 and June 2024, and
$100,000 in July 2024. [Id. at 58-59]. Additionally, AtWork would provide a
promissory note for $20,000 each month between December 2023 and
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March 2024, as well as in July 2024, that would be due as a $100,000 lump
sum payment in August. [Id.]. On December 29, 2023, AtWork proposed
adopting that revised payment schedule with one exception—namely, that
the deferred $100,000 lump sum payment would be tied to “the successful
launch of the platform” rather than function as a series of promissory note
obligations. [Id. at 57]. Before receiving AnthroWare’s response, AtWork
paid AnthroWare the first two $100,000 monthly payments that would be due
for work in December and January under the proposed plan.2 [Id.]. In
response to AtWork’s proposal, AnthroWare asked for clarification regarding
AtWork’s definition of a “successful launch,” noting that AnthroWare was
“looking for a way to say ‘yes.’” [Id.]. AtWork responded that its “goal would
be to tie it to when we ‘go live’ with the total franchise system (7/1/24).” [Id.
at 56-57]. AnthroWare’s response—“Thanks so much for this, we will run
with it and put some language together so that we can update our payment
schedule and move forward”—concluded the negotiations on January 5,
2024. [Id. at 55]. On January 24, 2024, AnthroWare invoiced AtWork in
accord with the revised payment plan—the invoice reflected a $100,000
2 Before the parties settled on the terms of the revised payment plan, AnthroWare invoiced
AtWork at the original rate in November and December 2023 for work to be performed in
December and January. [Doc. 50-5 at 2; Doc. 50-9 at 15]. AtWork made the initial two
$100,000 payments based on its expectation that this monthly payment amount would be
part of the revised payment plan that was being negotiated. [Id.].
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payment due by January 31, 2024 and an additional $20,000 balance to be
paid later. [Id. at 52]. AtWork paid the invoice, and AnthroWare accepted
the payment without dispute. [Doc. 50-1 at 6; Doc. 50-5 at 2; Doc. 50-14 at
9].
On January 31, 2024, AnthroWare provided AtWork with a change
order, SOW-3.2, that incorporated the negotiated revisions to the payment
plan. [Doc. 51-2 at 93-94, 116]. SOW-3.2’s “Scope Change Log” noted that
“[p]er negotiation decision made by Jon Jones [of AnthroWare] and Jason
Leverant [of AtWork] through December 2023, the monthly bill rate has
changed and a deferred fee structure has been designed.” [Id. at 84].
However, SOW-3.2 changed the trigger for the $100,000 deferred payment,
stating that it would “become due thirty (30) days after at least one AtWork
Tenant has completed 30 calendar-days of use in the live environment
(PILOT), or on 7/30/2024, whichever is sooner.” [Id. at 93].
SOW-3.2 also included many other changes. For example, although
SOW-3.2 preserved the project summary from SOW-3 and 3.1 verbatim, it
included a wholesale revision of the “Deliverables” section. [Id. at 86, 88-
91]. The new “High Level Deliverable[ ]” was to “[b]urn down the remaining
work related to the locked feature set” of the TempServ software product.
[Id. at 88]. The locked feature set was a “list of workflows and required
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functions” that was produced collaboratively by AnthroWare and AtWork, and
SOW-3.2 noted that “[a]dditions to this list of required functions and
workflows are considered a change in scope and must be treated as such.”
[Id. at 89]. On February 14, 2024, AnthroWare again invoiced AtWork in
accord with the revised payment plan, with $100,000 due by February 29,
2024 and an additional $20,000 balance to be paid later. [Id. at 53].
On February 15, 2024, AtWork provided AnthroWare with comments,
questions, and change requests for SOW-3.2. [Id. at 115]. Regarding the
deferred $100,000 payment, AtWork requested that AnthroWare remove the
clause providing that the payment would be due “on 7/30/2024” even if the
platform had not yet launched. [Id. at 108]. AtWork instead reiterated its
agreement “to release deferred payment upon successful go-live of pilot.”
[Id.]. AtWork also pushed back on SOW-3.2’s discussion of the list of
workflows and required functions. [Id. at 104]. Specifically, AtWork stated
its understanding that “[t]he project has always been to replace TempServ
with an updated system,” and AtWork expressed concern that some of the
features necessary to accomplish that goal might be missing from the current
list of workflows and required functions. [Id.]. AtWork requested that “the
language better match what [it] originally signed up for.” [Id.].
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In response, on February 19, 2024, AnthroWare rejected AtWork’s
counterproposal regarding the deferred payment and the language about the
list of workflows and required functions as “impossible.” [Id. at 114]. AtWork
subsequently paid AnthroWare the $100,000 due under the February 14
invoice, and AnthroWare accepted the payment without dispute. [Doc. 50-1
at 6; Doc. 50-5 at 2; Doc. 50-14 at 9].
Neither party signed SOW-3.2. Nevertheless, AnthroWare invoiced
AtWork in accord with the revised payment schedule for the month of April,
and AtWork paid the $43,741 invoice. [Doc. 50-14 at 9]. The terms of SOW-
3.1 without the email modification would have expired at the end of March
2024, but AnthroWare continued to invoice AtWork in accord with the revised
payment schedule. [Id.]. AtWork paid AnthroWare’s two subsequent $43,741
invoices, and AnthroWare accepted payment without dispute. [Id.]. At the
end of May 2024, AnthroWare informed AtWork via email that “after the
payment due at the end of June to reserve the team for July . . . [AnthroWare]
was going to need to move back to the original [$]144,000” monthly rate for
work in subsequent months. [Doc. 50-3 at 59].
7. Termination of the Project
As late as June 13, 2024, AnthroWare’s progress report projected a
“Pilot Franchise Go Live” date for the product on June 24, 2024 and a “Big
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Bang Go Live” date on July 22, 2024. [Doc 49-3 at 110]. However, the
product did not go live on either date. AnthroWare again invoiced AtWork in
accord with the revised payment plan—a payment of $100,000 plus a
deferred balance of $20,000—for the month of July, but this time AtWork
withheld payment. [Doc. 50-5 at 2; Doc. 50 at 8-9].
On July 2, 2024, AnthroWare President Jason Stewart informed
AtWork that AnthroWare expected payment of $428,777—$100,000 for work
in July 2024, as well as an “accrued balance” of $328,777. [Doc. 50-14 at 6-
10]. The $100,000 payment for work in July represented the final payment
in the revised payment schedule negotiated the prior December. [Id. at 9-
10]. The first $100,000 of the $328,777 accrued balance represented the
sum of the five deferred payments of $20,000 for work in December through
March plus July. [Id. at 9]. The remaining $228,777 of the $328,777 accrued
balance represented a retroactive bill of $76,259 per month for work in April
through June. [Id.]. Stewart arrived at that number by arguing that AtWork
should have paid $120,000 for each of those months, rather than the $43,741
AtWork actually paid per month in accord with the revised payment schedule,
because AnthroWare “maintained a full-sized team” during those months
instead of scaling down its team as it had originally anticipated. [Id.].
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On July 9, 2025, AtWork refused this request for payment. [Id. at 3-4].
AtWork agreed to pay $43,000 for work in July, representing a downward
departure from the revised payment schedule, which called for a $100,000
payment with an additional $20,000 balance. [Id. at 3]. AtWork argued that
this downward departure was warranted because it had agreed to the
$120,000 combined payment for July based on AnthroWare’s representation
that there would be “additional effort required to ‘go live’ in July,” but the
product did not in fact go live in July. [Id.]. Instead, AtWork asserted that the
$43,000 payment for July “should be sufficient to transition any remaining
code” to AtWork so that AtWork could finish the project on its own. [Id.].
On July 11, 2024, AnthroWare CEO Jon Jones responded and
demanded immediate payment of $49,412, as well as an additional payment
of $482,425.64 to “secure work product” created between April 1 and July
10, 2024. [Id. at 2]. According to Jones, the $49,412 represented the unpaid
balance of the “total contracted value” of SOW-3.1. [Id.]. To reach that
balance, Jones disregarded the revised payment schedule and assumed a
payment obligation of $144,9363 per month for work through March 2024.
3 This assumption was erroneous. Jones’s assertion that “[t]he signed agreement placed
a fee of $144,936 per month for 22 months” is inconsistent with the plain text of SOW-3
and SOW-3.1, both of which establish a monthly payment of $144,837. [Doc. 20-5 at 6;
Doc. 20-6 at 7]. Every invoice in the record also establishes that the monthly payment
under SOW-3 and 3.1 was $144,837. [Doc. 51-2 at 34-51]. However, starting with the
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[Id.]. Jones then subtracted the sum of all payments made by AtWork to
AnthroWare for invoices under SOW-3 and 3.1—eighteen months at
$144,837, four months at $100,000, three months at $43,741, and nine
months of an additional $99 software expense4—to reach a balance of
$49,412. [Id.]. Jones maintained that the additional payment of $482,425.64
represented the sum of monthly payments of $144,936 for work in April, May,
June, and July 1-10 on a prorated basis.5 [Id.]. Jones informed AtWork that
if AnthroWare did not receive the $49,412 payment by the end of the next
business day, he would have “no option but to lay off the team immediately,”
and that, in turn, would make it “impossible” for AnthroWare to hand off the
remaining code to AtWork. [Id.].
AtWork refused this request for payment, and AnthroWare stopped
performing. Two months later, on September 18, 2024, AnthroWare initiated
this suit against AtWork. [Doc. 1-1].
invoice dated 2/15/2023, AnthroWare began adding a “Reimbursable Expense” of $99 for
“Usersnap Software” to the monthly invoice, bringing the total monthly payment to
$144,936 for nine months through the invoice dated 10/15/2023. [Id. at 43-51].
4 See supra note 3.
5 The Court has been unable to replicate any method by which Jones reached this figure,
and AnthroWare’s counsel offers no explanation. If this were a true proration of the
claimed $144,936 for July, it would constitute payment for 10.185 days, rather than 10
days.
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IV. DISCUSSION
A. AtWork’s Motion for Summary Judgment
1. AnthroWare’s Claims
The First Cause of Action in AnthroWare’s Amended Complaint asserts
that AtWork materially breached the MSA and SOW-3, as amended by SOW-
3.1, by failing to pay, and repudiating its obligation to pay, the full amount due
for services provided between December 2023 and March 2024. [Doc. 20
at 8]. The Second Cause of Action asserts a quantum meruit claim for the
full reasonable value of labor and services that AnthroWare provided to
AtWork between April 1, 2024 and July 10, 2024. [Id. at 8-9]. The Third
Cause of Action asserts that, if the Court determines that the parties agreed
to SOW-3.2, AtWork materially breached the terms of that agreement by
failing to pay the amount due for services rendered in July 2024, repudiating
the contract, terminating the contract with fewer than sixty days’ notice,
frustrating AnthroWare’s ability to complete the product, and failing to pay the
$100,000 deferred payment by July 30, 2024. [Id. at 9-11]. The Fourth
Cause of Action seeks both a declaratory judgment that AnthroWare has not
received final payment from AtWork and injunctive relief barring AtWork from
using any work and intellectual property produced by AnthroWare pursuant
to SOW-3. [Id. at 11-12].
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AtWork moves for summary judgment on grounds that AnthroWare has
failed to present a forecast of evidence to sustain any of these claims.
2. Governing Law
The express language of the MSA establishes that this dispute is
governed by North Carolina law. [Doc. 20-2 at 7]. The parties disagree,
however, as to whether SOW-3 is governed by the common law or the
Uniform Commercial Code (“UCC”). [Doc. 51 at 8-13; Doc. 55 at 4].
North Carolina applies the “predominant factor” test to determine
whether the common law or the UCC governs a mixed contract involving the
sale of both goods and services. Hensley v. Ray's Motor Co. of Forest City,
580 S.E.2d 721, 724 (N.C. Ct. App. 2003). Under the predominant factor
test, courts look to “(1) the language of the contract, (2) the nature of the
business of the supplier, and (3) the intrinsic worth of the materials” to
determine whether the predominant factor of the contract is “the rendition of
services with the sale of goods incidentally involved” or “the sale of goods
with the provision of services incidentally involved.” Id. at 724-25 (citation
and internal quotation marks omitted).
“It is the general law of contracts that the purport of a written instrument
is to be gathered from its four corners.” Ussery v. Branch Banking & Tr. Co.,
777 S.E.2d 272, 279 (N.C. 2015) (citation and internal quotation marks
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omitted). When reviewing and interpreting contractual language, courts
construe the various terms harmoniously, such that “[e]ach clause and word
is considered with reference to each other and is given effect by reasonable
construction.” Id. “Another fundamental rule of contract interpretation is that
a written contract is construed against the party who drafted it.” State v.
Philip Morris USA Inc., 618 S.E.2d 219, 225 n.14 (2005) (citation and internal
quotation marks omitted).
Here, SOW-3’s language, which was drafted by AnthroWare,
unambiguously establishes an agreement for AnthroWare to design and
develop a custom software product for AtWork. The title page for SOW-3
refers to the project as “TempServ 2.0 Build.” [Doc. 20-5 at 1]. The
“Overview” of the project proposes the “build of a minimum viable product,”
discusses the “new build” and implementation of “a product,” states the value
of “building this product,” and explains how the “new product” will function.
[Id. at 2]. Although the “High Level Deliverable[ ]” of SOW-3 is to “[p]rovide
a product development team,” that team is “allocated to build the next
evolution of the TempServ product.” [Id. at 4]. Moreover, SOW-3’s “Timeline”
estimates that “the Deliverables in this SOW will take approximately sixteen
months to complete.” [Id. at 6]. This timeline cannot reasonably be
construed as a timeline for merely providing a product development team. It
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is plainly a timeline for providing the product itself. As a result, SOW-3’s
language obligates AnthroWare to provide a good—i.e., a minimum viable
software product—to AtWork. For purposes of determining the governing
law, however, the operative question for the Court is whether SOW-3’s
language requires a degree of custom design and development befitting a
services contract to which the common law applies.
The North Carolina Business Court has observed that a consumer
purchase of “a shrink-wrapped word processing program from the shelf” of
an electronics store is “very clearly” a sale of a good, whereas a
programmer’s contract to “invent[] and develop[] new software for a particular
customer” looks “more like a services contract.” Smart Online, Inc. v.
Opensite Techs., Inc., No. 01 CVS 09604, 2003 WL 21555316, at *4 (N.C.
Super. June 17, 2003). The sale of “preexisting software,” even when
combined with “custom modifications or upgrades to adapt it to the user’s
needs,” typically counts as a sale of a good. Id. (quoting Pearl Invs., LLC v.
Standard I/O, Inc., 257 F. Supp. 2d 326, 353 (D. Me. 2003)); see also
Waterfront Props., Inc. v. Xerox Connect, Inc., No. 3:04CV322-H, 2006 WL
267191, at *1, *5 (W.D.N.C. Jan. 31, 2006) (reaching the same conclusion
when the seller provided “customized databases” for “preexisting software”).
Neither side, however, has cited to any authority under North Carolina law
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that addresses a contract like the one at issue here, which involves the
design and development of software from scratch for a particular customer.
Most courts that have addressed this issue have concluded that custom
software development contracts are services contracts to which the common
law applies. See, e.g., Multi-Tech Sys., Inc. v. Floreat, Inc., No. CIV. 01-1320
DDA/FLN, 2002 WL 432016, at *3 (D. Minn. Mar. 18, 2002) (“The few cases
considering the question indicate that the UCC does not apply to an
agreement to design and develop a product, even if compensation under that
agreement is based in part on later sales of that product.”); Pearl, 257 F.
Supp. 2d at 353 (“[F]or purposes of applicability of the UCC, development of
a software system from scratch primarily constitutes a service.”); Wharton
Mgmt. Grp. v. Sigma Consultants, Inc., No. C.A. 89C-JA-165, 1990 WL
18360, at *1, *3 (Del. Super. Ct. Jan. 29, 1990), aff'd, 582 A.2d 936 (Del.
1990) (concluding that a contract to “design” and “develop” “customized
computer software” was “exclusively or primarily” a contract for services);
State v. Maximus, Inc., No. X06CV075011488S, 2009 WL 1142570, at *7
(Conn. Super. Ct. Apr. 1, 2009) (reviewing similar cases and concluding that
“the degree of development and customization or programming that was
required by the buyer” is a “significant factor” for determining whether a
contract was predominantly for goods or services).
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As a result, SOW-3’s language, which shows that AnthroWare agreed
to build a custom software product from scratch, supports a conclusion that
SOW-3 is a contract to which the common law applies. The other two
elements of the predominant factor test also support this conclusion.
AnthroWare represents itself as a “boutique creative, digital product,
marketing, and insights agency” that provides “technical and creative
services” tailored to the needs of its clients. [Doc. 49-8 at 5; Doc. 20-3 at 2].
Moreover, the intrinsic worth of the materials at issue pales in comparison to
the relevant labor costs. Accordingly, the Court concludes as a matter of law
that the common law, rather than UCC, governs SOW-3, even though the
subject of the contract was for AnthroWare to provide a product.
3. Modification of SOW-3 and 3.1
It is undisputed that the parties formally agreed to SOW-3 and SOW-
3.1 but did not formally agree to SOW-3.2.6 [Doc. 20-5 at 7; Doc. 20-6 at 8;
Doc. 50-6 at 19; Doc. 50-14 at 2]. The question before the Court is whether,
as a matter of law, the parties also agreed to a valid modification of SOW-3
and 3.1.
6 AnthroWare concedes that the parties did not agree to SOW-3.2. [Doc. 51 at 7, 13; Doc.
50-3 at 25, 61; Doc. 50-14 at 2; 50-17 at 28]. As such, AnthroWare appears to have
abandoned the Third Cause of Action in its Amended Complaint. [Doc. 20 at 9-11].
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“Parties to a contract may, by mutual consent, agree to change its
terms.” Electro Lift, Inc. v. Miller Equip. Co., 166 S.E.2d 454, 456 (N.C. Ct.
App. 1969). Well-settled North Carolina law establishes that “a written
contract may ordinarily be modified by a subsequent parol agreement and
such subsequent agreement may be either express or implied by conduct of
the parties.” Id. (citation omitted); see also 42 E., LLC v. D.R. Horton, Inc.,
722 S.E.2d 1, 6-7 (N.C. Ct. App. 2012) (noting that for conduct to modify or
waive a written contractual provision, such conduct must “naturally and justly
lead[] the other party to believe the provisions of the contract are modified or
waived” (citation and internal quotation marks omitted)).
A valid contract modification, however, “must possess all elements
necessary to form a contract.” Electro Lift, 166 S.E.2d at 456-57. “In the
formation of a contract an offer and an acceptance are essential elements,”
and “the offer must be communicated, must be complete, and must be
accepted in its exact terms.” Dodds v. St. Louis Union Tr. Co., 170 S.E. 652,
653 (N.C. 1933). Additionally, “[c]ommon law principles dictate that
traditionally, any alter[ation] [of] the terms of a contract must be supported by
new consideration.” Canteen v. Charlotte Metro Credit Union, 900 S.E.2d
890, 894 (N.C. 2024) (internal citations and quotation marks omitted).
“Consideration is present if there is a benefit to the promisor or a detriment
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to the promisee.” Lannan v. Bd. of Governors of Univ. of N. Carolina, 913
S.E.2d 163, 171 (N.C. 2025).
Contract formation “results from the concurrence of minds of two or
more persons, and its legal consequences are not dependent upon the
impressions or understandings of one alone of the parties to it. It is not what
either thinks, but what both agree.” Howell v. Smith, 128 S.E.2d 144, 146
(N.C. 1962) (citation and internal quotation marks omitted). “The question
whether a contract has been made must be determined from a consideration
of the expressed intention of the parties—that is from a consideration of their
words and acts.” Normile v. Miller, 326 S.E.2d 11, 17 (N.C. 1985) (citation
and internal quotation marks omitted). A party’s “undisclosed intention is
immaterial in the absence of mistake, fraud, and the like, and the law imputes
to a person an intention corresponding to the reasonable meaning of his
words and acts.” Howell, 128 S.E.2d at 146. “If [a party’s] words or acts,
judged by a reasonable standard, manifest an intention to agree in regard to
the matter in question, that agreement is established, and it is immaterial
what may be the real but unexpressed state of his mind on the subject, as
mental assent to the promises in a contract is not essential.” Id. Accordingly,
“the test of the true interpretation of an offer or acceptance is not what the
party making it thought it meant or intended it to mean, but what a reasonable
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person in the position of the parties would have thought it meant.” Id. “When
the parties use clear and unambiguous terms, the contract should be given
its plain meaning, and the court can determine the parties’ intent as a matter
of law.” Alaimo Family Chiropractic v. Allstate Ins. Co., 574 S.E.2d 496, 498
(N.C. Ct. App. 2002). “Interpreting a contract requires the court to examine
the language of the contract itself for indications of the parties' intent at the
moment of execution.” Philip Morris USA, 618 S.E.2d at 225.
Here, because the record of the parties’ email correspondence
regarding the revised payment schedule and the subsequent invoices and
payments in accord with that schedule is undisputed, the Court interprets the
meaning of the parties’ correspondence and conduct as a matter of law.
On December 21, 2023, amid negotiations about revising AtWork’s
payment obligations in conjunction with AnthroWare’s recently revised
product development obligations,7 AnthroWare presented a contract
modification offer to AtWork. [Doc. 51-2 at 58-60]. AnthroWare proposed a
revised payment schedule: payments of $100,000 per month for December
through March plus July, with an additional $20,000 for each of those months
7 When AtWork initiated these negotiations about payment on November 27, 2023,
AtWork’s rationale for doing so was that the parties’ lengthy discussions regarding
relieving AnthroWare of any responsibility for the cash application had recently resulted
in a decision to shift responsibility for that work onto a different vendor. [Doc. 51-2 at 78-
79].
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deferred to July 31, 2024, plus payments of $43,741 per month for April
through June. [Id. at 59-60].
On December 29, 2023, AtWork expressed its willingness to agree to
the payment schedule, but presented a counterproposal regarding the trigger
for paying the $100,000 in deferred payments (5 x $20,000)—namely, to tie
the payments “to the successful launch of the platform.” [Id. at 57]. After
AtWork clarified what was meant by a “successful launch,” AnthroWare
responded affirmatively on January 5, 2024: “Thanks so much for this, we
will run with it and put some language together so we can update our
payment schedule and move forward.” [Id. at 55 (emphasis added)]. In
anticipation of the conclusion of the negotiations on these terms, AtWork had
paid the December and January payments in accord therewith. [Id. at 57].
As part of its January 5, 2024 response, AnthroWare thanked AtWork “for
releasing [the first two] payments as we figured this out; that means a lot to
us and we appreciate it.” [Id. at 55 (emphasis added)].
On January 24, 2024, before AnthroWare “put some language
together,” AnthroWare invoiced AtWork in accord with the revised payment
schedule—the invoice reflected a $100,000 payment due by January 31,
2024 plus a deferred $20,000 balance. [Doc. 51-2 at 52]. AtWork paid the
January invoice, and AnthroWare accepted the payment without dispute.
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[Doc. 50-1 at 6; Doc. 50-5 at 2; Doc. 50-14 at 9]. In fact, every invoice that
AnthroWare sent AtWork after January 5, 2024 requested payment
consistent with the terms of the revised payment schedule, and AnthroWare
accepted all of AtWork’s payments on those invoices without dispute. [Doc.
50-1 at 6; Doc. 50-3 at 32, 59; Doc. 50-5 at 2; Doc. 50-14 at 9; Doc. 51-2 at
52-53]. AnthroWare gave no indication that it expected payment outside the
terms of the revised payment schedule until after AnthroWare missed the
“go-live” deadline and AtWork withheld payment on the final invoice for work
in July 2024. [Doc. 50-3 at 32, 59; 50-14 at 6-10].
The Court gives the parties’ words and acts their plain meaning.
AnthroWare’s statement that “we will run with it” is an acceptance of AtWork’s
counteroffer and a statement of AnthroWare’s intent to document the parties’
new agreement. Similarly, AnthroWare’s expression of thanks to AtWork for
releasing payments “as we figured this out” is a clear indication that the
parties’ negotiations had ended. Moreover, all of AnthroWare’s subsequent
conduct through June 2024 indicates that AnthroWare understood that it was
bound by the terms of the revised payment schedule. As such, AnthroWare’s
January 5, 2024 email cannot reasonably be construed as a mere statement
of AnthroWare’s intent to continue negotiating at a later date. The Court
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concludes as a matter of law that AnthroWare’s affirmative response on
January 5, 2024 was an acceptance of AtWork’s counteroffer.
As required by the common law, the parties’ agreement to the revised
payment schedule was supported by new consideration: AtWork agreed to
accept a product “with a significant piece missing (cash application and
related accounting functions),” and AnthroWare agreed to accept less
payment in exchange. [Doc. 51-2 at 79 (emphasis in original)]. Accordingly,
the Court concludes as a matter of law that the parties’ agreement to the
revised payment schedule, including the term conditioning the deferred
payment upon the successful launch of the software product on July 1, 2024,
constituted a valid modification of SOW-3 and 3.1. Based on the forecasts
of evidence, taken in the light most favorable to AnthroWare as the non-
moving party, no reasonable jury could find facts to support any different
conclusion.
AnthroWare resists this conclusion and contends that the emails lack
the “essential terms for an agreement” because they “did not define the
scope of the services or work that Anthroware would provide in exchange for
the proposed payment schedule,” and that AtWork’s subsequent rejection of
SOW-3.2 evinces the absence of such an agreement. [Doc. 51 at 14-15].
The forecast of evidence, however, cannot sustain that contention.
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AnthroWare incorporated the revised payment schedule into its SOW-3.2
proposal, which AnthroWare presented to AtWork on January 31, 2024.
[Doc. 51-2 at 83-96]. However, SOW-3.2 included terms inconsistent with
the agreement reached earlier in the month8 and introduced new terms not
contemplated in the parties’ prior negotiations.9 [Id. at 88-91, 93, 104, 108].
As such, SOW-3.2 was a proposal for an additional modification that was
rejected by AtWork. This unsuccessful attempt to reopen negotiations and
modify other terms of SOW-3 does not affect the validity of the parties’ prior
agreement. To the extent that AnthroWare, at the time of its January 5, 2024
email, may have harbored an undisclosed intention to continue negotiating
the terms of the deferred payment, such undisclosed intention is immaterial.
AnthroWare’s words and acts, including AnthroWare’s decision to begin
invoicing AtWork in accord with the revised payment schedule before
preparing SOW-3.2, constitute an acceptance of AtWork’s counteroffer,
yielding a valid contract modification.
8 SOW-3.2 proposed a different trigger for the $100,000 deferred payment, providing that
the deferred payment would “become due thirty (30) days after at least one AtWork Tenant
has completed 30 calendar-days of use in the live environment (PILOT), or on 7/30/2024,
whichever is sooner.” [51-2 at 93 (emphasis added)].
9 SOW-3.2 included a wholesale revision of the “Deliverables” section, including a new
“High Level Deliverable[ ]” and several pages of terms regarding the product’s
infrastructure, features, and integrations and the parties’ communications and decision-
making obligations. [Doc. 51-2 at 88-91].
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The Court notes that SOW-3 and 3.1 contain provisions that require
any modifications to SOW-3 and 3.1’s “terms (and attached Services
Specifications, Software Specifications, and Scope of Work)” to be “signed
by authorized representations of the parties.” [Doc. 20-5 at 7; Doc. 20-6 at
8]. However, North Carolina courts have concluded that contractual
provisions requiring “any modification of the contract to be in writing” or
declaring that “[n]o salesman or agent of the company shall have the right to
change or modify this contract” do not, in fact, bar such modifications. 42 E.,
722 S.E.2d at 7 (citation and internal quotation marks omitted). Moreover,
even a contract’s “no waiver” provision may be subsequently waived
because “the nonwaiver clause itself, like any other term of the contract, is
subject to waiver by agreement or conduct during performance.” Town of
Forest City v. Florence Redevelopment Partners, LLC, 896 S.E.2d 653, 659
(2024) (citation and internal quotation marks omitted).
Here, both parties acted in accord with the modification to SOW-3.1 in
the invoicing and payment of the amounts due thereunder. This manifests a
bilateral understanding that the parties were proceeding with the contract as
modified, waiving the requirement of formal documentation and signature.10
10 The modification was, of course, in writing: emails. As such, this is not a waiver of the
writing requirement, but only of the formality. There are no signature, but it us undisputed
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Moreover, the forecast of evidence shows that the “attached Services
Specifications, Software Specifications, and Scope of Work” were subject to
significant changes across the course of the project without corresponding
formal, signed modifications to those attachments. For example, the parties
agreed to offload the cash application onto another platform and outsource
its development to other vendors, but they never executed a formal, signed
modification of the functionality list to remove the cash application. The
forecast of evidence also indicates that the parties did not always execute
formal change orders when they agreed to change payment schedules and
deadlines. For example, it is undisputed that AnthroWare invoiced AtWork
and AtWork paid for two additional months of work pursuant to SOW-2 after
the expiration of SOW-2.2. [Doc. 20 at 5; Doc. 50-6 at 6].
Accordingly, the Court concludes as a matter of law that the parties’
course of performance reveals a clear intent to waive the contractual
provisions requiring all modifications to be formal, signed exhibits to the
contract. The parties’ agreement to the revised payment schedule was
consistent with the parties’ course of performance across their longstanding
that the respective participants in the email exchange had authority. Lastly, Jones was the
CEO of AnthroWare, and not some mere “salesman or agent.” As such, that provision also
need not have been waived. AnthroWare’s waiver was, thus, quite minor and clearly
manifested by word and performance
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partnership. Once again, based on the forecasts of evidence, taken in the
light most favorable to AnthroWare as the non-moving party, no reasonable
jury could find facts to support any different conclusion.
4. The Contract
Having concluded that the parties validly agreed to modify SOW-3 and
3.1, the Court now interprets the contract between the parties as a matter of
law. SOW-3 is a contract for AtWork to pay AnthroWare to perform the
service of creating a minimum viable product to replace TempServ. As
modified by SOW-3.1 and the parties’ agreement to the revised payment
schedule, SOW-3 provides that, beginning with December 2023, AtWork was
obligated pay AnthroWare according to the following schedule: $100,000 per
month for four months, December 2023 through March 2024; $43,741 for
three months, April 2024 through June 2024; and $100,000 for July 2024.
AtWork was also obligated to pay AnthroWare an additional $100,000 if the
product was successfully launched by July 1, 2024. AnthroWare was
obligated to create and deliver a minimum viable product in accordance with
the specifications incorporated into SOW-3, except that AnthroWare was
relieved of the obligation to build the cash application and related functions.
It is undisputed that AtWork made all of the payments contemplated by
the revised payment schedule except for the $100,000 payment for work in
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July 2024 and the $100,000 payment that was conditioned on the product’s
successful launch. It is also undisputed that the product was never
successfully launched and that AnthroWare stopped performing under the
contract no later than July 12, 2024. However, questions of material fact
remain regarding breach—including whether AnthroWare committed a first
material breach that excused some of AtWork’s payment obligations.
Accordingly, the Court will grant summary judgment in part in favor of
AtWork on AnthroWare’s First Cause of Action. However, to the extent that
the First Cause of Action asserts a breach of the contract as interpreted by
the Court herein, the Court will deny summary judgment in part to AtWork on
that cause of action. The Court will also deny summary judgment to AtWork
as to the Fourth Cause of Action, which seeks remedies predicated on the
underlying breach of contract claim. Because the Court has concluded that
a valid contract existed through July 2024 and that the parties did not agree
to SOW-3.2, the Court will grant summary judgment to AtWork as to
AnthroWare’s Second and Third Causes of Action.
B. Remaining Motions
AnthroWare moves for summary judgment on the breach of warranty
components of AtWork’s breach of contract counterclaim and on AtWork’s
fraudulent misrepresentation, negligent misrepresentation, and professional
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negligence counterclaims.11 [Doc. 49]. The Third Party Defendants also
move for summary judgment on AtWork’s fraudulent misrepresentation and
negligent misrepresentation claims. [Id.]. As to AtWork’s breach of contract
counterclaim, summary judgment is denied.
In order to bring a fraudulent or negligent misrepresentation claim, a
party must identify the purported misrepresentations “with particularity so
that the defendant can understand the time, place and content of the
representation, the identity of the person making the representation, and how
the plaintiff justifiably relied on that information.” Value Health Sols., Inc. v.
Pharm. Rsch. Assocs., Inc., 891 S.E.2d 100, 114 (N.C. 2023). Additionally,
the purported misrepresentations must “constitute material representations
of fact, as opposed to mere puffery.” Glob. Hookah Distributors, Inc. v. Avior,
Inc., 401 F. Supp. 3d 653, 659 (W.D.N.C. 2019). “Courts have held indefinite
statements of corporate optimism to be puffery,” and “[t]he line between
corporate optimism and material statements falls where the statements at
issue were specific factual allegations that were not simply sales pitches but
rather can be proven true or false—and, if properly supported, could be found
11 AtWork also asserts a counterclaim for unjust enrichment in the event that the Court
concludes that the contract between AtWork and AnthroWare is void or unenforceable.
[Doc. 23 at 50]. Because the Court concludes as a matter of law that SOW-3, as modified
by SOW-3.1 and the revised payment schedule, is neither void nor unenforceable, the
Court will dismiss AtWork’s unjust enrichment claim.
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material by a reasonable jury.” Id. at 659 (citations and internal quotation
marks omitted). Moreover, the purported representations must misrepresent
“existing or ascertainable facts, as distinguished from a matter of opinion or
representation relating to future prospects.” Value Health Sols., 891 S.E.2d
at 119 (citation and internal quotation marks omitted).
Here, AtWork’s forecast of evidence fails to identify with particularity
any adequate predicate statement for AtWork’s misrepresentation claims.
General statements about the ability of AnthroWare’s employees, the status
of AnthroWare’s progress on the project, the estimated timeline for the
project’s completion, and AnthroWare’s future performance will not suffice.
Accordingly, the Court will grant summary judgment to AnthroWare and to
the Third Party Defendants on AtWork’s misrepresentation claims.
The Court will also grant summary judgment to AnthroWare as to
AtWork’s professional negligence claim, which the Court concludes is barred
by the economic loss rule. See Crescent Univ. City Venture, LLC v. Trussway
Mfg., Inc., 852 S.E.2d 98, 101-04 (N.C. 2020); Johnson Bros. Corp. v. City
of Charlotte, No. 23CVS002076-590, 2024 WL 808823, at *2-*6 (N.C. Super.
Feb. 27, 2024); Legacy Data Access, Inc. v. Cadrillion, LLC, 889 F.3d 158,
164 (4th Cir. 2018); Apex Tool Grp. LLC v. Cyderes, LLC, No.
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323CV00236KDBSCR, 2023 WL 7490146, at *4, *7-*8 (W.D.N.C. Nov. 13,
2023).
AtWork moves to exclude the opinions of Michael Potts, AnthroWare’s
software expert. [Doc. 48]. Because the Court has not relied on Potts’s
opinions at summary judgment, the Court will deny AtWork’s motion without
prejudice.
Finally, AnthroWare’s pending Motion for Judgment on the Pleadings
in Part [Doc. 32] and the Third Party Defendants’ pending Motion to Dismiss
[Doc. 30] will be denied as moot.
V. CONCLUSION
The parties may proceed to trial on their breach of contract claims to
the extent that they assert a breach of SOW-3 as interpreted by the Court
herein. This matter will be set for jury trial during the March 9, 2026 trial
term.
O R D E R
IT IS, THEREFORE, ORDERED that the Defendant’s Motion for
Summary Judgment [Doc. 50] is hereby GRANTED IN PART and DENIED
IN PART. As to the First Cause of Action in the Plaintiff’s Amended
Complaint [Doc. 20], summary judgment is DENIED IN PART to the extent
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that the First Cause of Action asserts a breach of the contract as interpreted
by the Court herein; summary judgment is otherwise GRANTED IN PART as
to the First Cause of Action. As to the Second and Third Causes of Action in
the Plaintiff’s Amended Complaint [Doc. 20], summary judgment is hereby
GRANTED. As to the Fourth Cause of Action in the Plaintiff’s Amended
Complaint [Doc. 20], summary judgment is hereby DENIED.
IT IS FURTHER ORDERED that the Third Party Defendants’ Motion
for Summary Judgment and Plaintiff’s Motion for Summary Judgment in Part
[Doc. 49] is hereby GRANTED IN PART and DENIED IN PART. Summary
judgement is GRANTED as to Counts II, III, and IV of the Defendant’s
Amended Counterclaims [Doc. 23] and Counts I and II of the Defendant’s
Third Party Complaint [Doc. 25]. Summary judgment is DENIED as to Count
I of the Defendant’s Amended Counterclaims [Doc. 23].
IT IS FURTHER ORDERED that the Defendant’s Motion to Exclude
the Opinions of Michael Potts [Doc. 48] is hereby DENIED WITHOUT
PREJUDICE.
IT IS FURTHER ORDERED that the Plaintiff’s Motion for Judgment on
the Pleadings in Part [Doc. 32] is hereby DENIED as moot.
IT IS FURTHER ORDERED that the Third Party Defendants’ Motion to
Dismiss [Doc. 30] is hereby DENIED as moot.
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IT IS FURTHER ORDERED that Count V of the Defendant’s Amended
Counterclaims [Doc. 23] is hereby DISMISSED.
IT IS FURTHER ORDERED that this case is set for jury trial during the
March 9, 2026 trial term.
IT IS SO ORDERED. Signed: January 6, 2026
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