Prancer Capital, Corp. vs. Experian Information Solutions, Inc.

Reply to Opposition

Cal. Super. - 4th Dist.July 2, 2018

H O w oO 0 9 S N Wn 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Daniel J. McLoon (State Bar No. 109598) Kerry C. Fowler (State Bar No. 228982) JONES DAY 555 South Flower Street Fiftieth Floor Los Angeles, CA 90071.2300 Telephone: +1.213.489.3939 Facsimile: +1.213.243.2539 Email: kcfowler@JonesDay.com Attorneys for Defendant ELECTROMICALLY FILED Superior Court of Califarnia, County of Orange 01/29/2019 at 02:31:00 PM Clerk of the Superior Court By & Clerk, Deputy Clerk EXPERIAN INFORMATION SOLUTIONS, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY ORANGE - CENTRAL PRANCER CAPITAL CORP., a Florida Corporation, Plaintiff, Vv. EXPERIAN INFORMATION SOLUTIONS, INC., an Ohio corporation; CHEETAH DIGITAL MARKETING SOLUTIONS, INC., a Delaware corporation; and DOES 1 through 50, inclusive, Defendant. CASE NO. 30-2018-01002887-CU-BC-CJC DEFENDANT EXPERIAN INFORMATION SOLUTIONS, INC.’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS Date: February 5, 2019 Time: 2:00 p.m. Dept: C11 Complaint Filed: Trial Date: Reservation ID: July 2, 2018 None 72924558 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS SN O O © 9 O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In its opposition to Experian Information Solutions, Inc.’s (“Experian”) Motion for Judgment on the Pleadings (the “Motion™), Prancer Capital Corp. (“Prancer”) argues that the Motion should be denied because: (1) the language of two Pricing Addendums prohibit Experian from terminating the parties’ agreement upon thirty (30) days’ written notice; and (2) Prancer has properly alleged a breach of contract cause of action in the Complaint. The Court should reject these arguments as they are based on an unreasonable reading of the parties’ agreement and ignore well-established rules of contract interpretation. Section 2 of the Consumer Services Schedule, attached to the Motion as Exhibit 2, clearly and unambiguously permits Experian to terminate the parties’ agreement without cause upon thirty (30) days’ written notice. The parties’ agreement is clear and explicit that the two Pricing Addendums Prancer relies upon in its Opposition have no impact whatsoever on Experian’s right to terminate. Because the agreement forecloses any cause of action premised on an alleged breach of contract by Experian, the Complaint should be dismissed with prejudice and Prancer should not be afforded an opportunity to amend. II. THE AGREEMENT The parties’ agreement is comprised of several documents, including the Standard Terms and Conditions, the Consumer Services Schedule and applicable pricing documents, referred to as Pricing Addendums (collectively referred to as the “Agreement”).! The Standard Terms and Conditions “contains the standard terms and conditions for Experian’s provision of products and services (collectively, ‘Services’) to the Client.” [Motion at Ex. 1 (“STAC”).] The STAC is “supplemented by individual schedules containing additional terms and conditions applicable to specific Services (each as ‘Schedule’)” to be provided by Experian to the client. The STAC does not set forth any specific Services to be provided by Experian to the client. Instead, the specific Services for each client are set forth in the applicable “Schedule.” ! The parties also executed an Experian/Fair Isaac Credit Scoring Services Agreement and a Death Master File Addendum, which are not relevant to the Motion or this Reply. 2 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS HH L N OO 00 9 O N wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In this case, the applicable “Schedule” is the Consumer Services Schedule, which defines “Services” as “the supply of consumer credit information, account review services, identification information, generic scoring services, and other data services from information stored in one of Experian’s consumer databases.” [Motion at Ex. 2 (the “Consumer Services Schedule”).] The Consumer Services Schedule provides that “Experian will provide Services to Client for the fees set forth in a pricing document signed by both parties...” The June 1, 2016 Pricing Addendum and the April 26, 2017 Pricing Addendum Prancer relies upon in its Opposition are the “pricing documents” referenced in the Consumer Services Schedule. [See Exs. 4 & 5 to Decl. of Mac W. Cabal in Support of Opposition (collectively, the “Pricing Addendums”).] The Pricing Addendums merely “establish[] the pricing for all of [Prancer]’s purchases of the Services listed [in the addendum].” III. THE PRICING ADDENDUMS DO NOT PROHIBIT EXPERIAN FROM TERMINATING THE AGREEMENT UPON 30 DAYS’ WRITTEN NOTICE The Pricing Addendums do not prohibit Experian from terminating the Agreement upon thirty (30) days’ written notice. As detailed in the Motion, Experian properly terminated the Agreement pursuant to Section 2 of the Consumer Service Schedule, which provides that either party can terminate without cause “upon thirty (30) days prior written notice to the other party.” [Motion at Ex. 2, Schedule § 2.] This language is clear and unambiguous, and Prancer’s attempts to circumvent it are unavailing. See Bionghi v. Metropolitan Water Dist. of So. California, 70 Cal. App. 4th 1358, 1364 (1999) (“The termination clause is clear and unambiguous. With the words ‘The Agreement may be terminated by [the MWD] hereto 30 days after notice in writing,’ it provides that the only condition for termination is 30 days’ notice, and allows termination with or without cause.”). A. Section 2 of the Consumer Services Schedule clearly and explicitly addresses termination where the parties have executed a Pricing Addendum. First, Prancer argues that Experian could not terminate the Agreement because it is bound by the 24-month and 36-month “Pricing Terms” in the Pricing Addendums. Prancer relies on the language in Section 2 of the Consumer Services Schedule stating that “if a term is designated in a 3 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS SH W N OO 00 ~~ O&O Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 pricing document signed by both parties, such term will apply to this Schedule.” Prancer conveniently and misleadingly ignores the last part of that provision, which specifically addresses termination where the parties have executed a Pricing Addendum. Under California law, if a contract is clear and explicit, the contract’s language governs its interpretation. Cal. Civ. Code § 1638. Section 2 of the Consumer Services Schedule provides: 2. Term. This Schedule shall commence on the Schedule Effective Date and continue in force without any fixed date of termination and either Client or Experian may terminate this Schedule upon thirty (30) days prior written notice to the other party. Notwithstanding the foregoing, if a term is designated in a pricing document signed by both parties, such term will apply to this Schedule and Client shall have no right to terminate this Schedule upon thirty (30) days prior written notice with regards to the applicable Services. [Motion at Ex. 2, § 2 (emphasis added).] This language is clear and explicit that the execution of a Pricing Addendum prohibits the client (in this case, Prancer) from terminating the Agreement upon 30 days’ written notice, but has absolutely no effect on Experian’s right to terminate. Therefore, this language governs the interpretation of the Agreement and precludes Prancer’s breach of contract claim. B. The Pricing Addendum is a “pricing document” not a “Schedule.” Next, Prancer argues that Experian’s termination of the Consumer Services Schedule is insufficient to terminate the Agreement because the STAC requires termination or expiration of all Schedules. [See Motion at Ex. 1, § 2 (The Agreement “shall continue in effect until the termination or expiration of all Schedules.”).] Prancer contends that the Pricing Addendums are also a “Schedule” and, as such, must expire before the STAC can be terminated. The Agreement reflects that a Pricing Addendum is a “pricing document,” not a “Schedule” and so it need not expire before the Agreement can be terminated.’ Courts recognize that parties to a contract may define the words they use in the contract, and, if the definitions are free from ambiguity, the contract will be enforced according to the definitions assigned by the parties. See Morrison v. Wilson, 30 Cal. 344, 348 (1866). Here, “Schedule” is a capitalized, defined term in the Agreement, meaning “individual schedules 2 Prancer concedes that the Pricing Addendums are “pricing documents.” [See Opposition, atp.5,6,9.] 4 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS A W N Oo 0 3 O N Dn 10 11 12 13 14 15 16 17 18 19 20 21 2 23 24 25 26 27 28 containing additional terms and conditions applicable to specific Services” which “supplement” the terms and conditions of the STAC. [Motion at Ex. 1, § 1.] The Consumer Services Schedule is the only document in the Agreement which contains the word “Schedule” in its name, and, by its explicit terms, “supplements the Experian Standard Terms and Conditions.” [Motion at Ex. 2.] Indeed, the provisions in the Consumer Services Schedule consistently refer to “this Schedule.” [See e.g., Motion at Ex. 2, §§ 1, 2.] The Pricing Addendums, in contrast, clearly do not use the word “Schedule” in their name and do not even mention the word “Schedule” at all. Instead, the provisions of the Pricing Addendums consistently refer to “this Addendum.” The STAC and Consumer Services Schedule also treat a “Schedule” and a “pricing document” as separate and distinct for purposes of the Agreement. For example, Section 4 of the STAC states, “Client will pay Experian for the Services in the amounts agreed upon and set forth in the applicable Schedule or other mutually agreed pricing document.” [Motion at Ex. 1, § 4 (emphasis added).] Section 1 of the Consumer Services Schedule provides, “Experian will provide Services to Client for the fees set forth in a pricing document ... which incorporates this Schedule ... by reference.” [Motion at Ex. 2, § 1 (emphasis added).] The Agreement’s use of different names, and its treatment of “pricing documents” and “Schedules” as separate and distinct, dispels Prancer’s interpretation that a Pricing Addendum is a “Schedule.” Accordingly, the Agreement ended upon Experian’s termination of the Consumer Services Schedule, which was the only existing “Schedule” as defined by the Agreement. C. The Pricing Addendums do not contain a termination provision. Prancer also contends that the 24-month and 36-month “Pricing Terms” of the Pricing Addendums take precedence over the “general provisions within the [Consumer Services Schedule] which does not have a specific term duration.” Prancer relies on the language in the Pricing Addendums providing that “[w]here particular matters are addressed expressly in this Addendum, the terms and conditions of this Addendum (and not the Other Agreements) shall govern; otherwise, the terms and conditions of the other Agreements (and not this Addendum) shall govern.” [Exs. 4 & 5 to Decl. of Mac W. Cabal in Support of Opposition.] This argument misconstrues the effect of the “Pricing Terms.” The “Pricing Terms” are not 5 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS f t © 0 NN OA wn h w N O N N N N ND N N N N = e m e m e m e m ee e d e m pe d ® N N N nm B R A W N = D V N D E W N = O at issue in this case. For example, this is not a case where Experian attempted to change the price of its Services before the end of the 36-month “Pricing Term.” The issue here is whether Experian properly terminated the parties’ agreement prior to the end of the “Pricing Term.” The Pricing Addendums are silent on this issue. Thus, because termination before the end of the “Pricing Term” is not “addressed expressly in [the Addendums], the terms and conditions of the other Agreements (and not [the Addendums]) shall govern.” The Consumer Services Schedule is clear that Experian could terminate upon thirty (30) days’ written notice, notwithstanding the execution of the Pricing Addendums. [See Section IIL. A., supra. ] D. Prancer’s interpretation is unreasonable and renders Section 2 of the Consumer Services Schedule meaningless. Aside from being incorrect, Prancer’s interpretation of the Agreement is unreasonable and renders Section 2 of the Consumer Services Schedule meaningless. This is contrary to well-settled rules of contract interpretation. In California, “[a] contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.” Cal. Civ. Code § 1643 (emphasis added). Additionally, “[t]o the extent practicable, the meaning of a contract must be derived from reading the whole of the contract, with individual provisions interpreted together, in order to give effect to all provisions and to avoid rendering some meaningless.” Zalkind v. Ceradyne, Inc. 194 Cal. App. 4th 1010, 1027 (2011) (emphasis added). Under the Agreement, the STAC establishes the standard terms and conditions applicable to the Services described in the Consumer Services Schedule, and the Pricing Addendums establish the pricing for those Services. [See Section II, supra.] Accordingly, once Experian terminated the Consumer Services Schedule, it ceased providing Services to Prancer, and any “Pricing Terms” or standard terms and conditions applicable to those Services became moot. Under Prancer’s proposed interpretation, even if Experian terminated the Consumer Services Schedule, and consequently, stopped providing Services to Prancer, it would still be bound by the “Pricing Terms” 6 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS S H O W N Oo 0 9 O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 set forth in the Pricing Addendums. The result of this interpretation is that Experian would be required to provide “Pricing Terms” for nonexistent Services. Such a reading of the Agreement is unreasonable. Prancer therefore urges that Experian could only terminate “the complete agreement” (meaning the STAC, Consumer Services Schedule and Pricing Addendums) for cause pursuant to Section 9 of the STAC. This completely ignores Section 2 of the STAC and Section 2 of the Consumer Services Schedule — which clearly provide for termination without cause. The Court should not adopt an interpretation that renders those clauses meaningless. IV. PRANCER HAS FAILED TO ADEQUATELY ALLEGE A BREACH OF CONTRACT AND SHOULD NOT BE PERMITTED TO AMEND Prancer also asks this Court to deny Experian’s Motion on the grounds that Prancer has adequately plead a cause of action for breach of contract. However, Prancer’s recitation of the elements of breach of contract are negated by the terms of the Agreement permitting Experian to terminate upon thirty (30) days’ written notice. See Dodd v. Citizens Bank of Costa Mesa, 222 Cal. App. 3d 1624, 1627 (1990) (“Facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence.”); Kim v. Westmoore Partners, Inc., 201 Cal. App. 4th 267, 282 (2011) (“If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence.”). Any cause of action premised on an alleged breach of contract by Experian is foreclosed by the clear language of the parties’ agreement, and the Complaint should be dismissed with prejudice. Because amendment would be futile, Prancer should not be afforded an opportunity to amend its Complaint.} See Vaillette v. 3 Prancer also argues that it should be permitted to amend its Complaint because “Experian did not meet and confer with Prancer before filing its Motion for Judgment on the Pleadings as required under Code of Civil Procedure 439.” This argument is both inaccurate and a red herring for several reasons. First, prior to the filing of the Motion, Experian’s counsel did expressly inform Prancer’s counsel, via email on October 10, 2018, of Experian’s intention to file an early dispositive motion based on the Court’s ruling on Prancer’s Motion for Preliminary Injunction. (Reply Decl. of Kerry C. Fowler Pursuant to Cal. Code Civ. Proc. § 439(a)(3), 92.) Out of an abundance of caution, those discussions were not incorporated into a declaration because they were made in the context of communications regarding settlement. (/d.) However, as evidenced by Prancer’s own admissions, starting approximately one month prior to the filing of the Motion, Experian’s counsel and Prancer’s counsel had several discussions regarding Experian’s motion and discovery purportedly needed for the opposition thereto. In light of Prancer’s challenge to the sufficiency of the meet and confer, Experian is submitting a Declaration pursuant to Section 439(a) with this Reply. Second, to date, Experian has responded to written discovery, allowed Prancer to proceed 7 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS N Y nm Re W N 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Fireman's Fund Ins. Co., 18 Cal. App. 4th 680, 685 (1993) (affirming trial court order sustaining a demurrer without leave to amend where the language of the parties’ agreement precluded a cause of action). V. CONCLUSION Based on the foregoing, Experian respectfully requests that the Court grant a judgment on the pleadings in favor of Experian on all four counts of the Complaint. Dated: January 29, 2019 JONES DAY By: /s/ Kerry C. Fowler Kerry C. Fowler Attorneys for Defendant EXPERIAN INFORMATION SOLUTIONS, INC. with two depositions of Experian employees that Prancer identified as being relevant to the issues raised in the Motion for Judgment on the Pleadings, and has produced all documents relevant to this litigation. There are simply no more facts or evidence to be had, or amendments to be made, that would alter the outcome of this Motion. Experian terminated its agreement with Prancer in accordance with the express terms of the STAC and CSS. Finally, as expressly set forth in Section 439(a)(4), even if the Court determines Experian’s meet and confer was not sufficient, that finding is not grounds to deny the motion for judgment on the pleadings. Cal. Code Civ. Proc. § 439(a)(4). 8 EXPERIAN’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS ~N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I, Diane Sanchez, declare: [ am a citizen of the United States and employed in Los Angeles County, California. I am over the age of eighteen years and not a party to the within-entitled action. My business address is 555 South Flower Street, Fiftieth Floor, Los Angeles, California 90071.2300. On January 29, 2019, I served a copy of the within document(s): DEFENDANT EXPERIAN INFORMATION SOLUTIONS, INC.’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS ] by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, in the United States mail at Los Angeles, California addressed as set forth below. [x] by placing the document(s) listed above in a sealed UPS Overnight envelope and affixing a pre-paid air bill, and causing the envelope to be delivered to a UPS agent for delivery. [] by personally delivering the document(s) listed above to the person(s) at the address(es) set forth below. [x] by transmitting via e-mail or electronic transmission the document(s) listed above to the person(s) at the e-mail address(es) set forth below. See Attached Service List [ am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing an affidavit. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on January 29, 2019, at Los Angeles, California. bs Lx St Diane Sanchez NAI-1504611024v1 Proof of Service Craig P. Bronstein, Esq. Mac W. Cabal, Esq. LANAK & HANNA, P.C. 625 The City Drive South, Suite 190 Orange, CA 92868 Telephone (714) 620-2350 cpbronstein@lanak-hanna.com mwecabal@lanka-hanna.com NAI-1504611024v1 SERVICE LIST Proof of Service