Gordon Rees Scully Mansukhani San Diego attorneys Benjamin T. Morton and Jennifer E. Duty recently obtained summary judgment on behalf of their client, a regional credit union, against a plaintiff who filed an action in the U.S. District Court, Southern District of California seeking in excess of $1.5 million in damages based on its claims for breach of contract, misappropriation of trade secrets, violation of the Unfair Competition Law and declaratory relief.
The plaintiff, a Texas based technology company, who markets its ability to implement and manage overdraft protection programs for financial institutions, originally contracted with the credit union to install and implement an overdraft program in 2008. After a change in management and the financial crisis in 2008 and 2009, the credit union declined to launch the program and notified the plaintiff the program was not going forward. With the improved economic and regulatory climate in 2012, the credit union decided to implement an alternative overdraft program. The credit union did not use the plaintiff’s program but hired a competitor who had favorable pricing and a more advanced and integrated system.
While the plaintiff asserted that the credit union had an obligation to pay the plaintiff under the contract because of its alleged implementation of the plaintiff’s recommendations, Gordon & Rees attorneys successfully argued that the credit union’s employment of another vendor four years after the initial contract was signed did not trigger any rights or obligations under the plaintiff’s contract. Gordon & Rees also successfully argued that there was nothing unique or unknown about the plaintiff’s program that would support a trade secret claim. Rather its basic function, to provide non-interest income to financial institutions by assessing fees to customers for overdrafts and debit coverage, was similar to all of its competitors’ programs. District Court Judge Dana Sabraw agreed and granted summary judgment in favor of the credit union.