Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

ACI Worldwide Corp. v. Churchill Lane Associates, LLC

United States District Court, D. Nebraska

August 4, 2017




         Plaintiff, ACI Worldwide Corp. (“ACI”) filed this action for a declaratory judgment to determine the rights and legal responsibilities of ACI and Defendant, Churchill Lane Associates, LLC (“Churchill”), under a Licensing Agreement. (Filing No. 1). Previously, Chief Judge Smith Camp granted ACI's Motion for Summary Judgment, denied Churchill's Motion for Partial Summary Judgment, and dismissed all of Churchill's counter-claims. (Filing No. 110). Churchill appealed the judgment to the Eighth Circuit Court of Appeals, which affirmed the judgment in part, and in part reversed and remanded the case for further proceedings. (Filing No. 115).

         Now that the case has been remanded, ACI requests that the Court grant its “Motion to Amend Complaint and Answer to Defendant's Counterclaim” (Filing No. 81), which ACI filed after the parties filed their summary judgment motions, but before Chief Judge Smith Camp entered judgment in ACI's favor. The Court never explicitly ruled on the motion to amend. For the reasons explained below, the Court will deny the motion.


         In February 2001, ACI and Nestor, Inc. (“Nestor”) entered into a Licensing Agreement, under which ACI was permitted to use and sub-license portions of a suite of software products developed by Nestor. ACI used the licensed software technology to develop new software programs, which ACI then licensed to its customers. Per the Licensing Agreement, Nestor owned any new technology developed by ACI. In exchange, ACI agreed to pay Nestor periodic royalties. (Filing No. 109 at p. 2; Filing No. 115 at p. 2).

         In 2002, due to Nestor's financial difficulties, Nestor and ACI executed Amendment 2 to the License Agreement, assigning Nestor's right to the royalties to Churchill, an entity formed by Nestor investors. Nestor and Churchill entered into agreements wherein Nestor (1) irrevocably assigned to Churchill the future royalties due to Nestor under the Licensing Agreement, and (2) promised not to modify or terminate the Licensing Agreement without Churchill's consent. ACI received notice of the assignment and began remitting the royalties directly to Churchill. Further amendments were made to the Licensing Agreement in 2007 and 2008. (Filing No. 109 at pp. 3-4; Filing No. 115 at pp. 2-3).

         In 2009, Nestor became insolvent and went into receivership. A court appointed receiver sold all of Nestor's rights in the Licensing Agreement and the licensed software technology to American Traffic Solutions (“ATS”), and on July 20, 2014, ACI purchased from ATS all of Nestor's remaining rights, title, and interest in the licensed software technology and the Licensing Agreement. On July 21, 2014, ACI unilaterally terminated the License Agreement. ACI subsequently sent Churchill a notice that the royalty obligations assigned to Churchill were no longer in effect, and enclosed a check representing the full and final payment for the balance of royalties due. Churchill did not consent to the termination and informed ACI that Churchill was still entitled to further royalties. (Filing No. 109 at p. 6; Filing No. 115 at p. 4).

         On August 20, 2014, ACI filed this action for a declaratory judgment, asking the Court to declare that: (1) ATS's assignment to ACI was valid and enforceable; (2) ACI owns the Licensed Software Technology free and clear of any claim or right of Churchill; (3) ACI is the proper assignee of and successor Licensor under the Licensing Agreement, free and clear of any claim or right of Churchill; (4) ACI validly terminated the Licensing Agreement effective July 21, 2014; (5) ACI tendered timely, final, and full payments of all amounts due to Churchill under the Licensing Agreement and no new amounts can become due; (6) Churchill is a non-party to the Licensing Agreement and does not have standing to challenge the assignment of the Software or the assignment and termination of the Licensing Agreement; and (7) any other relief the Court deems just and equitable. (Filing No. 1).

         Churchill asserted several affirmative defenses and counter-claims. (Filing No. 11). Churchill's counter-claims for declaratory relief asked the Court to rule that: (1) the Licensing Agreement was not terminated and that ACI remains obligated to pay royalties to Churchill; (2) Churchill is due an accounting of the royalties outstanding per the terms of the Licensing Agreement; (3) ACI must pay all royalties due under the Licensing Agreement; (4) Churchill is entitled to Royalties on any fees paid to ACI or its affiliates for license or maintenance of the Licensed Software Technology or any part of the new technology; and (5) even if the Licensing Agreement was terminated, Churchill is still owed royalties on any sublicenses which may have been effected with respect to ACI and any third parties prior to the termination of the Licensing Agreement. (Filing No. 11 at pp. 6-9).

         On April 8, 2015, Churchill moved for partial summary judgment, asking the Court to find that Churchill is a party to the Licensing Agreement and that ACI could not terminate the Licensing Agreement without the consent of Churchill. (Filing No. 30). On August 14, 2015, ACI filed a Motion for Summary Judgment, asking the Court to enter judgment in ACI's favor on those matters for which ACI sought declaratory judgment in its Complaint. (Filing No. 58).

         While both summary judgment motions were pending, on November 13, 2015, ACI filed the present motion to amend its Complaint and Answer to Churchill's Counterclaim. (Filing No. 81). ACI's proposed amended pleadings seek to, among other changes: add a claim of unjust enrichment due to Churchill's alleged self-dealing and improper conduct, in the amount of $25, 204, 596, for royalty payments tendered by ACI to Churchill between September 2002 and July 2014; add new justifications for ACI's termination of the License Agreement; add an affirmative defense for unclean hands arising out of Nestor's rejection of ACI's offers to purchase the royalties in 2002; add an assertion that ACI's obligations under the License Agreement ended as early as June 24, 2009; and add the Rule against Perpetuities as an affirmative defense. (Filing No. 81-2; Filing No. 81-4).

         After ACI filed its motion to amend, on December 23, 2015, counsel for ACI filed a Letter with the Court, stating:

We respectfully submit that the Court need only decide the parties' competing summary judgment motions, a decision that likely will obviate the need to decide the discovery motions. Put simply, there is a straightforward basis for the Court to grant [ACI] judgment, now, on the existing summary judgment record. Undisputed facts applied to a clear written agreement demonstrate that ACI Worldwide is entitled to summary judgment. But if ACI Worldwide is right that the entry of summary judgment now is appropriate, then the Court need not decide all of those other motions, discovery will be concluded, and trial preparation ended.

(Filing No. 102 at pp. 1-2). Based on ACI's representations in its Letter, the Court entered an order on December 30, 2015, stating, “the Court will not address [ACI's] Motion to Amend Complaint ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.