International Decision Systems, Inc. v. JDR Solutions, Inc.
- Eric Tostrud
- 0:18-cv-02951
- U.S. District Court · District of Minnesota
- 15
In International Decision Systems v. JDR Solutions, Judge Tostrud granted in part and denied in part JDR’s dismissal motion, separating claims by whether they accrued before October 22, 2012.
International Decision Systems, Inc.’s contract-related claims against JDR Solutions, Inc.; claims accruing before October 22, 2012 were subject to the granted portion of the dismissal motion, while claims accruing on or after that date remained under consideration.
What happened
International Decision Systems, Inc. sued JDR Solutions, Inc. under Minnesota law, alleging that JDR failed to pay commissions and provide required reports under a contract effective February 1, 2007. International sought more than $3.2 million and declaratory relief.
JDR argued that Minnesota’s six-year deadline for contract claims barred the entire lawsuit. The court determined that each missed monthly commission payment or quarterly report generally created a separate claim, and International alleged that breaches continued through June 30, 2017. The complaint therefore included some claims within the six-year period and some claims accruing earlier.
Judge Eric C. Tostrud ordered that JDR’s motion to dismiss was granted in part and denied in part. The motion was granted, without prejudice to International’s right to seek permission to amend, for claims accruing before October 22, 2012; it was denied for claims accruing on or after that date. The court also granted JDR’s motion to supplement the record.
The detailed version
- International Decision Systems, Inc. v. JDR Solutions, Inc. · No. 0:18-cv-02951
- Eric Tostrud
- May 7, 2019
Background
International Decision Systems, Inc. and JDR Solutions, Inc. entered into a contract effective February 1, 2007. International alleged that JDR was authorized to resell International’s software and provide services to International’s customers, but failed to pay required commissions, maintain adequate records, and provide quarterly reports. International also alleged that JDR breached the implied duty of good faith and fair dealing and sought declarations concerning the parties’ contract rights and obligations. International claimed more than $3.2 million in damages.
JDR moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that Minnesota’s six-year statute of limitations barred all of International’s claims. The court also considered JDR’s motion to supplement the record with an audit report prepared by International’s accountants.
Analysis
The court applied Minnesota law. It explained that a contract claim generally accrues when the breach occurs, even if the resulting damages are discovered later. When a contract requires recurring payments or reports, a separate claim generally arises for each missed payment or report, and the limitations period begins for that claim when the payment or report was due.
International served the complaint on October 22,
- The six-year limitations period therefore reached claims accruing on or after October 22,
- International alleged that JDR missed monthly commission payments and quarterly reports throughout the contract period, including through June 30,
- The court concluded that these allegations plausibly included claims within the limitations period. The complaint did not need to identify the specific date of every alleged breach to survive dismissal of the entire case.
The court rejected International’s argument that the limitations period should be extended based on fraudulent concealment. The complaint did not plead an affirmative false statement or act intended to prevent discovery of the claims, facts showing that the alleged breaches could not have been discovered through reasonable diligence, or other facts meeting the heightened pleading requirements for fraud. The court also concluded that the alleged failure to provide required reports established a contract breach rather than concealing one, and that the allegations about delays in the audit process lacked enough supporting detail.
The court noted that the parties agreed that the declaratory-judgment and implied-duty claims followed the contract claim for statute-of-limitations purposes. It therefore focused its limitations analysis on the breach-of-contract claim.
Outcome
The court ordered that JDR’s Motion to Dismiss was GRANTED IN PART and DENIED IN PART. As to claims accruing before October 22, 2012, the motion was GRANTED without prejudice to International’s right to seek leave to amend its complaint under the case’s Pretrial Scheduling Order and any amendments to that order. As to claims accruing on or after October 22, 2012, the motion was DENIED. The court also GRANTED JDR’s Motion to Supplement the Record. Judge Eric C. Tostrud signed the order.
Read the full 15-page opinion on CourtListener, the free public archive maintained by the Free Law Project.