CHICAGO — A judge has deleted a tax accounting firm's attempt to reopen a class action lawsuit in Chicago federal court against a tax software provider for claims of fraud, saying the accountant can't demonstrate any of the alleged fraud actually took place in Illinois.
U.S. District Judge Rebecca R. Pallmeyer granted a motion for summary judgment sought by defendant Universal Tax Systems, which does business as CCH Small Firm Services, according to a memorandum and order handed down March 31.
In the same order, Pallmeyer denied a motion by plaintiff D&B II Enterprises, which does business as Bain Accounting Tax, that fraud claims in the case should be reconsidered. Additionally, she terminated as moot D&B Enterprises' motion for class action certification.
Elizabeth Fegan
| Hagens Berman Sobol Shapiro
"[D&B] has asked the court to reconsider Judge [James] Zagel’s decision to grant summary judgment for [Universal Tax Systems] on [D&B]'s claim under the Illinois Consumer Fraud and Deceptive Business Practices Act," Pallmeyer said in the order. "[D&B]'s motion is denied because D&B has not presented any evidence that any of the circumstances relating to its allegations of fraud took place primarily and substantially in Illinois."
D&B brought its putative class action against Universal Tax Systems, asserting performance issues with Universal's tax software for the 2012 tax year amounted to consumer fraud.
After fraud counts were dismissed earlier by Judge Zagel, D&B added "several contract and quasi-contract claims," and then filed a motion to certify a class to include people who purchased Universal Tax Systems' software during the 2012 tax year.
Universal Tax Systems, however, objected to the claims, arguing it had used a disclaimer allowed under Illinois state law, according to Pallmeyer's order.
"The Illinois Uniform Commercial Code allows merchants to disclaim the implied warranty of merchantability, provided they do so using 'conspicuous' language that 'mention[s]' merchantability," Pallmeyer wrote. "The parties may disclaim all implied warranties by expressions like ‘as is,’ ‘with all faults’ or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty. [Universal Tax Systems] contends it made such a disclaimer in this case, and [D&B] does not argue that the disclaimer of warranties in the 2012 SSLA [standard software license agreement] is insufficient as written."
D&B claimed the 2012 SSLA was unenforceable because it never agreed to the 2012 SSLA, and that the deferred payment agreement to which D&B did agree, did not include a reference to the 2012 SSLA. D&B also claimed that enforcing the 2012 SSLA "would be procedurally unconscionable."
D&B also argued the deferred payment agreement's description of the SSLA as an 'other' agreement made it clear that the deferred payment agreement did not incorporate any 'other' agreements by reference.
"This argument is not persuasive," Pallmeyer said. "Language distinguishing one document from another does not automatically preclude incorporation by reference. If anything, such language may be a prerequisite for incorporation by reference, as the concept of incorporation by reference implies the existence of an incorporating document that is distinguishable from the document being incorporated. In the absence of an 'other' document, there would be nothing for 'this' document to incorporate."
D&B is represented by attorneys Elizabeth A. Fegan, Daniel J. Kurowski and Mark T. Vazquez, of the firm of Hagens Berman Sobol Shapiro Llp, of Chicago; and Don M Downing, Gretchen Garrison and Jason D. Sapp, of the firm of Gray, Ritter & Graham, P.C., of St. Louis.
Universal Tax System is represented by attorneys Craig C. Martin, Leah K. Casto, Matthew R. Devine, David E. Jimenez-Ekman, Brienne M. Letourneau and Caroline L. Meneau, of the firm of Jenner & Block, of Chicago.