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Tribus, LLC v. Greater Metro, Inc.

Court of Appeals of Missouri, Eastern District, Second Division

November 19, 2019

TRIBUS, LLC, Appellant,
v.
GREATER METRO, INC., Respondent.

          Appeal from the Circuit Court of St. Charles County Honorable Jon A. Cunningham

          PHILIP M. HESS, PRESIDING JUDGE

         Introduction

         Tribus, LLC ("Tribus") appeals from the trial court's entry of judgment for Greater Metro, Inc. ("Greater Metro"), in which it rejected Tribus' breach-of-contract claim against Greater Metro and granted Greater Metro's breach-of-contract counterclaim against Tribus. Tribus brings five points on appeal. Finding no merit to any of Tribus' points, we affirm the judgment.

         Factual and Procedural History[1]

         1. Contract Obligations and Performance

         Tribus is a custom software developer headquartered in St. Louis, Missouri, that builds digital tools, including websites and customer management relationship software ("CRM"), and markets them to real estate brokerages. Greater Metro[2] is a residential real estate brokerage company. Roughly 350 real estate agents are affiliated with Greater Metro. Real estate agents affiliated with Greater Metro are independent contractors, not employees, of Greater Metro. On October 27, 2013, Tribus and Greater Metro executed a Consulting, Product Development & Licensing Agreement ("Contract"), which provided Tribus would create, design, and deploy a custom company website for Greater Metro; license both basic websites and upgraded websites to agents affiliated with Greater Metro; license CRM to Greater Metro; and provide content marketing services.

         The term of the Contract was "thirty-six (36) months beginning on the date the [company] website is functionally deployed and accepted by [Greater Metro]." The Contract provided Greater Metro agreed to timely furnish, at its own expense, all information, items, and personnel required to complete the Contract. The Contract provided that if Greater Metro made no payment within thirty days of its due date, Greater Metro would be in breach of the Contract and the amount unpaid would be subject to 18% interest per month until paid in full. In addition, the Contract included the following integration clause: "NO WAIVER, MODIFICATION, ALTERATION, OR ADDITION TO THIS AGREEMENT, INCLUDING THE WORK STATEMENT, SHALL BE VALID UNLESS IN WRITING SIGNED BY BOTH PARTIES. THIS AGREEMENT, AND THE WORK STATEMENT CONSTITUTE THE ENTIRE CONTRACT BETWEEN THE PARTIES AND SUPERSEDES ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS, CONDITIONS, AND PROPOSALS." Attached to the Contract was a "Statement of Work," which described the design and other services Tribus would provide Greater Metro. The Statement of Work provided the "[f]unctionality of each design must fall within the offerings of Tribus."

         Agent Websites

         The Contract provided Tribus would create basic agent websites for Greater Metro's agents and Greater Metro would pay Tribus recurring charges of $5, 500 per month for the first 250 user accounts and $22 per month for each additional user. The Contract also provided Tribus would create upgraded agent websites and Greater Metro would pay $980 per month to license twenty upgraded agent websites. No time frame for completing the agent websites was included in the Contract. However, based on correspondence it had with Tribus before executing the Contract, Greater Metro expected the agent websites to be available and functional immediately after the Contract's execution. On October 25, 2013, two days before the Contract's execution, Greater Metro emailed Tribus, stating:

I believe [Tribus] said that, while the company website would take 90 days to design and implement, the agent websites could be up much sooner. How is that? Wouldn't they be lacking content, IDX functionality, [3] etc.? What components of their website would be available to them initially in a couple of weeks?

         In response, Tribus did not dispute this time frame and stated: "[W]e don't need the company site to get MLS[4] approval or setup the agent sites. We can definitely have them up and running within a week or two max." On October 27, 2013, the day of the Contract's execution, Greater Metro emailed Tribus, stating: "New agent sites immediately and custom built website in 60-90 days." In response, Tribus also did not dispute this time frame.

         Greater Metro and Tribus agreed Tribus would launch the agent websites before working on the company website. Tribus provided a placeholder for the company website to allow work on the agent websites before the company website went "live." Tribus "turned on" Greater Metro's basic agent websites on December 9, 2013. When Tribus "turned on" the basic agent websites, Greater Metro's agents could access and customize them. However, the agent websites were not "live" or accessible to the public until further action was taken by the agent to point his or her personal domain to Tribus' website.

         In the following months, Greater Metro experienced several functional issues with the basic agent websites. "Agent About" boxes on the websites were not showing the agents' information. Agent websites included incorrect default header images and messages. MLS feeds were not displaying correctly for agents working as part of a team. MLS feeds were inconsistent among agent websites. Agents experienced difficulty linking themselves to their websites and opening search options in a new tab. "My Listing" headers appeared on agents' websites who had no listings. Many agents experienced difficulty logging on to their websites. The agent websites were difficult to customize, requiring agents to enter a code to change basic aspects of their websites, such as font or headings. Despite these issues, Greater Metro continued to work with Tribus to troubleshoot, as it wished to keep their relationship on an "even keel."

         On December 20, 2013, eleven days after Tribus "turned on" the agent websites, Greater Metro contacted Tribus asking when the upgraded agent websites would be available to its agents. Tribus responded it would make the upgraded agent websites available "asap" once it received a list of agents eligible to receive an upgraded website. Upon Tribus' receipt of the agent list on December 20, 2013, Tribus told Greater Metro the upgraded agent websites were not ready because custom coding needed to be completed. Tribus stated the upgraded agent websites would be ready in early January 2014. On January 29, 2014, Tribus informed Greater Metro that lead routing integration was still being completed on the upgraded agent websites. On February 11, 2014, Greater Metro asked Tribus to make the upgraded agent websites available. On February 13, 2014, Greater Metro emailed Tribus asking whether the upgraded agent websites were complete, stating, "When we signed our contract for services we were led to believe this was already up and running and ready to go." On February 24, 2014, Greater Metro emailed Tribus asking why Greater Metro could not access the upgraded agent websites. Ultimately, only four of the 350 Greater Metro agents successfully pointed their personal domains to their Tribus websites.

         Company Website

         The Contract provided Tribus would create a custom company website for Greater Metro and Greater Metro would pay Tribus $10, 750 according to the following schedule: $5, 375 upon execution of the Contract, $2, 687.50 upon final design approval, and $2, 687.50 twenty-four hours before the company's website's official deployment. The Contract stated the company website would be designed according to Greater Metro's specifications set forth in a design questionnaire. No time frame for completion of the company website was included in the Contract. However, based on correspondence it had with Tribus before executing the Contract, Greater Metro expected the company website to be completed within sixty to ninety days after the Contract's execution. On October 25, 2013, two days before the Contract was executed, Greater Metro emailed Tribus: "I believe [Tribus] said that . . . the company website would take 90 days to design and implement[ ] . . . ." Tribus did not dispute this time frame in its response to Greater Metro. On October 27, 2013, the day of the Contract's execution, Greater Metro emailed Tribus, stating: "New agent sites immediately and custom built website in 60-90 days." Tribus also did not dispute this time frame in its response to Greater Metro.

         Greater Metro paid Tribus $5, 375 on October 28, 2013, and completed a design questionnaire regarding the company website on November 1, 2013. On November 18, 2013, Tribus produced an initial design of the company website for Greater Metro's review. On November 27, 2013, Greater Metro told Tribus the initial design did not follow Greater Metro's specifications. On December 31, 2013, Greater Metro followed up with Tribus, seeking a status update on the progress of the company website's design. In response, Tribus told Greater Metro it had "put things with the site on the backburner" and had not been working on it between November 27, 2013, and December 31, 2013. In early January 2014, Tribus produced a second design for the home page of the company website. Greater Metro responded with feedback on January 8, 2014.

         On February 11, 2014, over three months after the Contract's execution, Greater Metro sent a message to Tribus requesting a meeting to review the latest draft of the company website design. On March 3, 2014, Greater Metro inquired whether Tribus could complete the company website within thirty days. Tribus responded it would need an additional thirty to thirty-five days to complete the company website after obtaining Greater Metro's final approval. Greater Metro never accepted and approved a final design for the company website, and the company website was never viewable by the public.

         CRM

         The Contract provided Tribus would license CRM to Greater Metro and Greater Metro would pay Tribus $5, 500 per month for the first 250 user accounts. Tribus told Greater Metro staff and agents the following about CRM:

You can go in and set up as many dashboards to keep track of whatever you want to as you want. You can set up custom reports. You can keep track of how many leads that are coming in. You can keep track of your Zillow business; you can keep track of your Trulia business. You can keep track of everything. It is incredibly easy and it's literally a click, and, uh, you click two buttons and you have a new dashboard.

         Greater Metro experienced several functional issues with CRM. Greater Metro first experienced difficulty syncing CRM with Microsoft Exchange and Outlook in December 2013. Greater Metro spent months working with Tribus to resolve this issue. The sync was not functioning until February 13, 2014. Greater Metro also experienced a "bug" in CRM causing duplicate values to appear. Greater Metro reported this issue on February 14, 2014, and the issue was not resolved until March 6, 2014. Greater Metro also could not access CRM from February 27, 2014, through March 3, 2014. Greater Metro never released CRM to its agents due to its lack of functionality.

         2. Termination of the Contract and Payments

         On January 3, 2014, Greater Metro messaged Tribus, requesting a face-to-face meeting to "review the status of [Greater Metro's] account," which Greater Metro believed was in "great distress." Greater Metro told Tribus it "had a lot of serious concerns about Tribus' ability to meet [its] contractual obligation." Tribus responded it could not meet face-to-face. By mid-March 2014, Greater Metro became concerned that continuing working with Tribus would cause it embarrassment and to lose agents. Greater Metro notified Tribus it was "not going to be moving forward with Tribus websites" on April 14, 2014. Then, Greater Metro sent a formal notice terminating the Contract on May 23, 2014. Greater Metro paid Tribus $20, 760.80 from the Contract's execution until its termination. Greater Metro paid:

$5, 375 for "website setup" on October 28, 2013;
$2, 000 for November "marketing/branding" on November 1, 2013;
$2, 400 for "exchange connector licenses" on November 25, 2013;
$5, 500 for December "Tribus user fees" and December "marketing/branding" on December 1, 2013; and
$6, 006.00 for January "user fees," $2, 000 for January "marketing/branding"; and $980 for upgraded agent websites on January 1, 2014.[5]

         Greater Metro contends it paid the January 1, 2014, invoice by mistake. Greater Metro made no payments following January 1, 2014. On May 27, 2014, Greater Metro contracted with Real Estate Digital ("RED"), another website developer.

         3. Pre-Trial

         Tribus filed a petition against Greater Metro on July 11, 2014, in St. Charles County Circuit Court, seeking payment for Greater Metro's "past due amounts" under the Contract. Tribus included two counts in its petition. In Count I, Tribus alleged Greater Metro breached the Contract by failing to make monthly payments from February 2014 through July 2014 and sought $25, 000 or more. In Count II, Tribus contended it conferred benefits upon Greater Metro with Greater Metro's consent and acceptance and sought $50, 978.69 under the principle of quantum meruit. Greater Metro filed its answer, affirmative defenses, and a counterclaim for breach of contract against Tribus on August 21, 2014. Greater Metro claimed Tribus breached the Contract by failing to timely provide functional agent websites; CRM; and adequate training, support, and troubleshooting to Greater Metro. Tribus filed its answer to Greater Metro's counterclaim and affirmative defenses on September 19, 2014.

         During discovery, Tribus sent Greater Metro a request for production of all communications between Greater Metro staff and its agents regarding Tribus' websites. On December 12, 2016, Greater Metro served its responses to Tribus' request. On January 3, 2017, Greater Metro supplemented its discovery responses. Unsatisfied with Greater Metro's responses, Tribus moved to compel Greater Metro's production of communications between its staff and agents. On May 5, 2018, the trial court ordered Greater Metro to supplement its responses to indicate whether any additional internal correspondence with its agents existed. On May 22, 2018, Greater Metro again supplemented its responses, indicating Greater Metro did not have and could not locate responsive correspondence beyond what it already produced.

         4. Trial

         A three-day bench trial commenced on September 4, 2018. Before evidence was introduced, Tribus' counsel generally requested the trial court enter written findings of fact and conclusions of law. Tribus called two witnesses as part of its case in chief. At the conclusion of Tribus' evidence, Tribus moved for an adverse inference against Greater Metro, asserting Greater Metro failed to comply with the trial court's order to produce communications between its staff and agents. The trial court heard argument on the motion. Tribus argued Greater Metro engaged in the spoliation of evidence by failing to preserve all emails between its staff and agents during the parties' relationship and asked the trial court to infer those emails would show the agents were satisfied with their websites. Greater Metro argued it produced all correspondence between its staff and agents it had in its possession. The trial court took Tribus' request for adverse inference under submission.

         Greater Metro requested judgment be entered for Greater Metro on Tribus' quantum meruit claim. The trial court granted the motion and judgment was entered for Greater Metro and against Tribus on Count II of Tribus' petition. Greater Metro presented its case. ...


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