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ST. LOUIS RECORD

Tuesday, March 19, 2024

Penske wins round in Level One suit alleging improper of utilization of payment system, source code

Technology07

ST. LOUIS – A federal judge in the U.S. District Court for the Eastern District of Missouri - Eastern Division has granted a summary judgment for Penske Truck Leasing in a remaining claims regarding a case in which Level One Technologies sued Penske alleging that Penske improperly utilized Level One's payment software.

U.S. District Judge Rodney Sippel had previously granted summary judgment on counts one through four of the multi-count claim for fraud, negligent misrepresentation, breach of duty of good faith and fair dealing and lost volume, and in a May 14 order, the judge also granted summary judgment on one of two remaining counts for “unjust enrichment.”

One account of breach of contract remains.

Level One alleged that Penske used the source code from its Epay application to develop Penske's own Penske Online Payment System.

In evaluating the allegation of unjust enrichment, Sippel pointed out that the plaintiff, Level One, has a contract in place covering the issue, and that unjust enrichment does not apply when a party has “entered into an express contract for the same matter for which it seeks recovery.” Level One, according to the court’s ruling, had contended that “this limitation on recovering for unjust enrichment ‘is narrowly construed.’”

Although all of the other counts have now been dismissed, Level One seems to have a much stronger argument in support of its breach of contract claim – as laid out in the background section of the judge's May 14 memorandum and order. The services agreement in place stated that Penske “will not use, copy, or transfer any gained knowledge from the Epay application data and source code for the purpose of developing identical or similar version of (the software) for Penske’s proprietary use,” a standard used in deliberating on the substance of Level One’s grievances.

The court is now left to deal with whether Penske's developing of its proprietary system did in fact violate the provisions of the service agreement.

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