DECISION AND ORDER INTRODUCTION Plaintiff irth Solutions, LLC, sued Defendant Atlantic Infratrac, LLC, for breach of contract and misappropriation of trade secrets. ECF No. 1. Atlantic counterclaimed for breach of contract. ECF No. 20. Now before the Court are irth’s motion to dismiss Atlantic’s counterclaim, ECF No. 22, and Atlantic’s motion for judgment on the pleadings as to irth’s claim for attorneys’ fees against Atlantic, ECF No. 25. For the reasons stated below, irth’s motion to dismiss is GRANTED and Atlantic’s motion for judgment on the pleadings is DENIED. BACKGROUND irth is a company that offers a web-based software program, DigTrack, that helps utility companies manage “dig tickets.” Dig tickets notify utility companies and other underground asset owners of excavation jobs that will impact their property. When a utility receives a dig ticket, it must physically mark the location of its assets at the excavation site to protect the assets and avoid interruption of services. To manage the dig tickets, utilities engage “contract locators” to identify and mark locations in response to a ticket. The contract locators, in turn, rely on software like DigTrack to successfully manage and process the dig tickets. Atlantic is a contract locator. In October 2015, it contracted with irth’s predecessor, Bytronics, Inc., to license the DigTrack software. The licensing agreement between the parties provided that Bytronics would provide technical support for the DigTrack software system within specified timeframes and would correct any defects in the system. ECF No. 22-2 at 2. In or around November 2017, irth acquired Bytronics and was assigned the Atlantic licensing agreement. Following the assignment, Atlantic found that the customer service for DigTrack, which had previously been very good, deteriorated significantly. Specifically, irth’s response times to Atlantic’s request for support became late and, at times, caused DigTrack to become completely unavailable to Atlantic. Consequently, Atlantic looked for an alternative service provider and ultimately left irth for a competitor, Apex Data Solutions and Services, LLC. irth alleges that Atlantic gave Apex’s owner, Kyle Murphy, access to the DigTrack software system in contravention of the licensing agreement, which allowed Murphy to steal irth’s trade secrets to improve Apex’s competing software system, DigTix. As a result, irth filed a misappropriation of trade secrets lawsuit against Apex and Murphy, and later filed this breach of contract and misappropriation of trade secrets lawsuit against Atlantic. As part of this lawsuit, irth seeks a judicial declaration that it may recover from Atlantic the attorneys’ fees and costs it incurs in prosecuting its lawsuit against Apex and Murphy. ECF No. 1 at 21 (irth’s fourth claim). Atlantic counterclaimed for breach of contract against irth based on irth’s failure to provide timely customer support to Atlantic as required by the licensing agreement. ECF No. 20. The Court first addresses irth’s motion to dismiss Atlantic’s counterclaim, and then turns to Atlantic’s motion for judgment on the pleadings. IRTH’S MOTION TO DISMISS ATLANTIC’S COUNTERCLAIM irth moves to dismiss Atlantic’s breach of contract counterclaim on the basis that it is barred by several limitation of liability provisions in the licensing agreement. This is a matter of contract interpretation which is “generally a question of law” and thus “suitable for disposition on a motion to dismiss.” Am. Auto. Ins. Co. v. Rest Assured Alarm Sys., 786 F. Supp. 2d 798, 803 (S.D.N.Y. 2011). On a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss, the Court need not accept the allegations of the complaint regarding the construction of the [contract], but instead can interpret the contract before it. Gerdau Ameristeel US Inc. v. Ameron Int’l Corp., No. 13 Civ. 07169 (LGS), 2014 U.S. Dist. LEXIS 100515, at *8-9 (S.D.N.Y. July 22, 2014). “At the motion to dismiss stage, a district court may dismiss a breach of contract claim only if the terms of the contract are unambiguous.” Orchard Hill Master Fund Ltd. v. SBA Commc’ns Corp., 830 F.3d 152, 156 (2d Cir. 2016). “Whether a contract is ambiguous is a question of law for the court to decide.” Bayerische Landesbank, N.Y. Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 53 (2d Cir. 2012). Here, Atlantic alleges that irth failed to timely and effectively provide customer support to Atlantic, causing the DigTrack system to be unavailable to Atlantic on several occasions. Atlantic claims that this breached the following provisions of the licensing agreement: 2.0 SCOPE 2.1 Software BYTRONICS will provide support for the software required to operate the DigTrack system. This support will be limited to the DigTrack System’s executable programs, along with any ancillary programs authored by BYTRONICS Any defects in these programs will be corrected by BYTRONICS…. 2.3 Communication Services…. Should the CLIENT experience difficulty in accessing the DigTrack site, BYTRONICS shall be notified immediately using the Emergency Support Request…. 3.0 RESPONSE TIME 3.1 Normal Support Request BYTRONICS’ response to any Normal Support Request shall be made prior to the close of the following business day. 3.1 [sic] Emergency Support Request BYTRONICS’ response to any Emergency Support Request shall be to begin remediation as soon as practicable and continue until the system is functional. ECF No. 22-2 at 2. irth moves to dismiss Atlantic’s counterclaim as being barred by Sections 8.2, 8.3, and 10.0 of the licensing agreement, which provide in relevant part as follows: 8.0 WARRANTY 8.2 BYTRONICS accepts no responsibility for the operation or performance of the program. The entire risk of use and consequences of use of the DigTrack System falls completely on the CLIENT. 8.3 BYTRONICS shall not be liable in any respect for any loss, claim, injury, or damages alleged to have resulted from use of, or in reliance on the DigTrack System. In this respect, the CLIENT shall completely indemnify and defend for any such loss claim, injury or damages as provided below. 10.0 RISK ACKNOWLEDGEMENT CLIENT acknowledges and accepts all risks associated with using the DigTrack System. The CLIENT also represents that they have developed a backup plan in the event the DigTrack System may become unavailable due to any reason whatsoever. This backup plan may include fax machines, serial printers, etc. In the event the DigTrack System may become unavailable, BYTRONICS’ sole responsibility will be limited to the efforts to bring the system back online. ECF No. 22-2 at 3. The Court finds that these sections unambiguously bar Atlantic’s counterclaim. In them Atlantic agreed to absolve irth from liability for damages based not only on Atlantic’s “use” of the DigTrack System, but also on its “reliance” upon the System. See ECF No. 20
