HomeMy WebLinkAbout2021CV60475 - CITY OF FORT COLLINS V. OPEN INTERNATIONAL, LLC AND OPEN INVESTMENTS, LLC – (STATE COURT) - 001 - COMPLAINTDISTRICT COURT, LARIMER COUNTY, COLORADO
201 La Porte Avenue, Suite 100
Fort Collins, Colorado 80521
COURT USE ONLY
___________________________
Case Number:
Division
Plaintiff:
CITY OF FORT COLLINS, a Colorado home rule
municipality,
v.
Defendants:
OPEN INTERNATIONAL, LLC, a Florida limited liability
company; OPEN INVESTMENTS, LLC, a Florida limited
liability company
Attorneys for Plaintiff:
Case Collard, Colo. Reg. No. 40692
Andrea Ahn Wechter, Colo. Reg. No. 43722
Maral J. Shoaei, Colo. Reg. No. 50115
Dorsey & Whitney LLP
1400 Wewatta Street, Suite 400
Denver, CO 80202
Tel.: (303) 629-3400
Fax: (303) 629-3450
Email: collard.case@dorsey.com
Email: wechter.andrea@dorsey.com
Email: shoaei.maral@dorsey.com
COMPLAINT AND JURY DEMAND
Plaintiff City of Fort Collins, a Colorado home rule municipality (the “City”), by and
through its undersigned attorneys, states its Complaint as follows:
INTRODUCTION
1. Defendants Open International, LLC and Open Investments, LLC (jointly “Open”)
intentionally misled and induced the City into entering into a costly professional services
agreement and scope of work for a software solution that Open knew or should have known was
not fit for the City’s purposes and that it could not deliver in a timely fashion.
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2. The City seeks rescission of the agreements with Open, return of all funds paid by
the City, and a return of the parties to the position they were each in before the City entered into
the agreements. Alternatively, the City is entitled to its damages and recovery of its attorneys’ fees
and other litigation costs based on Open’s conduct and breach of the applicable agreements.
PARTIES, JURISDICTION AND VENUE
3. The City is a home rule municipality organized under Article XX of the Colorado
Constitution with a City Hall located at 300 Laporte Ave, Fort Collins, CO 80521.
4. Open International, LLC is a Florida limited liability company with its principal
place of business at 13019 Mar Street, Coral Gables, FL 33156.
5. Open Investments, LLC is a Florida limited liability company with its principal
place of business at 13019 Mar Street, Coral Gables, FL 33156.
6. Pursuant to the Master Professional Services Agreement, Open International
contracted with the City, but Open Investments signed an “Irrevocable Guarantee” that it would
“unconditionally guarantee the performance of Open International of all obligations set forth in
this MPSA and Software License Agreement [and] liability of [Open Investments] may be
enforced without requiring [the City] to pursue enforcement against Open [International].” Exhibit
1, MPSA at p. 4. The City is entitled to pursue enforcement against both entities.
7. This is an action for equitable and money damages arising from Open’s fraudulent
inducement, breach of contract, and breach of duties.
8. This Court has jurisdiction and venue in this Court is proper because the contracts
under which this matter arises are governed by the laws of the State of Colorado and the parties
contractually agreed that exclusive jurisdiction for litigation of any dispute, controversy or claim
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arising out of or in connection with the relevant contracts shall be only in the Federal or State court
with competent jurisdiction located in Larimer County, Colorado or Denver, Colorado, and the
parties expressly submitted to the personal jurisdiction and venue therein.
9. Additionally, jurisdiction is proper in this Court pursuant to C.R.S. § 13-1-124
because the wrongful actions by Open described herein took place within the State of Colorado.
GENERAL ALLEGATIONS
The City and the Fort Collins Connexion
10. The City of Fort Collins is the county seat of Larimer County, Colorado with an
estimated population of over 170,000.
11. The City’s many features and amenities make it a great place to live and work:
Colorado State University, the foothills of the Rocky Mountains, the Cache La Poudre River, a
highly educated and creative workforce, diverse employment opportunities, a historic downtown,
and many miles of trails, parks, natural areas, and bike paths.
12. The City has received numerous awards1 including the #1 Best Place to Live in
America by both Marketwatch and Livability in October 2020, a top-ten “Best Performing” City
in 2018 and 2019 by the Milken Institute, and the #5 Most “Remote-Ready” City by Livability in
January 2021.
13. In 2017, the City was one of only five business and nonprofit organizations awarded
the Malcom Baldrige National Quality Award, the nation’s highest presidential honor for
performance excellence through innovation, improvement, and visionary leadership. The City is
1 See https://www.fcgov.com/visitor/awards.php
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just the third municipal organization ever to receive this honor.2
14. The City has long provided its residents with traditional utility services like water,
wastewater, stormwater, and electricity. Since at least 2010, the City has been exploring ways to
improve the reliability and speed of internet services for City residents. High-speed broadband is
the “nervous system” of innovation, entrepreneurship, education, and quality of life. In 2010 the
City partnered with Colorado State University to apply for the Google, “Think big with a gig: Our
experimental fiber network” challenge to install and test ultra-high-speed broadband networks in
order to make internet access better and faster. Though Fort Collins was not selected by Google
Fiber, the broadband discussions continued and were incorporated into the City’s 2014 Strategic
Plan, which articulates the City’s priorities, ways to measure success, and aligns work across
projects.
15. The City recognized the growing importance of high-speed internet within the
economy and citizen’s daily lives and developed a plan for securing gigabit-speed internet
throughout the City. The existing networks within the City would require significant technology
upgrades before they were able to offer reliable gigabit speeds to the public at a reasonable price.
16. However, until November 2015, Colorado General Assembly Senate Bill 05-152
(“SB-152”) may have prohibited the City from being engaged in providing internet services. In
November 2015, 83% of the City’s voters chose to opt out of SB-152, thus removing any legal
barrier SB-152 may have erected preventing the City from providing high-speed internet to its
residents.
2 See https://www.fcgov.com/excellence/
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17. In turn, the City addressed the broadband situation in its 2015/2016 Strategic Plan
with “Strategic Objective 3.9 – Encourage the development of reliable high speed internet services
throughout the community.” This objective’s goal is to bring reliable, high-speed internet to the
City, while making an informed decision through evaluation of risk and opportunities.
18. Ultimately, in 2017, the City’s voters approved an amendment to Fort Collins
Municipal Charter to allow the City to provide telecommunication facilities and services, including
the transmission of voice, data, graphics and video using broadband internet facilities, to its
residents. After this approval, the City prepared to launch “Fort Collins Connexion”—a municipal
broadband service—to provide broadband internet, voice, and video services.
The City’s Request for Proposal/Open’s Response and Representations
19. With the approval to launch its own broadband service, the City needed a way to
provide customer care and billing services for Fort Collins Connexion customers. The City had a
billing system in place for its utility services and desired to put in place a system that would
consolidate the billing services. To that end, the City was looking to engage an experienced partner
and a mature, well developed, real-world tested product that would handle both (1) its new
Connexion municipal broadband service and (2) its existing utilities.
20. On February 10, 2018, the City published a Request for Proposal 8697 for “Vendor
Selection and Implementation of a Comprehensive Solution for Utilities/Broadband Billing
(CIS/OSS)” including a detailed response template and seeking submission of responses by March
12, 2018 (“RFP”). The City’s goal was to transition from its 21-year-old software for its existing
utilities to a more sophisticated system that integrates bill pay and customer service in one self-
service web portal for all five of its utilities (electric, water, wastewater, storm water, and now
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Connexion, the new business unit that would provide internet, voice, and video services to the
community). In the RFP, the City clearly indicated that it was looking for a comprehensive and
integrated solution providing functionality to its utility Customer Information System (“CIS”), its
field services, and to serve the range of needs both for current City utilities and for Connexion.
21. Eight firms submitted proposals in response to the RFP.
22. On March 12, 2018, Open submitted its proposal (“Response”) to the City’s RFP.
The Response was a comprehensive document with over 1,000 pages setting forth Open’s
purported experience and capabilities.
23. In its Response, Open claimed that it had “30 years of experience implementing
CIS solutions for utility service providers” and “over 100 CIS implementations across the
Americas.”
24. Open also claimed in its Response that it offered a product, Open Smartflex, which
was introduced in 2004 and was currently in “its fifth product generation with a flexible, rules
based [Operational Support System (“OSS”)], a single product platform to support utilities and
telecommunication service providers.”
25. Open claimed that its product was off-the-shelf and ready for implementation.
Specifically, Open claimed that “it complies with the vast majority of the functional and technical
requirements of this RFP with one single and uniform product: Open Smartflex.” Open said that
Smartflex is “delivered pre-configured with the best practices for the utility industry” for which
implementation would only require it to be “fine-tuned” to address the specific needs of the City.
Open explained that it offers “a rules-based approach for implementing customer-specific
enhancements without customizing source code.”
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26. Indeed, Open represented that “on average, 84% of the functionalities requested by
clients from the utilities industry are covered by Open’s business models the remaining 16%
should be covered by configuration, framework, or development activities.”
27. Open also stated that, based on its extensive experience, the requested
implementation would occur in two phases. The first would take “12 months with a three month
post-go-live support period” and the second would “occur one month later [and] have four months
post-go-live support.” Open assured the City that “this timeframe is quite adequate, based on our
experience and our view of the functional scope, the solution business model, the implementation
methodology, as well as actual successful implementations for similar projects.” Open made
specific representations that the “Project Closure” would occur in January 2020.
28. In its Response, Open also included a “Functional Matrix”. The Functional Matrix
was intended to help the City understand what functionality Open offered through its Smartflex
solution as part of the base product and what functionality may require additional development.
Open categorized its functionalities with letters ranging from A through G, with “A” as identifying
those “[p]rovided as part of the base system,” “B” as those “In Development,” “C” as those that
“will require some enhancements,” “D” as those that “will require minor software coding,” “E” as
those that “will have to be modified,” “F” as those that will require “[e]xtensive modification to
base code,” and “G” as those for which “[s]oftware can not be enhanced or modified.” The vast
majority of the items were marked “A,” a few were marked “B,” and almost none were marked
“C” or below.
29. Throughout the RFP process and up until signing the contract with the City, Open
promoted the idea that almost all the required functionality was already available without
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modification and that implementation would only require the product to be “fine-tuned.”
30. In reliance on Open’s statements and representations, the City was induced to move
forward with Open and ultimately entered into a Master Professional Services Agreement (the
“MPSA”) and Software License Agreement, both executed August 9, 2018. True and correct
copies of the MPSA and Software License Agreement are attached hereto as Exhibits 1 and 2,
respectively, and incorporated herein by reference.
31. At the same time, and based on the same statements and representations, the City
was induced into executing a “Scope of Work” (”SOW”). A true and correct copy of the SOW is
attached hereto as Exhibit 3 and incorporated herein by reference.
32. The SOW also included a “Functional Requirements Matrix” representing similar
information as the Functional Matrix found in Open’s Response to the RFP.
33. The MPSA and Software License Agreement incorporated the RFP, Open’s
Response, and the SOW (collectively referred herein as “the Agreements”).
34. Shortly thereafter, the City and Open began implementation of the Smartflex
solution.
35. Under the Agreements, the total maximum cost for completion of the work outlined
in the SOW, MPSA, and Software License Agreement was approximately $7.3 million. Total
changes to the original budgeted cost amount to approximately $4.7 million. The City has paid to
Open approximately $8.6 million as of May 2021 and retained approximately $1.1 million
pursuant to the Agreements.
36. Open agreed to deliver the product by June 2019 for Connexion and by October
2019 for the other four utilities. But to date, Open has failed to deliver a fully functioning product
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for any of the five utility services.
Open’s Misrepresentations About Smartflex
37. Although Open represented its Smartflex product as being in the fifth generation
and only requiring “fine-tuning”, the City has come to find that much of the product was not even
built. Rather than a process of fine-tuning, nearly all the product configuration has required
customizing source code and extensive software development.
38. For example, the City found out well into the implementation process that the self-
service portal, which Open represented as category “A” and as “provided as part of base system”,
did not even exist at the time the City and Open entered into the Agreements.
39. Open recently disclosed to the City for the first time that Open expended 30,000
hours of development effort after claiming that the self-service portal was part of the base system.
40. Additionally, contrary to Open’s representations that the mature and complete
Smartflex product would make implementation straightforward, the product’s shortcomings have
required additional work—rather than mere configuration or set-up, the implementation became a
software development/coding project.
41. For instance, Open estimated configuration would be completed under its fixed-fee
proposal. To date, however, the City has contracted with Open for more than 15,000 additional
hours and there remains considerable effort required to complete the configuration required.
42. The implementation has also required 30 project change requests (“PCRs”) and,
even with these requests, the City still does not have a functional system. Indeed, some PCRs
remain incomplete; for example, Open has not completed PCR 9 (dated January 2020) and it
remains part of the backlog list. Other PCRs have been partially implemented or delivered for
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testing purposes but not released.
43. Open represented that Smartflex was ready for the US market. But Smartflex does
not support many features which are common in US utility billing applications like paperless
billing, allowing customers to choose internet speed and contract length separately, allowing
volume customers to add multiple phone lines in bulk (with adjacent telephone numbers), and
allowing a preview of what a bill would look like if a customer made a proposed change (before
making the change).
Open’s Missed Deadlines and Inadequate Support
44. As noted above, Open’s Response proposed an implementation plan with two
rollouts over a total period from start of work to completion of about 16 months. In the SOW, the
Parties agreed to a timeline of a “13-month period with an additional 4-month post-go-live support
period as a requirement of the City.” Open again represented that “this timeframe is adequate,
based on our experience and our view of the functional scope, the solution business model, and
the implementation methodology.”
45. Under the SOW, “Go Live for Broadband” was scheduled to be mid-June 2019
with “Utilities Go Live” scheduled to be mid-September 2019 and full closure occurring January
1, 2020. Open, however, missed these deadlines.
46. On August 31, 2019, the City agreed to allow the Broadband portion of Smartflex
to Go Live out of necessity to support the new City Broadband service. However, the functionality
that Open agreed to provide was not complete. Open committed to complete the Broadband
functionality within 120 days. But Open also failed to meet these new deadlines.
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47. In May 2020, it became evident that Open would miss its deadlines for the Utilities
Go Live.
48. The City and Open agreed via the First Amendment to the MPSA dated June 2,
2020, a copy of which is attached hereto as Exhibit 4 and incorporated herein by reference, (the
“First Amendment”) on new milestone dates for Utilities, including:
a. Utilities System Testing Successfully Completed – September 2020
b. Utilities Go-Live – October 2020
c. Utilities Stabilization – Successfully Complete – February 2021
49. Open also missed these new deadlines in breach of the First Amendment.
50. In addition, Open did not provide the necessary support to meet the City’s needs on
the agreed upon timelines.
51. Open promised a very high level of support and, with respect to Service Level
Agreements (“SLA”), agreed via its Response to “achieving 95% compliance with the Incident
SLAs. This implies that 95% of the cases will have a temporary or definitive solution within the
established time period, with 20 as the minimum number of incidents registered in the month.”
52. In the MPSA, Open committed to a “target of 100% compliance” with the SLAs
and Open acknowledged that compliance with “the SLA at a level of 95% is a material condition
of the Agreement”.
53. While the City has allowed some temporary solutions, Open has not met these
benchmarks with permanent solutions.
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54. Open has frequently rolled out new versions of the product (currently on version
25), but when a new version is released, Open has no ability to “roll back” a version that causes
new issues.
55. Open has also failed to provide the necessary training and testing support to support
the project properly. There is no set curriculum or materials to assist with training users. Other
platforms have standard user manuals, training materials, and a highly competent staff whose sole
role is to deliver that training.
The City’s Attempts to Resolve the Issues
56. For months, the City attempted, in good faith, to work out the problems and issues
internally with Open’s representatives and Project Managers. The City continued to devote time
and money to support Open’s development of the Smartflex solution. The parties held weekly
meetings in an effort to help Open develop the solution. While awaiting the solution, the City was
forced to continue to devote significant employee time to manually perform the tasks that Open’s
solution was supposed to provide. However, despite the City’s efforts and patience, Open’s Project
Managers and executives have failed to or have been unable to resolve the disputed issues.
57. These discussions fulfilled the City’s obligations pursuant to MPSA section 17.1 to
“first strive to work out the problem internally.”
58. During recent discussions in May 2021, the City and Open engaged in detailed
communications trying to resolve these disputed issues and move forward cooperatively. During
those communications, the City raised the idea of initiating the next step in the dispute procedure
in Section 17.2 of the MPSA (“Executive Negotiation”) to help the Parties resolve the issues using
the contractual procedure.
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59. Open’s response was that an official Notice of Dispute would be interpreted by
Open as a serious escalation and that it would not be conducive to finding a mutually beneficial
resolution. Accordingly, the City held off on issuing the Notice of Dispute and intended to (and
did) continue discussions with Open in good faith.
60. However, on May 19, 2021, Open sent a purported “Notice of Default pursuant to
Section 13.2 of the MPSA.” In this notice, Open claimed that the City was in breach, even though
it was Open that had misrepresented the status of its own fifth generation product and the scope of
the work needed.
61. For example, in its Notice, Open claims that the City failed to provide a “complete
prioritized” issue list for broadband. However, the City provided this list and information on
March 23, 2021.
62. Open also alleges that the City has not provided the acceptance criteria. However,
Open misplaces the fault. Under, Section 6 of the SOW, Open is responsible for specifying
acceptance criteria and test cases. Open’s product remains unready for acceptance and the
provision of this information from the City is not the reason.
63. On May 25, 2021, the City sent a Notice of Default and Notice of Dispute to Open
that preliminarily responded to some of the issues raised by Open and also outlined the failures of
Open. To date, Open has failed to provide the functionalities promised and has indicated that it
cannot deliver the functionalities promised under the previously agreed-upon timelines and
budgets.
64. Open and the City continued discussions in May and June 2021. On June 17, 2021,
representatives of Open and the City met in person to discuss a potential resolution. The City
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requested an amicable dissolution of the relationship, up to and including rescinding the contract.
Open characterized an amicable dissolution as “impossible”. Moreover, Open stated that the City
should not be concerned about additional financial investment and advised the City that Open had
ample personnel waiting and ready complete the work. The City requested that Open document
their proposal and the City would review it.
65. On June 28, 2021, Open delivered its proposal for continuing to work on solutions
for broadband and utility billing. However, Open’s proposed solution is too expensive and too
slow. Open proposed that the City would have to agree to share in another $3.3 million of
additional costs and, in addition, would have to pay ongoing costs of over $120,000 per month
($1.5 million per year) to manage the system. Even then, the system would not be complete for
another 16 months. This proposal does not cure Open’s material breaches.
66. As a result of the above acts, the City has been, continues to be, and will be
substantially harmed by Open’s material failures to perform services as agreed.
FIRST CLAIM FOR RELIEF
(Fraudulent Inducement)
67. The City re-alleges and incorporates by reference the allegations of all the
foregoing paragraphs as if fully restated herein.
68. The City was induced to enter into the Agreements and the First Amendment by
Open’s representations that it was knowledgeable about the work contemplated by the parties and
set forth in the Agreements, had significant experience in the work, and had a highly-capable and
well-developed complete product to meet the City’s needs, among others.
69. Open made material representations about the fitness of the Smartflex product for
the City’s needs. Specifically, in its Response to the RFP, Open falsely represented to the City that
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it offered a product currently in “its fifth product generation with a flexible, rules based
[Operational Support System (“OSS”)], a single product platform to support utilities and
telecommunication service providers.” Open included mocked-up screenshots of functionality
that was not yet developed and did not exist. Open knew at that time that it could not fulfill that
promise it made because, as the City has come to find out, much of the product was not even built.
For example, the self-service portal, which Open represented as “A – provided as part of base
system”, did not even exist at the time the City and Open entered into the Agreements. Open
recently disclosed for the first time that it expended 30,000 hours of development effort to build a
self-service portal after entering into the MPSA.
70. Open also falsely represented that its product was a turnkey, off-the-shelf product
and ready for implementation (with minimal configuration) to support the City’s five utilities,
including the City’s new Connexion municipal broadband service offering. However, rather than
mere configuration or set-up, the implementation became a software development/coding project.
71. Open further made false representations about the schedule and timing for
executing the project and the level of support Open would provide to execute the project.
72. Open’s representations about its services, products, and capabilities were false.
73. These facts were material to, among other things, the City’s decision to enter into
the Agreements and the First Amendment, to agree to changes to the contract price exceeding $4.6
million, and to pay Open for the services. Specifically, due to the need for adequate support in
implementing a new system and to meet the promised deadlines as communicated to the City’s
residents, the City relied on Open’s representations to enter into the Agreements and the First
Amendment. Thus, Open made false representations of material facts.
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74. At the time Open made these representations, it knew they were false. Open had
full control over its products and had full knowledge of the functionalities, capabilities, and state
of development—and the lack of functionalities, capabilities, and development—of its product and
further knew the time it would take to execute its product for the City. Open made these false
representations with the intent that the City would act upon them by executing the Agreements and
the First Amendment. Open knew it could not fulfill the promises and representations made at the
time it made those promises and representations.
75. The City reasonably relied on Open’s false representations and did not know of the
falsity of Open’s representations. The City would not have entered into the Agreements, the First
Amendment or any similar agreements had it known the true facts. For example, the City would
not have entered into the Agreements and the First Amendment if it had known that almost all of
the requisite functionalities were not actually category “A” as represented in the Functional Matrix.
This representation was critical to the City’s decision to enter into the relationship with Open as it
needed to meet the promised scheduled of releasing a billing system for Connexion by June 2019,
as it had indicated to its residents.
76. The City’s reliance on Open’s false and intentional representations has damaged
the City and, therefore, the City is entitled to rescind the Agreements and the First Amendment
and to receive restitution of its damages. The City’s reliance was reasonable and justifiable as
Open held itself out to the City as an expert in this field and in this product in particular.
77. The City has asked Open to rescind the Agreements and the First Amendment and
put the parties back in the positions they were prior to signing (by Open returning the funds paid
by the City and then the City would return any material provided by Open).
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SECOND CLAIM FOR RELIEF
(Breach of Contract)
78. The City re-alleges and incorporates by reference the allegations of all the
foregoing paragraphs as if fully restated herein.
79. The Agreements and the First Amendment constitute valid and enforceable
contracts by and between the City and Open.
80. Open agreed to deliver to the City the products and functionalities set forth in the
Agreements and First Amendment.
81. Open failed to deliver to the City the products and functionalities set forth in the
Agreements and First Amendment in breach thereof and materially breached the Agreements and
First Amendment. These breaches included a breach of the duty to provide the products and
functionalities within the time promised and the duty to provide adequate support.
82. Specifically, Open stated that, based on its extensive experience, the requested
implementation “timeframe is quite adequate, based on our experience and our view of the
functional scope, the solution business model, the implementation technology, well as actual
successful implementations for similar projects.”
83. Open, however, failed to meet these deadlines and subsequent deadlines set forth
in the Agreements and First Amendment.
84. Open promised that it would provide a product that met the City’s needs and
combined broadband and utility billing. Open has failed to do so.
85. Open’s breaches of the Agreements and First Amendment were material.
Specifically, Open’s failure to fulfill its contractual obligations directly and proximately has
caused the City significant damages for the services it never received.
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86. The City performed all of its obligations under the Agreements and First
Amendment. It provided the required “complete prioritized” issue list for broadband.
Additionally, contrary to any allegations by Open, the City was not responsible for providing
acceptance criteria, rather, it was Open’s responsibility which it failed to perform because it failed
to provide a product ready for acceptance.
87. The City seeks rescission of all agreements and reimbursement for all amounts paid
to Open to date because such services had no reasonable commercial value. The City also seeks
value for any additional costs it will incur to complete the work. In the alternative, the City seeks
damages pursuant to the Agreements and First Amendment.
THIRD CLAIM FOR RELIEF
(Breach of Implied Covenant of Good Faith and Fair Dealing)
88. The City re-alleges and incorporates by reference the allegations of all the
foregoing paragraphs as if fully restated herein.
89. The common law imposes upon Open, as a contracting party, the duty of good faith
and fair dealing. This duty prohibits a contracting party from exercising a judgment conferred by
the express terms of the contract in such a way as to evade the spirit of the transaction and deprive
the other party of the expected benefit of the contract.
90. The City and Open entered into the Agreements and First Amendment, which were
in effect at all relevant times herein.
91. Under the Agreements and First Amendment, for example, p. 23 of the MPSA,
Open had the sole discretion to modify the supported platform and product. It also had the
discretion to determine delivery time of the product and its performance under the Agreements
and First Amendment.
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92. Open had a duty to perform its contractual obligations in good faith and ensure the
prompt development of the solution with the capabilities set forth in the Agreements and First
Amendment, and it breached these duties by failing to deliver the solution in a timely fashion.
Open also breached these duties by failing to provide adequate support. Open further breached
these duties when it failed to disclose the deficiencies in its work and product in an effort to induce
the City to continue making payments.
93. Open’s conduct has been willful, unfair, and in bad faith.
94. The City has been damaged by Open’s breach of the implied covenant of good faith
and fair dealing in at least the amounts it paid to Open for software functionality Open failed to
deliver, plus interest and additional amounts expended in connection with seeking the return of the
funds in an amount to be determined at trial.
FOURTH CLAIM FOR RELIEF
(Declaratory Judgment)
95. The City re-alleges and incorporates by reference the allegations of all the
foregoing paragraphs as if fully restated herein.
96. An actual and justiciable controversy between the City and Open regarding their
rights and obligations under the Agreements exists.
97. The City has acted lawfully at all times.
98. A judicial declaration of the Parties’ rights and obligations with respect to the
Agreements and the First Amendment would terminate the controversy and remove uncertainty.
99. All parties who have an interest that would be affected by the requested declaration
are parties to this action, and the requested declaration will not prejudice the rights of any non-
parties.
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100. The City requests an adjudication that it did not breach the Agreements and the
First Amendment. Rather, the City provided the necessary information, including a complete
prioritized issue list for broadband in a timely manner. The City also requests an adjudication that
under Section 6 of the SOW, Open is responsible for specifying acceptance criteria and test cases.
Open’s product remains unready for acceptance and the provision of this information from the
City is not the reason. And that the City provided contractually adequate staffing based on the
staffing levels that should have been needed based on Open’s initial representations.
101. Additionally, the City requests an adjudication and determination of whether the
Agreements should be rescinded, or otherwise to determine the rights and obligations that the
parties have to each other thereunder. The City specifically seeks a judicial declaration that the
Agreements and First Amendment are rescinded, and are of no force or effect.
PRAYER FOR RELIEF
WHEREFORE, the City respectfully requests that this Court enter judgment in its favor
granting the following relief:
A. For adjudication that the Agreements and First Amendment between the
City and Open have been rescinded, and for restoration of the parties to their pre-
contractual positions;
B. For recovery by the City of any and all sums that it paid to Open under the
Agreements and First Amendment;
C. For any and all damages available pursuant to the parties Agreements and
First Amendment;
D. For compensatory and general damages according to proof;
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E. For a judicial declaration that the Agreements and First Amendment are
rescinded;
F. For pre- and post-judgment interest on all amounts claimed to the extent
permitted by law and at the statutory rate;
G. Costs and attorneys’ fees as permitted by contract and statute; and
H. Such other and further relief as this Court may deem just and proper.
JURY DEMAND
The City hereby demands a trial by jury on all issues so triable.
Respectfully submitted this 2nd day of July, 2021.
s/ Case Collard
Case Collard
Andrea Ahn Wechter
Maral J. Shoaei
DORSEY & WHITNEY LLP
1400 Wewatta Street, Suite 400
Denver, CO 80202
Telephone: (303) 629-3400
Facsimile: (303) 629-3450
Email: collard.case@dorsey.com
Email: wechter.andrea@dorsey.com
Email: shoaei.maral@dorsey.com
ATTORNEYS FOR PLAINTIFF
Plaintiff’s Address:
300 Laporte Ave,
Fort Collins, CO 80521