Moses.com Securities v. Comprehensive Software

Citation: Moses.com Securities, Inc. v. Comprehensive Software Sys., Inc., 406 F.3d 1052 (8th Cir. 2005).

Factual Background
In 1999, Moses.com (“Moses”) wanted to enter into the online stock brokerage business. Moses negotiated with Comprehensive Software Systems (“CSS”) to have a it 'develop a software program to facilitate online stock trading in accordance with Moses’s specific needs. Moses and CSS did not enter into a formal contract, however they negotiated a letter of intent to work together “in establishing an appropriate software system for Moses’s needs.” Subsequently, Moses executives became dissatisfied with CSS’s slow progress and in February of 2000 they asked CSS to discontinue its work and leave the Moses’s office.

Shortly thereafter, Moses filed a suit in state court raising state tort claims for fraudulent misrepresentation, negligent misrepresentation and negligence. CSS moved the case to federal court.

Trial Court Proceedings
Moses filed an amended complaint, which added several additional claims as well as added CSS’s former clients Southwest and Glatstein as defendants. The District Court found that “Moses’s allegations of conspiracy were too indefinite to resolve the various motions to dismiss that had been raised.” Thus, Moses filed a second amended complaint adding additional claims and pleading more facts. Subsequently, the Court dismissed Moses’s claims against Southwest and Glatstein. Moses moved to file a third amended complaint.

The District court entered judgment in favor of CSS. CSS was awarded $33,000 on its counterclaim seeking damages for unpaid work in quantum meruit. Further, the Court held that Moses was not entitled to file a third amended complaint. Moses filed a motion for a new trial and the Court denied that motion. Moses appealed from the judgment in favor of CSS, the denial of leave to amend and the denial of the motion for a new trial.

Appellate Court Proceedings
The Appellate Court affirmed the district court’s holdings. First, the Court held that the district court did not abuse its discretion by disallowing the use of the evidence that Moses’s sought to present at trial. The Court reasoned that it was reasonable to exclude evidence about non-party companies and that allowing the evidence may have confused the jury and further, the evidence “was not probative of the central issues in the case.”

Second, the Court held that the trial court did not err in granting Southwest and Glatstien’s motions to dismiss. In its complaint, Moses alleged that Southwest and Glatstein were CSS’s co-conspirators and assisted in misrepresenting CSS’s abilities. The Court held that Moses failed to allege any specific facts to support this accusation. Finally, the Court held that the district court’s denial of leave to amend for a third time was not an abuse of discretion. Since the district court had already granted leave to amend twice, allowing a third amended complaint would prejudice the Defendant because “numerous motions to dismiss had already been briefed and ruled, and discovery in [the] matter [was] now well underway.”