1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 6 CONVERGENT MOBILE, INC., Case No. 4:19-cv-06484-YGR

7 Plaintiff, RULE 52 ORDER AFTER TRIAL ON THE

MERITS

8 v.

9 JTH TAX, INC., 10 Defendant.

11 JTH TAX INC., 12 Counterclaimant, 13 v.

14 CONVERGENT MOBILE, INC., Counter-Defendant. 15

16 17 This case arises out of an alleged contractual breach eighteen (18) months into a three-year 18 commercial agreement. Resolution of the case centered on the allegation of defendant and 19 counterclaimant customer JTH Tax Inc. dba Liberty Tax Service (“JTH”) that plaintiff and 20 counter-defendant developer Convergent Mobile, Inc. (“Convergent”) failed to perform material 21 aspects of a Master License Agreement (“the MLA”) and did not timely cure. Additional issues 22 included whether JTH provided proper notice of the breach and which party, if either, properly 23 terminated the MLA. Convergent seeks payment of the balance due under the three-year MLA 24 and attorneys’ fees. JTH countersued for damages based on pre- and post-termination breaches of 25 contract, including for Convergent’s alleged failure to return JTH’s customer content in a timely 26 manner. 27 Over the course of a four-day bench trial, the Court heard testimony from seven witnesses 1 breached the MLA and the implied covenant of good faith and fair dealing contained therein. 2 Payment is owed to Convergent thereunder in the amount of $601,200 plus prejudgment interest 3 and costs. The Court’s findings of fact and conclusions of law follow. 4 I. STIPULATIONS OF FACT 5 Prior to trial, the parties stipulated to the following facts (Dkt. No. 99): 6 JTH and Convergent entered into an MLA effective December 1, 2017. The 2017 MLA 7 was a result of a long period of negotiations that had begun in or about February or March 2017. 8 Per the MLA, Convergent agreed to provide services to JTH in connection with Convergent’s 9 web-based and mobile communications platform. 10 Section 8(a) and Annex A, Section IV(A) of the MLA provides the term of the agreement 11 namely, (i) three years for product services called “LBL Pro,” “US411,” and “OPS411,” and 12 (ii) one year for OnTyme unless either are terminated earlier pursuant to the terms of the MLA. 13 Notwithstanding the foregoing, in the event that the parties negotiated and formalized a written 14 agreement to continue provision of the OnTyme service, the integrations completed by 15 Convergent in year one of this MLA were to remain functional during potential future years of 16 service. 17 The MLA further provided: First, over the three-year term of the agreement, Convergent 18 was required to provide the “LBL Pro”, “US411”, and “OPS411” services in exchange for which 19 JTH agreed to pay a monthly fee for those services of $125,400.00. Second, the MLA also 20 contemplated the additional “OnTyme” service. The parties agreed that the “OnTyme” function 21 would be provided to JTH at no cost in the first year. After the first year, per Section V(D) of the 22 MLA, “if the parties chose to continue this service,” then for years 2 and 3 of the MLA, 23 “OnTyme’s” cost would be “negotiated and formalized in a written document signed by both 24 parties.” Third, Section 1(c) contemplated further development work that CMI might perform for 25 JTH. All such custom development work required the parties to enter into separate “Statements of 26 Work Agreements” (“SOWs”) which had to be in writing and executed by both parties. Section 27 1(c) also noted that any such SOWs into which they entered in the future would include a rate of 1 Section 8(c) of the MLA provides the parties with the grounds for termination of the 2 agreement. Relevant to this action, Section 8(c) provides for termination “(ii) by either party upon 3 thirty (30) days prior written notice in the event of a material breach of the Agreement by the other 4 party, where the other party has failed to cure such breach within thirty (30) days of such notice.” 5 Here, on May 1, 2018, Steve Peters, Vice President of Technology for JTH, sent an email 6 to Convergent’s CEO Mickey Breen and other Convergent agents informing Convergent that JTH 7 did not wish to move forward on the OnTyme scheduling application. The parties never entered 8 into a formal written agreement regarding the OnTyme function. In the same email, Mr. Peters 9 listed a number of issues JTH had noticed regarding Convergent’s performance of its contractual 10 obligations and asked Mr. Breen to investigate and remedy these performance issues identified in 11 the email. 12 Thirty days later, on May 31, 2018, Convergent’s COO Krishna Pillai emailed Mr. Peters 13 and went through each of the issues raised by JTH on May 1, 2018, assuring him that all the issues 14 were resolved. 15 Section 7(a) states:

16 (a) Fees. Customer shall pay to Convergent Mobile the applicable fees specified in Annex A (each, a "Fee"). Each month in advance, 17 Convergent Mobile shall deliver to Customer an invoice setting forth the Platform Services to be rendered to, and the Fees payable by 18 Customer, together with any applicable Taxes (as defined in Section 7(b)). Customer shall pay in U.S. Dollars by check, ACH payment 19 system or wire transfer to Convergent Mobile all applicable Fees and Taxes within thirty (30) days of the date of such invoice. 20 21 On or about June 1, 2019, Convergent sent JTH invoice #903 for payment of $125,400.00 22 for the services Convergent would provide for June 2019. JTH never paid the June 1, 2019 23 invoice. In a letter dated June 19, 2019, JTH’s counsel, William Harvey, notified Mr. Breen, that 24 Convergent had failed to deliver on a number of contractual obligations under the MLA, that such 25 failures to deliver constituted material breaches of the MLA, and that JTH intended to terminate 26 the MLA for cause under Section 8(c) of the MLA. In a letter dated June 25, 2019, Stephen Peary, 27 counsel for Convergent, informed Mr. Harvey, that with respect to the issues raised in June 19, 1 in the MLA, or that such issues were not actually required under the MLA. 2 On or about July 1, 2019, Convergent sent JTH invoice #904 for payment of $125,400.00 3 for the services Convergent would provide for July 2019. JTH never paid the July 1, 2019 4 invoice. On July 10, 2019, Mr. Breen sent JTH a letter demanding payment for a past-due amount 5 of $125,400 pursuant to the June 1, 2019 invoice. 6 On or about August 1, 2019, Convergent sent JTH invoice #905 for payment of 7 $125,400.00 for the services Convergent would provide for August 2019. JTH never paid the 8 August 1, 2019 invoice. On August 19, 2019, counsel for Convergent sent JTH’s counsel a letter 9 noting that JTH had still failed to pay its past-due amounts in violation of Section 7 of the MLA, 10 and that unless JTH paid all such amounts, Convergent would cease providing any and all services 11 under the MLA on August 21, 2019. Convergent stopped providing JTH with any further services 12 under the MLA on or by September 1, 2019. 13 Relevant here, the MLA provided for the effect of terminations. Sections 8(d)1 and 8(e) 14 state: (d) Effect of Termination - Customer. 15 Immediately upon termination or expiration of this Agreement, Customer shall pay all Fees owing as of the date of termination, and 16 cease all use of, and shall not access or use the System. At Convergent Mobile's written request, Customer will promptly return or destroy all 17 documents and all other materials provided by Convergent Mobile to Customer (and all copies thereof), whether in machine or human- 18 readable form and regardless of medium, including notes, discs, electronic mails, tapes, films, reference materials and memoranda that 19 contain, refer to, or relate in any way to the System or Convergent Mobile Content, except for necessary archival copies, provided, that 20 Customer's confidentiality obligations hereunder with respect to the retained archival copies shall survive the termination of this 21 Agreement and shall continue for so long as Customer retains such archival copies. If requested by Convergent Mobile, Customer agrees 22 to certify to Convergent Mobile that all such materials (and any copies thereof) have been returned to Convergent Mobile or destroyed. 23 (e) Effect of Termination — Convergent Mobile. 24 Within thirty (30) days of the expiration or the receipt of notice of termination of this Agreement, Convergent Mobile will promptly 25 26 1 There are two subsections labeled Section 8(e) and no Section 8(d). The first 8(e), 27 entitled “Effect of Termination – Customer” should have been Section 8(d) and should be referred return to Customer all Customer Confidential Information in a 1 standard, and commercially reasonable, format designated by Customer, and return or destroy all documents and all other materials 2 provided by Customer to Convergent Mobile (and all copies thereof), whether in machine or human-readable form and regardless of 3 medium, including notes, discs, electronic mails, tapes, films, reference materials and memoranda that contain, refer to, or relate in 4 any way to the Customer Confidential Information. If requested by Customer, Convergent Mobile agrees to certify to Customer that all 5 such materials (and any copies thereof) have been returned to Customer or destroyed. 6 Section 11 of the MLA is a Limitation of Liabilities provision, and provides that neither 7 party shall “be liable to the other party for any special, indirect, exemplary, incidental, 8 punitive or consequential damages relating in any manner to this Agreement, and whether 9 such damages are based on contract, tort (including negligence), strict liability or otherwise, 10 or arise from performance issues, lack of availability, reliability or delays or omissions 11 related to System[ ] even if such persons have been advised of the possibility of such 12 damages” (emphasis in original). 13

II. LEGAL FRAMEWORK

14 Plaintiff brings three claims: breach of contract, promissory estoppel, and breach of the 15 implied covenant of good faith and fair dealing.2 (Dkt. No. 1.) California law controls each claim. 16 Breach of Contract: “To prevail on a cause of action for breach of contract, the plaintiff 17 must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for 18 nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” 19 Richman v. Hartley, 224 Cal. App. 4th 1182, 1186 (2014). “When a party’s failure to perform a 20 contractual obligation constitutes a material breach of the contract, the other party may be 21 discharged from its duty to perform under the contract.” Brown v. Grimes, 192 Cal. App. 4th 265, 22 277 (2011) (collecting cases). “Normally the question of whether a breach of an obligation is a 23 material breach, so as to excuse performance by the other party, is a question of fact.” Id. at 277- 24 25 2 JTH counterclaims for (i) breach of contract prior to termination, (ii) breach of contract 26 after termination, (iii) breach of the implied warranty of good faith and fair dealing, and (iv) declaratory relief. (Dkt. No. 48.) JTH offered no evidence of damages either before or during 27 trial, and thus, for this reason, all of its affirmative claims fail. The claim for declaratory relief is 1 278 (collecting cases). “Whether a partial breach of a contract is material depends on ‘the 2 importance or seriousness thereof and the probability of the injured party getting substantial 3 performance.’” Id. at 278 (quoting 1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, 4 § 852, pp. 938–940). “A material breach of one aspect of a contract generally constitutes a 5 material breach of the whole contract.” Id. (citation omitted). 6 Implied Covenant of Good Faith and Fair Dealing: Next, “[t]here is an implied 7 covenant of good faith and fair dealing in every contract that neither party will do anything which 8 will injure the right of the other to receive the benefits of the agreement.” Comunale v. Traders & 9 Gen. Ins. Co., 50 Cal. 2d 654, 658 (1958). “Every contract imposes upon each party a duty of 10 good faith and fair dealing in its performance and its enforcement.” Carma Devs. (Cal.), Inc. v. 11 Marathon Dev. Cal., Inc., 2 Cal. 4th 342, 371 (1992) (internal quotation marks omitted). “The 12 covenant of good faith finds particular application in situations where one party is invested with a 13 discretionary power affecting the rights of another. Such power must be exercised in good faith.” 14 Id. at 372. While it cannot impose substantive duties or limits, the “covenant of good faith and 15 fair dealing . . . exists merely to prevent one contracting party from unfairly frustrating the other 16 party’s right to receive the benefits of the agreement actually made.” Guz v. Bechtel Nat., Inc., 24 17 Cal. 4th 317, 349-350 (2000). 18 Promissory Estoppel: Finally, California has adopted the Restatement's view on 19 promissory estoppel claims. US Ecology, Inc. v. State of California, 129 Cal. App. 4th 887, 901 20 (2005) (citing Kajima/Ray Wilson v. Los Angeles Cnty. Metro. Transp. Auth., 23 Cal. 4th 305, 310 21 (2000)). “The elements of a promissory estoppel claim are ‘(1) a promise clear and unambiguous 22 in its terms; (2) reliance by the party to whom the promise is made; (3)[the] reliance must be both 23 reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his 24 reliance.’” Id. (quoting Laks v. Coast Fed. Savs. & Loan Ass’n., 60 Cal. App. 3d 885, 890 (1976)). 25 III. FINDINGS OF FACT AND CONCLUSIONS OF LAW 26 The Court accepts the parties’ stipulated facts and makes the following findings based on 27 1 the testimony and evidence presented at trial.3 The existence of the MLA and JTH’s failure to pay 2 after May 2019 are not in dispute. The main question to be resolved is performance and whether a 3 proper termination under the MLA occurred, and, if necessary, damages. Thus: 4 A. Pre-Litigation Notices and Correspondence 5 The parties specifically negotiated a three-year contract which could only be terminated for 6 cause as defined therein. Relevant here, a party could only terminate “upon thirty (30) days prior 7 written notice in the event of a material breach of the Agreement by the other party where the 8 other party has failed to cure such breach within thirty (30) days of such notice.” Section 8(c). 9 JTH provided only two notices which could have complied with Section 8(c), one from May 1, 10 2018 and one from June 19, 2019. The Court addresses each: 11 May 1, 2018: On May 1, 2018, JTH sent Convergent a notice via email outlining what it 12 believed to be material breaches of the MLA. (Ex. 200.) The email notice was sent by “Steve 13 Peters – VP of Technology,” “Martha O’Gorman – Chief Marketing Officer,” and “David 14 Schaefer – AVP Digital Marketing.” Only David Schaefer testified. On May 31, 2018, within the 15 thirty-day cure period, Convergent responded and either cured or advised why the item listed was 16 not required under the MLA. (Ex. 237.) JTH did nothing to object to or dispute Convergent’s 17 response. The Court finds JTH’s silence in response and continued payment under the MLA for 18 an additional year constituted an acceptance of the proffered cure. Thus, this letter cannot serve as 19 a basis for JTH’s termination of the MLA for cause. 20 June 19, 2019: On June 19, 2019, JTH sent Convergent a second notice of material 21 breaches of the MLA. (Ex. 13.) This letter was signed by “William B. Harvey, Senior Corporate 22 Counsel.” This notice largely regurgitated the issues listed in the May 1, 2018 letter and thus, the 23 response dated June 25, 2019 did as well. As the Court finds the May 1 letter did not form the 24 basis for a termination for cause under Section 8 of the MLA, neither does this one. The Court 25 provides further amplification below. 26

27 3 The twenty-nine (29) admitted exhibits, include: Exhibits 4, 9, 10, 11, 13, 14, 15, 17, 24, 1 Convergent responded to these letters denying any claim or allegation that it was not 2 complying with the MLA, or in the case of the first notice providing a cure. With regard to the 3 second notice sent in June 2019, Convergent responded claim-by-claim on June 25, 2019, as 4 discussed below, disputing nearly all of JTH’s allegations. (Ex. 14.) 5 When no further response was forthcoming, Convergent sent a demand for payment on 6 July 10, 2019. (Ex. 15.) This letter noted that JTH had failed to pay the invoices issued in June 7 and July 2019. 8 Finally, when Convergent received no response from JTH, Convergent’s newly hired 9 outside counsel sent one final pre-litigation letter on August 19, 2019, indicating that services 10 would be shut down on August 21, 2019. (Ex. 17.) Further, it indicated that services would be 11 terminated, in part, due to JTH’s failure to make payment on three invoices (see Exs. 9, 10, 11), 12 and, in part, due to an attempt to mitigate further damage to Convergent. 13 With this termination summary in mind, the Court now returns to the beginning. 14 B. The Parties’ Contractual Relationship 15 The principal individuals involved in the MLA included the following: Amanda Shell, 16 assisted by Amy Saak and Danielle Collier (before 2017), were primarily responsible for the day- 17 to-day operations for Convergent with respect to JTH; Krishna Pillai was responsible for all 18 programming and customization of the products delivered under the MLA; and Michael Breen 19 was the primary contact for the client relationship with Martha O’Gorman of JTH who was the 20 Vice-President of Marketing. Mses. Saak, Collier and O’Gorman did not testify at trial. 21 The evidence was undisputed, and in fact, corroborated by JTH’s own Assistant Vice 22 President of Digital Marketing, David Schaefer, that Ms. O’Gorman and Convergent had a 23 positive, long-term relationship. Mr. Breen testified that Convergent catered to Ms. O’Gorman 24 providing many services which were not listed in the MLA and Convergent considered itself Ms. 25 O’Gorman’s partner such that it served as an extension of her department, including writing 26 speeches and assisting with presentations. Communications between the parties were constant and 27 extended beyond normal working hours during the high seasons. Further, Ms. Shell credibly 1 comprehensive online process was significantly corrupted and took huge amounts of time to 2 validate and clean. Not surprisingly, cleaning data usually takes significantly longer than 3 anticipated. However, having good data as one moves into the digital arena from “flag wavers” on 4 the corners of streets, is an important starting point. 5 That said, there is no evidence that either Mr. Pillai or Mr. Breen had significant 6 experience in digital marketing. In 2014, when Mr. Schaefer joined JTH, given his significant 7 experience, he credibly testified that Convergent did not meet his personal expectations, especially 8 in light of the fact that Convergent was a significant expenditure for the marketing department for 9 JTH. Convergent perceived Mr. Schaefer’s lack of support. The problem for JTH is that Mr. 10 Schaefer’s personal expectations did not control the MLA, nor were those expectations formally 11 communicated to Convergent. 12 Rather, and despite Mr. Schaefer’s professional prodding, Ms. O’Gorman maintained a 13 protective approach to Convergent, and, as VP of Marketing, communicated JTH’s satisfaction 14 with Convergent’s performance notwithstanding its lack of subject matter expertise in digital 15 marketing. That she may have communicated frustration with respect to the lack of a report once 16 in the spring of 2018 does not change the Court’s overall assessment of her satisfaction with 17 Convergent’s performance. To the contrary, despite the concerns raised by Mr. Schaefer, 18 including those in the letter sent on May 1, 2018, Ms. O’Gorman did not terminate the MLA for 19 lack of performance after Convergence’s response on May 31, 2018. Given the constant day-to- 20 day communications between the parties, without more, evidence of one incident does not 21 persuade the Court that Ms. O’Gorman was not satisfied with Convergent. Moreover, JTH 22 decision not to call Ms. O’Gorman as a witness to articulate this litigation-view further bolsters 23 this conclusion.4 24 At a minimum, principles of good faith and fair dealing required that JTH not act in a 25 manner which would frustrate Convergent’s right to receive the benefit of the bargain under the 26

27 4 Mr. Schaefer’s testimony regarding Ms. O’Gorman’s statements during that timeframe 1 MLA. It was undisputed that Convergent provided services at a discount during the first year of 2 the MLA which it intended to recover in years two and three. Thus, having fired Ms. O’Gorman 3 in the fall of 2018, and without Mr. Schaeffer who left JTH a month later due to the “toxic” 4 environment internally and the public “turmoil” externally, it is not surprising that, with respect to 5 this MLA, both Convergent and JTH kept proceeding on the same course as before in year two. 6 With twenty-twenty hindsight, it is easy to complain about the level of service such as that 7 to which Mr. Jim Forguson testified with respect to the issues communicated via the Issue Tracker 8 or email. Again, Convergent believed it was responsive, communicating promptly, and resolving 9 issues in good faith. Mr. Forguson himself agreed that Ms. Shell was honest in her 10 communications, including those where she reported that some of the delays were related to 11 Google rather than Convergent. The evidence in the record does not resolve any particular issue 12 in this regard. Nor does the evidence indicate that JTH advised Convergent that its approach 13 constituted a material breach under the MLA. Rather, in retrospect, with a new vendor, Mr. 14 Forguson can now compare the expertise. This retrospective view is not controlling. Moreover, 15 Mr. Forguson had no personal knowledge of the terms of the MLA or the requirements thereunder. 16 Instead, and again, with Cory Hughes as a new head of marketing, JTH’s in-house counsel, 17 William Harvey attempted to create a notice of material breach by literally cutting and pasting 18 significant portions of the letter from May 1, 2018 into another notice letter sent over a year later 19 on June 19, 2019. The second notice did nothing to acknowledge the prior communications and 20 JTH’s acquiesce with respect to those issues during Ms. O’Gorman’s tenure. Mr. Harvey who sat 21 through the entire trial chose not to testify, confirming that he had nothing to add in terms of 22 personal knowledge. 23 Even reviewing the parties’ different perspectives regarding the nature of the myriad 24 breaches, the language of the MLA is vague, and the evidence presented at trial did not confirm 25 that Convergent breached the MLA. Both notices of termination focused on alleged breaches 26 from “Section 2 iii”5 and the Annex of the MLA. Section 2(f) of the MLA reads as follows:

27 Operation of the System. In addition to the custom development 1 described on Annex A the Customer and Convergent Mobile 2 warrant that each is obligated to, and will, provide the following:

3 i.US 411 Text Messaging Service:

4 ***

5 ii.US 411 Contest Management Service: *** 6 iii.Business Listing Management Service (LBL Pro)

7 A.Customer will 1. Provide to the System a list of Customer locations and 8 update this list on a daily basis. 9 B. The System will: 10 1. Provide ongoing management of Customer’s listing and business data, including claiming, updating, and verifying 11 Customer’s business listing information and content (LDL) which will enable consistent distribution of such data to data providers, 12 search engines and directors. 13 2. Distribute LDL to all main aggregators 3. On a daily basis, publish claim and manage content on all 14 Liberty and Siempre related Google pages. For purposes of LBL, Content is defined as business name, address, phone number, 15 website URL, business hours, profile picture, logo and cover photo. 16 4. Create a claiming guide to assist with promote LBL. 17 5. Provide an export function to provide ready access to LBL formatted for direct submissions to Yelp and other mutually 18 agreed sites. 6. Enable and manage change tracking. 19 7. Provide accuracy reporting, status reporting (distribution, changes, current inventrory) as provided in Annex A. 20

21 Unless specified in Annex A, the MLA provides no further details on the requirements for the 22 LBL Pro. 23 In the June 2019 notice, JTH outlined the following alleged ten breaches: 24 1. “Section 2, iii, B, 4: ‘Create a claiming guide to assist with and promote LBL.’ 25 This is an unfulfilled deliverable per the MLA.”6 (Ex. 13.) 26

27 6 The parties define “LBL” in the MLA to mean business listing information and content. 1 o This was identical to an item raised in the May 2018 email. (Ex. 200 2 (“Section 2, iii, B, 4: ‘Create a claiming guide to assist with and promote 3 LBL’ This is an unfulfilled deliverable.” (emphasis in original)).) 4 o Convergent responded that it was delivered to JTH in May 2018, and that 5 this guide was specifically created for JTH and delivered to Jennifer Shutt. 6 As seen above, Convergent correctly notes that the MLA does not state any 7 specific attributes of the guide. The Court received no evidence from Ms. 8 Shutt that she did not receive the guide nor was any evidence of a 9 contemporaneous email from JTH disputing the same in June of 2018. 10 Even crediting Mr. Schaefer’s claim that he did not see the guide, he did not 11 so advise in 2018 and had left the company by 2019. Further, his vision of 12 what would have constituted a “guide” was likely not the same as 13 Convergent. 14 2. “Section 2, iii, B, 5: ‘Provide an export function to provide ready access to LBL 15 formatted for direct submission to Yelp and other mutually agreed sites.’ This is an 16 unfulfilled deliverable per the MLA.” (Ex. 13.) 17 o This was identical to an item raised in the May 2018 email. (Ex. 200 18 (“Section 2, iii, B, 5: ‘Provide an export function to provide ready access to 19 LBL formatted for direct submission to Yelp and other mutually agreed 20 sites.’ This is an unfulfilled deliverable.” (emphasis in original)).) 21 o Convergent responded that this was provided to JTH in June 2018 and that 22 Jennifer Schutt was copied in March 2018 on the email regarding the list of 23 mutually agreed sites. Convergent also noted that the export functionality 24 was inexplicably turned off for Mr. Forguson, but that they had since 25 remedied this error. The Court received no evidence from Ms. Shutt that 26 she did not receive the guide nor was any evidence of a contemporaneous 27 email from JTH disputing the same in June of 2018. Nor did the evidence 1 later turned off. Notably, Mr. Forguson himself was not asked about 2 whether he could previously access the export function, or whether he could 3 access the export function following June 2019. 4 3. ‘Section 2, iii, B, 6: ‘Enable and manage change tracking’ This is an unfulfilled 5 deliverable per the MLA.” (Ex. 13.) 6 o This was substantively identical to an item raised in the May 2018 email. 7 (Ex. 200 (“Section 2, iii, B, 6: ‘Enable and manage change tracking.’ 8 Evidence of this would need to be provided to allow us to see the 9 changes Convergent Mobile have made in a consumable and 10 documented format. This reporting would need to be contemporaneous 11 and accessible to JTH Tax Inc immediately upon request.” (emphasis in 12 original)).) 13 o Convergent responded that this feature along with daily reports had since 14 May 2018 been provided to Mr. Forguson and Ms. Jennifer Schutt. The 15 Court received no evidence from Ms. Shutt that she did not receive the 16 change tracking. Mr. Forguson testified that he tracked changes on a daily 17 basis with Ms. Shell. As noted above, the MLA does not specify any 18 particular method. Additionally, there was no evidence of a 19 contemporaneous email from JTH disputing the same in June of 2018. 20 4. Annex A to MLA: Phase 1, Part 1: LBI- Pro access through Zeenet: “A: ‘APIs for 21 Bing, Google, and Apple: 1. Locations are processed upon receipt and after 22 successful validation will be distributed to Google, Bing, and Apple using APIs 23 within six (6) hours of validation. 2. Location information from the Liberty Admin 24 System is received automatically via API at the System. 3. The System will notify 25 Liberty about locations that do not pass validation. Liberty will review and correct 26 any invalid information.’ These APIs do not exist, and the services are not 27 delivered within 6 hours of validation.” (Ex. 13 (emphasis in original).) 1 (Ex. 200 (“A: ‘APIs for Bing, Google, and Apple: 1. Locations are 2 processed upon receipt and after successful validation will be distributed to 3 Google, Bing, and Apple using APIs within six (6) hours of validation. 2. 4 Location information from the Liberty Admin System is received 5 automatically via API at the System. 3. The System will notify Liberty 6 about locations that do not pass validation. Liberty will review and correct 7 any invalid information.” – We require evidence that these APIs, 8 systems, and services are in place and working properly according to 9 the language of the contract.” (emphasis in original)).) 10 o With respect to LBL Pro access through Zeenet, Convergent responded that 11 this work was completed in May 2018, and that it had awaited a response 12 from JTH for over a year. Mr. Pillai testified that this work had been 13 completed and access given to five individuals from JTH (Ms. Schutt, Mr. 14 Schaeffer, Ms. O’Gorman, Mr. Forguson and Mr. Peters), but Mr. Schaeffer 15 testified that this access was not working properly or functioning. Notably, 16 Mr. Schaeffer could not recall whether he or anyone ever conveyed these 17 issues to Convergent beyond the May 2018 email. Additionally, there was 18 no evidence of a contemporaneous email from JTH disputing the same in 19 June of 2018. 20 o With respect to the APIs for Bing, Google, and Apple, JTH claimed that 21 these services were not in place, and that they took longer than six hours in 22 violation of the MLA. Convergent responded that the system had been in 23 place since December 2017, and that JTH was receiving any invalid 24 information through daily emails. Mr. Pillai had testified, corroborated by 25 Ms. Shell, that this data could be observed from the user interface of the 26 dashboard. Moreover, in accordance with Convergent’s May 31, 2018 27 response, Convergent began sending emails containing “Change Tracking” 1 from Ms. Shutt that she did not receive these emails or files, nor was there 2 any evidence of a contemporaneous email from JTH disputing the same in 3 June of 2018. 4 5. Annex A to the MLA, Phase 1, Part 3: “[‘]B: Google My Business (GMB) 5 Insights: 1. Current reporting available in LBL Pro includes GMB Insights data on 6 a Brand and Location level. 2. New Insights data is released daily. (There is 7 currently a delay of 3-4 days in Google’s release of data. The LBL Pro system 8 accommodates for this delay. As Google makes improvements on their timing the 9 System will be updated to accommodate improve Google timing.) Metrics currently 10 included in this reporting are: Count of Direct and Discovery Searches; Count of 11 Map and Search Views; Count of Website, Direction and Call Actions. All Metrics 12 are available on a daily basis, summation occurs based on date range selected by 13 JTH Tax, Inc. when running the reports. 3. Additional modifications already in 14 progress for GMB reporting are: Monthly trend charts showing totals of all 15 locations for Searches, Views and Actions (including count of direct and discovery 16 searches such as brand and keyword searches, count of map and search views and 17 count of website, direction and call actions.) 4. Export functionality of data for the 18 GMB report: Brand level is available in both Excel and PDF formats. Locations 19 level is available in PDF format.’ These metrics are not available or sent to us on a 20 daily basis as we have no access to the LBL Pro system and have no reports sent to 21 us daily. The additional modifications mentioned are not sent to us monthly as 22 indicated. We have received 1-2 of these ‘monthly trend’ reports and not at regular 23 intervals – these had to be requested and the follow through was extremely slow. 24 Export Functionality is not available in Excel.” (Ex. 13. (emphasis in original)) 25 o This was substantively identical to an item raised in the May 2018 email.7 26

27 7 (Ex. 200 (“[‘]B: Google My Business (GMB) Insights: 1. Current reporting available in 1 o JTH claimed that certain GMB metrics were not provided per the MLA. 2 Convergent responded that these metrics are available through the GMB 3 dashboard and have been available since the inception. For instance, Ms. 4 Shell credibly testified that these metrics were available to JTH, through a 5 separate user account maintained by JTH, and that she was aware of at least 6 one JTH employee named Occasio Gee who had access to the dashboard. 7 Further, Ms. Shell testified that to the best of her knowledge she had sent 8 the requested reports. Additionally, there was no evidence of a 9 contemporaneous email from JTH disputing the same in June of 2018. 10 6. Annex A to the MLA, Phase 2, Part 1.: “LBL Pro is supposed to permit certain 11 custom content to be maintained for use in GMB,” including AdWords Extension, 12 Phone Communications Manager, and Email. (Ex. 13.) 13 o This was a new notice item that had no analogue to any items reported in 14 the May 2018 email. (See generally Ex. 200.) 15 o JTH claimed that this functionality was not available. Convergent 16 conceded that this functionality had not been available when it responded in 17 June 2019, but responded that this was a new notice item that would be 18

19 system accommodates for this delay. As Google makes improvements on their timing the System will be updated to accommodated improve Google timing.) Metrics currently included in this 20 reporting are: Count of Direct and Discovery Searches,; Count of Map and Search Views; Count 21 of Website, Direction and Call Actions. All Metrics are available on a daily basis, summation occurs based on date range selected by JTH Tax, Inc. when running the reports. 3. Additional 22 modifications already in progress for GMB reporting are: Monthly trend charts showing totals of all locations for Searches, Views and Actions (including count of direct and discovery searches 23 such as brand and keyword searches, count of map and search views and count of website, direction and call actions.) 4. Export functionality of data for the GMB report: Brand level is 24 available in both Excel and PDF formats. Locations level is available in PDF format.’ These 25 metrics are not available as we have no access to the LBL Pro system and have no reports sent to us daily. The additional modifications mentioned are not sent to us monthly as 26 indicated. We have received 1-2 of these “monthly trend” reports and not at regular intervals – these had to be requested and the follow through was extremely slow. Export 27 Functionality is not available, and if it is, we haven’t been shown/trained on how to do this. 1 rectified under the 30-day cure period. Ms. Shell generally testified that 2 such custom fields (e.g. AdWords Extension, Phone Communications 3 Manager) were included in the LBL Pro used by Convergent for JTH, but 4 did not specify a time frame for when these were implemented. Otherwise, 5 no further information was provided on this topic during the trial by the 6 parties. 7 7. Annex A to the MLA, Phase 1, Part 3, A: Dashboard Analytics: “the dashboard is 8 supposed to provide an overview of the count of brand locations, distribution 9 activity and user accounts. The Dashboard does not provide access to user 10 accounts.” (Ex. 13.) 11 o This was substantively identical to an item raised in the May 2018 email. 12 (Ex. 200 (“[‘]A: Dashboard Analytics: 1. Current dashboard provides 13 overview of the count of brand locations, distribution activity and user 14 accounts. 2 Dashboard improvement (See Part 3, Sections A and B)[.]’ We 15 have never received access to a dashboard for analytics nor has this 16 been offered to our POC with Convergent Mobile for Local Business 17 Listings, Jennifer Schutt - Web Content Specialist.” (emphasis in 18 original)).) 19 o JTH claimed that the user accounts were not providing certain contracted 20 information to be properly displayed. Convergent responded by noting that 21 individuals at JTH were provided with access to the system, and that these 22 individuals could have requested the information on demand. Convergent 23 also noted that increased functionality was coming by week’s end of their 24 June 2019 response letter. Mr. Schaeffer testified that Convergent 25 responded in May 2018 by sending credentials to him and several other JTH 26 employees. Despite these new credentials, he was unable to log in to the 27 system with the credentials provided, nor could he access the system with 1 however, Mr. Schaeffer testified that he could not recall that he 2 communicated his inability to log into the system directly to Convergent. 3 Mr. Schaeffer did inform his boss, Ms. O’Gorman, but was unaware 4 whether she communicated this concern to Convergent. The Court 5 emphasizes that JTH did not call Ms. O’Gorman as a witness, and there was 6 no evidence of a contemporaneous email from JTH disputing the same in 7 June of 2018. Indeed, Ms. Shell testified to her knowledge that neither she 8 nor Convergent ever received notice that there was ever an issue with the 9 credentials provided to log into the system. 10 8. Annex A to the MLA, Phase 2, Part 2: “Social Media guidelines, Address Best 11 Practices, Yelp Claiming, etc. will all be easily available from the LBL Pro 12 dashboard so Zees can reference at any time. This deliverable is not available” 13 And “PlotMe” functionality in the LBL Pro System: “You represented that this will 14 permit real-time collection of lat/long coordinates of locations as well as storefront 15 photos. Lat/Long information will assist in any PIN marker corrections needed. 16 Photos should be sent to corporate for approval prior to distribution to Google. 17 Photos can also be used on Office Pages with libertytax.com as needed. There is no 18 PlotMe functionality in the LBL Pro System. Thus, this deliverable has not been 19 met.” (Ex. 13.) 20 o This was a new notice item that had no analogue to any items reported in 21 the May 2018 email. (See generally Ex. 200.) 22 o JTH claimed that these were unfulfilled deliverables under the MLA. 23 Convergent correctly pointed out that this specific request’s deadline was 24 on or before the end of the second year of the contract, was November 30, 25 2019. Both Ms. Shell and Mr. Pillai testified that it was their and 26 Convergent’s understanding that the second year of the contract included 27 any date before November 30, 2019. There was no other evidence 1 interpretation controls as it is reasonable. 2 9. JTH further cited to an incident that occurred in February 2019, whereby there was 3 a reporting issue in the system where text messages were sent did not correctly 4 populate on the reporting page: “There was a reporting issue where text messages 5 that were sent, did not populate on the reporting page. This caused a loss of faith in 6 the system used by Convergent and skepticism about the reports generated in 7 general.” (Ex. 13.) 8 o As this occurred in February 2019, there was no analogue to any items 9 reported in the May 2018 email. (See generally Ex. 200.) 10 o Convergent responded that this one-time occurrence was remedied the next 11 day in February 2019. Indeed, Mr. Forguson confirmed that this was a one- 12 time error, but that JTH otherwise had problems with the text messaging 13 platform. Despite these issues, Mr. Forguson also stated that Mr. Breen at 14 Convergent was his “go-to guy for texting” and that such problems were 15 likely resolved by Mr. Breen. There is otherwise no evidence that 16 Convergent was unresponsive or failed to address an issue with JTH 17 regarding the text messaging platform. 18 10. JTH also cited to the complete inability to send ad-hoc texts: “Next, there is a 19 complete inability to send ad-hoc text. There were multiple times throughout the 20 tax year that Liberty wanted to take advantage of certain initiatives as they came 21 up, but could not, as we had to wait 24-48 hours to text, instead of being able to 22 text in real time.” (Ex. 13.) 23 o This was a new notice item that had no analogue to any items reported in 24 the May 2018 email. (See generally Ex. 200.) 25 o Convergent responded that the MLA does not require this service to be 26 provided to JTH from Convergent. Mr. Hughes testified that it was his 27 understanding that ad hoc texting would be industry standard in similar 1 not had experience drafting agreements similar to the MLA. Notably, no 2 witness called by JTH could identify any relevant MLA section that 3 required ad hoc texting. Indeed, Mr. Pillai had built custom “pieces of 4 software” to enable some ad hoc texting due to requests from Mr. Forguson, 5 but that this was outside of any requirements imposed on Convergent 6 through the MLA. 7 JTH further submitted evidence in the form of emails and reflecting other issues it had with 8 Convergent and its services. However, each email thread reflects that Convergent resolved these 9 issues, and JTH did not otherwise follow up or demonstrate any dissatisfaction with the ultimate 10 remedy or resolution of these issues. 11 Accordingly, in light of the foregoing, the Court finds that JTH breached the MLA for 12 failure to pay without complying with the termination clause under the MLA, and alternatively, by 13 breaching the covenant of good faith and fair dealing to the extent that it failed to communicate 14 any perceived breach to Convergent after it had communicated its response to the May 2018 15 letter.8 The Court need not make findings on the claim of promissory estoppel as it was pled in 16 the alternative. 17 18 19

20 8 The Court is further unpersuaded by JTH’s eleventh-hour attempt to characterize Convergent’s use of subcontractors as a material breach of the MLA. JTH points to Section 1b. of 21 the MLA, which provides: 22 Access to the System as described herein and on Annex A and individual Platform Services described in Annex A require (i) custom 23 development or graphic services or (ii) integration of certain applications owned by Customer, or licensed to or otherwise made 24 available to Customer by third parties (collectively, "Customer Applications”) through an API connection to the System.. 25 Neither this statement nor the section it is contained within unambiguously prohibit Convergent 26 from relying on third-parties in providing services to JTH under the MLA. Furthermore, the notion that it raised security issues is belied by a specific section related to Security which does 27 not import such concerns. See “Section 6. Authorized Persons; Security.” The Court therefore 1 C. Damages 2 1. Convergent’s Affirmative Claims 3 Having found JTH violated the terms of the MLA, contract damages are due thereunder. 4 See Copenbarger v. Morris Cerullo World Evangelism, Inc., 29 Cal. App. 5th 1, 9 (2018) 5 (“Contract damages seek to approximate the agreed-upon performance. ‘[I]n the law of contracts 6 the theory is that the party injured by breach should receive as nearly as possible the equivalent of 7 the benefits of performance.’” (quoting Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 8 4th 503, 515 (1994))); Postal Instant Press v. Sealy, 43 Cal. App. 4th 1704, 1709 (1996) (“Under 9 contract principles, the nonbreaching party is entitled to recover only those damages, including 10 lost future profits, which are ‘proximately caused’ by the specific breach. . . . Or, to put it another 11 way, the breaching party is only liable to place the nonbreaching party in the same position as if 12 the specific breach had not occurred. Or, to phrase it still a third way, the breaching party is only 13 responsible to give the nonbreaching party the benefit of the bargain to the extent the specific 14 breach deprived that party of its bargain.”). 15 California law also employs “[t]he doctrine of mitigation of damages [which] holds that [a] 16 plaintiff who suffers damage as a result of . . . a breach of contract . . . has a duty to take 17 reasonable steps to mitigate those damages and will not be able to recover for any losses which 18 could have been thus avoided.” Agam v. Gavra, 236 Cal. App. 4th 91, 111 (2015) (internal 19 quotation marks omitted). “Under the doctrine, [a] plaintiff may not recover for damages 20 avoidable through ordinary care and reasonable exertion.” Id. “However, [t]he duty to mitigate 21 damages does not require an injured party to do what is unreasonable or impracticable.” Id. 22 Moreover, “[w]here the fact of damages is certain . . . the amount of damages need not be 23 calculated with absolute certainty. The law requires only that some reasonable basis of 24 computation be used, and the result reached can be a reasonable approximation.” Acree v. Gen. 25 Motors Acceptance Corp., 92 Cal. App. 4th 385, 398 (2001). “Whether a plaintiff acted 26 reasonably to mitigate damages . . . is a factual matter to be determined by the trier of fact.” 27 Powerhouse Motorsports Grp., Inc. v. Yamaha Motor Corp. U.S.A., 221 Cal. App. 4th 867, 884 1 Here, the monthly invoice due under the MLA was $125,400. (Exs. 9-11.) For the months 2 of June through August, 2019, the amounts totaled $376,200.9 In September 2019, Convergence 3 laid off its employees and apparently did nothing to replace the contract work lost other than to 4 focus on suing JTH. Mr. Breen testified that during the term of the MLA, after expenses, 5 Convergent would net $30,000 to $40,000. However, neither party introduced any documentary 6 evidence to substantiate this claim. The Court believes that Mr. Breen inflated the amount given 7 his interest in the outcome of this case. Given its duty to mitigate, the Court finds that 8 Convergence is due no more than $15,000 per month for the balance of the MLA after August 9 2019, for an additional amount of $225,000. Accordingly, with the three months totaling 10 $376,200 and the fifteen months totaling $225,000, the Court awards damages of $601,200.10 11 The Court further finds that Convergent is owed prejudgment interest. In general, 12 California Civil Code section 3287(a) provides that “[a] person who is entitled to recover damages 13 certain, or capable of being made certain by calculation, and the right to recover which is vested in 14 the person upon a particular day, is entitled also to recover interest thereon from that day.” 15 “Prejudgment interest is allowed where the amount due is fixed by the terms of a contract” and 16 Convergent is entitled to recover prejudgment interest on the sum awarded from the time such sum 17 became due. Leaf v. Phil Rauch, Inc., 47 Cal. App. 3d 371, 376 (1975). The Court has no 18 discretion under Civil Code section 3287(a) and must award prejudgment interest upon request 19 from the first day there exists a breach and a liquidated claim. North Oakland Med. Clinic v. 20 Rogers, 65 Cal. App. 4th 824, 828 (1998). Where there is no legal rate provided by a contract, the 21 legal rate of interest is 10 percent per year. Cal. Civ. Code § 3289(b). 22 Here, the MLA provides for one percent per month for delinquent payments on each 23 invoice. (Ex. 4 (“SECTION VII – INVOICING . . . C. Invoices due, net 30. Convergent Mobile 24

25 9 Extended the full term of the balance of the contract (18 months remaining) would have totaled $2,257,200. 26 10 The Court notes that Convergent withdrew consequential and incidental damages before 27 trial that were the subject of a motion for partial summary judgment filed by JTH. Convergent’s 1 may charge interest at the rate of one percent (1%) per month for delinquent payments for each 2 30-day periods delinquent.”).) JTH failed to pay Convergent for three invoices before Convergent 3 mitigated its damages and shut off services at the end of August. Thus, the Court finds that the 4 one percent rate if applicable for the three invoices issued for June, July, and August 2019, and 5 applies the 10 percent per year rate to the remaining amounts due from September 2019 to 6 November 2020. 7 With respect to JTH’s argument that Convergent terminated the MLA itself and that it 8 therefore is not entitled to damages strains credulity. First, JTH was the party that first materially 9 breached the MLA by failing to make payments on the invoices.11 Specifically, JTH failed to 10 make payment for the invoices issued in June, July, and August 2019. Even under an 11 interpretation that JTH’s June 2018 letter constituted a formal notice as required under the MLA, 12 JTH still failed to timely make payment due under the MLA to Convergent. Thus, the facts do not 13 support that Convergent terminated the MLA where JTH was the first party to alter the contractual 14 relationship. 15 Second, JTH failed in both pre-litigation and during this litigation to point to a specific 16 provision in the MLA that Convergent materially breached. This is especially so where the MLA 17 required JTH to give Convergent thirty (30) days to cure any perceived or actual breach of the 18 MLA. Instead, JTH recycled and regurgitated a substantively similar letter from 2018 for its June 19 2019 letter, alleging various violations of the MLA that Convergent noted, with the sole exception 20 of one item, were resolved some time ago. JTH’s failure to further engage in a good faith dialogue 21 over these issues demonstrates not only a breach of the MLA by JTH, but a further breach of the 22 implied covenant of good faith and fair dealing contained therein. 23 2. Issue of Attorneys’ Fees 24 The Court next addresses the issue of attorneys’ fees, which was the subject of motion for 25

26 11 The Court is unpersuaded by JTH’s arguments that Convergent’s officers testified in their deposition that it was Convergent which terminated the MLA. These “gotcha” moments do 27 not persuade where they are based on a hyper-technical arguments that do not reflect the substance 1 partial summary judgment filed by JTH. (Dkt. No. 65.) Based on the MLA and the record before 2 the Court, the Court concludes that attorneys’ fees are not available to the parties. Convergent 3 points to Section 10 of the MLA as authorizing the payment of attorneys’ fees. Convergent also 4 introduced evidence that, during the negotiations of the MLA, JTH’s counsel drafted and inserted 5 the specific language of Section 10 into the MLA. (See Exs. 25, 27, 28.) Section 10 in its entirety 6 provides:

7 10. Indemnification (a) Convergent Mobile's Obligations. 8 (i) Convergent Mobile shall indemnify, defend and hold harmless Customer and its Representatives, from and against any losses, 9 liabilities, judgments, settlements, damages and costs, including attorneys' fees and disbursements (collectively, "Losses"), resulting 10 from or arising out of any third-party suits, actions, claims, demands or similar proceedings (collectively, "Proceedings"), to the extent that 11 they are based upon or in connection with a claim that the System or Platform Services, or any portion thereof, infringes or violates a third 12 party's IP Rights. Convergent Mobile's shall not be liable for any such indemnification to the extent such infringement is attributable to any 13 information sent by the Customer to Convergent Mobile or to Customer's use of the System or Platform Services. 14 (ii) In the event that a third-party claims that the use of all or portion 15 of the System or Platform Services infringes such third party's IP Rights, or, in Convergent Mobile's judgment, the use of all or portion 16 of the System or Platform Services may be enjoined for any reason, Convergent Mobile may, at its sole election, (A) defend against such 17 claim, (B) modify or redesign the System to avoid such infringement claim, (C) obtain a license from such third party to permit Customer's 18 continued use of the System, or (D) terminate the Agreement with respect to such portion of the System. Subject to Section 11(a) (i) of 19 this Agreement, the provisions of this Section 11 (a) (ii) state the sole and exclusive liability of Convergent Mobile, and the exclusive 20 remedy of Customer, with respect to any such third-party claim.

21 (iii) Convergent Mobile shall indemnify and hold harmless Customer and its Representatives, from and against any and all losses, costs and 22 expenses (including reasonable attorney's fees and costs) that may be incurred because of Convergent Mobile's violation of any 23 representation or warranty or any material breach of this Agreement by Convergent Mobile, including without limitation, the 24 representations and warranties contained in Annex A.

25 b) Customer's Obligations. Customer shall indemnify, defend and hold harmless Convergent Mobile and its Representatives from and 26 against any Losses resulting from any Proceedings to the extent that they are based upon or arise out of Customer's material breach of its 27 obligations in Section 12. 1 indemnification from actions brought by third parties. The section is not only specifically titled 2 “Indemnification,” but the provision only addresses issues of indemnification. 3 California law does not authorize the award of attorneys’ fees for prevailing parties in a 4 contract dispute unless authorized by that contract. Generally, the provision would be stand-alone 5 where it is intended to be generally applicable to all disputes. Instead, as noted above, the 6 identified fees provision is located within the indemnity provision. Moreover, an express 7 indemnity clause “is enforced in accordance with the terms of the contracting parties’ agreement.” 8 Prince v. Pac. Gas & Elec. Co., 45 Cal. 4th 1151, 1158 (2009). Indeed, a “court will not infer that 9 the parties intended an indemnification provision to cover attorney fees between the parties if the 10 provision does not specifically provide for attorney’s fees in an action on the contract.” Alki 11 Partners, LP v. DB Fund Servs., LLC, 4 Cal. App. 5th 574, 600 (2016) (quotation marks omitted). 12 Here, nothing in the contract suggests such a broad reading of the indemnification 13 provision. In fact, the parties’ contract negotiations confirm this view. Mr. Stephen Peary, who 14 negotiated the MLA on behalf of Convergent, testified this specific provision was inserted by 15 JTH’s counsel, Kathleen Curry. He tried to delete it, but she insisted in maintaining the provision. 16 The notations and comments from the redlined documents confirm that the provision concerned 17 indemnification only. (See Ex. 25 at 10 (comment from Mr. Peary, stating “Kathleen: Convergent 18 Mobile indemnifies for IP and confidentiality breaches – that is it”).) This is so even when 19 construing any ambiguities in this provision of the MLA against JTH, which is the drafter of this 20 provision. See Int’l Bhd. of Teamsters v. NASA Servs., Inc., 957 F.3d 1038, 1042 (9th Cir. 2020) 21 (“[A]mbiguous contract provisions [are] construed against the drafter.” (citing Penthouse Int'l, 22 Ltd. v. Barnes, 792 F.2d 943, 948 (9th Cir. 1986); Jacobs v. Freeman, 104 Cal. App. 3d 177, 189 23 (1980)). Ultimately, Mr. Peary agreed to the provision on behalf of Convergent as he was aware 24 of California Civil Code section 1717 and knew it would be construed to benefit both parties. That 25 reciprocal construction though only relates to indemnification. Convergent cannot transform this 26 limited attorneys’ fees clause into one for a prevailing party generally.12 27 ] 3. JTH’s Affirmative Claims 2 Finally, as previously noted, JTH failed to introduce any evidence as to its damages with 3 || regard to its affirmative claims. The Court notes that there is some evidence in the record and on 4 || the docket that Convergent may have withheld certain information that should have been returned 5 || to JTH following the termination of the MLA.'> However, JTH failed to quantify any monetary 6 || harm as a result of Convergent’s failure to return certain information to JTH.'4 Accordingly, the 7 || Court concludes that, because of JTH’s failure to introduce evidence supporting its damages, that 8 || JTH’s claims fail as a matter of law. 9 || IV. CONCLUSION 10 Accordingly, the Court finds that judgment should be entered in favor of Convergent in the 11 amount of $601,200 plus prejudgment interest and costs. ae 2 Convergent shall file a form of judgment, approved as to form by JTH, within five (5)

13 business days of this Order.

14 This Order terminates Docket Number 65.

15 IT Is So ORDERED. 16 |] Dated: April 22, 2021

17

YVONNE GONZALEZ ROGERS

18 UNITED STATES DISTRICT JUDGE 19 29 || partial summary judgment. (Dkt. No. 65.) 1 '3 The Court notes, however, that the record further reflects other substantial evidence that JTH still had and has access to its GMB account which is separate and apart from Convergent’s 97 |] account, notwithstanding JTH’s claims to the contrary. Moreover, the MLA contains protections for Convergent’s separate intellectual property, including the GMB account owned by 3 Convergent. (See Ex. 4 (section 3).) Thus, at the very least, it is unclear if there is anything that Convergent still retains in violation of the MLA’s requirement that Convergent return JTH’s data 94 || following the termination of the MLA. The Court need not resolve this discrepancy given that JTH has failed to quantify the damages resulting from Convergent’s alleged withholding of JTH’s 25 GMB account. %6 ‘4 JTH’s citation to Convergent’s letter offering to return access to JTH’s GMB account as to the amount of damages does not persuade. The amount requested by Convergent totals the 27 || amount that was then due to Convergent under the MLA to the date of that letter. The Court fails to see how such a value can be attributed to the damages suffered by JTH based on Convergent’s 28 alleged withholding of its GMB account or its data therein.