090079.31202/21089582v1

IN THE UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF PENNSYLVANIA 

____________________________________ 

 : 

SUNGARD FINANCIAL SYSTEMS INC. : 

 : 

 Plaintiff, : CIVIL ACTION NO. 02-CV-4332 

 : 

 v. : 

 : 

J.B. OXFORD & COMPANY : JURY TRIAL DEMANDED 

 : 

 Defendant. : 

 : 

PLAINTIFF SUNGARD FINANCIAL SYSTEMS INC.’S REPLY BRIEF 

IN FURTHER SUPPORT OF ITS MOTION TO DISMISS 

 Plaintiff SunGard Financial Systems Inc. (“SunGard”), respectfully submits this 

Reply Brief in Further Support of its Motion to Dismiss Defendant J.B. Oxford & 

Company’s (“Oxford”) Counterclaim, in accordance with Rule 12(b)(6) of the Federal 

Rules of Civil Procedure. 

PRELIMINARY STATEMENT

Oxford’s Memorandum of Law in Opposition to SunGard’s Motion to Dismiss 

fails to adequately address the core legal arguments advanced by SunGard. In short, 

Oxford’s counterclaim for misrepresentation must be dismissed for three reasons: (1) 

the economic loss rule bars a claim for fraud or misrepresentation because a written 

contract exists between the parties; (2) the parol evidence rule bars Oxford from 

relying upon alleged fraudulent misrepresentations or omissions made prior to the 

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execution of, but not incorporated into, the Agreement; and (3) the fraud claim is not 

stated with the particularity required by Rule 9(b) of the Federal Rules of Civil 

Procedure. For these reasons and as explained more fully below, Oxford’s 

Counterclaim is legally insufficient and must be dismissed. 

A. The Economic Loss Doctrine Mandates Dismissal of the 

Fraud Claim. 

In its initial memorandum, SunGard argues that the economic loss doctrine 

clearly bars Oxford’s misrepresentation counterclaim under Pennsylvania law because 

it is rooted in contract. Oxford cites one case from a state court in support of its 

argument that “where plaintiff has claimed intentional misrepresentation, courts have 

been loathe to dismiss claims under the economic loss doctrine.” Oxford’s Mem. at 

8. Oxford misconstrues the law in Pennsylvania regarding the economic loss 

doctrine. 

Subsequent to the case cited by Oxford, the Third Circuit Court of Appeals 

recently concluded that “the Supreme Court of Pennsylvania would apply the 

economic loss doctrine to intentional fraud cases.” Werwinski v. Ford Motor Co., 

286 F.3d 661, 680 (3d Cir. 2002). The court explained: 

The economic loss doctrine is designed to place a check on 

limitless liability for manufacturers and establish clear boundaries 

between tort and contract law. Carving out an exception for 

intentional fraud would eliminate that check on liability and blur 

the boundaries between the two areas of law, thus exposing 

manufacturers to substantially greater liability. In light of these 

realities, we select the path that limits liability by rejecting appellants' request 

for an intentional fraud exception. 

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Based on these reasons, we believe the district court correctly 

applied the economic loss doctrine to appellants' fraudulent 

concealment claims. Therefore, we will affirm the district court's 

order with respect to appellants' common law fraudulent 

concealment claims. 

Id. at 680-81 (emphasis added); see also Duquesne Light Co. v. Westinghouse Elec. 

Corp., 66 F.3d 604, 618 (3d Cir. 1995) (holding that the economic loss doctrine 

“prohibits plaintiffs from recovering in tort economic losses to which their 

entitlement flows only from a contract.”). These decisions are in keeping with 

decisions from Pennsylvania courts (and the growing majority of jurisdictions since 

the United States Supreme Court’s 1986 decision in East River Steamship Corp. v. 

Transamerica Delaval, Inc., 476 U.S. 858 (1986)) that preclude an action of intentional 

misrepresentation where the parties have expressed their agreement in a written 

contract. 

Accordingly, given the clear and controlling law in Pennsylvania precluding the 

recovery of purely economic losses in tort, Oxford’s misrepresentation claim is ripe 

for dismissal. 

B. The Parol Evidence Rule Also Bars Oxford’s Counterclaim.

 Oxford takes the position that the parol evidence rule does not apply here 

because a “fully integrated contract” does not exist. Oxford’s Mem. at 9. Ignoring 

the Remote Processing Agreement attached to SunGard’s Complaint and the 

provisions contained therein which belie its argument (Oxford calls this negotiated 

contract “simply irrelevant”), Oxford attempts to stave off dismissal of its 

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misrepresentation counterclaim as “premature.” Id. Oxford’s position throughout 

its response is essentially that it now claims it did not understand what it was buying – 

SunGard’s “Phase3 System.” Despite the presentations and numerous meetings 

Oxford has described in its Counterclaims (¶¶ 40-43), Oxford would have this Court 

believe that it was willing to commit millions of dollars to a project over a several year 

period, but there was “never a meeting of the minds” as to what it was buying. 

Oxford’s Mem. at 6-7. 

As SunGard explained in its initial memorandum in support of its motion to 

dismiss, Oxford’s misrepresentation claim is based on alleged oral representations as 

to the functionality and implementation of the Phase 3 system, as well as anticipated 

conversion dates discussed orally that are not part of the written agreement between 

the parties. Oxford concedes as much in the Counterclaim by acknowledging that: 

“SunGard made these representations orally and in sales materials.” See Counterclaim 

at ¶ 53. Again, Oxford puts in plain words in its brief that its misrepresentation claim 

is based upon the “detailed and comprehensive oral and written representations to 

J.B. Oxford” made by SunGard in describing the capabilities of the Phase3 System 

prior to the execution of the Remote Processing Agreement. Oxford’s Mem. at 3. 

Remarkably, Oxford later claims there is “no enforceable contract governing the 

dispute in this case.” Id. at 7. 

None of the alleged representations made by SunGard to Oxford that form the 

basis of Oxford’s Counterclaim are found in the Remote Processing Agreement, 

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which governs the entire relationship between the parties. See Agreement, Section 

9.6, Exhibit A to Complaint (“This Agreement . . . states the entire understanding 

between the parties with respect to its subject matter, and supersedes all prior 

proposals, marketing materials, negotiations and other written or oral 

communications between the parties with respect to the subject matter of this 

Agreement.”). The parol evidence rule was designed to defeat counterclaims like the 

one advanced by Oxford here inasmuch as Oxford is seeking to add terms and 

conditions to the contract which are not in the Agreement. See Winters v. 

Investment Sav. Plan of Knight-Ridder, 174 F. Supp. 2d 259, 263 (E.D. Pa. 2001) 

(“Here, plaintiff's argument that she was fraudulently induced into signing the 

agreement is barred by the parol evidence rule, and the Court cannot consider it”). 

Accordingly, this Court must dismiss Oxford’s fraud counterclaim because the 

parol evidence rule bars Oxford from changing or adding terms and conditions to the 

Agreement, or from relying upon alleged representations or omissions prior to the 

execution of the Agreement. 

C. The Counterclaim Also Fails to Comply With Federal Rule 

Of Civil Procedure 9(b) By Not Alleging Fraud With 

Particularity. 

SunGard reiterates here that Oxford’s counterclaim provides no precision or 

substantiation about the alleged fraud. The Counterclaim merely refers to “factual 

misrepresentations,” but provides no factual allegations as required by Rule 9(b) of 

the Federal Rules of Civil Procedure. See Counterclaim at ¶¶ 53-58. 

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In its brief, Oxford argues that based upon a single case, McHale v. NuEnergy 

Group, 2002 WL 321797, *3 (E.D. Pa. Feb. 27, 2002), it “need not allege such details 

as the ‘date, place, or time.’” See Oxford’s Mem. at 11. The McHale court did not 

actually lower the pleading bar as much as Oxford believes. While the McHale court 

acknowledged that “allegations of ‘date, place, or time’ fulfill these functions [of 

placing defendants on notice of the precise misconduct with which they are charged],” 

a plaintiff is free “to use alternative means of injecting precision and some measure of 

substantiation into their allegations of fraud.” Id. However, Oxford has done 

neither. Indeed, the Counterclaim does not state with specificity any particulars about 

the time, place and content of the allegedly false representations nor any 

substantiation as to their allegations of fraud. Instead, Oxford simply alleges 

ambiguous “factual misrepresentations.” See Counterclaim at ¶¶ 53-58. Accordingly, 

this Counterclaim fails to provide the requisite specificity required by Rule 9(b) and 

should be dismissed. 

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CONCLUSION

For the above reasons, as well as those set forth in SunGard’s initial brief, 

SunGard respectfully requests that the Court grant its motion to dismiss Defendant’s 

counterclaim with prejudice. 

Dated: November 26, 2002 Respectfully submitted, 

BLANK ROME COMISKY & McCAULEY LLP 

By: /s/ James T. Smith 

 James T. Smith, Esquire 

 Michael E. Adler, Esquire 

 One Logan Square 

 Philadelphia, PA 19103 

 215-569-5500 

Attorneys for Plaintiff SunGard Financial Systems Inc.

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CERTIFICATE OF SERVICE

I, Michael E. Adler, Esquire hereby certify that a true and correct copy of 

Plaintiff SunGard Financial Systems Inc.’s Reply Brief in Further Support of its 

Motion to Dismiss Defendant’s Counterclaim, was hereby served this 26th day of 

November, 2002, via first class mail, postage pre-paid on the following: 

 Mark S. Stewart, Esquire 

 Ballard Spahr Andrews & Ingersoll, LLP 

 1735 Market Street, 51st Floor 

 Philadelphia, PA 19103-7599 

 /s/ Michael E. Adler 

 Michael E. Adler, Esquire 

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