IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

 

 

PEERLESS WALL & WINDOW : CLASS ACTION

COVERINGS, INC., in its own right :

and on behalf of all persons :

similarly situated, :

:

Plaintiff : No. 98 1084

:

v. :

:

SYNCHRONICS, INC., a Tennessee :

corporation, :

: JURY TRIAL DEMANDED

Defendant. :

 

 

CLASS ACTION COMPLAINT

 

 

INTRODUCTION

1. This class action is brought by Peerless Wall & Window Coverings, Inc. on behalf of all persons who, beginning as early as 1984 through December 31, 1995, purchased V6.5 Synchronics Software, Synchronics Inventory Plus Software, Synchronics Point of Sale Software or other similar software designed and/or manufactured by Synchronics, Inc., Real World and/or Great Plains Software, directly from Synchronics, Inc. or through one of its licensed dealers, which at the time of purchase would cease to function, in whole or in part, by the year 2000 without modification.

 

THE NAMED PARTIES

2. Representative Plaintiff, Peerless Wall & Window Coverings, Inc. 1998 ("Peerless"), is a Pennsylvania corporation with its principal place of business at 1411 Fifth Avenue, Pittsburgh, PA 15219. Peerless is a retail business that sells wallpaper and related products through stores located in the Western District of Pennsylvania.

3. Defendant, Synchronics, Inc. ("Synchronics"), is a Tennessee corporation with its principal place of business at 6584 Poplar Avenue, Suite 200, Memphis, TN 39138. Synchronics is engaged in the business of designing, manufacturing, distributing and selling computer software, including but not limited to V6.5 Synchronics Software, for retail businesses that performs cash register, inventory, accounting and other related functions. Synchronics sells its computer software to retail businesses throughout the United States, including in the Western District of Pennsylvania, either directly or through one or more of its licensed distributors.

 

JURISDICTION AND VENUE

4. Jurisdiction of this Court is proper under 23 U.S.C. 1332, as complete diversity between the parties exists. Representative Plaintiff Peerless Wall & Window Coverings, Inc. is a Pennsylvania corporation with its principal place of business in Pennsylvania. Defendant Synchronics, Inc. is a Tennessee corporation with its principal place of business in Tennessee. 5. Upon information and belief, the amount in controversy exceeds $75,000.00 for Representative Plaintiff and for each member of the class, exclusive of interest and costs, by virtue of the cost of replacing, modifying or upgrading the computer software purchased from Synchronics and the attendant computer hardware so that it will function after December 31, 1998; and by virtue of the punitive damages alleged herein, in which each class member, including the Representative Plaintiff, has an undivided interest.

6. Venue is properly laid in this District as a substantial part of the events or omissions giving rise to these claims occurred within this District.

 

FACTUAL ALLEGATIONS

7. Synchronics has been in the business of designing, manufacturing, distributing and selling computer software since 1980.

8. In or about 1984, Synchronics began manufacturing and/or selling computer software, which it, Real World and/or Great Plains Software designed to perform cash register, inventory, accounting, credit card approval and other similar functions for retail businesses. This computer software includes V6.5 Synchronics Software, Synchronics Inventory Plus Software, Synchronics Point of Sale Software, as well as other computer software programs.

9. Synchronics sells its, Real World's and Great Plains' computer software to retail businesses directly or through a network of more than 700 dealers that Synchronics licenses to sell its products.

10. Beginning in or about 1984, Synchronics knew or should have known that the computer software it designed, manufactured, distributed and/or sold would cease to function, in whole or in part, on or before January 1, 2000 since it was not designed to be capable of processing information that includes dates after December 31, 1999. For example, this computer software will not process a credit card with an expiration date on or after January 1, 2000, even if it is presented to the retailer before the year 2000. Further, cash register, inventory, accounting and other similar functions of this computer software will not function with purchase, ordering or payment dates on or after January 1, 2000, even before the year 2000 arrives.

11. Plaintiff does not know how the computer software at issue was designed since that information is believed to be in the exclusive possession of Synchronics, Real World and Great Plains.

12. As a designer of its computer software, Synchronics knew or should have known that it did not create its computer software with the capability of processing information that includes dates on or after January 1, 2000, and would thereby render its computer software unusable on or before January 1, 2000.

13. Given its knowledge, experience and expertise as a designer of computer software, Synchronics knew or should have known that its, the Real World and Great Plains software it Manufactured, distributed and/or sold did not have the capability of processing information that includes dates on or after January 1, 2000, and would thereby render its computer software unusable on or before January 1, 2000.

14. To promote the sale of the computer software it designed, manufactured, distributed and/or sold to retail businesses, Synchronics disseminated sales literature to Peerless and other persons similarly situated that contained statements such as:

A) "With Synchronics Point of Sale and related software products you'll stay up-to-date. Every minute. Every Day";

B) "it will continue to meet [your specific] needs as you increase sales expand your business or add locations";

C) "you maintain complete control over what your system does, with manual entry and adjustment always available"; and

D) Other similar statements indicating that the computer systems could be used beyond the year 2000 and could grow with one's business without modification.

15. Synchronics knew or recklessly or negligently disregarded that:

A) Its sales literature misrepresented that its computer systems could be used beyond the year 2000 and could grow with one's business without modification;

B) Its sales literature concealed and/or failed to disclose that its computer software could not compute dates on or after January 1, 2000 and thus would cease to function without costly modifications on or before January 1, 2000;

C) It designed, manufactured, distributed and/or sold computer software that could not perform all of its intended functions because without costly modification it could not compute dates on or after January 1, 2000; and

D) It concealed and/or failed to disclose to Peerless and other unsuspecting class members the very material fact that the computer software would cease to function, in whole or in part, on or before January 1, 2000 because it could not compute dates on or after January 1, 2000.

16. Synchronics actively concealed from and/or failed to disclose to Peerless and the Class the foregoing material information, until the Spring of 1997 when it is believed that Synchronics first began notifying persons who purchased computer software from it that they would have to make costly modifications to their existing computer systems or purchase new computer systems in order to be able to compute dates on or after January 1, 2000.

17. Synchronics waited until the Spring of 1997 to begin notifying purchasers of the defect in the computer systems they purchased from Synchronics, even though Synchronics knew or should have known of the defect since 1984 and, in fact, created new software known as Counter Point that it announced in April of 1995 and began selling in June of 1995 which eliminated the defect and was capable of computing dates on and after January 1, 2000.

18. To add insult to injury, Synchronics accompanied its Spring of 1997 notification to purchasers of the defect in the computer software purchased from Synchronics with an offer to sell them new Counter Point software or a modification to "upgrade" their defective computer software.

19. Synchronics knowingly, recklessly or negligently misrepresented, concealed and/or failed to disclose to Peerless and other persons similarly situated that the computer software it designed, manufactured, distributed and/or sold to them would cease to function on or before January 1, 2000 because it could not compute dates on or after January 1, 2000 with the intent to increase profits for Synchronics both by facilitating the initial sales of computer software and by ensuring that a subsequent purchase of computer software would be necessary.

20. Peerless and other similarly situated persons have been damaged as a result of Synchronics misconduct described above.

 

PEERLESS WALL & WINDOW COVERINGS, INC.

 

21. On or about June 30, 1994, Peerless purchased V6.5 Synchronics Software from Synchronics through its licensed dealer, Roth Computer Register Company, located in Pittsburgh, Pennsylvania.

22. Peerless purchased the computer software from Synchronics to perform cash register, inventory, accounting, and other similar functions in its retail stores located in Western Pennsylvania. Prior to its purchase of the V6.5 Synchronics Software, Peerless received Synchronics sales literature that described this computer software as being capable of performing these functions. The sales literature did not state that the V6.5 Synchronics Software was not capable of processing dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or after January 1, 2000. Instead, the sales literature stated as follows:

A) "With Synchronics Point of Sale and related software products you'll stay up-to-date. Every minute. Every day.";

B) "it will continue to meet [your specific] needs as you increase sales, expand your business or add locations"; and

C) "you maintain control over what your system does, with manual entry and adjustment always available."

It was upon this sales literature that Peerless purchased the V6.5 Synchronics Software from Synchronics.

23. In or about the Spring of 1997, Peerless first became aware, through a conference held by Synchronics, that the V6.5 Synchronics Software it had purchased would cease to function by December 31, 1998 because that computer software could not process dates on or after January 1, 2000. Prior to this time, Peerless was never informed by Synchronics and did not know nor did it have reason or the expertise necessary to suspect that its V6.5 Synchronics Software could not process dates on or after January 1, 2000 and would cease to function by December 31, 1998.

24. In order to correct the aforesaid defect with the V6.5 Synchronics Software, Peerless will have to purchase modifications or new computer software; purchase hardware to run the computer software; undergo disruption to its business in order to install the software and hardware, and to train its employees to use it; and incur other attendant expenses 25. In the Spring of 1998, Peerless contacted Synchronics to request that Synchronics correct the aforesaid defects in the computer system Peerless purchased from Synchronics. Synchronic refused to correct the aforesaid defects in Peerless' computer Systems unless Peerless paid Synchronics additional monies.

 

CLASS ACTION ALLEGATIONS

26. This class action is brought pursuant to Federal Rule of Civil Procedure 23 on behalf of a class of all persons in the United States who, beginning as early as 1984 through December 31, 1995, purchased directly from Synchronics, Inc. or through one of its licensed dealers, V6.5 Synchronics Software, Synchronics Inventory Plus Software, Synchronics Point of Sale Software or other similar software designed and/or manufactured by Synchronics, Inc., Real World and/or Great Plains Software, that at the time of purchase could not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, without modification on or before January 1, 2000.

27. Excluded from the class are Synchronics' officers, directors, dealers or employees who held those positions during the time any of the misconduct alleged herein was employed by Synchronics, any firm, trust or corporation in which such person in a controlling interest or which is related to or affiliated with such persons, and any legal representatives, heirs, successors in interest or assigns of any such excluded party.

28. The Class is so numerous as to make joinder impracticable. The exact number of class members is unknown, but can be determined from records maintained by Synchronics or its dealers. It is believed that the class contains thousands of members, and that class members are unaware that they have claims. Whether or not they are aware, however, their claims have damages in amounts that, while significant, when taken individually may be too small to justify the expense of a separate lawsuit; aggregated, however, they make litigation financially feasible.

29. The Representative Plaintiffs claims are typical of the claims it seeks to represent for the class. Such Representative Plaintiff will fairly and adequately represent the members of the class who are victims of the same misconduct, and it has no interests that are antagonistic to the claims of the class. The Representative Plaintiffs interests in this action are antagonistic only to the interests of Synchronics, and the Representative Plaintiff will vigorously pursue the claims that it asserts on behalf of the class.

30. The Representative Plaintiff has retained counsel who is competent and experienced in class action litigation, and who has represented other consumers in complex class action litigation. Counsel have agreed to handle this case on a contingent basis, with its compensation for professional services to be awarded by the Court.

31. Common questions of law and fact affect the rights of each member of the class and common relief by way of damages is sought for the class.

32. Numerous and substantial questions of law and fact, to all members of the class, will control in this litigation and will predominate over any so called individual issues.

33. Among the numerous common questions of law and fact with respect to the members of the class are the following:

A) Did Synchronics design, manufacturer, distribute and/or sell computer systems that could not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 unless modifications were made?

B) Whether Synchronics disseminated sales literature that misrepresented that its computer systems could be used beyond the year 2000 and could grow with one's business without modification?

C) Whether Synchronics disseminated sales literature that concealed and/or failed to disclose that its computer software could not compute dates on or after January 1, 2000 and thus would cease to function, in whole or in part, without costly modifications on or before January 1, 2000?

D) Whether Synchronics concealed and/or failed to disclose to Peerless and other persons similarly situated the very material fact that its computer software would cease to function on or before January 1, 2000 because it could not compute dates on or after January 1, 2000?

E) Whether Synchronics' conduct constitutes a breach of contract?

F) Whether Synchronics' conduct constitutes a breach of an express warranty?

G) Whether Synchronics' conduct constitutes a breach of implied warranty?

H) Whether Synchronics' conduct constitutes fraud?

I) Whether Synchronics' conduct constitutes negligence?

34. A class action provides a fair, efficient and superior method, if not the only method, for adjudicating this controversy. The substantive claims are substantially the same and will require evidentiary proof of the same kind and application of the same (or only a limited number of categories of) law.

35. The Representative Plaintiff will seek to identify all members of the class through such discovery procedures as may be appropriate and will provide the class with such notice of this action as the Court may direct.

 

COUNT I - BREACH OF CONTRACT

36. The averments of paragraphs 1 through 35 are incorporated herein.

37. Beginning in or about 1984 through December 31, 1995, Synchronics offered to sell computer systems to retail businesses that would perform cash register, accounting, inventory, credit card processing and other similar functions.

33. Synchronics disseminated sales literature in connection with its offer that described the computer systems it sold in a manner that indicated that the computer systems could be used beyond January 1, 2000 and could grow with one's business without modification.

39. Synchronics did not inform Peerless and the other members of the Class that the computer software offered by Synchronics could not compute dates on or after January 1, 2000 and thus would cease to function, in whole or in part, without modification on or before January 1, 2000.

40. Peerless and the other members of the Class accepted Synchronics' offer as set forth in the preceding three paragraphs and purchased from Synchronics computer systems for their retail businesses.

41. In or about the Spring of 1997, Synchronics began to notify persons who had purchased the aforementioned computer systems from it that they could not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 without modification.

42. By providing Peerless and the members of the Class with computer software that would not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 without modification, Synchronics failed to perform its obligations under the contract.

43. As a result of Synchronics' breach of contract, Peerless and the other members of the Class have been or will by January 1, 2000 be forced to purchase new computer software or modify their existing computer software, purchase hardware to run the software, incur costs attendant to the installation and training for the modified or new software and/or hardware, and/or incur other attendant costs.

 

COUNT II - BREACH OF EXPRESS WARRANTY

44. The averments of paragraphs I through 43 are incorporated herein.

45. Beginning in or about 1984 through December 31, 1995, Synchronics offered to sell computer systems to retail businesses that would perform cash register, accounting, inventory, credit card processing and other similar functions.

46. Synchronics disseminated sales literature in connection with its offer that described the computer systems it sold in a manner that indicated that the computer systems could be used beyond January 1, 2000 and could grow with one's business without modification.

47. Synchronics did not inform Peerless and the other members of the Class that the computer software offered by Synchronics could not compute dates on or after January 1, 2000 and thus would cease to function, in whole or in part, without modification on or before January 1, 2000.

48. Peerless and other members of the Class accepted Synchronics' offer as set forth in the preceding three paragraphs and purchased from Synchronics computer systems for their retail businesses.

49. In or about the Spring of 1997, Synchronics began to notify persons who had purchased the aforementioned computer systems from it that they could not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 without modification.

50. By providing Peerless and the members of the Class with computer software that would not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 without modification, Synchronics failed to perform its obligations as expressly warranted under the contract.

51. As a result of Synchronics' breach of its express warranty, Peerless and the other members of the Class have been or will by January 1, 2000 be forced to purchase new computer software or modify their existing computer software, purchase hardware to run the software, incur costs attendant to the installation and training for the modified or new software and/or hardware, and/or incur other attendant costs.

 

COUNT III - BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY

52. The averments of paragraphs I through 51 are incorporated herein.

53. Beginning in or about 1984 through December 31, 1995, Synchronics offered to sell computer systems to retail businesses that would perform cash register, accounting, inventory, credit card processing and other similar functions.

54. Synchronics disseminated sales literature in connection with its offer that described the computer Systems it sold in a manner that indicated that the computer systems could be used beyond January 1, 2000 and could grow with one's business without modification.

55. Synchronics did not inform Peerless and the other members of the Class that the computer software offered by Synchronics could not compute dates on or after January 1, 2000 and thus would cease to function, in whole or in part, without modification on or before January 1, 2000.

56. Peerless and the other members of the Class accepted Synchronics' offer as set forth in the preceding three paragraphs and purchased from Synchronics computer systems for their retail businesses.

57. In or about the Spring of 1997, Synchronics began to notify persons who had purchased the aforementioned computer systems from it that they could not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 without modification.

58. By providing Peerless and the members of the Class with computer software that would not process dates on or after January 1, 2000 and thus would cease to function, in whole or in part, on or before January 1, 2000 without modification, Synchronics failed to perform its obligations as impliedly warranted under the contract.

59. As a result of Synchronics' breach of the implied warranty of merchantability, Peerless and the other members of the Class have been or will by January 1, 2000 be forced to purchase new computer software or modify existing computer software, purchase hardware to run the software, incur costs attendant to the installation and training for the modified or new software and/or hardware, and/or incur other attendant costs.

 

COUNT IV - FRAUD

60. The averments of paragraphs 1 through 59 are incorporated herein. 61. Synchronics knowingly and intentionally defrauded Peerless and the other members of the Class by:

A) Misrepresenting, through statements in its sales literature, that its computer systems could be used beyond the year 2000 and could grow with one's business without modification;

B) Concealing and/or failing to disclose in its sales literature or otherwise that its computer software could not compute dates on or after January 1, 2000 and thus would cease to function, in whole or in part, without costly modifications on or before January 1, 2000.

62. Synchronics had a duty to disclose and not to misrepresent or conceal material information as a result of Synchronics' affirmative misstatements, its contractual duties arising from the sale of computer software and/or duties imposed by law upon Synchronics to Peerless and the other members of the Class.

63. Synchronics' failure to disclose, misrepresentation and/or concealment of the foregoing material facts resulted in financial harm to Peerless and the other members of the Class.

64. Synchronics failed to disclose, misrepresented and/or concealed the foregoing material facts from Peerless and the other members of the Class knowing that these facts may have justifiably induced them to:

A) Refrain from purchasing computer software from Synchronics; and

B) Insist that they be provided with computer software that could compute dates on or after January 1, 2000.

65. Synchronics carried out this misconduct willfully, wantonly and with reckless disregard for the interests of Peerless and the other members of the Class.

 

COUNT V - NEGLIGENCE

66. The averments of paragraphs I through 65 are incorporated herein. 67. Synchronics had a duty to exercise reasonable care in designing, manufacturing, distributing and/or selling computer software to Peerless and the other members of the Class. Synchronics further had a duty to exercise reasonable care in providing information to Peerless and the other members of the Class both before and after the sale of computer software to them.

68. The foregoing duties arise from Synchronics' contractual duties and/or other duties imposed upon Synchronics by law.

69. Synchronics breached its duties and was reckless, careless and/or negligent by:

A) Designing, manufacturing, distributing and/or selling computer software that could not perform all of its intended functions because without costly modifications it could not compute dates an or after January 1, 2000;

B) Creating, developing and disseminating sales literature that falsely indicated that its computer systems could be used beyond the year 2000 and could grow with one's business without modification;

C) Creating, developing and disseminating sales literature that concealed and/or omitted the very material fact that the computer software would cease to function on or before January 1, 2000 because it could not compute dates on or after January 1, 2000;

D) Concealing and/or failing to disclose to Peerless and the other members of the Class the very material fact that the computer software would cease to function on or before January 1, 2000 because it could not compute dates on or after January 1, 2000.

70. Synchronics' foregoing acts and/or omissions were reckless, careless and/or negligent and caused financial harm to Peerless and the other members of the Class.

WHEREFORE, Plaintiff demands the following relief on behalf of itself and all others similarly situated:

A) That an Order be entered certifying this action as a Plaintiff Class Action under Federal Rule of Civil Procedure 23 as set forth herein;

B) Compensatory damages in such amount as the Court deems just and proper;

C) Punitive damages as to Counts for which they are available under the applicable law and such amount as the Court deems just and proper;

D) Costs of litigation;

E) Prejudgment interest; and

F) Such other relief as this Court deems just and proper.

 

DEMAND FOR JURY TRIAL

 

 

Plaintiff demands a jury trial on all Counts of this Complaint.

 

 

SPECTER SPECTER EVANS &

MANOGUE, P.C.

 

 

By:

David J. Manogue, #42119

John C. Evans, #43951

Joseph N. Kravec, Jr., #68992

The 26th Floor, Koppers Building

Pittsburgh, PA 15219

(412) 642-2300

COUNSEL FOR PLAINTIFF AND

THE CLASS