A training company that is suing CUES has added fraud to its list of complaints against the professional association, according to new court documents in the case.
The original suit, filed July 6 in Iowa District Court by the Cedar Rapids, Iowa-based BVS Performance Solutions, alleged CUES dodged obligations to perform certain marketing activities under a deal dating back to 2011. BVS, which provides staff training and member education services, is seeking unspecified damages and has asked the court to let it out of its contract with CUES.
This week, BVS filed an amended complaint alleging, among other things, that CUES intentionally lied about working with BVS to get more customers.
"CUES falsely represented to BVS that CUES intended to work in partnership with BVS," it said. "CUES' representations were false, as CUES instead intended to secure royalties/commissions from BVS' existing customer base without investing in a serious effort to expand the customer base."
BVS also said CUES knew its representations were false or reckless because CUES' corporate structure and practice did not allow for the type of relationship CUES promised to BVS.
"CUES intended to deceive BVS to enable CUES to obtain an immediate revenue stream without investing funds," it claimed.
The amended complaint also sheds more light on what went wrong between the parties.
According to BVS, CUES selected the company as its new online training partner in 2011, and BVS agreed to pay a royalty or commission for new business and renewals. To facilitate this, CUES allegedly agreed to give BVS free access to or space on its website, in its publications and via speaking roles at CUES conferences and conventions.
CUES also promised access to credit union executives who were CUES members and that it would invest substantial marketing dollars to promote the relationship, according to BVS.
CUES purposely kept the parties' written agreement vague in regard to the commitments, and then failed or refused to perform the marketing activities, or performed them so poorly as to constitute a material breach of contract, according to the complaints.
The dispute has apparently been brewing for years. BVS first filed suit over the matter in June 2014, according to the filings. Once that happened, it said, a former CUES president/CEO agreed to work to resolve the dispute, and BVS dropped the suit after it moved to federal court. However, the terms of that new agreement were never finalized, according to both parties.
CUES, which is based in Madison, Wis., denied the allegations in the suit and filed a counterclaim for damages in excess of $75,000, according to new court documents. CUES also said it has performed its duties under the contract and alleged BVS still has not paid what it owes.
"We strongly deny any allegations of breach of contract or fraudulent conduct," CUES CEO John Pembroke told CU Times. "We are confident the position we are taking in this litigation will prevail. Beyond that, it is our policy not to discuss the details of pending litigation."
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