American Computer Trust Leasing v. Jack Farrell Implement Co.

American Computer Trust Leasing (ACTL) (plaintiff), a computer-hardware leasing firm, was affiliated with Automatic Data Processing, Inc. (ADP), a software firm. Boerboom International, Inc. (Boerboom) (defendant) and Jack Farrell Implement Co. (Farrell) (defendant) were agricultural-equipment dealers that both leased computer hardware from ACTL and licensed software designed by ADP especially for farm-equipment dealerships. Boerboom and Farrell signed software-license agreements warning that a licensee’s default could result in cancellation of the license. Both Boerboom and Farrell defaulted, and after Farrell’s account became significantly past due, ADP notified Farrell in June 1987 that it would terminate all processing and support services on July 8, 1987 if payments were not then made. On that date, ADP deactivated Farrell’s software. After Farrell noticed the deactivation, it brought its account current, which resulted in reactivation of Farrell’s licensed software. According to ADP, however, Farrell then not only disconnected its modem to prevent ADP from accessing Farrell’s system but also failed to make any further payments. Additionally, Boerboom requested deactivation of its licensed software when it changed to another type of computer system, so ADP complied with Boerboom’s deactivation request. ACTL sued Boerboom and Farrell for nonpayment of computer-hardware lease payments that had become due. Farrell and Boerboom defended on the ground that the hardware did not work properly, and they asserted a counterclaim against both ACTL and ADP for alleged violation of federal Racketeer Influenced and Corrupt Organizations Act (RICO) arising from their software deactivations. ATCL moved for summary judgment on the RICO counterclaim.