Houston firms lose software lawsuit
A federal jury in East Texas awarded Plano-based property management software company ResMan a $152 million verdict after finding a former customer improperly accessed ResMan’s software to develop its own rival product with a third party.
In Sherman federal court Thursday, the five-woman, threeman jury ordered two Houston defendants, customer Karya Property Management and software developer Expedien, to pay ResMan $32.29 million in compensatory damages and $120 million in punitive damages for breach of contract, misappropriation of trade secrets and tortious interference.
The jury heard nine days of testimony and arguments and then deliberated for about two hours before returning its judgment.
The verdict is also a victory for a Houston-based, women-led trial team at Hogan Lovells, which was able to win a high-stakes case when courts across Texas are facing a significant, pandemic-induced backlog in jury trials.
“It’s important that we continue to try cases and I’m hopeful that with each trial that is finished that people will feel more confident about the courthouse and trying cases,” said Maria Wyckoff Boyce, the Hogan Lovells lawyer who led ResMan’s trial team. “It was very important that we got back in the courtroom in front of a jury as soon as the court scheduled us to retry the case.”
At trial, jurors heard and viewed evidence that Karya and Expedien improperly accessed ResMan’s system more than 1,000 times without ResMan’s knowledge or permission in order to create Arya, the name of the rival software. Evidence that showed the improper access included teleconference recordings between the defendants that analyzed the ResMan system to determine which features to use in the Arya software.
Although defense lawyers admitted at trial that Karya breached its subscription agreement with ResMan, they argued that no mis
appropriation of trade secrets took place and that the so-called “trade secrets” entailed publiclyavailable information, according to lawyers.
They also claimed that they independently developed their software without using ResMan’s product.
Karya is a privately held company that manages more than 20,000 apartment units in Houston, Dallas, San Antonio, Austin, Salt Lake City, Las Vegas and Kansas City.
Lead defense lawyer Michael Richardson of Corpus Christi did not respond to multiple requests for an interview. Defense co-counsel Dick Sayles of Dallas declined to comment. Several attempts to contact the defendants were unsuccessful.
“The jury’s verdict for ResMan provides important relief for our client and its hard-working employees, who spent years and many millions of dollars developing this groundbreaking property software used to manage apartment buildings throughout the United States,” said Wyckoff Boyce.
ResMan Chief Executive Paul Bridgewater agreed.
“This case is very important to ResMan because our intellectual property is one of our most valuable assets,” Bridgewater said. “Our trial team partnered closely with us to protect our state-of-theart property management solution.”