Software Developer Wins 7.1 Million in License Case


Jackson County jury finds A.G. Edwards violated agreement

Charles Emerick

A Kansas City-based computer software developer received a $7.1 million jury award on allegations that it was the victim of a license agreement violation.

Overlap, based in downtown Kansas City, claimed A.G. Edwards & Sons breached its contract when it purchased only a few licenses of Overlap's investment software but put the program on dozens of computers. Overlap filed the lawsuit in January 2003.

The Jackson County jury in February awarded $1.2 million for breach of contract, $1.8 million for negligent misrepresentation and $1.8 million for fraud. Overlap also received an additional $2.3 million in punitive damages.

Overlap attorney Patrick Stueve, of Stueve Siegel Hanson in Kansas City, said the company, which sought $4.4 million in damages at the trial, was satisfied with the outcome.

"We felt the jury understood our case," he said, "and obviously felt that our client had been injured substantially and awarded substantial damages."

A spokesman for A.G. Edwards could not be reached for comment.

According to the plaintiffs, A.G. Edwards bought four licenses for the use of an Overlap software program that generates a report that identifies the common stock holdings among two or more mutual funds.

But the defendant loaded the software on more than 50 computers and then made reports generated by the software available to all its stockbrokers, Overlap alleged. It also claimed A.G. Edwards misrepresented the nature and extent of its use of the software to Overlap's president.

At trial, Overlap argued A.G. Edwards knew it was prohibited from sharing the reports with its brokers. The plaintiff said the defendant continued to breach its contract and did not tell Overlap.

According to Overlap's attorneys, A.G. Edwards claimed the terms of the software license agreement permitted that use.

After eight days of evidence, the jury needed two hours to reach it decision.

According to Stueve, the case against A.G. Edwards was one of six brought by Overlap on claims that brokerage firms from across the country violated license agreements and intellectual property rights.

Overlap has settled four others for a recovery of approximately $3 million. One more case is pending in Jackson County. That case is in discovery, Stueve said.

Facts of the Case

Type of Action: Breach of contract

Court: Jackson County Circuit Court

Case Number/Date: 03CV201858/Feb. 13, 2008

Judge: Roger Prokes, visiting judge

Verdicts and Settlements: $7.1 million verdict

Plaintiff's Experts: None

Special Damages: $1.2 million for breach of contract, $1.8 million for negligent misrepresentation, $1.8 million for fraud and $2.3 million in punitive damages

Caption: Overlap Inc. v. A.G. Edwards & Sons Inc.

Plaintiff's Attorneys: Patrick Stueve and Eric Dirks, Stueve Siegel Hanson, Kansas City

Defendant's Attorneys: Jeffrey Kalinowski, Michael Phillips and Carrie Bechtold, Husch Blackwell Sanders, St. Louis

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