AtPac Suit Cost Update

[The following reports Nevada County resident and RR reader Bob White’s progress in his investigation into the cost impact of the AtPac suit which the county fought for almost two years and then settled.  The EIA mentioned below is the agent administering the insurance pool for member jurisdictions like counties and municipalities.  RR’s reporting on the background and progress of this lawsuit can be accessed by searching this blog with keywords ‘AtPac’ and ‘Diaz’.]

Bob White

As you may know I have been conducting an investigation into the actual cost to the County of the AtPac settlement.  This investigation is not only directed at ascertaining the cost or an approximation of the cost but also an attempt to determine how that cost could have been, or can be determined, and of course with that, whether or not it could be determined, prior to the settlement, at the time of the settlement, or after the settlement was made.  At this time my investigation has amounted to seven letters containing 4,400 words, and two face-to-face meeting with County staff.

I am continuing my investigation but it is appropriate that I relate some of the information I have obtained to this point.  Some of this information may have already been disclosed and some of this information is not pertinent to my inquiry.

The fact the settlement was in excess of one million dollars it automatically triggered an additional $60,000 in premium.  I have not yet determined if this additional $60,000 is a onetime occurrence or if it is reoccurring for any period of years.

The total cost of the settlement was $1.9 million to AtPac and $775,000 in legal fees.  The County paid that amount and was reimbursed by EIA (Excess Insurance Authority) for $2.575 million.

It was EIA that made the offer of $1.9 million in settlement.  That limited EIA's costs to $1.9 million had the County refused to settle.  It was for that reason the County agreed to settle.

The County's case was based on, and contingent on, an independent forensic evaluation of the data that Aptitude manipulated.  This forensic evaluation was expected to illustrate that AtPac incurred no damage.  Because this information does not actually pertain to my investigation, I did not attempt to determine why it was believed that this would absolve the County.  This forensic evaluation was never accomplished or completed due to litigious obstruction tactics employed by the plaintiff's attorneys.

The legal costs were around $5,000 to $10,000 a month until April of 2011.  It was at that point the costs started escalating to the $100,000 per month range.  That was then that EIA became involved.

Comments

[Dixon Cruickshank]

I guess they could read depositions too and pulled their plug

Just a guess, the 60K is probably a premium increase to recover those dollars and is not a one time item. I'm sure NC is now in the Loose Cannon Pool

[Russ Steele]

Dixon --- Price less --- Loose Cannon Pool

[Paul Emery]

Bob

Good job keeping to the facts. This confirms my stated position that the insurance company pulled the plug to limit their losses. This was open season for lawyers to raise prices and ring up the hours. How this affects Nevada County premiums is still up in the air but very interesting. It's too bad that actual trials never happen in these cases because it keeps the truth from being revealed.

My guess is pretty simple. Diaz was under pressure top save money and, with the full knowledge of County Council, CEO and
Information and General Services office tried to ignore the fine print and got caught.

That's about it.

[Michael Anderson]

Paul Emery wrote: "My guess is pretty simple. Diaz was under pressure to save money and, with the full knowledge of County Council, CEO and Information and General Services office tried to ignore the fine print and got caught."

Paul, the problem with this analysis is that it's incomplete and leaves AtPac blameless. If AtPac had generally behaved in a professional manner, and offered state-of-the-art, competitive products in the decade leading up to this debacle, this lawsuit would have never happened. You also fail to mention the fact that AtPac made its first settlement offer to Nevada County contingent on a ridiculous and obviously unenforceable demand that Aptitude Solutions not compete in 13 counties that AtPac was presently servicing.

[Michael Anderson]

Also, thank you George for posting Bob's letter. I do believe that reviewing the AtPac EULA, as well as this alleged "forensic evaluation," is a worthwhile exercise.

[George Rebane]

Apologies for accidentally deleting this comment by Steve Enos -

"a "forensic evaluation was never accomplished or completed due to litigious obstruction tactics employed by the plaintiff's attorneys". This says a lot."

[Paul Emery]

Michael

There wouldn't have been a need for a settlement offer if NC would have honored the contract they signed. Neglecting the fine print is no excuse. The reasons for switching software providers are irrelevant.

The main thing I see is that Diaz did not act alone in making the decision to open access to ApPac software.

[Bob W]

Steve you are correct and I must forward my impression with your prescience. This is in regard to my intentionally brief concept of the, more than likely, much more involved interchange between the two legal firms over the independent forensic evaluation. Please keep in mind that this is extraneous unsolicited information, not related to the substance of my inquiry. Having discovered it I felt obliged to relate.

When relating any information I prefer to attempt not to embellish realizing everyone may have their own interpretation of the same information. This should not necessarily apply to the same degree with respect to facts.

Paul you are free to characterize the influence of EIA on the settlement as "pulling the plug", someone else might call it "cornering". And then another one might say "being realistically adult". Take your pick.

Please remember that I am doing everything I can to restrict my research to the actual cost or projection of probable actual cost, and the related ability of anyone with the responsibility of, or benefit of, determining that. It is because of the time and effort that this has required that I tried to limit the scope to the issue I believe is of substance. That would be the cost. All the information related to the other point that is important is protected by the Brown Act and will never be disclosed.

[Barry Pruett]

"This forensic evaluation was never accomplished or completed due to litigious obstruction tactics employed by the plaintiff's attorneys."

Question: Is this Bob's assessment or an assessment by the County that Bob is reiterating?

I ask this because the "litigious obstruction tactics" which were conclusively determined were those related to failing to provide evidence (for which the County was sanctioned over $20,000) and willfully destroying evidence (for which the County was also sanctioned).

How can one accomplish a forensic evaluation with the servers destroyed?

[Bob W]

Barry,
Please refer to my explanation with attention to embellishment, information and facts. Since my comment about "litigious obstructive tactics" does not describe a definitive it should obviously be considered information rather than fact. You should interpret it as something that was conveyed to me that I am merely relating. Anyone not interested in what I choose to relate as being conveyed to me should ignore the comment. If this had been conveyed to me in writing I would have sighted the source. What I can say is that the two face-to-face meetings, earlier refer to, were with the County Risk Manager and County Council. My statement was formulated to specifically avoid mischaracterization of what I was told in person. You will need to interpret it the best you can and take from it what you will.

Personally I don't understand how a forensic evaluation would absolve the County even if it indicated that the actual manipulation of data did not damage AtPac. But then I am not an attorney.

[Barry Pruett]

Thanks Bob. That is what I thought and was just making sure. Good job on getting the insurance information. I did not know any of that.

[Hank]

May we email or phone off-site re. my research & planned guest-teaching re. the AtPac litigation? I'm a 31-year software lawyer/businessperson who's seen similar litigations in the past. I'd like to supplement my understanding of your local suit beyond the pleadings I've downloaded from the federal court database. I've guest-taught >200 times in 5 countries and published >25 articles re. i.t., so far.