The Rouse Co. has filed a multimillion-dollar lawsuit against PeopleSoft Inc., a California software and consulting company, alleging that it misrepresented a software package it sold to the Columbia corporation.
The lawsuit, filed last week in Howard County Circuit Court, claims that PeopleSoft was fraudulent and negligent by selling Rouse a human resource management systems software package that Rouse said is incompatible with its computer hardware.
"We understood - and were certainly led to believe - that this software would work properly on the existing hardware," said Richard J. Magid, an attorney with Whiteford, Taylor & Preston LLP who is representing Rouse. "And it turns out it wouldn't."
Working Concepts Inc., the Columbia company that installed the software, is named as a co-defendant. Rouse is suing that company for $2 million, alleging that Working Concepts is liable for breach of contract and negligence for its role in the software implementation.
Officials at Working Concepts said they were not familiar with the case.
Steve Swasey, director of public relations for PeopleSoft, said he could not comment on the Rouse case, but said PeopleSoft is a 13-year-old company and its human resource software package is its flagship product. "PeopleSoft has been known for its outstanding customers service and customer satisfaction," he said.
PeopleSoft, traded on the Nasdaq stock market, is a global provider of e-business software. The company reported revenue of $375.4 million for the first quarter of 2000. Revenue for the 1999 calendar year was $1.4 billion.
About 2,700 PeopleSoft customers use the human resources software. Swasey said implementation of the software is a very complex procedure.
Rouse is suing PeopleSoft for $8 million in punitive damages, $5 million in compensatory damages and about $600,000 for license and support services the company says it paid PeopleSoft for and did not get. The lawsuit says PeopleSoft did not tell Rouse that the software it purchased was incompatible with its hardware, and Rouse spent vast sums of money to fix the problem.
Rouse ultimately bought another computer platform to accommodate the PeopleSoft package, but has since learned the software company does not support its product on Rouse's new platform and will no longer provide support and updates for it, the lawsuit says.
"It's a large additional expense for Rouse that was not part of the agreement," Magid said.