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Customer wins $1M in suit against Web developer

The disappointed customer of a Web site developer won a $1 million verdict last month in the first case decided under the Virginia Uniform Computer Information Transactions Act.

An Alexandria Circuit Court jury on Dec. 17 awarded $1,138,500 to Blue Line Media, Inc., an employment recruitment business that claimed the interactive Web site it paid for never worked.

Blue Line owns an online law enforcement recruiting business located at www.LawEnforcementJobs.com. The company hired Web site developer Redmon Group to prepare and deliver a custom interactive Web site that would allow job seekers to enter their information onto the site and get connected with employers.

The Web site was never finished, according to Raighne C. Delaney, who tried the case for Blue Line along with partner David A. Temeles Jr. “I think what happened was they underbid the job and underestimated what it would take to do it,” said Delaney. Redmon had estimated the project would cost nearly $600,000. Blue Line paid Redmon more than $543,000 before giving up and cancelling the contract, according to Delaney.

Delaney explained that when a job seeker created an account, submitted a resume, or contacted an employer through the Web site, it was essential that the job seeker receive an e-mail notice to confirm the activity. “The e-mail system never worked,” Delaney said.

In addition, Delaney said Blue Line staffers were unable to manage information on the Web site without technical assistance, a feature that had been promised by Redmon.

“It just never really came together. It didn’t work at all,” Delaney said.

The jury was instructed under the state UCITA that the Web site developer had a duty to design, build and deliver the Web site “in accordance with industry standards and practices.”

Delaney said Blue Line used an “industry standards” expert, Todd Trivett, who testified that the Web site had 108 distinct defects and failed to meet industry standards.

Before the trial, the parties clashed over the measure of damages under UCITA, and Redmon managed to limit its exposure at trial, according to attorneys for the parties. Blue Line’s valuation expert, Mark Vogel, was prepared to testify that the dysfunctional Web site cost Blue Line as much as $3 million, Delaney said. Alexandria Circuit Judge Nolan B. Dawkins, however, limited the damage evidence to $1.4 million, based on the market value of the promised Web site under § 59.1-508.9.

The trial took three days with the jury deliberating on the morning of the fourth day. Delaney said the jury seemed well qualified to decide the technical issues involved – the panel included an accountant, an analyst for the CIA, an FBI agent, and a retired school teacher.

Virginia’s version of the UCITA was approved in 2000 despite a storm of opposition from various groups who claimed the law would tilt the playing field in favor of software vendors and against businesses and consumers. It has rarely been cited since.
Virginia and Maryland were the only states to adopt the UCITA, which had been promoted for adoption by all states as a uniform software licensing law.

Del. Joe T. May, R-Leesburg, who sponsored the legislation, said that he had not heard of the law being used in litigation. “It is probably used more as a reference,” he said.

In a recent government contract case from Alexandria U.S. District Court, Pilar Services Inc. v. NCI Information Systems Inc. (VLW 008-3-272), the court considered the application of the UCITA, but determined that the parties had chosen to let a private contract govern the transaction in question.

In this case, however, the UCITA served to set the standard for breach of contract and the measure of damages. “The statute makes clear that a Web site developer and builder has a duty to build and deliver in accordance with industry standards,” Delaney said.

It remains to be seen whether the Blue Line case will provide any precedential rulings. The option of appeal is “still being discussed,” according to Roger Heald of Fairfax, one of the attorneys for the Redmon Group.

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