Software Bug

At least six different consulting, assignment and license agreements were drafted during the more than five-year working relationship between AppLogix and DCAD. With each new agreement, more stipulations were added with regard to ownership, copyright and royalty dues when the software was sold to other counties; as a result, everybody wants a piece of the MARS pie and the right to profit from it. Part of profiting, however, is maintaining the software to keep it current with yearly tax law changes, something Baller says DCAD is incapable of doing.

"The amount of money that this thing is costing the county for the incompetency of some of the people around there is shocking," Baller says. He claims two of his employees, co-founder John Milam and Edward Jorge, were hired away from AppLogix to maintain MARS when DCAD employees weren't up to the job. One aspect of the various contracts between AppLogix and DCAD was a noncompete agreement.

"We had a contract with them that said we weren't able to hire each other's employees," Baller says. "If they didn't take our people, I would say there's a good chance that they wouldn't be getting tax rolls out."

DCAD doesn't deny hiring Milam and Jorge. (In attempts to contact both developers at the appraisal district's offices, Milam was unavailable and Jorge declined to comment on his move from AppLogix to DCAD in 2003.) According to court documents, DCAD asserts that AppLogix, which has sold versions of MARS to counties in New Mexico, has in turn violated the terms of their agreements by not remitting royalty fees to DCAD on those sales. Baller says the fees aren't due until those projects are completed, which he says they aren't.

All told, Baller says AppLogix stands to lose about $10 million in personnel costs and sales to DCAD, which Baller also says has interfered with potential clients in other Texas counties by questioning AppLogix's ability to support its software, something DCAD denies. Baller says that, so far, settlement offers have been rejected by DCAD, but the district's executive director, Ken Nolan, says that DCAD hopes to resolve the conflict in court-ordered mediation. Even if AppLogix loses the current suit, Baller says other software vendors have considered joining in a class-action suit against DCAD's attempt to compete with their products.

"Regardless of what happens with ours," says Baller, "this isn't going to go away for them."