Fort Collins: Fraud means you don’t get more

FORT COLLINS — Committing fraud means that a party is not entitled to additional payments from the party defrauded, the city of Fort Collins contended in a reply to a motion from the companies that failed to complete writing the software for the city’s Connexion internet utility.

The city won a judgment against Open International LLC and Open Investments LLC, related Florida companies that the city had engaged to write the software for utility billing, starting with Connexion but eventually to include the community’s other utilities.

After spending millions, the city determined that Open had misled it and filed suit to recover damages.

A jury determined that Open committed fraud in inducing the city to buy its services. The city filed a motion to compel payment of $22.5 million in damages.

Open, however, filed a motion asking the court to ignore the jury verdict and permit Open to collect on additional costs that it incurred.

In a tersely written response Monday, the city said that “Rather than accept that the jury found both Open entities liable for fraud, Open attempts to hijack remedies briefing to re-litigate issues that it waived or were already decided by the jury or the court,” the city wrote.

“Open — already found liable for fraud — is not entitled to any equitable deference.

“Mutual restitution cannot mean that Open (by committing fraud) gets credit for all of its alleged/unsupported labor costs. It only means that they get their software back …

“Open’s twisted view of ‘restitution’ and set-off would allow it to commit fraud, keep and use the more developed software, and keep the nearly $9 million it was paid by the city because it ‘earned those amounts not by fraud but by work the city requested and accepted. … Open is precluded from deriving any benefit from the fraud perpetrated by [it] and thus gets no credit for the work it did after its fraud,” the city said.

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