Last month, Mobile County Probate Judge Don Davis joined others around the country in filing suit against American Cadastre, LLC (AMCAD) after the company informed several municipalities it would no longer be providing service and software support related to judicial case management.
In November of 2012, AMCAD was awarded a 10-year contract with the Mobile County Probate Court to provide software and maintenance related the judicial process and the records the court is required by law to maintain.
The contract was broken into three parts that encompass the digital storage of land records, which include deeds, mortgages, tax liens, marriage licenses and local campaign finance records; a case management system, which electronically stores all of the judicial files related to the court and a web-based search engine know as “ROAM” used to access court documents.
Though the contract should have run through 2022, AMCAD suddenly terminated its case management services with the probate court in a June 23 email from CEO Richard Lowrey.
“In recent years, AMCAD has invested heavily in developing its justice solutions suite of products. Despite this investment, this division has historically operated at negative cash flow levels,” Lowrey’s email reads. “Because there is no additional capital available to the Company and the Company’s ongoing cash flow losses are expected to grow, (AMCAD) is streamlining the business today to sustain the operations that are cash flow generative.”
The court maintains at the time of the contract termination, it was in full compliance with its responsibilities under the contract.
“The contract termination by AMCAD came without any warning or notice whatsoever, and represents an enormous financial and operational burden for the probate court as well as local citizens,” the complaint reads.
Mark Erwin, Davis’ chief of staff, said despite the sudden termination of part of its contract, AMCAD has continued maintain the storage of land records and the online search engine.
The original contract came with a $1.5 million price tag, but so far the county has only paid $329,214. Erwin said monthly payments to AMCAD are invoiced separately and nearly half of each $11,000 installment covers the cost of the case management system the company is no longer maintaining.
The court also invested $72,303 in computer upgrades in order to accommodate the AMCAD system.
“As we moved toward implementing the new program, they came in and did an assessment of all our current hardware, servers and peripheral equipment,” Erwin said. “They suggested we purchase some things like electronic signature pads, small printers and some other equipment required to support their system. We went along with it.”
In the meantime, the probate office is contracting with Logical Computer Solutions, Inc. to the tune of $3,100 per month – mostly to maintain its servers and security backup for records.
The case management system AMCAD set up is currently operating, but Erwin said “there’s always that opportunity for something to go wrong with it.”
“We’re going to be in a bad situation if that happens,” he said.
The situation with AMCAD isn’t unique to Mobile County. The company notified municipalities across the country that it was getting out of the case management software business on the same day.
“Information from various media outlets and filings indicate that multiple lawsuits have been or soon will be filed against AMCAD,” the complaint reads.
Similar cases have been reported in Ohio, Oklahoma, Florida, Arizona and Texas. In Alabama, Shelby, Jefferson and Madison counties are facing the same dilemma.
“We really got into this (contract) because AMCAD was already providing the case management and land records services for two of the largest counties in Alabama,” Erwin said. “That went a long way toward us deciding this company was the one we needed to use.”
Erwin said it was fortunate Mobile County was only one year into its contract, adding that many of the other municipalities in the same situation paid out a lot more upfront.
At the advice of an IT consultant, the county sought the source codes from AMCAD for the software it’s currently using, which would provide a starting point for any vendor called in to maintain the system if AMCAD can’t perform the duties outlined in the contract.
“AMCAD voluntarily turned over what appears to be the source code and associated material related to the judicial case management component, but has refused requests for source codes related to the land records component and the online record search component of the system,” the complaint reads.
The complaint also requests the court to force AMCAD to turn over the remaining source codes for all the systems being using in the Mobile County Probate Court.
In its suit, the county is seeking any and all compensatory and consequential damages, plus the statutory interest rate, legal fees and other relief deemed appropriate. The probate office has also entered an interpleader action, which means its remaining monthly payments to AMCAD will go directly to the court until a decision has been reached.
Money aside, Erwin said the most important part of the legal action is getting a judge’s ruling on the validity of AMCAD’s contract moving forward.
“Looking ahead, we need to know where we are so we can determine what the solution is going forward – whatever company that may be,” he said. “We have to know where we are with AMCAD contractually so that we, as a court, can know how to proceed.”
The probate office and its attorneys have taken a legal position that because AMCAD breached part of its contract, any binding obligation to the remainder of the contract should be voided. However, that is something the courts will ultimately decide.
A status hearing on the case will take place at 2 p.m., Sept. 19 in circuit court, where the case was filed. Attempts to reach representatives at AMCAD have so far been unsuccessful.