Steele Software Systems Defrauded by First Union National Bank
Case Value $276M - Settlement
In 2002, Murphy, Falcon & Murphy represented Steele Software Systems in a case of breach of contract and fraud against First Union Bank (thereafter Wachovia and now part of Wells Fargo). Steele was a provider of computerized appraisal and title services for home equity loans and had invented the computerized program. It entered into a contract with First Union in 1998 and, using Steele’s software, the home mortgage business at First Union took off.
First Union’s contract with Steele promised that it would promote Steele software usage throughout the bank’s US footprint. Instead, the bank formed its own competing software company utilizing Steele Software Systems and sought to cut Steele out of the business.
This case became a classic “David v. Goliath.” A huge national bank with the assets available to grind down a small entrepreneur like Steele took advantage of its size and attempted to do just that. This was also a classic case of a jury, the stewards of law in our American legal system, doing what the jury system intended–upholding justice and decency and punishing wrongdoing.
The jury awarded $40 million in compensatory and $200 million in punitive damages, one of the largest judgements in Maryland history. The bank appealed and the Maryland Court of Special Appeals affirmed the compensatory damages but reversed the punitive damages award.
When the jurors were being interviewed at the conclusion of the trial, one of the jurors was questioned by an attorney and asked who she would want to represent her in any future litigation. The juror answered, immediately, “I would want no one other than Billy Murphy.”