Federal court resolves multi-million contract dispute between car auction company and consulting business

By Charmaine Little | Oct 4, 2018

The court capped an award at $9 million.  

SACRAMENTO –– A vehicle auction company will receive more than $9 million after a contract dispute with three technology consulting companies.

In a Sept. 10 decision, the U.S. District Court for the Eastern District of California resolved a handful of issues after a jury verdict in favor of Copart Inc. against Sparta Consulting Inc., KPIT Infosystems Inc. and KPIT Technologies Ltd. 

The order caps Copart's award at approximately $9 million. The court also determined the auto auction company is not owed restitution under its unjust enrichment claims, but may receive $6.3 million in restitution for its fraud claims. 

Copart's trade secrets misappropriation claim was dismissed. 

The companies' dispute centered around the defendants allegedly not completing consulting work after Copart paid more than $11 million. Copart then fired Sparta Consulting "for convenience," according to documents. 

After a May trial, a jury found Sparta Consulting committed fraud against Copart by withholding information. The jury awarded Copart $4.69 million for that claim and another $20 million for negligence. At the same time, the jury found Copart was partly at fault and awarded Sparta Consulting $4.8 million for Copart's breach of the agreement.

The current lawsuit and counter-suit came as a result of the jury's award.

Copart auctions off thousands of vehicles a day across the world, according to its website.

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