United Uptime Services Inc. has filed a new lawsuit in the Texas Business Court accusing a software company of duping it into buying its products that caused $21 million in damages to its business.
United Uptime, a company that provides various services — including maintenance, installation and compliance — has accused Cognitus Consulting of fraudulent and negligent misrepresentation, fraud, breach of contract, breach of the covenant of good faith and fair dealing and breach of warranty.
“In addition to fraudulently inducing United Uptime to execute a contract, Cognitus thereafter breached that contract by providing United Uptime with a defective system that caused, and continues to cause, serious damage to United Uptime’s business,” the lawsuit filed June 11 alleges. “Cognitus then perpetuated its fraud by continuing to promise it could cure any defects in the software, convincing United Uptime to sign additional statements of work, and forcing United Uptime to pay for services that Cognitus could not perform, all while concealing problems with the software implementation Cognitus knew existed.”
According to the lawsuit, which has been assigned to Judge Bill Whitehill, problems started in late 2023 after United decided it wanted to unify six disparate software systems that were used to operate its various business units. The move was meant to maximize efficiency and employ software that could leverage AI and other new technologies.
United Uptime told the court it began investigating third-party software companies and requesting proposals from a select few, including Cognitus. In February 2024, Cognitus provided its proposal to United Uptime, and after numerous meetings, the companies entered a master services agreement in June 2024 under which Cognitus would implement the new software for a total of $1.67 million.
“To date, United Uptime has paid Cognitus approximately $4,331,538.64 for an [enterprise resource planning] product that does not perform according to industry standards, does not address United Uptime’s core business processes, and does not meet the specific pre and post agreement representations of Cognitus regarding performance and functionality.”
United Uptime is represented by Jamil N. Alibhai and Natalie S. Poole of Munsch Hardt Kopf & Harr and Marcus Harris and Nicollette L.K. Roggeveen of Taft Stettinius & Hollister.
Counsel for Cognitus Consulting had not filed an appearance as of Monday.
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