Overstock.com has reason to celebrate after a district court in Salt Lake City, Utah, ruled in the online retailer’s favor, denying breach of contract and other claims for damages of $1.7 million.
The company said that in Haddadin v. Overstock, two brothers asserted they were entitled to damages of $1.7 million, plus future royalties, when the it contracted with Ed and Ayman Haddadin for the creation of an auto sales store on the e-tailer's website.
In finding for the company, the judge ruled from the bench at the close of the case, noting that elements of the Haddadin's testimony were simply "not credible."
"We applaud the judge in this case for understanding and ruling upon the facts," said CEO and chairman Patrick M. Byrne. "Overstock will always fight unmeritorious lawsuits."
Under the 2006 contract, Overstock.com purchased a software platform from the Haddadins, together with consulting services to support the auto store component of the site. The online retailer contends that the Haddadins were to assist in the creation of a dealer subscription auto listing service to populate the site with a nationwide auto inventory.
However, Overtock said the platform and business model were not successful, and the company created a different system using an alternate vendor and business model. Two years later, the Haddadins claimed entitlement to royalties under the original contract. The judge in the case ruled the evidence didn't support their claims to entitlement to royalties on any system, regardless of who supplied it.