In a lawsuit filed in early November in District County Court of Harris County, Texas, Stewart accuses Qualia of giving the firm “improper notice” for terminating its licensing agreement for the title production platform ResWare.
According to the filing, Qualia has threatened termination or “non-renewal” of Stewart’s licensing agreement, which the filing states in “in direct violation” of the agreement.
In 2015, Stewart was granted an “irrevocable and perpetual license” to install and use the ResWare software title production system product, which at that time was owned by Adeptive Software.
In the filing, Stewart states that it paid $1.782 million for the first set of the perpetual license before installing ResWare “across virtually the entire business platform.” The firm estimates that roughly 4,000 Stewart employees use the software on a daily basis.
Adeptive was acquired by Qualia in Dec. 2020. On Jan. 24, 2023, Qualia informed Stewart that in an effort to “modernize” the “old legacy contracts” Adeptive had entered, it would be terminating the ResWare licensing agreement Stewart had entered with Adeptive on Jan. 24, 2024. According to the complaint, Qualia claimed that the licensing agreement “is terminable at-will,” and that it “has demanded upwards of a 400% increase in the license and user fees under a new license agreement.”
Stewart said it “generates over a billion dollars of revenue a year in transactions that depend on the ResWare software to process,” and that it “could not operate without a title production system software implemented and designed for Stewart Title’s business.”
After discussion, Qualia decided to extend the termination timeline to July 24, 2024. In the complaint, Stewart said even this does not give it sufficient time to transition to a new software across its business platform, which the firm said could take “between three and four years.” The lawsuit says that despite this knowledge Qualia has refused to withdraw its notice of termination of the license agreement, which prompted the lawsuit.
According to Stewart, if the license agreement is terminated, it “would suffer damages, monumental harm, and enormous disruption to its business.”
In the filing, Stewart demands a jury trial and asks for a declaratory judgment and injunctive relief to “preclude Qualia from wrongfully terminating the ResWare Master License and Services Agreement.”
A spokesperson for Stewart wrote in an email that due to the ongoing litigation it cannot comment on the issue.
“Qualia has been in a year-long process of modernizing all of our legacy Resware contracts, and 90% of Resware customers have signed new, multi-year Qualia Master Agreements,” a spokesperson for Qualia wrote in an email. “After a year-long negotiation with Stewart and multiple contract extensions through July 2024, we reached a commercial impasse and filed for a commercial arbitration proceeding, consistent with the dispute resolution provisions of the legacy contract. In response, Stewart filed a lawsuit. As we have expressed to Stewart, our goal would be to reach a resolution that allows Qualia to provide software to Stewart for many years to come, or alternatively, allows for an efficient transition of Stewart off of Resware.”
This story was updated to include a comment from a Qualia spokesperson.