Carrollton, Texas-based multifamily software and services provider RealPage has been served with a lawsuit from Santa Barbara, Calif.-based Yardi Systems, which alleges that RealPage subsidiary EverGreen Consulting accessed information outside the scope of agreements with clients on seven occasions in the past six months. Originally an IT consulting firm offering services primarily to Yardi clients, EverGreen was acquired by RealPage in 2009 and has continued to offer Yardi support services to its client list since the acquisition. RealPage says any information accessed from Yardi was done so solely to support Evergreen's existing clients.
According to a press release issued by RealPage, EverGreen access to Yardi information is intended for the purpose of providing consulting and support services acting on behalf of shared Yardi and RealPage clients. RealPage says it will investigate the alleged information breaches and any other incidents provided by Yardi and will take “whatever actions are warranted by the facts."
The suit, filed by Yardi on January 25 in U.S. District Court in California and available for download on Yardi’s website, seeks to stop RealPage from “wrongfully infiltrating Yardi’s password-protected internal website, altering Yardi’s confidential internal data, and illegally downloading Yardi’s copyrighted and trade secret software, software manuals, price lists, and other confidential information.”
“Yesterday, Yardi Systems filed a lawsuit in Los Angeles to stop violation of its intellectual property rights by RealPage and Evergreen Solutions,” said Yardi in an official statement provided to Multifamily Executive by Yardi executives and attorneys. The company had no additional comment on the lawsuit.
Specifially, the suit alleges that persons in RealPage and Evergreen offices in Tulsa, Okla.; Eugene, Ore.; and Washington, D.C., obtained the user IDs of Yardi senior vice presidents Terri Dowen and John Pendergast (among others) to access password-restricted areas of Yardi’s internal website, then downloaded confidential price lists and altered internal confidential data. The suit alleges more than 200 instances of log-on violations and more than 100 illegal downloads.
An official statement provided exclusively to Multifamily Executive by RealPage sought to clarify the firm's role in accessing Yardi systems:
"We act as an agent for our clients providing services directly to them. As such, we are permitted to access Yardi information for the purpose of supporting our clients. Yardi alleges that some EverGreen employees accessed a Yardi website for purposes other than providing support to our clients. This would be against our policy, and we are investigating the specifics that they referenced to determine what actually happened. Once we understand the facts, we will determine what to do about it. We cannot fathom how Yardi was harmed by this, but we do take our responsibility to operate strictly within the authority granted to us very seriously."
RealPage claims that since its acquisition of EverGreen, Yardi has been “openly disparaging” of EverGreen services. The firm further states in its press release that it believes Yardi has a “hidden intent” in filing the lawsuit to inhibit EverGreen from competing with Yardi's own consulting service organization. “This lawsuit is a tactic to limit alternative choices for Yardi clients, thereby restraining a more open and competitive marketplace,” the release says. “RealPage intends to defend this action vigorously and to protect EverGreen's right to provide services to clients that they share with Yardi.”
In its statement provided to Multifamily Executive, RealPage adds that Yardi has represented to clients and prospects that Evergreen is not qualified to provide Yardi consulting and support. "Our clients would disagree with this," the statement says.
Owner/operators on both sides of the RealPage/Yardi fence were reticent to comment on the record regarding the lawsuit, preferring to let the drama instead play out without client weigh-in. Multifamily IT executives expect little if any operational impact or interruption to services from either firm.