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Per-Se Technologies6/30/2005
Appellant, Per-Se Technologies, Inc., formerly known as Medaphis Corporation, sued appellee, Sybase, Inc., alleging negligent misrepresentation and fraud. Appellee filed a rule 166a(c) motion for summary judgment, and the trial court, without specifying its grounds, granted the motion. In five issues on appeal, appellant contends that appellee did not conclusively negate causation, that appellant is entitled to recover as damages attorney's fees incurred in arbitration with a third party and fees for services to that third party, that appellant is entitled to indemnity for contractual fees paid, and that the two-year limitations period was tolled by the discovery rule and by fraudulent concealment. We affirm in part and reverse in part, and remand the cause to the court below.
BACKGROUND
Appellant, Per-Se Technologies, Inc., is the assignee of the rights of BSG Alliance/IT (BSG). BSG was the party involved in the underlying events in this case.
In June 1995, SCI Management Corp. ("SCI"), a nation-wide funeral home chain, contracted with BSG to develop a company-wide computer system (the "Horizon Project") for intra-company communications. The project was divided into three phases. Phase I consisted of consultation with SCI regarding its requirements and the design of the system. Phases II and III consisted of the construction and implementation of the system, with Phase II focusing on SCI's cemetery business and Phase III focusing on the funeral home operations.
SCI required a system with a "three-tiered architecture" to provide for the synchronization of data between the individual funeral homes (the third tier), the regional "clusters" (the middle tier), and the central database located at SCI's corporate headquarters (the top tier). This communication process is referred to as "replication." Additionally, SCI required that the three-tiered architecture system be able to replicate data using a "non-persistent connection" (a dial-up connection present only while data are being sent or received). A non-persistent connection was a critical component for the system---and therefore the entire Horizon Project---because a persistent connection, requiring a dedicated data line, would have been prohibitively expensive, rendering the Horizon Project economically infeasible.
To complete its bid for Phase II, BSG solicited bids from Sybase and another vendor, Oracle, for the design of software needed for the project. In January 1996, the two vendors conducted a proof of concept ("POC") to test the capability of their software designs. Oracle, in its POC, demonstrated that it could replicate the data, but only in a two-tiered architecture. Sybase's POC demonstrated that it could perform the replication in a three-tiered architecture, using its "SQL Anywhere" database software for the remote locations and its "System 11" database software at the regional clusters and corporate headquarters.
However, while Sybase showed that it could replicate data using a persistent connection, the system operated in an "error condition" when performing the replication task using a non-persistent connection. Sybase referred to this as an "asynchronous" problem. David Cornell, BSG's lead technical architect on the Horizon Project, testified that Sybase represented to BSG that a software upgrade to correct the problem would be available in August 1996. Doug Odom, SCI's lead manager, testified that BSG told SCI that BSG had received assurances from Sybase concerning the software upgrade.
Notwithstanding the replication issue discovered during the POC, BSG, in its report to SCI, recommended that Sybase be selected as the software vendor for the Hor
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