Fortune Systems Settles Suit by ComputerLand
Fortune Systems Corp. said Monday that it has agreed to fix, take back or exchange all faulty computer systems that it sold to ComputerLand Corp., the big retail chain.
The accord settles a lawsuit filed by ComputerLand last summer. Fortune also agreed to a “very small cash payment” in the out-of-court agreement, said Allan May, vice president and general counsel of the Redwood City, Calif., manufacturer.
The suit had asked $1 million plus other damages. May would not say how large a cash payment was involved or how much it would cost Fortune to meet the terms of the agreement. But he said fewer than 100 computer systems sold to ComputerLand were faulty.
ComputerLand, based in Oakland, alleged in August in Alameda County Superior Court that it was stuck with “hundreds of thousands of dollars’ ” worth of Fortune’s multiuser microcomputers that couldn’t accommodate as many users as the manufacturer claimed.
The 32:16 computer systems, priced at $5,000 to $25,000 and designed for several workers to use simultaneously, sold poorly after early products did not meet expectations. A management shake-up followed in which founder and Chairman Gary B. Friedman resigned. Fortune said hardware and software problems have long since been resolved.
In its suit, ComputerLand accused Fortune of fraud, misrepresentation and breach of contract. Fortune countered that the retail chain of 750 stores was “grandstanding.”
In a release Monday, the two firms said that their agreement is “amicable” and that they “look forward to a healthy working relationship in the future.” May said ComputerLand is Fortune’s only retail outlet.
