Nevada County taxpayers are on the hook for $100,000 of a $1.9 million lawsuit settlement, officials said Tuesday.

Citing the cost of continuing litigation of Auburn-based software firm AtPac's lawsuit against Nevada County, county officials agreed to settle this week for $1.9 million. Insurance will cover almost all the cost of the settlement and the county's legal defense fund aside from $100,000, said Nevada County Counsel Michael Jamison.

Jamison announced the settlement at the Nevada County Board of Supervisors meeting Tuesday. AtPac, which provided software for the county's Clerk-Recorder office through 2008, lost its contract to Florida-based Aptitude Solutions. During the transfer of Clerk-Recorder information to Aptitude's servers, AtPac claimed Aptitude — its competition for the contract — was allowed access to its trade secrets, so in February 2010 it sued the county, Aptitude Solutions and Clerk-Recorder Gregory Diaz in federal court.

The case gained notoriety in 2010 when Barry Pruett, an attorney from southern Nevada County, attempted to unseat Diaz in a countywide election Pruett ended up losing handily. Pruett had previously represented AtPac in its contract negotiations with the county and took campaign donations from the company's owner.

“The parties now wish to resolve this dispute and to put this matter behind them,” Jamison said in a statement to the board. “The parties have widely differing views of the facts, circumstances and evidence surrounding this dispute... and agree that there has not been any finding of liability for or against any party. Gregory Diaz, the County of Nevada and Aptitude Solutions, Inc. expressly deny that they possess or have utilized AtPac, Inc.' s proprietary information.”

The cost of taking the case to trial was estimated at $1.75 million, Jamison added.

“The parties acknowledge that the matter is being settled solely to avoid further litigation and other costs of going to trial.”

Attorneys for AtPac were not available for comment Tuesday. Diaz could not be reached for comment on the matter and his office referred comments to Jamison.

Supervisors took heat throughout the litigation process from some sectors, including Nevada County's Tea Party Patriots, which viewed the amount spent on legal fees in the case as excessive.

“We're just really pleased that this is over with,” said Board Chair Ed Scofield.

Insurance is covering most of the cost of the defense for Diaz, Nevada County and Aptitude, Jamison said. The legal bill from Los Angeles-based Cypress LLP, the county's original outside law firm in the case, amounted to $725,000 according to county documents. The county agreed to cover 70 percent of those costs, or $507,500, which was reimbursed by insurance, Jamison said. Aptitude's share of the Cypress bill came to $217,500.

On Friday, County CEO Rick Haffey announced the county had already received $618,758 in insurance reimbursement for its legal defense.

The county elected to drop Cypress LLP for Sacramento-based Pillsbury Winthrop Shaw Pittman this spring. It entered into a $500,000 maximum contract with Pillsbury at that time, and agreed to split the bill 50-50 with Aptitude, Jamison said.

Because the case just wrapped up, it is unclear how much of that contract was used and what Aptitude Solutions' share of the bill will be, according to Peter Chaney, Nevada County's risk manager.

The county did not spend up to the maximum on the contract, however, Jamison added.

To contact Staff Writer Kyle Magin, e-mail kmagin@theunion.com or call (530) 477-4239.