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Humvee maker, defense giant BAE wrangle over $277M judgment

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A dispute over the true cost of Humvee body armor rushed to the battlefield in the deadliest days of the Iraq war has resulted in a court battle that includes suggestions that one of the world’s top defense contractors may have serious business problems as it argues against posting full security for a $277 million judgment.

British defense contractor BAE Systems Inc. has asked the Indiana Court of Appeals to stay execution of the judgment pending appeal. Mishawaka-based Humvee maker AM General LLC argues it’s entitled to the judgment and opposes BAE’s motion.

BAE argues in court filings this month that a ruling in St. Joseph Superior Court in November ordering it to post an appeal bond or irrevocable letter of credit in the amount of $290 million “effectively holds the bond cap statute unconstitutional.”

BAE argued it should only have to provide security in the amount of $25 million under I.C. 34-49-5-3, which BAE argues caps appeal bonds at that amount.

BAE supplied armor kits that could be installed on AM General’s Humvees. St. Joseph Superior Judge Michael Scopelitis in April ordered BAE to pay $277,939,519 to AM General, ruling BAE and predecessor companies were in breach of contract and violated most-favored customer clauses by overcharging for armor kits that troops used in the field to retrofit Humvees.

BAE appealed in October and earlier this month filed a motion to stay execution of judgment pending appeal.

“The trial court erroneously concluded that BAE Systems’ alternate form of security … was not sufficient,” the company’s brief says.

“There is simply no evidence that BAE Systems itself, or its parent company, present any risk of not complying with any final judgment in this case,” the company argues. Its filings say there is “virtually no chance” BAE will not satisfy a final judgment.

AM General argued in reply that BAE misreads the appeals bond statute, which allows discretion on when the cap may not apply, and that in any event, Trial Rule 62(D) governs a request to stay the trial court order.

“AM General received its judgment on April 2, 2013, and BAE has managed to avoid posting full security against the judgment as required by Trial Rule 62(D) for more than 37 weeks,” the Humvee maker argues. “AM General is entitled to protection of its very large judgment without further delay.”

“The trial court considered substantial evidence attached to AM General’s opposition brief about the state of BAE’s finances and serious problems facing its business,” AM General argues in its pleadings.

“No BAE officer or employee with knowledge affirmed the representations about the company’s financial condition,” according to AM General’s filing.

BAE says it recorded international sales of more than $27 billion in 2012, and its parent company, BAE Systems PLC, is rated as the world’s second-largest defense contractor, according to the Stockholm International Peace Research Institute.

No arguments before the Court of Appeals have been scheduled in the case.

 

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  1. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  2. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  3. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  4. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  5. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

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