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Judge rules on summary judgment motions in IBM case

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The State of Indiana may be on the hook to pay IBM $40 million in subcontractor assignment fees per the contract it had with IBM to update the state’s welfare system, a contract the state cancelled in October 2009 because it wasn’t happy with results.

Marion Superior Judge David Dreyer issued several rulings Wednesday in the lawsuit stemming from the cancelled contract between the state and IBM. The state hired IBM in 2006 but cancelled the contract three years later and sued IBM to try to recover the millions it paid before ending the contract, plus triple damages. IBM countersued for breach of contract, arguing the state still owed around $100 million.

Dreyer rejected the state’s contention that IBM isn’t entitled to the $40 million in subcontractor assignment fees. The contract between the state and IBM said that the “state shall pay” IBM those fees, and there is no dispute that the state accepted assignment of the subcontracts at issue. The Family & Social Services Administration believes this ruling is an error and plans to appeal, according to a spokeswoman.

IBM also asked for $43 million in deferred fees due to the termination of the agreement as well as $9.3 million for equipment the state has but did not pay IBM for, but Dreyer denied summary judgment on those issues.

Dreyer ruled in favor of the state on IBM’s argument that its poor performance could be excused because of the economic downtown and flooding that occurred after the contract was signed. He found that any contention by IBM at trial that the economy or the flooding rendered its performance “impossible” or otherwise justifies any failure by IBM to meet contractual obligations are precluded as a matter of law.

There are also disputes of material fact as to whether there was a breach of the contract, so Dreyer denied the state’s motion for summary judgment on the matter.

The court has ruled the state is limited to recovering no more than $125 million in damages; if the state can’t prove IBM breached the contract, it could owe the company $100 million per a termination clause.

An issue that arose from this case is whether Gov. Mitch Daniels can be deposed. Dreyer originally ruled Daniels doesn’t have to be deposed, but later ruled that he can be. That issue will be before the Indiana Supreme Court Feb. 13.

The case is set to go to bench trial Feb. 27.

 

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  1. Did someone not tell people who have access to the Chevy Volts that it has a gas engine and will run just like a normal car? The batteries give the Volt approximately a 40 mile range, but after that the gas engine will propel the vehicle either directly through the transmission like any other car, or gas engine recharges the batteries depending on the conditions.

  2. Catholic, Lutheran, even the Baptists nuzzling the wolf! http://www.judicialwatch.org/press-room/press-releases/judicial-watch-documents-reveal-obama-hhs-paid-baptist-children-family-services-182129786-four-months-housing-illegal-alien-children/ YET where is the Progressivist outcry? Silent. I wonder why?

  3. Thank you, Honorable Ladies, and thank you, TIL, for this interesting interview. The most interesting question was the last one, which drew the least response. Could it be that NFP stamps are a threat to the very foundation of our common law American legal tradition, a throwback to the continental system that facilitated differing standards of justice? A throwback to Star Chamber’s protection of the landed gentry? If TIL ever again interviews this same panel, I would recommend inviting one known for voicing socio-legal dissent for the masses, maybe Welch, maybe Ogden, maybe our own John Smith? As demographics shift and our social cohesion precipitously drops, a consistent judicial core will become more and more important so that Justice and Equal Protection and Due Process are yet guiding stars. If those stars fall from our collective social horizon (and can they be seen even now through the haze of NFP opinions?) then what glue other than more NFP decisions and TRO’s and executive orders -- all backed by more and more lethally armed praetorians – will prop up our government institutions? And if and when we do arrive at such an end … will any then dare call that tyranny? Or will the cost of such dissent be too high to justify?

  4. This is easily remedied, and in a fashion that every church sacrificing incense for its 501c3 status and/or graveling for government grants should have no problem with ..... just add this statue, http://commons.wikimedia.org/wiki/File:Capitoline_she-wolf_Musei_Capitolini_MC1181.jpg entitled, "Jesus and Cousin John learn to suckle sustenance from the beloved Nanny State." Heckfire, the ACLU might even help move the statue in place then. And the art will certainly reflect our modern life, given the clergy's full-bellied willingness to accede to every whim of the new caesars. If any balk, just threaten to take away their government milk … they will quiet down straightaway, I assure you. Few, if any of them, are willing to cross the ruling elite as did the real J&J

  5. Tina has left the building.

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