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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. Good riddance to this dangerous activist judge

  2. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  3. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  4. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  5. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

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