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State will appeal IBM ruling

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The state is going to appeal Wednesday’s decision in Marion Superior Court that it pay IBM $52 million for ending early its billion-dollar contract with the company to update the state’s welfare system.

Marion Superior Judge David Dreyer ordered the state pay IBM $12 million in early termination closeout payments and for equipment it retained after canceling the contract in October 2009. The judge ruled in January that the state owed IBM $40 million in subcontractor assignment fees for terminating the contract.

IBM and the state filed lawsuits against the other over the cancellation of the 10-year contract the state entered into with IBM to update Indiana’s welfare system. The $1.3 billion contract was signed in December 2006, but the state terminated it in October 2009, dissatisfied with IBM’s results.

The state sought more than $437 million from IBM, but Dreyer ruled earlier this year the most the state could recover is $125 million in damages. IBM wanted the state to pay it $100 million for terminating the contract early.

“The largely undisputed evidence shows that the Governor, the Family and Social Services Administration and various State of Indiana officials set out to fix Indiana’s poorly-performing welfare system by inserting an untested theoretical experiment, and substitute personal caseworkers with computers and phone calls,” the order says. “This is now admitted to be an error, and there is nothing in this case, or the Court’s power, that can be done to correct it, or remedy the lost taxpayer money or personal suffering of needy Hoosiers. All that can be done in this case is to take the first step at setting the final numbers among so many millions already spent.”

In a statement released by the governor’s office, the state focused on the improvements to Indiana’s welfare system performed by another vendor, which Gov. Mitch Daniels described as being the state’s most timely, accurate, cost-effective and fraud-free system ever.

Adam Horst, director of the Office of Management and Budget, said even if the ruling stands, it will not impact the state surplus. The state sets aside money for lawsuits.

The state’s attorneys, John Maley and Peter Rusthoven of Barnes & Thornburg LLP, released a statement saying, “Fortunately, the court’s ruling, while mistaken on some issues, has now rejected the great majority of IBM’s claims for additional money. This was another step in the right direction; and we are confident Indiana’s appellate courts will now set aside most if not all of the IBM claims that still remain.”

Wednesday’s ruling awards IBM $52,081,416, plus prejudgment interest and costs. The company is not entitled to damages for deferred fees or mandatory changes. The state got nothing out of its complaint.

 

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  1. Payday loans take advantage of people in many ways. It's great to hear that the courts are using some of their sins to pay money back to the community. Hopefully this will help change the culture of many loan companies, and make lending a much safer endeavor for those in need. http://lawsuitlendingnow.com/lawsuit-loans-post-settlement.html

  2. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  3. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  4. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  5. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

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