DELPHI ASSOCIATES, INC., Claimant, v. THE STATE OF ILLINOIS, Respondent.
Case summary
Claimant sought $967,539 wrongfully withheld as liquidated damages plus additional sums for delays, out-of-scope work, and failure to renew a contract for a Medicaid Management Information System. The court approved a joint stipulation and awarded the $967,539 in settlement of all claims.
AI-generated summary from the opinion text — may contain errors. The opinion text and PDF above are the official record.
Headnotes
- NEIL F. HARTIGAN, Attorney General (MICHAEL TAYLOR, Assistant Attorney General, of counsel), for Respondent.
- CoriTRAcTs-contract to design information system-State applied liquidated damages clause-stipulation-awardgranted. The Claimant filed an action alleging that the State improperly withheld funds under the liquidated damages clause of a contract by which the Claimant was to design and implement an information system for the State, and pursuant to the stipulation of the parties, an award was entered for the Claimant in full and final settlement of the claims arising from the completion of the contract.
This cause comes on to be heard following the filing of a joint stipulation whereby the parties have agreed to a settlement of this matter and are seeking an award from the Court.
The parties stipulated as follows:
1. In September of 1978, the parties, Delphi and the State of Illinois, entered into a contract which provided that Delphi would design and implement a Medicaid Management Information System, to be used by the State of Illinois. The contract was twice amended by the parties. The maximum contract price provided in the second amendment was $6,509,457.
2. The contract contained a liquidated damages clause which permitted the State of Illinois to withhold up to 15%of the contract price, in the event that Delphi did not complete the Medicaid Management Inf ormation System in a timely fashion.
3. The contract, as amended, provided for completion of an operational Medicaid Management Information System by September 30,1980.
4. The contract, as amended, provided that the completion date would be extended upon the occurrence of certain events, thereby extending the date upon which the liquidated damages clause became effective.
5. The Medicaid Management Information System
became operational in the Fall of 1981. The parties have disputed the question of whether the completion date in fact was extended as provided for in the contract, as amended.
6. The State of Illinois withheld from Delphi payment of the sum of $967,539 as liquidated damages.
7. Delphi thereafter filed suit against the State of [*129] Illinois contending that the liquidated damages clause was being improperly applied; that the completion date in fact had been extended in accordance with the terms of the contract, as amended; that the contract, as amended, entitled Delphi to an adjustment in the contract price based on State caused delays; that the State owed Delphi additional sums for out of scope work and rental reimbursement; that the State’s failure to renew the contract in accordance with the terms of the contract caused Delphi additional damages.
8. As a result of these claims Delphi asserted that in accordance with the terms of the contract, as amended, the State owed Delphi (1)a sum in excess of $2,000,000 for adjustment of the contract price, as amended, resulting from State-caused delays; (2) the sum of $967,539 for liquidated damages being wrongfully withheld by the State; (3) damages in the amount of $225,000 for the State’s failure to renew the contract as required by the contract’s terms; (4) rental expense reimbursement in the amount of $90,000; and ( 5 ) payment for out of scope work in the amount of $59,184.
9. The parties have now completed extensive discovery, including depositions and document production, and legal research on the issues of the case. As a result of these efforts the parties have entered into settlement negotiations for the purpose of fairly resolving the issues and avoiding a complex, extended trial.
10. As a result of these negotiations the parties have agreed to settle the entire matter for the sum of $967,539, which represents the amount of the contract price, as amended, which was withheld for liquidated damages. Payment of this sum by the State to Delphi would keep the total payments received by Delphi for the project [*130] below the total contract prices as agreed to by the parties and approved by the legislature.
11. Delphi, in consideration for payment of the settlement amount agreed to by the parties, will release all the other claims against the State.
12. The funds withheld from Claimant Delphi have lapsed and must therefore be paid by an award from this
Court. The Medicaid Management Information. System
project took place over several years and Delphi Associates, Inc. was to receive progress payments for its work in fiscal years 1979, 1980 and 1981. The payments to Delphi Associates, Inc. were from Appropriation Number 001-47835-1200-0000. The amount of the lapse in each fiscal year is reflected in'exhibit one.
The amount of lapse in each year was sufficient to cover the portion of progress payment withheld in each fiscal year.
13. The State of Illinois agrees to stipulate to an award in favor of Delphi Associates, Inc. in the amount of $967,539 in full settlement and satisfaction of Delphi's claims against the State of Illinois in this matter.
14. Delphi Associates, Inc., agrees to accept the amount of $967,539 in full settlement of its claims against the State of Illinois in this matter and, further, agrees to release the State of Illinois from any further liability which might be asserted as a result of the Medicaid Management Information System.
Wherefore, the parties jointly pray that this Court enter an award on behalf of Delphi Associates, Inc., in the amount of nine hundred and sixty seven thousand and five hundred and thirty nine dollars ($967,539).
This Court is not bound by such stipulations but it [*131] does not seek to interpose controversy where none exists. We have reviewed the stipulation and the record in this matter. We approve the settlement and will enter the award.
It is hereby ordered that the Claimant herein, Delphi Associates, Inc., be and hereby is awarded the sum of $967,539.00 (nine hundred sixty-seven thousand, five hundred thirty nine dollars) in full and final satisfaction of this claim.