Louisiana Record

Tuesday, April 7, 2020

Unisys entitled to $1.3 million in mutually terminated contract with Office of Motor Vehicles, appeals court says


By Karen Kidd | Jan 9, 2019

General court 07

BATON ROUGE – Louisiana's First Circuit Court of Appeal recently found that Pennsylvania-based technology company Unisys Corp., which has been seeking more than $8.7 from the Louisiana Office of Motor vehicles following an amicably terminated contract to re-engineer computer systems, is entitled to a portion of that amount.

In its 27-page opinion issued Dec. 28, the appeals court approved a lower court judgment awarding Unisys approximately $1.3 million plus interest, affirming the decision of the 19th Judicial District Court for East Baton Rouge Parish that itself affirmed the state commissioner of administration's conclusions in Unisys' claim for damages over termination of the professional services contract.

The appeal court found no error in the commissioner's determination that the Office of Motor Vehicles had mutually agreed to terminate the contract.

"Accordingly, we find no merit to this assignment of error," the opinion said. "For these same reasons, we also deny Unisys's request for judgment in its favor for retainage on all deliverables previously approved in its answer to appeal."

Chief Judge Vanessa Guidry-Whipple wrote the appeals court opinion in which Judges Page McClendon and Toni M. Higginbotham concurred.

Unisys was first contracted in December 2002 to re-engineer the computer systems in the state's Department of Public Safety and Corrections and the motor vehicles office in the Next Generation Motor Vehicles (NGMV) project, according the background portion of the opinion. In a letter dated in January 2009, the parties mutually agreed to terminate the contract "for convenience," as permitted under a section of the contract.

The following March, Unisys submitted an inventory of deliverables that included a request for an additional payment of more than $8.7 million for work that had been in progress when the contract was terminated. The following November, after unsuccessful negotiations, a state official issued a letter to Unisys saying none of the additional payment was due because both parties had agreed to terminate the project and that all contractual requirements had been met.

In July of the following year, the commissioner of administration issued a decision on Unisys' request for a written decision, concluding Unisys was due some payment for work that had been performed satisfactorily and approved. The commissioner's conclusions meant Unisys was entitled to $1.3 million but no more.

The following August, Unisys filed a petition for limited judicial review with the district court, challenging the commissioner's denial of the full amount Unisys was seeking, in addition to attorney's fees, costs and interest, above the $1.3 million. For its part, the Office of Motor Vehicles filed a reconventional demand and asked the district court to deny Unisys the $1.3 million and any other payment it was demanding.

The district court dismissed the Office of Motor Vehicles reconventional demand with prejudice, stating that its review was limited to matters raised in Unisys' petition.

The Office of Motor Vehicles appealed, saying the district court erred in dismissing its reconventional demand. The appeal court granted the office's motion and remanded the case. Following remand, the Office of Motor Vehicles filed an exception of no cause of action, an exception the district court denied in November 2015.

After further proceedings, in December 2017 the district court affirmed the commissioner's decision without modification and and the Office of Motor Vehicles and Unisys both appealed.

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Louisiana First Circuit Court of Appeal