August 31, 2004

Indiana Decisions - 7th Circuit Issues three today

Golembiewski, Michae v. Barnhart, Jo Anne (ND Ind., Judge Lee)

Before BAUER, CUDAHY, and COFFEY, Circuit Judges.
BAUER, Circuit Judge. Michael Golembiewski appeals from a judgment of the United States District Court for the Northern District of Indiana denying his petition for an award of attorney’s fees and costs pursuant to the Equal Access to Justice Act (“EAJA”). We reverse; the government was not substantially justified in supporting the Administrative Law Judge’s (“ALJ”) ruling and since the government did not complain about the computation of fees, we simply remand for the court to enter the fees requested by Golembiewski. * * *

It is not reasonable for an ALJ to find that a condition does not exist at all where the evidence establishes that it does exist even if it is “small.” The record in Golembiewski’s claim included numerous opinions by treating physicians that the MRIs established herniated or protruding discs. The ALJ’s finding of “no herniations” has no support in the administrative record. He did not “have a rational ground for thinking he had a rational ground” to find no herniations nor did the Commissioner have such a rational ground for arguing support of the ALJ’s decision. The district court’s decision constitutes an abuse of discretion.

Hinc, Thomas P. v. Lime-O-Sol Company (ND Ill.)
Before EASTERBROOK, KANNE, and DIANE P. WOOD, Circuit Judges.
KANNE, Circuit Judge. Thomas Hinc, a resident of Illinois, sued Lime-O-Sol Company (“LOS”), an Indiana corporation with its headquarters in Indiana, for breach of contract. Holding that LOS’s contractual obligation to use its “best efforts” to market the product developed by Hinc was too vague to be enforceable, the district court granted summary judgment in favor of LOS. Hinc appeals. We reverse. * * *

A. Indiana Law Applies. Initially, we must determine whether Indiana or Illinois law applies. The contract here does not contain a choice-of-law provision. * * *

While the place of contracting favors Illinois, the place of negotiation, the place of performance, and the location of the subject matter of the contract all favor Indiana. On balance, we agree with the district court that Indiana law controls this case.

B. “Best Efforts” Clause. Having found that Indiana law governs, we must now decide whether the “best efforts” clause contained in the parties’ contract is so ambiguous as a matter of Indiana law that it may not be enforced. Neither the parties nor our own research has found an Indiana Supreme Court or Indiana
appellate court ruling on point.

When, as here, a federal court sitting in diversity is called upon to decide an unsettled question of state law, our obligation is to deduce, as closely as possible, how the Indiana Supreme Court would rule. * * * Where possible, Indiana courts will construe contracts as being valid, rather than void. * * * In applying Indiana contract law, the primary purpose is to ascertain and give effect to the intentions of the parties. * * * This requires courts to “read the agreement in a manner which harmonize its provisions as a whole and to give effect to the parties’ expressed intent.” * * * “In most cases, the intent of the parties to a contract is to be determined by the ‘four corners’ of the contract[,]” * * * “giving the words contained therein their plain, usual, and ordinary
meaning,” * * *. “When a court finds a contract to be clear in its terms and the intentions of the parties apparent, the court will require the parties to perform consistently with the bargain they made.” * * * An ambiguous contract is construed against the drafting party. * * *

Keeping in mind the general principles and rules of construction of Indiana contract law outlined above, we now turn to the contract in this case. * * * We believe that Indiana’s highest court would take the approach that “best efforts” provisions can be contractually enforced.

III. Conclusion. The “best efforts” clause at issue here was not so vague as to be unenforceable under Indiana law. We therefore REVERSE the judgment of the district court and REMAND for further proceedings consistent with this opinion.

USA v. Messino, Christopher (ND Ill.)
Before BAUER, EASTERBROOK, and KANNE, Circuit Judges.
BAUER, Circuit Judge. [This is a Blakely/Booker case that requires close reading; I hope to come back to it later today.]

Professor Douglas Berman has reviewed the case and written this entry. He promises coments on Judge Easterbrook's dissent later today.

Posted by Marcia Oddi at August 31, 2004 02:42 PM