Technical Security Integration, Inc. v. EPI Technologies, Inc.
U.S. Court of Appeals for the Seventh Circuit
Technical Security Integration, Inc. v. EPI Technologies, Inc., 126 F.4th 557 (7th Cir. 2025)
Technical Security Integration, Inc. v. EPI Technologies, Inc.
Opinion
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 22-2861
TECHNICAL SECURITY INTEGRATION, INC.,
Plaintiff-Appellant,
v.
EPI TECHNOLOGIES, INC.,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 19-cv-08493 — John Robert Blakey, Judge.
____________________
ARGUED SEPTEMBER 12, 2023 — DECIDED JANUARY 16, 2025
____________________
Before EASTERBROOK, HAMILTON, and PRYOR, Circuit
Judges.
PRYOR, Circuit Judge. Technical Security Integration, Inc.
(“Technical Security”) and EPI Technologies, Inc. (“EPI”) con-
tracted to do business with one another. They agreed to sub-
mit any contractual disputes to mediation, and they agreed
that if mediation were to fail, the prevailing party in an even-
tual lawsuit would be entitled to attorneys’ fees. They failed
2 No. 22-2861
to specify, however, a timeline for making or responding to a
mediation demand in the first instance.
Eventually a contractual dispute arose. EPI initially
sought mediation but later sued Technical Security in state
court and (for the most part) lost. Technical Security then
sought attorneys’ fees from EPI in federal court. The district
court rejected that request and ordered the parties to pay their
own fees. Technical Security appeals, arguing that it was en-
titled to attorneys’ fees in the underlying state lawsuit.
Because the contract between Technical Security and EPI
does not specify who must seek mediation and when, we can-
not resolve this dispute on the record before us. We therefore
vacate the district court’s entry of summary judgment for EPI
and remand for further proceedings.
I. BACKGROUND
A. Factual History
On May 16, 2013, Technical Security and EPI executed a
Sales Representative Agreement (“Agreement”) pursuant to
which EPI agreed to sell Technical Security’s products across
the Midwest in exchange for commissions. Section 16 of the
Agreement covers “Disputes and Mediation.” That section re-
quires any disputes between the parties arising under the
Agreement to be submitted to mediation. If, “within 180 days
after submission to mediation,” the parties cannot reach a set-
tlement, Section 16 gives each party the right to sue in federal
or state court, “with all reasonable attorney fees, court costs
and expenses incurred by the prevailing party in such litiga-
tion to be paid by the other party.”
On July 29, 2015, EPI sent a letter to Technical Security de-
manding mediation to resolve a dispute over commissions.
No. 22-2861 3
The demand specified that the mediation would take place in
Chicago during the week of August 24 and proposed a spe-
cific mediator. Technical Security responded saying it would
follow up with an alternative mediator.
Two weeks later, on August 12, EPI emailed Technical Se-
curity to check on the status of the mediation demand. Tech-
nical Security’s attorney responded saying he would check in
with his client about its choice of mediator. After another
week passed with no response, EPI followed up a second
time, on August 20. Technical Security’s attorney replied that
he would “be in touch.” On September 14, having still heard
nothing of substance from Technical Security, EPI forwent a
third follow-up and sued Technical Security in the Circuit
Court of Cook County, Illinois, alleging that Technical Secu-
rity breached the Sales Representative Agreement by failing
to pay commissions owed to EPI.
B. State Court Proceedings
The state court granted partial summary judgment for
Technical Security on the commissions dispute. EPI then
moved to dismiss its remaining claims and the court granted
that motion. Invoking Section 16 of the Agreement, Technical
Security moved for attorneys’ fees, but the state court denied
the motion, determining that the request for fees involved a
factual dispute and there were otherwise no claims to litigate.
Technical Security then sent EPI a mediation demand to re-
solve the fee dispute. EPI did not respond.
C. District Court Proceedings
On December 30, 2019, Technical Security sued EPI in the
Northern District of Illinois alleging its entitlement to fees and
costs in the underlying state court litigation.
4 No. 22-2861
Both parties moved for summary judgment. EPI argued
that Technical Security was not entitled to attorneys’ fees,
pointing out that Section 16 allows for litigation (and there-
fore recovery of attorneys’ fees) only after the occurrence of
the condition precedent set forth in the Agreement: 180 days
of fruitless mediation. According to EPI, Technical Security
prevented this condition from occurring by not agreeing to
EPI’s mediation demand. Since there was no failed mediation,
there could be no award of attorneys’ fees. Technical Security
argued that EPI prevented the mediation from occurring by
suing in state court before Technical Security could respond
to EPI with an alternative mediator.
The district court granted summary judgment in favor of
EPI, concluding on the record before it that Technical Security
“slow[ed] or prevent[ed]” the mediation process by failing to
respond to EPI’s initial mediation demand. Technical Security
appeals, asking us to enter summary judgment in its favor or
to remand the case to the district court for further factfinding.
II. DISCUSSION
We review the entry of summary judgment de novo,
meaning we consider the facts and draw all inferences in the
light most favorable to the nonmoving party. Sterling Nat’l
Bank v. Block, 984 F.3d 1210, 1217 (7th Cir. 2021). Summary judgment is warranted when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). A genuine issue requires more than “some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586
(1986). The nonmoving party must provide specific mate- rial facts showing there is a genuine issue for trial. Celotex Corp. v. Catrett,477 U.S. 317, 324
(1986).
No. 22-2861 5
The parties agree that Illinois law governs this contract
dispute, so we analyze their arguments according to Illinois
law. In doing so, we attempt to give effect to the parties’ intent
by looking to the plain language of the contract. Block, 984
F.3d at 1217 (applying Illinois law). If the contract is unclear,
we “can consider extrinsic evidence to determine the parties’
intent.” Thompson v. Gordon, 948 N.E.2d 39, 47(Ill. 2011). Ex- trinsic evidence, such as evidence of the parties’ course of dealing and course of performance, is appropriate when a contract is ambiguous or contains a “yawning void” that “cries out for an implied term.” Brooklyn Bagel Boys, Inc. v. Earthgrains Refrigerated Dough Prods., Inc.,212 F.3d 373, 380
(7th Cir. 2000) (applying Illinois law and quoting Bidlack v. Wheelabrator Corp.,993 F.2d 603, 608
(7th Cir. 1993) (en banc)).
Recall that Section 16 of the Sales Representative Agree-
ment requires Technical Security and EPI to mediate any con-
tractual disputes. Only if mediation fails can either party sue
to enforce the Agreement and recover attorneys’ fees. The re-
quirement to mediate is therefore a “condition precedent” to
litigation because it is an “event that must occur” before either
party may sue. See Hardin, Rodriguez & Boivin Anesthesiologists,
Ltd. v. Paradigm Ins. Co., 962 F.2d 628, 633(7th Cir. 1992) (ap- plying Illinois law). Here, both parties agree that the condi- tion precedent—mediation—did not occur. Technical Secu- rity maintains, however, that EPI wrongfully prevented the condition from occurring, thus breaching the contract. A party to a contract cannot avoid the consequences of a condition precedent by preventing that condition from occur- ring. Quantum Mgmt. Grp. Ltd. v. Univ. of Chicago Hosps.,283 F.3d 901, 906
(7th Cir. 2002) (applying Illinois law). Technical Security is seeking the enforcement of the Agreement even 6 No. 22-2861 though the condition precedent failed, so it must show that EPI was at fault or failed to act in good faith to bring about the meditation. E.B. Harper & Co. v. Nortek, Inc.,104 F.3d 913, 919
(7th Cir. 1997) (applying Illinois law). Because the preven- tion of a condition precedent is considered a breach of con- tract, EPI would not then be able to rely on the condition’s failure to avoid performance. Quantum Mgmt. Grp. Ltd. v. Univ. of Chi. Hosps.,283 F.3d 901, 906
(7th Cir. 2002) (applying
Illinois law).
Technical Security argues that by suing prematurely, EPI
prevented mediation. Technical Security maintains that EPI
should have allowed it more than six weeks to respond with
an alternative mediator because Technical Security was being
asked to mediate in an unfamiliar jurisdiction. Technical Se-
curity also argues that EPI should have warned of its forth-
coming lawsuit. EPI counters that it could not have been ex-
pected to wait indefinitely for Technical Security to respond
to its demand for mediation and multiple follow-ups.
The problem is that neither party’s argument is supported
by the terms of the Agreement. Section 16 of the Agreement
does not require a warning before filing suit. Nor does it set a
timeline for demanding mediation, responding to such a de-
mand, or selecting a mediator. The Agreement provides only
that once mediation begins, the parties may go to court if they
cannot settle within 180 days. In other words, the Agreement
leaves a “yawning void” that “cries out for an implied term”
as to the mediation timeline. See Brooklyn Bagel Boys, 212 F.3d
at 380. We are not convinced by either party’s attempt to read in contract language that does not exist. The contract’s plain lan- guage requires neither pre-suit warning nor an explicit No. 22-2861 7 agreement that a party will mediate within a specified period. The Agreement gives only a vague condition, the fulfillment of which depends on unwritten temporal requirements. “Where a contract does not specify the time for performance, the law implies a reasonable time.” Wilmette Partners v. Hamel,594 N.E.2d 1177, 1184
(Ill. App. Ct. 1992). But reasonableness is ultimately a question of fact based on “all the conditions and circumstances that might surround the case.”Id.
Without clearer language, we are left to investigate what a reasonable time would have been for the parties to ensure the condition precedent occurred. See Brooklyn Bagel Boys,212 F.3d at 380
). The record is devoid of specific facts which might inform this reasonableness inquiry. Absent evidence as to what consti- tutes a reasonable time to mediate, claims as to the speed with which either party acted are not determinative. See Wilmette Partners,594 N.E.2d at 1184
.
We respectfully conclude that the district court erred in
faulting Technical Security for preventing mediation. The
court did not consider whether it was reasonable for EPI to
sue within six weeks of demanding mediation, or if Technical
Security’s responses were reasonably delayed due to factors
beyond its control. Because neither party provides enough ev-
idence to assess the reasonableness of each party’s conduct,
neither party is entitled to summary judgment at this stage.
Accordingly, we reverse and remand for the district court to
resolve the open fact issues through proceedings it deems ap-
propriate.
III. CONCLUSION
For these reasons, we VACATE the grant of EPI’s motion
for summary judgment and REMAND for further proceed-
ings consistent with this opinion.
8 No. 22-2861
HAMILTON, Circuit Judge, concurring. I agree in all
respects with Judge Pryor’s opinion for the court resolving
this appeal. I add only my hope that the parties, with or
without help from the district court, will be able to resolve
this dispute without a trial. Given the “yawning voids” in
the key terms of the parties’ written contract, the central
issue in such a trial would be which party’s executives and
lawyers acted more unreasonably in the weeks after EPI
sought mediation of the contract dispute and before it filed
suit in state court.
It’s hard to overstate how petty that secondary dispute
over dispute resolution processes is likely to seem in the
majesty of a federal courtroom. Prospective jurors called to
court might reasonably wonder why on earth they must take
time from their daily lives to resolve this dispute. Based on
my experience with trials and juries, I would not be
surprised if a jury tried to find a way to punish one party, or
perhaps both.
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