Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-22-02861/USCOURTS-ca7-22-02861-0/pdf.json

Parties Involved:
EPI Technologies, Inc.
Appellee
Technical Security Integration, Inc.
Appellant

Document Text:

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”) contracted to do business with one another. They agreed to submit any contractual disputes to mediation, and they agreed 

that if mediation were to fail, the prevailing party in an eventual lawsuit would be entitled to attorneys’ fees. They failed 

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
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 entitled 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 cannot 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 requires 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 settlement, 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 litigation to be paid by the other party.”

On July 29, 2015, EPI sent a letter to Technical Security demanding mediation to resolve a dispute over commissions. 

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
No. 22-2861 3

The demand specified that the mediation would take place in 

Chicago during the week of August 24 and proposed a specific mediator. Technical Security responded saying it would 

follow up with an alternative mediator. 

Two weeks later, on August 12, EPI emailed Technical Security to check on the status of the mediation demand. Technical 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 Security 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 resolve 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. 

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
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 therefore 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 material facts showing there is a genuine issue for trial. Celotex 

Corp. v. Catrett, 477 U.S. 317, 324 (1986). 

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
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). Extrinsic 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 Agreement requires Technical Security and EPI to mediate any contractual disputes. Only if mediation fails can either party sue

to enforce the Agreement and recover attorneys’ fees. The requirement 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) (applying Illinois law). Here, both parties agree that the condition precedent—mediation—did not occur. Technical Security 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 occurring. 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 

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
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 prevention of a condition precedent is considered a breach of contract, 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 Security also argues that EPI should have warned of its forthcoming lawsuit. EPI counters that it could not have been expected 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 demand, 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 language requires neither pre-suit warning nor an explicit 

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
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 constitutes 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 evidence 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 appropriate.

III. CONCLUSION

For these reasons, we VACATE the grant of EPI’s motion 

for summary judgment and REMAND for further proceedings consistent with this opinion.

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8
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.

Case: 22-2861 Document: 34 Filed: 01/16/2025 Pages: 8