Free Motion to Amend/Correct - District Court of Federal Claims - federal

Case 1:02-cv-00796-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

INFORMATION SYSTEMS & NETWORKS CORPORATION, Plaintiff, v.

THE UNITED STATES OF AMERICA, Defendant.

) ) ) ) ) ) ) ) ) ) )

No. 02-796 C (Judge Allegra)

MOTION TO AMEND COMPLAINT The plaintiff, Information Systems & Networks Corporation ("plaintiff "or "ISN"), by its undersigned attorneys, respectfully submits this Motion to Amend its Complaint (the "Proposed Amended Complaint"), and in support thereof, states as follows: Preliminary Statement Plaintiff initiated this action seeking the payment of damages arising from the performance of a contract with the Department of the Navy in the mid-1990's. The Complaint asserted five (5) Counts: 1. For Breach of Contract; 2. For Breach of the Good Faith and Fair Dealing Covenant of the Contract; 3. For Constructive Change; 4. For An Equitable Adjustment; and 5. For Attorneys Fees and Costs. This Complaint was filed after the plaintiff had been unsuccessful in enforcing a claimed settlement agreement with the Department of the Navy, both in the trial and appeals court. After the Complaint was filed in this case, virtually the sole focus of the parties was on Count 1 as to whether the parties had entered into a contract for the Engineering Change Proposal ("ECP"), whether expressly or impliedly. Cross motions were filed on this Count with extensive briefing, and after oral argument, the Court issued a thorough 1

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decision on this issue, dismissing Count 1. The ECP portion of this case represents about one half of ISN's damages. The other half consists of the unpaid profit from the fully performed firm fixed price contract. Both the amount of the profit and ISN's contractual entitlement to it cannot be disputed. However, in two audits performed by DCAA on the contract in November 1995 and on the termination settlement proposal in December 1996, the DCAA objected to the payment of profit by the defendant so the defendant did not pay it. Throughout the course of the case over the years, these two elements of ISN's damage case have been well known by the defendant in detailed analysis provided in connection with settlement discussions. This action is in the discovery phase. The Proposed Amended Complaint ISN respectfully moves this Court, pursuant to FRCP 15, for leave to file the Proposed Amended Complaint in the form annexed hereto as Exhibit A. A copy of the Proposed Amended Complaint, with the changes sought highlighted, is annexed hereto as Exhibit B. The proposed amendments fall into one category: Clarification of ISN's damage case as originally alleged in the Complaint. ISN does not seek to add any counts; it does not seek to include damages which were not contained in the original damages ad damnum; it does not seek to assert a new claim. Consultation With Opposing Counsel Pursuant to the practice and requirements of this Court, the undersigned attempted to obtain the consent of counsel for the defendant. The defendant opposes the amendment as set forth in the Joint Status Report filed on May 16, 2005 on the grounds that these amendments somehow present a new claim or do not pertain to the original contract claim. As will be shown, the defendant is mistaken.

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Memorandum in Support of the Motion ISN respectfully submits the Memorandum in Support of its Motion for leave to amend its complaint and to file the Proposed Amended Complaint. FRCP 15 provides, in relevant part: (a) Amendments..."a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires ." The function of Rule 15 (a) is to enable a party to assert matters that were overlooked or were unknown at the time of the filing of the original complaint. Here, the elements of ISN's damages were neither overlooked or unknown. But because the focus has been on the ECP and not the damages generally asserted in the Complaint, clarity is necessary. However, even if the amendments were sought to increase ISN's damages, or to assert a different remedy, amendment is allowed. See WXON-TV, Inc. v. A.C. Nielsen Co., 742 F. Supp. 418 (C.D. Mich. 1990); see also WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE, §1474. The Supreme Court, in its opinion in Foman v. Davis, 317 U.S. 178 (1969), enunciated the following general standard which is to be employed under Rule 15(a): "If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason ­ such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. ­ the leave sought should, as the rules require, be `freely given.' Amendment should be denied only when there is prejudice to the opposing party, bad faith, or futility in the amendment. None of these countervailing factors are present here. There would be no prejudice to the defendant if leave were granted to amend as requested. The defendant has known of ISN's damages arising from this contract since it audited the termination settlement proposal in December 1996. During the course of the litigation since 3

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1998, defendant has received detailed analysis of how ISN calculates its damages and the proof in support of the same. All the requested amendments do is clarify exactly what the elements of ISN's damage case are so that the evidence will be consistent with the allegations of the Complaint. Conclusion WHEREFORE, for the reasons set forth herein, plaintiff respectfully requests that this Court grant the Motion to Amend the Complaint and direct the Clerk of this Court to file the Proposed Amended Complaint (annexed hereto as Exhibit A), together with whatever further, different and other relief this Court may deem proper.

Respectfully submitted,

Dated: May 18, 2005 ______/s/_____________________ NORMAN H. SINGER, ESQUIRE Singer & Associates, P.C. 10411 Motor City Drive 7th Floor Bethesda, Maryland 20817 (301) 469-0400 - Phone (301) 469-0403 ­ Facsimile

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