Free Joint Preliminary Status Report - District Court of Federal Claims - federal

Case 1:06-cv-00157-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS YATES INTERNATIONAL, L.L.C. Plaintiff, v. UNITED STATES OF AMERICA, Defendant. ) ) ) ) ) ) ) ) )

No. 06-157C (Judge Allegra)

JOINT PRELIMINARY STATUS REPORT Pursuant to the Court's order dated October 11, 2006, and Appendix A of the rules of the United States Court of Federal Claims, counsel for plaintiff and defendant respectfully submit the following joint preliminary status report. RCFC Appendix A Rule 4: (a) Jurisdiction:

The plaintiff believes that the Court possesses jurisdiction to entertain and to decide this action pursuant to the Tucker Act, 28 U.S.C. § 1491 and the Contract Disputes Act, 41 U.S.C. § 609. Defendant is currently unaware of any reason why the Court

would not have jurisdiction to entertain and decide this action. (b) Consolidation:

According to the Court's order dated September 22, 2006, this case has been consolidated with Yates International, LLC v. United States, No. 06-570C (Fed. Cl.), filed on August 4, 2006.

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(c)

Bifurcation:

The plaintiff does not believe that the trial of liability and damages should be bifurcated. Defendant believes that the

issue whether the terminations for default of the two contracts should be upheld, as well as defendant's counterclaims, should be bifurcated from plaintiff's claims in this consolidated action. (d) Deferral:

The plaintiff believes that further proceedings should be deferred pending the plaintiff's bringing an action in this Court or amending its complaint based on the deemed denial of the plaintiff's certified claim, which the plaintiff submitted to the contracting officer on August 3, 2006. See McDonnell Douglas

Corp. v. United States, 37 Fed. Cl. 285, 290-91 (complaint seeking a ruling that termination for default be converted to termination for convenience did not activate statute divesting contracting officer of authority to issue a final decision on contractor's post-complaint claim). The plaintiff also

anticipates that it will submit a termination for convenience settlement proposal to the contracting officer, but does not believe that deferral currently is necessary to accommodate that anticipated claim. See id. at 294 (filing a termination for

convenience cost claim before the termination for default is converted is not premature). 2

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Defendant does not object to deferring further proceedings to allow plaintiff to bring an action in this Court based upon its claim submitted to the contracting officer on or about August 3, 2006. Defendant notes that, pursuant to Sharman Co. v. United

States, 2 F.3d 1564, 1571 (Fed. Cir. 1993), overruled on other grounds, because this matter is in litigation, the Department of Justice, rather than the contracting officer, possesses exclusive authority to represent the agency in the dispute. Plaintiff disagrees with defendant's argument that the subject of plaintiff's August 3, 2006 claim is in litigation and that the contracting officer has been divested of his authority to issue a final decision on the claim. Corp., supra. (e) Remand/Suspension: See McDonnell Douglas

Neither party seeks remand or suspension at this time. (f) Joinder:

Neither party intends to join additional parties at this time. (g) Dispositive Motions:

Counsel for defendant anticipates filing a dispositive motion addressing the propriety of the terminations for default, as well as defendant's counterclaims, on or before January 15, 2007. Counsel for defendant anticipates filing a dispositive 3

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motion upon liability addressing Yates's claims on or before February 15, 2007. (h) Relevant Issues:

Based upon a preliminary review of the case, plaintiff believes that the following issues of fact and law are relevant in this case: 1. Whether the Government's termination of contract number

SP0450-03-D-1411 ("the Refurbishment Contract") for default was improper and should be converted to a termination for convenience because the plaintiff was not in default because of Government delay, the Government failed to comply with required procedures when it terminated the Refurbishment Contract, the alleged

default was severable from the remainder of the contract, and the Government was in breach of the contract; 2. Whether the Government's termination of contract number

SP0450-03-D-4141 ("the Refill Contract") for default was improper and should be converted to a termination for convenience because plaintiff was not in default because of Government delay, the Government failed to comply with required procedures, the alleged default was severable from the remainder of the contract, and the Government was in breach of the contract; 3. If the termination for default of the Refurbishment

Contract is upheld, whether the Government's claim for 4

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reprocurement costs is for excess costs for services similar to those terminated, that the costs are reasonable, and that the Government mitigated its damages; and 4. If the termination for default of the Refill Contract

is upheld, whether the Government's claim for reprocurement costs is for excess costs for services similar to those terminated, that the costs are reasonable, and that the Government mitigated its damages. Defendant believes the following issues of fact and law are relevant in this case: 1. Whether the Government's termination of the parties'

Refurbishment Contract, No. SP0450-03-D-1411 was justified and should be upheld; 2. Whether the Government's termination of the parties'

Refill Contract, No. SP0450-03-D-4141 was justified and should be upheld; 3. Whether, as a result of its abandonment of the

contracts, Yates is liable to the Government for its costs of temporarily securing and renting Yates' abandoned facility which housed Government-owned property; 4. Whether, as a result of its abandonment of the

contracts, Yates is liable to the Government for its costs of cleaning up debris at Yates' abandoned facility, transferring the 5

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Government-owned property to the follow-on contractor, and settling Yates' unpaid debts to the owner of the facility; 5. Whether Yates must reimburse the Government for the

Government-owned property (cylinder valves) which was missing at the time Yates abandoned its facility. Refurbishment Contract 6. Whether Yates is entitled to recover upon its claim for

progress payments, and if so, in what amount; 7. Whether Yates is entitled to recover upon its claim for

rusted cylinder caps, and if so, in what amount; Defendant's Affirmative Defenses 8. Whether any or all of Yates' claims are barred by the

doctrine of accord and satisfaction; and 9. (i) Whether Yates has waived any or all of its claims. Settlement:

The parties will explore the possibility of settlement, if appropriate, as this case progresses. The plaintiff is

interested in pursuing expedited alternative dispute resolution. The parties reserve their right to request a full evidentiary trial of this matter and do not request an arbitration, mediation, or paper trial at this time. The parties

will continue to consider these alternatives to litigation

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throughout the course of these proceedings and will promptly advise the Court of any further developments. (j) Trial:

The parties anticipate that a trial will be necessary in the event that this case is not resolved through dispositive motions and/or settlement. (k) Electronic Case Management Needs:

The parties recognize that this is an electronically-managed case and intend to file all documents in accordance with the Court's procedures for electronic filings. (l) Additional Information:

The parties are not aware of any additional information which the Court should be made aware of at this time. RCFC Appendix A Rule 5: Proposed Discovery Plan:

In the event that these proceedings are not deferred, plaintiff proposes the following discovery plan: November 30, 2006 Plaintiff and Defendant Initial Disclosures Plaintiff and Defendant Identify Experts Plaintiff Discovery Completed Defendant Discovery Completed Discovery of Experts Completed

January 5, 2007

February 9, 2007 March 9, 2007 March 16, 2007

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Defendant does not believe that discovery is necessary in order to file its dispositive motions. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/ Brian M. Simkin BRIAN M. SIMKIN Assistant Director s/ Lauren S. Moore LAUREN S. MOORE Attorney Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, N.W. Attn: Classification Unit, 8th Floor Washington, D.C. 20530 202.616.0333 (telephone) 202.514.8640 (facsimile) Attorneys for Defendant s/ Robert E. Korroch ROBERT E. KORROCH Williams Mullen Fountain Plaza Three, Suite 200 721 Lakefront Commons Newport News, Virginia 23606 [email protected] 757.249.5100 (telephone) 757.249.5109 (facsimile) Attorneys for Plaintiff OCTOBER 26, 2006 8

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CERTIFICATE OF ELECTRONIC FILING I hereby certify that on the 26th day of OCTOBER, 2006, a copy of the foregoing "JOINT PRELIMINARY STATUS REPORT" was filed electronically. I understand that notice of this filing will be

sent to all parties by operation of the Court's electronic filing system and that parties may access this filing through the Court's system.

/s/ Lauren S. Moore

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