Free Response to Motion - 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. COFC No. 06-157C (Judge Allegra)

Plaintiff, v UNITED STATES OF AMERICA, Defendant. __________________________________________

PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR LEAVE TO AMEND ITS ANSWER The plaintiff objects to the defendant's motion for leave to amend its answer to add counterclaims and affirmative defenses that do not arise under the contracting officer's final decision of June 29, 2006. Counsel for the plaintiff does not dispute that on July 20, 2006, he gave verbal consent to counsel for the defendant to file an amended answer and that counsel for the defendant mentioned that the amended answer would include counterclaims, but the consent was based on an understanding that the affirmative defenses, as well as the counterclaims, arose from the contracting officer's recent final decision on the government's claim for reprocurement costs. To the contrary, four of the six counterclaims and both of the affirmative defenses that the defendant proposes to raise in the amended answer do not arise from the contracting officer's final decision dated June 29, 2006. The defendant proposes to amend its answer to add the following counterclaims that arise under the contracting officer's final decision of June 29, 2006: Count I: Reprocurement Costs (Temporary Storage of Government Furnished Property)

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Count II: Reprocurement Costs (Removal of GFP and Debris from Yates International Facility) In addition, the defendant proposes to amend its answer to add the following counterclaims that do not arise from the contracting officer's recent decision: Count III: Breach of Contract Damages (Temporary Storage of Government Furnished Property) Count IV: Breach of Contract Damages (Removal of GFP and Debris from Yates International Facility) Count V: Breach of Contract Damages (Cylinder Valves) Count VI: Conversion (Cylinder Valves) Justice does not require that the Court give the defendant leave to amend its answer to add Counts III-VI of its proposed counterclaims. The defendant waited more than twenty (20) days after it served its answer, to which no responsive pleading was permitted, to amend its pleading. Under these circumstances, leave of the Court or written consent of the adverse party is required to amend the pleading. See RCFC 15(a). The plaintiff's counsel did not give written consent in anticipation that the defendant would offer a pleading upon which the plaintiff would indicate its consent. Instead, the defendant is seeking leave of the Court. In this case, the Court's leave should be denied because the interests of justice do not require that leave be given. To the contrary, the interests of judicial efficiency call for leave to be denied. I. The Plaintiff Objects to the Inclusion of Four of the Six Counterclaims in the Defendant's Amendment of Its Answer. According to its rights under the Contract Disputes Act, the plaintiff has transmitted to the Court for filing an appeal from the contracting officer's final decision on the government's claim for reprocurement costs. The plaintiff anticipates that its appeal from the contracting

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officer's final decision will be consolidated with the present matter. Therefore, in the plaintiff's view, the plaintiff is not prejudiced by the defendant's amendment of its answer to include its counterclaims for reprocurement costs that are based on the operation of the disputed contracts' termination for default clause. See FAR 52.249-8. However, the plaintiff questions the necessity of the defendant's proposed action because the issue arises directly in the plaintiff's new appeal. The defendant's motion for leave to amend its answer should be denied for four of its proffered six counterclaims. Four of the defendant's proffered counterclaims are grounded in the theory of breach of contract and are not dependent on the operation of the government's reprocurement rights under the contracts' termination for default clause. Only the defendant's proffered Counts I and II rely on the termination for default clause and the contracting officer's June 29, 2006 final decision. The defendant could have raised the remaining breach of contract claims in its original answer, but did not. II. The Plaintiff Objects to the Defendant's Amendment of Its Answer to Add Affirmative Defenses that Do Not Arise from the Contracting Officer's Final Decision Dated June 29, 2006. The defendant had ample opportunity to investigate, evaluate and assert its affirmative defenses that are based on the facts and claims stated in the plaintiff's complaint and should not be permitted to raise those defenses at this late date. To grant the defendant's request to amend its complaint for this purpose would be tantamount to the Court's granting the defendant an enlargement of its deadline for responding to the plaintiff's complaint, in contravention of an earlier order of the Court.

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The defendant's motion to amend its answer to include the affirmative defenses of accord and satisfaction and waiver should be denied because of undue delay. The defendant has not alleged or argued that its purported affirmative defenses were not available when its response to the complaint was due. See RCFC 8(c) (including accord and satisfaction and waiver among affirmative defenses to be pled). Rather, the defendant appears to be using its newly matured grounds for a counterclaim to open the door to raise its affirmative defenses late. The defendant's proposed affirmative defense of accord and satisfaction arises from alleged bilateral contract modifications that were in the defendant's possession when it received the plaintiff's complaint. Similarly, its proposed affirmative defense of waiver relies on alleged modifications that are a part of the defendant's contract administration file. CONCLUSION The defendant's motion to raise its breach of contract counterclaims and its alleged affirmative defenses in an amended complaint runs afoul of the Court's order that granted the defendant a sixty-five (65) day enlargement of time to respond to the plaintiff's complaint, but instructed that "No further enlargements of this deadline will be granted." Exhibit A. Leave for the defendant to amend its answer to include counterclaims and affirmative defenses that do not arise from the contracting officer's final decision of June 29, 2006 should be denied. For the reasons stated above, we respectfully request that the Court deny the defendant's motion for leave to file an amended answer to include counterclaims based on breach of contract and the affirmative defenses of accord and satisfaction and waiver.

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Dated: August 3, 2006 Respectfully submitted,

s/ 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

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CERTIFICATE OF FILING I hereby certify that on August 3, 2006, a copy of the foregoing "PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR LEAVE TO AMEND ITS ANSWER" 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. Parties may access this filing through the Court's system.

s/ Robert E. Korroch
#1125041 v1 - Yates - Response to Motion to Amend Answer

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