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

Case 1:05-cv-00751-NBF

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Filed 10/22/2007

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS CINCINNATI INSURANCE COMPANY, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 05-751C (Judge Firestone)

JOINT STATUS REPORT On October 2, 2007, this Court ordered the parties to submit, by October 23, 2007, a joint status report discussing the impact of the decision in National American Insurance Company v. United States, 498 F.3d 1301 (Fed. Cir. 2007) ("NAICO"), upon this case and proposing the next steps in this litigation. The parties have discussed the Court's Order and respectfully submit this report in response. In NAICO, the Court of Appeals for the Federal Circuit held that NAICO, as a payment bond surety, was equitably subrogated to the right of the contractor whose debt it discharged when it paid the claims of contractor's subcontractors. In addition, the court of appeals relied upon its prior decision in Insurance Company of the West v. United States, 243 F.3d 1367, 1375 (Fed. Cir. 2001), and stated that "a subrogee, after stepping into the shoes of a government contractor, may rely on the waiver of sovereign immunity in the Tucker Act and bring suit against the United States." Consequently, the court of appeals affirmed the judgment of the Trial Court against the United States. In the event that the United States were to file a petition for rehearing in NAICO, that petition would be due on or before November 7, 2007. Any petition for a writ of certiorari would be due on or before November 21, 2007. Absent further review, the decision in NAICO would resolve the contention raised by the

Case 1:05-cv-00751-NBF

Document 30

Filed 10/22/2007

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Government and rejected by this Court in its opinion dated June 2, 2006, that payment bond sureties may not maintain claims for reimbursement in this Court. In that event, the remaining issues include but are not limited to whether performance of the contract was complete at the time that plaintiff gave notice to the Government that subcontractors had not been paid and the Government made payment to the contractor. The parties propose that the Court continue the stay of proceedings currently in effect in this case until December 21, 2007, and allow the parties to file an additional joint statuts report at that time. By that time, the Government will either have sought further review of NAICO or have forgone that opportunity. In the event that review is sought, the parties may advise the Court of those proceedings. In the event that review is not sought, the requested time will allow the parties an opportunity to discuss the possibility of settlement and, if necessary, the course of further proceedings. Respectfully submitted, PETER D. KEISLER Assistant Attorney General

s/ Jeanne E. Davidson JEANNE E. DAVIDSON Director

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Case 1:05-cv-00751-NBF

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s/ G. Bruce Stigger G. BRUCE STIGGER Alber Crafton, PSC Hurstbourne Place, Suite 1300 9300 Shelbyville, Road Louisville, KY 40222 Tele: (502) 815-5000 Fax: (502) 815-5005 Attorney for Plaintiff

s/ Kirk T. Manhardt KIRK T. MANHARDT Assistant Director Commercial Litigation Branch Department of Justice 1100 L Street, N.W. Attn: Classification Unit 8th Floor Washington, D.C. 20530 Tele: (202) 353-0541 Fax: (202) 514-8640 Attorneys for Defendant

October 22, 2007

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Case 1:05-cv-00751-NBF

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CERTIFICATE OF FILING I hereby certify that on October 22, 2007, a copy of foregoing "JOINT 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. Parties may access this filing through the Court's system.

s/Kirk T. Manhardt Kirk T. Manhardt