Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

AF000953 Case 1:02-cv-01624-FMA Document 13-3

Filed 04/04/2003

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DEPARTMENT GF THE AIR FORCE
I ~ E A l ~ Q U A S T I < R S AIRLIf`T WI3G (AMC) 43D POPE AIR FORCE BASE. NOKTH CAROLINA CERTIFIED MAIL: 7 0 9 9 3 2 2 0 0007 0505 0504

23 July 2002

4 3 Contracting Squadrod!!GCP. 144 Reilly Road, Suite C I'qyie AFB, NC 28308-2896

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Thompson & Slagle A`ITN Scott K. Spooner 3295 Rivcr Exchange Drive, Suite 300 Norcross, GA 30032 Dear Mr. Spooner: Reference Contract No. F3 1601-96-C-0019,Altermepair Compound Pavcnicnts, Pope Air Force Base, NC, which was awarded to Payne Adanis Construction Co., Inc., Bond KO. S-500-83 16. and your letters dated 14 June 2002 and 7 July 2002. Clause 9 of the Takeover Agrccmcnt clearly anticipates paymen[ to Washington liiternarional Insurance Company (WIIC) only i n the event that the termination for default was louncl to be improper. This is clear from the language immediately following your quote of Clause 9 on your letter of 14 June 2002. That portion of the clause, which was not included in your letter, s k i k s : "The refund payment required under this Agreement by Obligee Lo Surety is givcn in recognition of the position o f Obligee that the termination for default is proper and that Principal has materially breached its Contract, and that, b u t lor such representation by Obligee, Surety would not have undertakcn the obligations contained in this Agreement pursuant to its perloririance hond." Paync Adams Constiilcticn. Inc. (PAC!) sough! coinpensacion only for pre-takcovcr cl;!!nis claims which only PAC1 could make and claims which had not been assigned to WllC. l'hc Air Force settled PACl's claim on 13 November 2001. In that settlement agreement, the Termination [or Default was expressly not convci-led to any other type of termination; lience the lermiiiatioii l o i ~ Default was proper and PAC1 tiad rriatcrially breached their contract. Thcreforc, no p;ryniciii 1 3 required by the Air Force 10 WIlC
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In addition, the funds negotiated during the I3 November 200 I Settlemen[ Agrccniciil wcrc paid to WIIC`s attorney, Mr. DeWirte Thompson, to bc held in trust pending resolution ni ihsiics between WIIC and PACI. Altliaugli the Air Force would be entitled to a downward adjutiiiciit cqutil to the amount that WIIC reccived ftom that settlement, as of this date, WIIC has not provided the Air Force with a copy of the settlement indicating aniount requested in your letter.

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AF000954 Case 1:02-cv-01624-FMA Document 13-3

Filed 04/04/2003

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Please funviud a copy ofthe setticnicnt agreement between PAC1 and WIIC to the undersigned or, in the altcmativc, certify the amuunt that WIIC received from that settlement agreement.
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Request you contact the following if you have any questions: Ms. Mata, (910) 394-5726, the undersigned at (910) 394-6200, or Maj Vam at (937) 255-61 11 Ext 269.

LESLIE L. CRAWLEY Terminating Contracting Officer

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AF000955 Case 1:02-cv-01624-FMA Document 13-3

Filed 04/04/2003

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TNOMIJSON SLAGLE, P.C. &
ArlORNClS AT L A W 3295 RIVEREXCILANGE DiirVE

ShE300 NORCROSS,o n c l ~ Gt 30092
DEW~CTIIOMPSON (CIA AND FL) JEITB. SLACLE AZIRPD A. MALENA, JR. .W. WRlClT DEMPStY, JR.

STEVENSALCEW
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R J O I I N D . AZEXANDFK SCOTT K. SF`OONER

O COUNSEL f
BYR0NM.G. SANFORD

kug1:st 5, 20c2 Leslie L. Crawley Terminating Contracting Oficer Department of the Air Force 43 Contracting SquadrodLGCA 1443 Reiily Road, Suite C Pope M R , N C 28308-2896

RE:

Paync Adams Construction Co., I n c ~ IJ S Air Force Pope Air Force Base - AlteriRepair 6241h Compound Pavement S-500-83 16 Bond No : Contract N o . : F31601-96-C-0019

Principal: Obligee: Project:

Dear Ms. Crawley.

I am in receipt of your letter dated July 23, 2002. I respectfully disagree with your opinion regarding the amounts owed on the above-referenced project Clause 9 of the Takeover Agreement clearly contemplates the facts at issue here. The clear terms of the agreement state "if the obligee and principal reach a settlement whereby payment or credit granted to the principal . . . obligee shall immediately, without hrther demand, r c h n d the surety the amounts paid by surety to completion contractor less sucli amounts as may have been paid by ohlizee to surety pursuant to the original contract
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Therefore, the Takeover Agreement addresses the agreement made between Peyne Adams and United States Government. The government and Payne Adams reached ari agreement whereby payment or credit was given to the principal and, thcrefore, owe thc balance of the Takeover Agreement

As for the claim that the United States gets a credit for the settlement between Payne Adams and the United States, we disagree with the United States' position Washington International has a separate indemnity agrecnient with Payrie Adams for the losses incurred by

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AF000956 Case 1:02-cv-01624-FMA Document 13-3
iesiic i Crawicy . .A.>qns! 6, 2002 Page 2

Filed 04/04/2003

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the surety and for payment of a portion of those proceeds of that settlement pursuant to the indemnity agreement. Washington International has paid out on numerous claims on the project and, therefore, is equitably subrogated to any recovery of Payne Adams on the project. The amounts that Washington International expended and to which we are equitably subrogated far exceeds the amount Washington !nterr.a!iona! recovered ptiisiiant to ihe settlemeni agreement ;between Payne A d a m and the United States.
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We again reiterate our demand for $120,435.18 detailed in our June 14, 2002 letter. If we do not receive payment of thc full amount within ten (10) days of the date of this letter, we will file suit in this matter. If you have any questions, please do not hesitate to give me a call. Sincerely,

THOMPSON & SLAGLE. P C

S ott K
SKSInb cc: Jeffrey Goldberg, Esq.

Spooner

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