Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:98-cv-00168-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS NORTH STAR ALASKA HOUSING CORP., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 98-168C (Judge Allegra)

DEFENDANT'S REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION IN LIMINE In its response to our April 18, 2005 motion in limine, plaintiff, North Star Alaska Housing Corp., argues that its damages are easily calculable and, therefore, evidence of those damages should not be excluded from trial. Opposition To The

Defendant's Motion In Limine ("Pl. Opp.") at 2, 6-10, 12.

Court has held that if a contractor states a non-monetary claim to its contracting officer, there is no requirement that the contractor have made a request for a sum-certain for the Court to possess jurisdiction to entertain the non-monetary claim. Clearwater Constrs., Inc. v. United States, 56 Fed. Cl. 303, 309, 311 (2003). Indeed, the Court has held that a contractor's

written claim to its contracting officer seeking an interpretation of contract terms is a valid claim pursuant to the Contract Disputes Act, 41 U.S.C.A. § 605(a). CW Gov't Travel,

Inc. v. United States, 63 Fed. Cl. 369, 381-82 (2004). However, for the Court to possess jurisdiction to entertain a monetary claim, a contractor must have submitted a claim to the

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contracting officer that "gives the contracting officer adequate notice of the basis and amount of the claim." See Contract

Cleaning Maint., Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987) (emphasis added). "[T]he amount claimed must be

stated in a manner which allows for reasonable determination of the recovery available at the time the claim is presented and/or decided by the contracting officer." Metric Constr. Co., Inc. "When a claim seeks

v. United States, 1 Cl. Ct. 383, 391 (1983).

a particular amount and the contracting officer finds entitlement to the amount sought, the claim can be settled and the contractor is precluded from taking an appeal under the doctrine of accord and satisfaction." Metric Constr. Co., Inc. v. United States, "When, however, no

14 Cl. Ct. 177, 179 (1988) (emphasis added).

specific amount . . . is sought, the contracting officer cannot settle the case by awarding the contractor the amount sought." Id. (emphasis added). Thus, a final decision by a contracting

officer could not preclude a contractor from filing suit seeking the difference between the amount awarded and a greater amount that the contractor has not specifically stated. Id.

Regardless of whether North Star has been able to easily calculate damages in preparing for trial, North Star does not demonstrate that, with respect to the items that we identified in our motion, it submitted to the contracting officer claims seeking any particular monetary amounts. -2With respect to those

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items, the Court does not possesses jurisdiction to entertain North Star's requests for monetary relief. Consequently, the

Court should preclude North Star from introducing, at trial, evidence of monetary damage concerning those items. Cf. id.

at 180 ("That Metric is now able to state its sum-certain claims [does] not vest jurisdiction in this Court over Metric's Barracks Contract claim."). Even with respect to the issue of an incentive fee award for 1998, North Star fails to demonstrate that it requested a specific amount from the contracting officer. Although North

Star's request for a contracting officer's decision upon that issue quotes the incentive fee provision of the Birchwood Homes lease, application of that provision does not necessarily result in an award of any specific amount; the provision allows for an award of "all, some, or none" of "5 percent of the `Maintenance Rental.'" 5-6. Appendix To Defendant's Motion In Limine ("Def. App.")

Without claiming entitlement to any specific amount, North

Star requested that the contracting officer address "the matter of the incentive fee for 1998." Def. App. 6. Because North Star

did not specifically request the maximum award or, indeed, any particular amount for a 1998 incentive fee award, the Court does not possess jurisdiction to entertain a claim for any specific award for that year. Cf. Metric Contr., 14 Cl. Ct. at 180

(dismissing monetary damage claim for lack of subject matter -3-

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jurisdiction where contractor did not state a claim for a specific amount in request to contracting officer). North Star's

position, however, would allow it to have sued for the maximum award for 1998 even if the contracting officer had made the $3,730 award that the Army ultimately made. That result would

contravene the rationale behind requiring a contractor to request from the contracting officer a specific amount; namely, promoting the settlement of claims by contracting officers and the avoidance of litigation. In our motion in limine we noted that, on July 17, 2002, we moved to dismiss North Star's 1998 incentive fee claim, as well as the "post-settlement conduct" claim that North Star sets forth in the complaint in Case No. 98-168C, for lack of subject matter jurisdiction. North Star implicitly acknowledges that it has not

responded to our motion to dismiss, and includes, in its response to our motion in limine, responses to that motion. nn.6-7. Pl. Opp. at 9

However, a party seeking to take an action after the

expiration of the period allowed for the action must file a motion for an extension of time. See Rule 6(b)(2) of the Rules The

of the United States Court of Federal Claims ("RCFC").

motion must set forth the specific number of additional days requested, and include a representation whether the motion has been discussed with opposing counsel. RCFC 6.1. North Star has

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not filed such a motion, and should be required to do so before being heard upon our motion to dismiss. North Star also requests leave to amend its Case 02-1632C complaint, in order to address our request for exclusion of evidence of entitlement to specific incentive fee awards for 1999 to the present. Pl. Opp. at 10. North Star, however, has not

filed a motion for leave to amend pursuant to RCFC 15(a), nor has it addressed the standard for such a motion. Court should deny North Star's request. Therefore, the

Even if the Court were

to grant that request, North Star does not demonstrate that it submitted to the contracting officer claims for maximum incentive fee awards, or for incentive fee awards of any particular amount, for 1999 to the present. North Star argues that the diminution of value claim that it raises in Case No. 02-1632C is not a claim for nonrecoverable consequential damages because the "decreased market value of [its] property" constitutes damages that "stem directly from the Government's actions respecting Birchwood Homes." at 12-13. Pl. Opp.

Damage to a contractor's business, however, is not

recoverable unless the contractor can demonstrate that the damage directly affected the contractor's ability to perform the contract. See United Med. Supply Co., Inc. v. United States, For example, if the Government

63 Fed. Cl. 430, 439-40 (2005).

delayed payments to a contractor, resulting in the contractor's -5-

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loss of standing in the community, the contractor may be able to recover if the lost standing made it impossible for the contractor to obtain materials or personnel with which to perform the contract. See Olin Jones Sand Co. v. United States, 225 Ct. A contractor may not, however,

Cl. 741, 743 & n.4 (1980).

recover the value of its business prior to alleged Government breaches. See Indus. Indem. Co. v. United States, 26 Cl. Ct.

443, 446 (1992). A contractor must also demonstrate that, at the time of contract execution, the damages it seeks were foreseeable. See

id. (citing Northern Helex Co. v. United States, 207 Ct. Cl. 862, 524 F.2d 707 (1975)). speculative. Damages are barred if they are A contractor

Olin Jones, 225 Ct. Cl. at 743 n.3.

must demonstrate that the Government's actions produced the damage inevitably and naturally, not possible or even probably. Ramsey v. United States, 121 Ct. Cl. 426, 433 (1951). The

nonpayment by the Government of a contract price, for example, does not naturally produce a contractor's bankruptcy. Id.

North Star argues only that the Government's actions decreased the market value of Birchwood Homes; it does not argue or allege in its Case No. 02-1632C complaint that the decrease in Birchwood Homes's market value has, for example, made it impossible for North Star to obtain materials or personnel with which to meet its obligations pursuant to the Birchwood Homes -6-

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lease.

Rather, North Star seeks, according to its experts'

report, the "change in Market value of the leased fee interest of the subject property" that allegedly resulted from Government actions since 1996. Pl. Opp. Exhibit ("Exh.") 5 at 41, 46. In

effect, North Star seeks to recapture the market value of Birchwood Homes that existed before the Government's alleged breaches of the lease began. That, however, is the type of Cf. Indus. Indem.

consequential damage that is not recoverable.

Co., 26 Cl. Ct. at 446 (dismissing contractor's claim for "its value as a going concern prior to the alleged breaches"). Although North Star argues that a decrease in the market value of Birchwood Homes was a direct and foreseeable consequence of the Government's actions, it does not argue (or present any evidence in support of an argument) that on November 6, 1987, the date that the parties executed the lease (Pl. Opp. Exh. 1 at 1), the Government possessed any knowledge that the market value of Birchwood Homes would decrease as a result of actions of the type that North Star alleges. Finally, any damage to North Star

resulting from a decrease in Birchwood Homes's market value since 1996 is speculative; North Star has not attempted to sell Birchwood Homes and has not, at least since approximately 1995, refinanced Birchwood Homes. Appendix To Defendant's Reply To

Plaintiff's Response To Motion In Limine 2 at 15-16, 3 at 13-25, 8 at 17, 9 at 8-15. -7-

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For the foregoing reasons and those set forth in our April 18, 2005 motion, the Court should grant our motion in limine. Respectfully submitted, PETER D. KEISLER Assistant Attorney General

s/David M. Cohen DAVID M. COHEN Director

OF COUNSEL WILLIAM. M. EDWARDS Assistant District Counsel United States Army Corps of Engineers Alaska District

s/Timothy P. McIlmail TIMOTHY P. MCILMAIL Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Telephone: (202) 307-0361 Facsimile: (202) 514-7965 Attorneys for Defendant

May 19, 2005

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Certificate of Filing I hereby certify that on May 19, 2005, a copy of the foregoing Defendant's Reply To Plaintiff's Opposition To Defendant's Motion In Limine 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. may access this filing through the Court's system. Parties

s/Timothy P. McIlmail