A.R.S. Inc. v. United States

157 Ct. Cl. 71, 1962 U.S. Ct. Cl. LEXIS 94, 1962 WL 9351
CourtUnited States Court of Claims
DecidedApril 4, 1962
DocketNo. 518-57
StatusPublished
Cited by5 cases

This text of 157 Ct. Cl. 71 (A.R.S. Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A.R.S. Inc. v. United States, 157 Ct. Cl. 71, 1962 U.S. Ct. Cl. LEXIS 94, 1962 WL 9351 (cc 1962).

Opinion

Dtjkfee, Judge,

delivered the opinion of the court:

This is a suit for breach of a contract dated July 16,1954, between Warren E. Avis, intervenor-plaintiff, and the Government under which the Government granted exclusive authority to Avis for two years to operate a “Rent-A-Car” business at the Washington National Airport. Avis agreed to pay I514 percent of the gross receipts of such operation that exceeded $200,000 a year, in addition to a specified monthly guarantee, and these payments were made throughout the two-year period of the contract. During this period, Avis assigned this contract to plaintiff, A.R.S. Inc. which licensed plaintiff, National Truck Rental Co. Inc., to operate as its agent under the contract. During most of this period, however, the Government was enjoined by United States District Court orders from interfering with similar operations at the airport by Hertz, a competitor of Avis. As a result, plaintiffs did not receive the exclusive authority granted by their contract.

The basic facts found by the Commissioner are not excepted to by either party, but defendant disagrees with the Commissioner’s summary and ultimate findings upon issues of fact.

The defendant contends that plaintiffs are collaterally estopped from asserting this claim because of a prior adjudication of the facts here involved before the United States District Court for the District of Columbia wherein, upon application of plaintiffs’ competitor, Hertz, the Government was enjoined from enforcing the exclusivity due plaintiffs under the Avis contract. Plaintiffs were not originally parties to that proceeding, but intervened. The District Court found, inter alia, that the intervenors had suffered and would continue to suffer irreparable damage, and that such damage was a result of interference in their operations by Hertz. The court enjoined Hertz from further solicitation [75]*75of business at the airport. This entire injunction proceeding did not in any way effect an adjudication of the contract or alleged breach thereof by the Government in issue in the present case. In fact, the interests of the Government, as defendant, and the plaintiffs as intervenors in the injunc-tional proceeding were the same. Furthermore, defendant has not pleaded estoppel or res judicata in defense, as required by Eule 16(b) of the Eules of this court. We conclude that plaintiffs are not collaterally estopped from maintaining this action.

The defendant also avers that even if it failed to perform its contract, it is not liable because performance was prevented by the District Court’s injunction. Nevertheless, the Government continued to accept payment each month under the contract, although plaintiffs objected to the interference in their operations by Hertz.

The Government received ten percent of Avis’ gross receipts under the previous 1951 contract, which was nonexclusive as to similar operations by other parties, and it was willing to renew this contract with Avis under the same terms in 1954. However, in the 1954 contract, the Government granted Avis an added right of exclusivity for his operations at the airport, in consideration of an added five and one:half percent of gross receipts. Under this second contract, plaintiffs paid the Government 15y2 percent of gross receipts of $407,779.49 over a two-year period plus monthly guarantee, in all amounting to $69,069.01. If the contract had been renewed on a non-exclusive basis at ten percent, as the Government had originally agreed, plaintiffs would have paid $40,777.95. The difference of $28,291.06 was paid by plaintiffs for complete exclusivity, as contemplated by the parties when the contract was drawn.

To the extent that plaintiffs paid for complete exclusivity, something they did not get, the Government has been unjustly enriched. Nevertheless, to the extent that plaintiffs’ competitor Hertz was prevented from solicitation of business and other activities at the airport, there was partial performance of the contract, and the Government has not been unjustly enriched thereby. We conclude that out of the total [76]*76payment of $28,291.06 fox’ exclusivity of operations, plaintiffs received partial exclusivity to tlie value of $13,000.00. The Government has been unjustly enriched by plaintiffs’ payment of the balance of $15,291.06.

Having concluded that plaintiffs have paid in excess of $15,000 in rental to the Government for an exclusive franchise which the Government failed, in violation of the contract, to provide, we must now consider whether plaintiffs are entitled to recover that portion of the excess rentals paid prior to the assignment from Avis to A.R.S. Trucking. The assignment instrument executed by Avis to Avis Rent-A-Car provides, in pertinent part, as follows:

AND, by this transfer I hereby release the United States of America from any obligations to me under said contract.
Provided, however, that this assignment and release shall be null and void unless and until it is accepted by Avis Rent-A-Car System, Inc. and approved by the United States of America, by the Director, Washington National Airport.

Plaintiff contends that the first paragraph set out above cannot be deemed to have released the Government from the claim presently before us because: (a) the release is invalid due to lack of consideration; (b) the Government was not a party to the assignment contract, and thus can claim no benefit from it; and (c) the burden of proving the validity and applicability of a release is on the defendant and defendant has failed to discharge this burden.

Although the original contract presently in issue made assignment of rights thereunder subject to approval by the Government, the Government was not a party to the assignment contract in which the quoted language, alleged to constitute the release, appears. Absent a showing of actual consideration from the Government to the assignor, Avis, the language of release would appear as nothing more than a gratuitous statement lacking in any semblance of mutuality of obligation, and thus unenforceable. The Government has not alleged or proven any consideration in support of the [77]*77alleged release. Nor has the Government alleged or proven that it placed reliance on the language in the assignment purporting to effect a release. It would certainly have been an easy matter to prove that absent that language, the Government would have exercised its authority under the original contract to disapprove the assignment, or that the Government in any way relied on that language in approving the assignment. Having failed to establish any consideration in support of the alleged release, we must conclude that it is unsupported, and thus unenforceable.

For the reasons stated judgment will be entered for plaintiffs and the intervenor in the sum of fifteen thousand two hundred ninety-one dollars and six cents ($15,291.06).

It is so ordered.

Daee, Senior District Judge, sitting by designation; Laba-moee, Judge/ Whitakee, Judge; and Jones, Chief Judge. concur.

FINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner Eichard Arens, and the briefs and argument of counsel, makes findings of fact as follows:

1. The plaintiff A.E.S.

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Cite This Page — Counsel Stack

Bluebook (online)
157 Ct. Cl. 71, 1962 U.S. Ct. Cl. LEXIS 94, 1962 WL 9351, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ars-inc-v-united-states-cc-1962.