Blaze Construction, Inc. v. United States

27 Fed. Cl. 646, 1993 U.S. Claims LEXIS 285, 1993 WL 19104
CourtUnited States Court of Federal Claims
DecidedJanuary 29, 1993
DocketNo. 717-88C
StatusPublished
Cited by22 cases

This text of 27 Fed. Cl. 646 (Blaze Construction, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blaze Construction, Inc. v. United States, 27 Fed. Cl. 646, 1993 U.S. Claims LEXIS 285, 1993 WL 19104 (uscfc 1993).

Opinion

OPINION

HORN, Judge.

BACKGROUND

The plaintiff, Blaze Construction, Inc. (Blaze), brought this action under 28 U.S.C. § 1491 (1982) for breach of contract, or, alternatively, for an alleged taking of plaintiff’s private property for a public purpose without just compensation, in violation of the Fifth Amendment to the Constitution. [648]*648The plaintiff claims that when the United States Department of Housing and Urban Development (HUD) signed a Mutual Help Homeownership Opportunity Program Annual Contributions Contract (ACC) with the Nez Perce Tribal Housing Authority, the government was, in effect, guaranteeing payment of a construction Turnkey Contract of Sale (Turnkey Contract), later signed by the Nez Perce Tribal Housing Authority and plaintiff, Blaze, and approved by HUD. In fact, the plaintiff admits that it was not a signatory to the ACC which provided funding for the project, conceding that: “direct privity with defendant is absent.” Nevertheless, the plaintiff urges that defendant breached the ACC by HUD’s failure to cure an alleged substantial default by the Nez Perce Tribal Housing Authority on the Turnkey Contract, as a result of which plaintiffs payment for work performed pursuant to the Turnkey Contract was delayed.

Originally, the defendant filed a Motion for Summary Judgment in which the government maintained that the Claims Court lacked jurisdiction to entertain plaintiffs claims. The defendant also contended that the Contract Disputes Act, 41 U.S.C. § 611 (1982), does not apply to contracts to which the United States is not a signatory, such as the Turnkey Contract between the Nez Perce Tribal Housing Authority and the plaintiff. Moreover, the defendant also argued that the decision by the Secretary of HUD not to declare a substantial default on the Turnkey Contract, in accordance with Clause 13.6 of the ACC, was not an abuse of discretion.

At the oral argument on defendant’s Motion for Summary Judgment, the court was surprised to learn from plaintiff’s counsel that the Nez Perce Tribal Housing Authority had tendered the principal amount due on the Turnkey Contract to the plaintiff. Moreover, defendant’s counsel indicated that the government also knew that plaintiff had been paid. Unfortunately, no prior notice had been given to the court to indicate a change in the status of this case. The plaintiff, therefore, was directed to submit an Amended Complaint, and both parties were directed to submit additional briefings reflecting the changed status of the case.

The plaintiff filed an Amended Complaint, which requests relief under a breach of contract theory for interest from October 17, 1988 to January 2, 1990, on the now paid principal. Alternatively, the plaintiff seeks an amount equivalent to the same interest dollars based on an alleged taking of plaintiff’s private property without just compensation in violation of the Fifth Amendment to the Constitution. Although plaintiff’s original Complaint had included a non-specific allegation that the defendant had violated the Constitution, the specific request for an award pursuant to the Fifth Amendment to the Constitution was clearly articulated for the first time in plaintiff’s Brief in Opposition to Defendant’s Motion for Summary Judgment. Defendant then filed a Motion to Dismiss to replace its earlier filed Motion for Summary Judgment. Plaintiff responded to the Motion to Dismiss, followed by the filing of defendant’s Reply to Plaintiff’s Opposition.

Because the plaintiff has been paid the principal amount due for contract performance, only limited issues remain before the court: whether the plaintiff is entitled to be paid an amount equivalent to the interest on the now paid principal, based on either a breach of contract or on an unconstitutional taking of plaintiff’s property without just compensation theory. In its Motion to Dismiss, defendant alleges that the court is without jurisdiction to rule on plaintiff’s claim for interest under a breach of contract theory, and that no claim is stated under the Fifth Amendment to the Constitution.

After a thorough review of the defendant’s Motion to Dismiss and the subsequent filings submitted by the parties, this court concludes that the court lacks jurisdiction to entertain a claim from this plaintiff for breach of contract and that the plaintiff does not have a valid cause of action under the Fifth Amendment to the Constitution for an unconstitutional taking. The plaintiff’s Complaint, therefore, is, hereby, DISMISSED.

[649]*649FACTS

HUD is authorized to make annual contributions to public housing agencies to assist in achieving and maintaining their projects. The Secretary is directed to embody the provisions for such annual contributions in a contract guaranteeing their payment. 42 U.S.C. § 1437c (1982, Supp. V. 1987). An ACC authorizes HUD “to pledge annual contributions as a guarantee of payment by a public housing agency of all principal and interest on obligations issued by it to assist the development or acquisition of the project to which the annual contributions relate____” 42 U.S.C. § 1437c(g) (1982). See also 24 C.F.R. §§ 905.101-905.430 (1987).

On August 29, 1979, the United States, acting through HUD, entered into an ACC with the Nez Perce Tribal Housing Authority. The United States agreed to authorize the Nez Perce Tribal Housing Authority to undertake development of public housing projects, with financial assistance from the United States, pursuant to the ACC. On October 9, 1987, the plaintiff, Blaze, and the Nez Perce Tribal Housing Authority entered into a Turnkey Contract for construction of an Indian Public Housing Project, pursuant to which the plaintiff agreed to construct thirty-seven (37) dwelling units within the boundaries of the Nez Perce Indian Reservation in Idaho. The project was substantially completed on or about August 4, 1988.

On August 3,1988, Gary Gors d/b/a G & C Construction, a subcontractor on the Turnkey Contract between Blaze and the Indian Housing Authority, alleged that it had not been paid for vouchers submitted, and filed a Complaint to recover over $700,-000. 00.against Blaze in the Tribal Court of the Nez Perce Tribe. Subsequently, on August 4,1988, the Nez Perce Tribal Court issued an Order directing the Nez Perce Tribal Housing Authority to withhold payment of funds to Blaze Construction until all claims before the Tribal Court were resolved, or until further Order of the Tribal Court.

On August 29, 1988, Blaze submitted to the Nez Perce Tribal Housing Authority a “Contractors Certificate and Release,” which demanded the balance due on the Turnkey Contract. In compliance with the Tribal Court’s Order, the Nez Perce Tribal Housing Authority refused to pay plaintiff. Therefore, on October 13, 1988, the plaintiff wrote to HUD’s Director of the Indian Housing Program in Seattle1

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Bluebook (online)
27 Fed. Cl. 646, 1993 U.S. Claims LEXIS 285, 1993 WL 19104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blaze-construction-inc-v-united-states-uscfc-1993.