Boehm v. United States

37 Cont. Cas. Fed. 76,073, 22 Cl. Ct. 511, 1991 U.S. Claims LEXIS 42, 1991 WL 15600
United States Court of Claims·Decided February 11, 1991·No. No. 282-88C·Published·Cited by 9 cases

Opinion

ORDER

MOODY R. TIDWELL, III, Judge:

This case is before the court on defendant’s motion to dismiss or, in the alternative, for summary judgment. Because the motion incorporated other documents, it will be considered a motion for summary judgment. Plaintiff argued that genuine disputed issues of material fact preclude allowance of the motion.

PACTS

The United States, acting through the Department of the Army, awarded Boehm Machine Products, Inc., d/b/a BB Manufacturing Co. (BB), two contracts for the supply of steering arm assemblies for use in M113 Armored Personnel Carriers. The two contracts, as amended, called for the delivery of 6,769 steering arm assemblies at a total price of $185,563. BB delivered all of the steering arms under the first contract, but only a portion under the second for the reasons set forth below. The cost to defendant for the delivered units was $141,584.66.

Delivery was stopped after defendant discovered that the steering arm assemblies broke during, or immediately after, installation. Defendant subsequently determined that the material composition of the units did not conform to contract requirements. Tests showed that the handles were made of a substandard alloy treated to a substandard hardness. The [513] Department of Justice became involved in defendant’s claims, and eventually secured a “Settlement Agreement.” That Agreement provided, in part:

I. Parties
I. This Settlement Agreement (Agreement) is entered into this 19th day of November 1985, between Boehm Machine Products, Incorporated, d/b/a BB Manufacturing Company (BB Manufacturing), a Texas corporation, William M. Boehm, and the United States of America.
* * * * * *
8. The United States, BB Manufacturing and William M. Boehm desire to settle all civil liability and disputes arising from the performance of the contracts by BB Manufacturing.
9. (c) The United States shall make available for receipt by BB Manufacturing all remaining steering arm assemblies still in its possession at Red River Arsenal, Texas. BB Manufacturing and William M. Boehm agree that under no circumstances will any of the steering arm assemblies thus returned to them be at any time subsequent to the signing of this agreement sold, furnished or provided to the United States for any purpose whatsoever.
* * * * * *
II. The United States hereby releases and discharges BB Manufacturing and William M. Boehm, jointly and severally, from any and all claims it may have against them arising out of their performance of the contracts, except for such obligations as are created by this Agreement, and excepting any claims which the United States may have under the Internal Revenue Code, Title 26 of the United States Code.
12. The foregoing constitutes the full and final settlement between the United States, BB Manufacturing and William M. Boehm.

(Emphasis supplied.)

On November 20, 1985 Mr. William M. Boehm for plaintiff, and Mr. Ronald Clark, Attorney, Civil Division, Department of Justice, for defendant, executed the settlement agreement, which defendant had drafted.

A “PROMISSORY NOTE SECURED BY DEED OF TRUST,” dated November 18, 1985, on certain real estate owned by plaintiff, or Mr. Boehm personally, accompanied the settlement agreement. The Agreement compromised the Government’s claim that BB had fraudulently sold defective steering arm assemblies to the United States Army. Instead, plaintiff agreed to repay defendant $150,000 as “damages,” and defendant was to return the steering arm assemblies to BB, which apparently hoped to resell the units to unsuspecting military users of other nations. The Promissory Note provided:

In installments as herein stated, for value received, Boehm Machine Products, Incorporated, d/b/a BB Manufacturing Company, a Texas Corporation, and William M. Boehm, promise to pay the Treasurer of the United States, the sum of One Hundred Fifty Thousand Dollars ($150,000.00), inclusive of interest. Payments of $3,125.00 are to be made to Treasurer of the United States, care of Roy McKinney, Director, Office of Budget, Planning and Evaluation, Civil Division, United States Department of Justice, Washington, D.C. 20530, beginning on December 1, 1985, and continuing in 47 equal monthly installments thereafter.
* * * * * *
Declaration of Default; Acceleration of Payments. In the event that the undersigned fails to make any of the payments specified in this note by the date or in the manner required by this note, the United States may, at its option, with notice delivered to the undersigned, declare that this note shall be in default, and the full remaining unpaid balance shall become due and payable, if the past due payment(s) have not been made by the 30th day following the due date of said payments) or within 15 days of receipt by the undersigned of the notice of default and intention to accelerate payments, whichever is later.
[514] Confession of Judgment. In the event of default, the undersigned hereby consents [sic] to the entry of a judgement against them in the amount of the full remaining unpaid balance plus interest compounded daily, accrued from the date of default, at the Treasury tax and loan account rate in effect on the date of the default, plus the costs of suit and attorney fees.

The emphasized language in paragraph 9(c) of the Settlement Agreement, supra, is the cause of the problem. Defendant understood the Settlement Agreement to require it to return to BB the steering assemblies that it had in storage at Red River Arsenal. Arsenal records show that defendant forwarded to plaintiff six cartons containing 349 steering arm assemblies weighing 9,542 pounds. Plaintiff received all 349 units, but discovered that the shipment weighed only 3,370 pounds, an ostensible 6,172 pound shortfall. Plaintiff thereupon demanded return of the “remaining” 6,172 pounds of steering arm assemblies. Defendant maintained that plaintiff received all of the units at the Arsenal, and that the Arsenal’s transit weight records must have been in error. Subsequently, however, defendant located an additional 550 steering arm assemblies at another site, which it offered to return at plaintiff’s cost. Plaintiff accepted the offer, but unilaterally declared those units outside of the scope of the Settlement Agreement. Plaintiff then claimed that defendant failed to return a total of 3,929 units to which plaintiff was entitled, and that defendant was in default of the Settlement Agreement. It appears from the record that, as a safety precaution, defendant previously had intentionally destroyed and/or disposed of all other units not located at Red River Arsenal.

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Boehm v. United States, 37 Cont. Cas. Fed. 76,073, 22 Cl. Ct. 511, 1991 U.S. Claims LEXIS 42, 1991 WL 15600 (cc 1991).

37 Cont. Cas. Fed. 76,073 (Boehm v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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