Cruz-Pagan v. United States

40 Cont. Cas. Fed. 76,900, 35 Fed. Cl. 59, 1996 U.S. Claims LEXIS 24, 1996 WL 89628
CourtUnited States Court of Federal Claims
DecidedMarch 1, 1996
DocketNo. 91-1103C
StatusPublished
Cited by35 cases

This text of 40 Cont. Cas. Fed. 76,900 (Cruz-Pagan 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
Cruz-Pagan v. United States, 40 Cont. Cas. Fed. 76,900, 35 Fed. Cl. 59, 1996 U.S. Claims LEXIS 24, 1996 WL 89628 (uscfc 1996).

Opinion

OPINION

ANDEWELT, Judge.

I.

In this action, plaintiff, Hipólito Cruz-Pagan, seeks to recover $225,250 from the United States Department of Justice Drug Enforcement Administration (DEA) for assistance and information plaintiff provided DEA field agents in a drug investigation that resulted in a forfeiture to the United States of $901,000 in cashier’s checks. In his com[60]*60plaint, plaintiff asserts different theories of recovery, including breach of contract, unjust enrichment, misrepresentation, and estoppel. During oral argument, however, plaintiff conceded that this court lacks jurisdiction over plaintiffs unjust enrichment claim and that plaintiff cannot recover under any of his other theories of liability unless plaintiff first can establish that a contract existed between DEA and plaintiff. In an April 10, 1995, order, this court denied defendant’s motion for summary judgment and prompted discovery on the issue of whether the DEA agents with whom plaintiff allegedly entered an agreement had implied actual authority to bind the government in contract. Upon completion of discovery, defendant filed a new motion for summary judgment. For the reasons set forth below, defendant’s motion is granted.

II.

Plaintiff alleges that he entered an enforceable contract with DEA through an agreement he reached with certain DEA field agents to the effect that plaintiff would receive 25 percent of the value of any property seized and forfeited as a result of plaintiffs assistance in a drug investigation. Plaintiff provided information and assistance that led to the forfeiture of $901,000 in cashier’s checks. DEA agents recommended that plaintiff receive a $100,000 award for his assistance but later withdrew that recommendation when plaintiff was indicted for conspiracy to possess cocaine with the intent to distribute.

To establish an enforceable contract with the United States, a party must show a mutual intent to contract, including an offer, an acceptance, and consideration passing between the parties. Fincke v. United States, 230 Ct.Cl. 233, 244, 675 F.2d 289, 295 (1982). In addition, the party must demonstrate that the government representative who entered the agreement had actual authority to bind the government in contract. City of El Centro v. United States, 922 F.2d 816, 826 (Fed. Cir.1990), cert. denied, 501 U.S. 1230, 111 S.Ct. 2851, 115 L.Ed.2d 1019 (1991); H.F. Allen Orchards v. United States, 749 F.2d 1571, 1575 (Fed.Cir.1984), cert. denied, 474 U.S. 818, 106 S.Ct. 64, 88 L.Ed.2d 52 (1985). For contracts among private parties, it is sufficient that an agent have “apparent authority” to bind the principal in contract.1 The additional requirement of actual authority for government contracts places a significant burden on the party negotiating an agreement with a government representative. As explained in Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1947): “[Ajnyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority.”2

In support of its original motion for summary judgment, defendant presented an affidavit in which a DEA official stated that DEA had not granted contracting authority to the agents with whom plaintiff allegedly entered an agreement. In denying defendant’s motion, this court concluded that the affidavit was insufficient to support summary judgment because in appropriate factual settings actual authority can be implied and an express grant of authority is not necessary. H. Landau & Co. v. United States, 886 F.2d 322, 324 (Fed.Cir.1989) (“Although apparent authority will not suffice to hold the government bound by the acts of its agents, implied actual authority, like expressed actual authority, will suffice.” (citation omitted)); see [61]*61also Miller Elevator Co. v. United States, 30 Fed.Cl. 662, appeal dismissed, 36 F.3d 1111 (Fed.Cir.1994); Zoubi v. United States, 25 Cl.Ct. 581 (1992). After completion of discovery on the issue of implied actual authority, defendant filed the instant summary judgment motion.

III.

In Landau, the Court of Appeals for the Federal Circuit articulated the following standard for determining the existence of implied actual authority: “ ‘Authority to bind the [government is generally implied when such authority is considered to be an integral part of the duties assigned to a [government employee.’ ” 886 F.2d at 324 (quoting John Cibinic, Jr., and Ralph C. Nash, Jr., Formation of Government Contracts 43 (1982)). Herein, both parties agree that the applicable definition of “integral” is “necessary to form a whole” or “essential to completeness,” as set forth in Webster’s Third International Dictionary 1173 (1981). To support his argument that contracting authority is necessary or essential to DEA agents’ carrying out their assigned duties, plaintiff relies upon deposition testimony from both a DEA official and an agent. The essence of this testimony is that DEA agents routinely use informants, also known as “cooperating individuals,” in their investigations and these informants expect, and virtually always receive, some form of compensation for their assistance. Such compensation typically is either in the form of a monetary award or a recommendation that the informant receive a reduced sentence for a crime the informant previously committed. Plaintiff argues that because DEA agents need informants and informants expect compensation, DEA necessarily expects its field agents, who are responsible for interaction with informants, to enter compensation agreements with these informants so as to induce cooperation. In other words, plaintiff argues that contracting authority is an “integral part of the duties assigned” to DEA agents because contracting authority is necessary and essential to the performance of their assigned duties of maintaining contact and exercising control over informants.

Plaintiffs proposed conclusion, however, does not follow inexorably from the evidence upon which plaintiff relies. Assuming that plaintiff is correct that DEA field agents need the assistance of informants and that these informants expect compensation, it would not follow that the only reasonably efficient way to secure this required assistance is to grant DEA field agents contracting authority. DEA can expect potential informants to assist DEA field agents so long as the informants expect, based on the totality of the circumstances, that DEA will compensate them fairly for any assistance rendered. It would appear that DEA could efficiently create such an expectation of compensation without granting contracting authority to its field agents. For example, DEA could adopt internal procedures that grant contracting authority to supervisors of the field agents and oblige the field agents to secure approval from their supervisors before agreeing to provide compensation for assistance.

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Bluebook (online)
40 Cont. Cas. Fed. 76,900, 35 Fed. Cl. 59, 1996 U.S. Claims LEXIS 24, 1996 WL 89628, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cruz-pagan-v-united-states-uscfc-1996.