Ed. Zueblin, A.G. v. United States

44 Fed. Cl. 228, 1999 U.S. Claims LEXIS 151, 1999 WL 447314
CourtUnited States Court of Federal Claims
DecidedJuly 2, 1999
DocketNo. 96-452C
StatusPublished
Cited by5 cases

This text of 44 Fed. Cl. 228 (Ed. Zueblin, A.G. 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
Ed. Zueblin, A.G. v. United States, 44 Fed. Cl. 228, 1999 U.S. Claims LEXIS 151, 1999 WL 447314 (uscfc 1999).

Opinion

OPINION & ORDER

SMITH, Chief Judge.

This is a government contracts case involving construction of military housing at various U.S. Army bases in Germany. In sum, plaintiff alleges that, despite a settlement agreement it signed with the Contracting Officer (CO) of the U.S. Army Corps of Engineers (COE), it should be allowed to pursue further damage claims against the government. Defendant asserts the defense of accord and satisfaction, pointing to the plain language of the signed settlement agreement and therefore the irrelevance of plaintiffs arguments regarding the circumstances and intent of the parties. Defendant moves for summary judgment. For the following reasons, defendant’s motion is granted in part and denied in part.

FACTS

In 1985, the European Division of the COE issued a Request for Proposals (RFP) to design and build prefabricated housing at five sites1 in (then) West Germany. The RFP required that certain prefabricated materials be manufactured in the U.S. and shipped to Germany on U.S. flag carriers.2 [230]*230Zueblin A.G., a German corporation with an American subsidiary, entered a joint venture with a U.S. company, AEGIS, Inc., and submitted a bid in response to the RFP. The COE awarded the contract to this joint venture.

Under the terms of the joint venture, AEGIS was responsible for the design, manufacture, and procurement of all U.S. items and for transporting all the U.S. goods to Germany. Unfortunately, AEGIS immediately experienced financial difficulties that prevented it from even beginning its tasks under the contract and joint venture. On May 20,1986, Zueblin notified the COE in writing that it would, of necessity, take over all of AEGIS’ work. Undisputedly, Zueblin incurred unexpected costs due to AEGIS’ inability to perform under the contract; for example, it had to substantially expand its U.S. subsidiary’s role, and procure new contracts for shipping items from the U.S. to Germany.

To make matters worse, the shipping company that Zueblin chose, U.S. Lines, declared bankruptcy on November 24, 1986. Zueblin subsequently advised the COE that this bankruptcy would interfere with the shipping schedule and delay completion of the housing projects. On December 4, 1986, the CO denied Zueblin’s request for an extension of time, because there were other U.S. carriers available. Zueblin then (in two separate letters) asked for a waiver of the contractual U.S.-flag requirement and informed the COE that it would quantify the delay occasioned by U.S. Lines’ bankruptcy. This waiver was denied.

Zueblin’s work under the contract had been scheduled to be completed in October 1987. Work was completed at all five German sites during 1988, and only then could Zueblin ascertain how much the delays due to AEGIS’ nonperformance and U.S. Lines’ bankruptcy had cost. On March 3, 1988, Zueblin sent a letter to the CO which outlined a conversion rate claim based on the fluctuations in the currencies of Germany and the United States. In October 1988, Zueblin submitted 15 claims relating to the five contracts and met with the COE to discuss its various claims for equitable adjustment. Several meetings thereafter failed to resolve the dispute between the parties.

At this point, the parties’ characterization of the facts diverge. Both agree that defendant offered to settle plaintiffs claims at a November 22, 1989 meeting for a sum of 2,220,020.87 Deutsche Marks (DM) plus 22,-699.35 U.S. Dollars ($). However, defendant states that the offer was a “final and global settlement that did not divide the settlement offer among the specific claims because Zueblin had asked for an ‘overall settlement.’ ” Def.Stmt. Of Uncontrov. Facts at 5, ¶ 25. Plaintiff sees the settlement differently: “Zueblin had requested that the [CO] examine the various items and address them in one office rather than requiring Zueblin to submit 75 separate claims to different offices. It was never proposed that the disputed items would be considered only one dispute such that final settlement would be accepted to satisfy all issues____” Pl.Stmt. Of Genuine Issues at 1-2. Specifically, although both parties agree that Zueblin’s conversion rate claim was discussed during settlement nego[231]*231tiations,3 defendant contends that the government’s settlement offer was understood by Zueblin to preclude any future claims on the contracts.

The language of the settlement agreement reads, in relevant part:

This letter represents the final agreement between the United States Government and the firm Zueblin, closing out the [contracts] ____ The basis for our discussion is your [Zueblin’s] letter of March 3, 1988 requesting that-1, the Contracting Officer, review your items of “proposed dispute” and consider them in terms of one combined dispute, rather than considering each item as a separate claim for each of the five contracts.
This offer is made with the understanding that no claims will be made against the United States Government on these contracts.

PLAppx. at 24-25. The letter was signed by the CO and by an authorized representative of Zueblin, Mr. Paul Lehmann. Eight days later, Zueblin executed the settlement, and stated in the accompanying cover letter that “it was again confirmed that with cooperative engineering spirit, final decision can be achieved on difficult contractual problems.” PL Complaint, Exhibit A. Further, in the releases of claims that accompanied Zueblin’s request for payment under the settlement agreement, Zueblin failed to specifically reserve any claims. The government made final payment to Zueblin on all five contracts in 1990.

On November 21, 1995, Zueblin submitted a certified claim for equitable adjustment concerning the five contracts at issue. Plaintiff contends that “a question of fact [exists] as to whether the claims submitted by Zueblin in its [certified claim] were the same claims presented and made a subject of the November 1989 settlement agreement.” Pl. Stmt. Of Genuine Issues at 2. The basis for plaintiffs claim in 1995 was that the fluctuations in the conversion rate between the U.S. Dollar and the German Mark, and the bankruptcy of U.S. Lines, increased plaintiffs costs under the contract, for which it is entitled to payment from the government. According to plaintiff, these claims were not and are not subject to the bilateral settlement agreement the parties reached in November 1989. On January 31, 1996, the CO rejected plaintiffs claims in writing. Plaintiff then filed its complaint in this court on July 26,1996.

DISCUSSION

The court must determine to what extent the 1989 settlement agreement between the parties bars its consideration of plaintiffs present claims. The first step is to decide whether, as a matter of law, there was an accord and satisfaction which covered plaintiffs current claims. If not, the court must determine whether any claims that were reserved from the settlement are legally cognizable.

I. JURISDICTION

This court has jurisdiction pursuant to the Tucker Act, 28 U.S.C. § 1491, over “any claim against the United States founded either upon the Constitution, or any Act of Congress ... or upon any express or implied contract with the United States----” 28 U.S.C. §

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Bluebook (online)
44 Fed. Cl. 228, 1999 U.S. Claims LEXIS 151, 1999 WL 447314, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ed-zueblin-ag-v-united-states-uscfc-1999.