Gary Aircraft Corp.

28 Cont. Cas. Fed. 81,028, 226 Ct. Cl. 568, 1981 U.S. Ct. Cl. LEXIS 2, 1981 WL 21437
CourtUnited States Court of Claims
DecidedJanuary 9, 1981
DocketNo. 407-80C
StatusPublished
Cited by5 cases

This text of 28 Cont. Cas. Fed. 81,028 (Gary Aircraft Corp.) 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
Gary Aircraft Corp., 28 Cont. Cas. Fed. 81,028, 226 Ct. Cl. 568, 1981 U.S. Ct. Cl. LEXIS 2, 1981 WL 21437 (cc 1981).

Opinion

Plaintiff, Gary Aircraft Corporation, brings this action to recover amounts due from defendant, United States Government, under two contracts. Plaintiff alleges both breach claims and claims under the "Disputes Clause” of the contracts. Defendant moves to dismiss, or alternatively, for summary judgment.

Under contract F-14608-71-0-0289 (contract 0289), effective December 1,1970, Gary contracted to overhaul certain R-2800 series engines. This contract expired on August 31, 1974. Under the second contract, F-41608-74-D-1645 (contract 1645), effective September 1,1974, Gary was to engage in additional and continued overhaul of R-2800 series engines and deliver specified numbers of these engines monthly. On March 5, 1975, the Contracting Officer (C.Ó.) terminated Gary’s right to proceed further with performance under the contract, citing Gary’s failure to meet the required deliveries. On June 22,1975, the C.O. rendered his final decision wherein he found Gary’s failure to deliver the contractually required supplies within the required time to be due to Gary’s fault and negligence. Gary appealed this determination which was docketed by the Armed Services Board of Contract Appeals (ASBCA) as ASBCA No. 20534 on July 24,1975. A dispute under both contracts also arose when Gary submitted to the C.O. a delay of work claim. This claim was docketed as ASBCA No. 21731 on January 21,1977.

Gary commenced a Chapter XI bankruptcy action on October 23,1976, and in June 1977 Gary moved to disallow the government’s proof of claim which had been filed. Prior to the July 18,1977, bankruptcy trial date, the government filed a Motion to Stay & Vacate before the bankruptcy [570]*570court, contending that resolution of certain claims was within the exclusive jurisdiction of the ASBCA. That motion was denied. The trial before the bankruptcy court commenced on July 19, 1977, and concluded on March 9, 1978. On August 30, 1978, the ASBCA dismissed Gary’s appeals without prejudice as substantially identical issues were involved in the bankruptcy court’s proceedings. On June 29, 1979, the bankruptcy court entered lengthy findings of fact and conclusions of law. The bankruptcy court found that contract 1645 was wrongfully terminated for default and concluded that the termination must be characterized as for the convenience of the government. The total amount of this claim was valued at $3,170,724. The bankruptcy court also found that certain requirements imposed by the government on contract 0289 amounted to a constructive change order. This claim was valued at $198,885.

The government appealed the bankruptcy court’s findings and conclusions relating to Gary’s claims against the government, described herein as Gary’s first and second claims. The government likewise appealed the failure of the bankruptcy court to defer its determinations on matters that had been before the ASBCA.

In its petition before us, Gary, basing its claims on the findings and conclusions of the bankruptcy court, presents five claims for relief: (1) contract 1645 was wrongfully terminated for default and that termination is one for the convenience of the government entitling Gary to recover, (2) the government issued a constructive change order under contract 0289, (3) Gary is entitled to all legal and accounting fees involved in preparing, negotiating and litigating claims one and two, (4) Gary is entitled to lost profits resulting from the government’s unlawful termination of contract 1645, and (5) in the alternative Gary claims consequential damages flowing from the government’s fraudulent misrepresentation and concealment of certain facts.

[571]*571Claims 1 and 2

The government argues that because the bankruptcy court determinations on the first two claims are on appeal before the district court, this court is deprived of jurisdiction. The relevant statute, 28 U.S.C. § 1500, provides that—

The Court of Claims shall not have jurisdiction of any claim for or in respect to which the plaintiff or his assigness has pending in any other court any suit or process against the United States or any person who, at the time when the cause of action alleged in such suit or process arose, was, in respect thereto, acting or professing to act, directly or indirectly under the authority of the United States.

Thus, if we determine Gary’s first and second claims before us are the same "claims for or in respect to which” it has pending in the district court, this court would be required to dismiss those claims.

The government argues that the crucial factor in our analysis is whether the suit proceeded in another forum upon the merits. We agree that the determination upon the merits test is relevant, but it is not determinative. See Brown v. United States, 175 Ct.Cl. 343, 358 F.2d 1002 (1966). Even more relevant is an analysis of the facts of this case in light of the statutory purpose. Section 1500 was designed to require an election between two forums both of which could presumably grant the same relief. Id. Its purpose is to bar duplicative suits. Universal Fiberglass Corp. v. United States, 210 Ct.Cl. 206, 218, 537 F.2d 393, 399 (1976). In the instant case, the bankruptcy court did not, and could not, provide complete relief, in the form of a money award to plaintiff. The claim before us, however, is different as it involves the awarding of monetary relief. Also, the bankruptcy court found such facts as necessary to exercise its jurisdiction to determine whether the government’s claims against Gary were entitled to priority. Defending against government claims of priority in one proceeding and instituting monetary claims against the government in another are not duplicative. This case is, in fact, analytically similar to instances where this court has held that a suit for reinstatement in the district court and a suit for back [572]*572pay in this court are not the same claim. E.g., Casman v. United States, 135 Ct.Cl. 647 (1956). Therefore, because the bankruptcy court did not address and could not award a claim for monetary relief and because we find that the claims in the bankruptcy case and in the case before us are not duplicative, we hold that we are not required to dismiss Gary’s first and second claims under 28 U.S.C. § 1500.

The government next argues that we should dismiss Gary’s first and second claims because of Gary’s failure to exhaust its administrative remedies. Those two claims arise under the "Disputes Clause” of the contract, and under that clause the ASBCA is given authority to determine disputes under the contract in the first instance. Under the Wunder-lich Act, 41 U.S.C. §§ 321-322, this court then exercises the limited judicial review of determining whether there was an abuse of discretion, or whether the action taken was arbitrary, capricious, or so grossly erroneous as to imply bad faith, or not supported by substantial evidence.

Exhaustion of administrative remedies is not required, however, if it is shown by clear evidence that such procedure is inadequate or unavailable. United States v. Blair,

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Cite This Page — Counsel Stack

Bluebook (online)
28 Cont. Cas. Fed. 81,028, 226 Ct. Cl. 568, 1981 U.S. Ct. Cl. LEXIS 2, 1981 WL 21437, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gary-aircraft-corp-cc-1981.