Hernandez, Kroone & Associates, Inc. v. United States

95 Fed. Cl. 395, 2010 U.S. Claims LEXIS 815, 2010 WL 4646247
CourtUnited States Court of Federal Claims
DecidedOctober 22, 2010
DocketNo. 07-165 C
StatusPublished
Cited by5 cases

This text of 95 Fed. Cl. 395 (Hernandez, Kroone & Associates, 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
Hernandez, Kroone & Associates, Inc. v. United States, 95 Fed. Cl. 395, 2010 U.S. Claims LEXIS 815, 2010 WL 4646247 (uscfc 2010).

Opinion

ORDER

JAMES F. MEROW, Senior Judge.

By leave of court, on March 8, 2010 [ECF No. 82], the government filed counterclaims under the special plea in fraud, 28 U.S.C. § 2514; the anti-fraud provision of the Contract Disputes Act, 41 U.S.C. § 604; and the False Claims Act, 31 U.S.C. § 3729. Plaintiffs Answer to the Counterclaims [ECF No. 84] was filed March 29, 2010. With leave of court, plaintiffs Amended Answer to the Counterclaims was filed on May 21, 2010 [ECF No. 88]. The government’s Motion to Strike [ECF No. 89], filed on June 3, 2010, seeks to eliminate certain affirmative defenses plead. Plaintiffs Opposition [ECF No. 91] was filed June 17, 2010; Defendant’s Reply [ECF No. 96] was filed on July 6, 2010.

On June 3, 2010, defendant also filed its Third Motion to Compel [ECF No. 90], seeking to require plaintiff “to provide proper and complete responses to our third set of interrogatories and requests for production of documents, served April 5, 2010.”

In its Response [ECF No. 93], plaintiff contends the discovery sought goes beyond the scope of the order allowing for the same, and also resists any further discovery obligations, insisting disclosure has been complete.

Although there has been ample time for discovery, the government asserts that plaintiff has failed to fully respond to discovery and in some instances deviated from prior responses, thus justifying continuing discovery relative to those revisions. No trial date has been set. There are serious allegations in this matter, including the recently-filed counterclaims. Both parties are entitled to rely on discovery responses. Absent extraordinary circumstances, amendment, revision, supplementation or other changes at trial will not be tolerated.

A. Affirmative Defenses

By leave of court following a contested motion, Defendant’s Amended Answer to Plaintiffs First Amended Complaint and Defendant’s Counterclaims [ECF No. 82] was filed on March 8, 2010. The counterclaims, [397]*397the possibility of which had been telegraphed as noted in the court’s Order of December 31, 2008 [ECF No. 39 at 2], detail facts which, it is asserted, warrant invocation of the special plea in fraud, 28 U.S.C. § 2514; the anti-fraud provision of the Contract Disputes Act, 41 U.S.C. § 604; and the False Claims Act, 31 U.S.C. § 3729.

Plaintiffs original Answer to the Counterclaims [ECF No. 84] included twenty-one affirmative defenses. After discussions between counsel, plaintiff voluntarily eliminated several. Plaintiffs Amended Answer [ECF No. 88] advanced thirteen. Defendant’s Motion to Strike [ECF No. 89] seeks to eliminate six more: waiver (first affirmative defense); unclean hands (third affirmative defense); laches (fourth affirmative defense); no actual injury (tenth affirmative defense); failure to mitigate damages (eleventh affirmative defense); and failure to plead fraud with particularity pursuant to RCFC 9(b) (thirteenth affirmative defense).

In its Response [ECF No. 92] plaintiff agreed to dismiss the tenth (no actual injury); eleventh (failure to mitigate damages); and the thirteenth (failure to plead fraud with particularity). Accordingly, defendant’s Motion to Strike addresses the affirmative defenses of waiver, unclean hands and laches.

Standard of Review

Rule 12(f) of the Rules of the Court of Federal Claims (RCFC) provides that “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter” and may do so sua sponte or on a motion by a party. “A motion to strike must be directed at a ‘pleading.’” Entergy Nuclear Fitzpatrick, LLC v. United States, 93 Fed.Cl. 739, 742 (2010) (citing Reunion, Inc. v. United States, 90 Fed.Cl. 576, 580 (2009) (quoting RCFC 12(f))); see also Tecom, Inc. v. United States, 86 Fed.Cl. 437, 441 n. 2 (2009). Plaintiffs Amended Answer to the Counterclaims is a “pleading.” RCFC 7(a)(3).

Generally, “ ‘[c]ourts view motions to strike with disfavor and rarely grant them.’ ” Entergy Nuclear, 93 Fed.Cl. at 742 (citing Fisherman’s Harvest, Inc. v. United States, 74 Fed.Cl. 681, 690 (2006)). “ ‘If sufficiency of the defense depends on disputed issues of fact or questions of law, a motion to strike should not be granted.’ ” Id. (citing Sys. Fuels, Inc. v. United States, 73 Fed.Cl. 206, 216 (2006)). “When considering a motion to strike a defense, the court must ‘construe the pleadings liberally to give the [pleader] a full opportunity to support its claims at trial.’ ” Id. (citing New York v. Almy Bros., Inc., 971 F.Supp. 69, 72 (N.D.N.Y.1997)).

Defendant argues that the affirmative defenses of waiver, laches and unclean hands may not be applied against the government in the circumstances presented regardless of any facts plaintiff could present.

Plaintiff contends that defenses should not be stricken unless they could not succeed as a matter of law under any facts that could be developed. As discovery is continuing and facts and theories are “still being uncovered,” (Pl.’s Opp., ECF No. 91 at 4-5), any determination as to legal sufficiency would be premature.

1. Waiver

In its entirety, plaintiffs affirmative defense of waiver states:

62. Counter-Claimant has engaged in conduct and activities sufficient to constitute a waiver of any alleged claim for relief asserted in the Counter-Claim. Such conduct and activities include, but are not limited to, the Counter-Claimant’s failure to provide the Counter-Defendant with a proper contractual scope of work, failing to administer the construction contract in good faith, failing to negotiate extra work claims in good faith, by deceiving the Counter-Defendant that the Counter-Claimant would compensate the Counter-Defendant for extra work but then denying the extra work, by threatening the Counter-Defendant with financial ruin if Counter-Defendant did not do what the Government demanded, wherein Counter-Defendant was deprived of project information necessary for its claims, and by failure to implement required claims resolution procedures in good faith.

(Pl.’s Am. Answer, ECF No. 88 at 9.)

Defendant asserts that, as a matter of law, the government cannot waive fraud counter[398]*398claims, citing authorities that contracting officers lack authority to waive such matters.

While not disagreeing that a contracting officer lacks authority to waive the substantive counterclaims, plaintiff contends that the Department of Justice, under the direction of the United States Attorney, may waive False Claims Act matters. Indeed, authorities cited by both parties recognize this possibility. Plaintiff asserts that as discovery is ongoing, it would be inappropriate to strike that affirmative defense at this time. Plaintiff cites United States ex rel.

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Cite This Page — Counsel Stack

Bluebook (online)
95 Fed. Cl. 395, 2010 U.S. Claims LEXIS 815, 2010 WL 4646247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hernandez-kroone-associates-inc-v-united-states-uscfc-2010.