J & E Salvage Co. v. United States

41 Cont. Cas. Fed. 77,079, 37 Fed. Cl. 256, 1997 U.S. Claims LEXIS 24, 1997 WL 50611
United States Court of Federal Claims·Decided February 7, 1997·No. No. 96-1C·Published·Cited by 18 cases

Opinion

OPINION

MILLER, Judge.

This case is before the court on defendant’s motion to dismiss for lack of subject matter jurisdiction pursuant to RCFC 12(b)(1) or, alternatively, for summary judgment pursuant to RCFC 56. In addition to opposing defendant’s motion, plaintiffs have cross-moved for summary judgment. Argument is deemed unnecessary.

FACTS

The facts pertinent to defendant’s motion are set forth in an earlier order, J & E Salvage Co. v. United States, 36 Fed.CI. 192, 196 (1996), dismissing plaintiffs’ claim for a taking, and are repeated here.1 On May 19, 1992, at the bequest of the United States Department of Defense, the Defense Reutili-zation and Marketing Office (the “DRMO”) held an auction at Cherry Point, NC, to sell certain surplus materials. John and Teresa Darlingon, general partners of J & E Salvage Co. (“plaintiffs”), purchased several “lots” of surplus merchandise at this auction. At the time of the sale, the purchased goods appeared to be solely large containers used for shipping and storing helicopter transmissions. Because the containers were bolted shut at the time of sale, plaintiffs were unable to ascertain what, if anything, was inside the containers.

After plaintiffs paid for the merchandise, government personnel loaded the goods onto plaintiffs’ truck for transportation to their company in Onslow County, NC. At some point after returning to their place of business, plaintiffs opened the containers and discovered that four of them held surplus helicopter transmissions valued at $289,-660.00 each.

Plaintiffs notified the DRMO of their discovery so as to avoid any accusations of having acquired the transmissions through illegal means. The DRMO responded by informing plaintiffs that the transmissions were still government property and should be returned immediately. Plaintiffs refused to acquiesce. Subsequently, as opposed to utilizing the Contract Disputes Act, 41 U.S.C. §§ 601-613 (1994) (the “CDA”), the DRMO filed suit in the United States District Court for the Eastern District of North Carolina on November 12, 1992, seeking a return of the transmissions.

In their response to the lawsuit, plaintiffs claimed that the CDA governed the matter and thus the federal district court was without subject matter jurisdiction to hear the case. The district court held that it had requisite jurisdiction and that the helicopter transmissions were government property and required plaintiffs to relinquish possession of the transmissions. Moreover, the district court declined to dismiss the Government’s claim for compensatory and punitive damages. United States v. J & E Salvage Co., No. 92-162-CIV-4-H (E.D.N.C. Aug. 19, 1994) (unpubl.).

Plaintiffs, fearing the district court’s contempt power, obeyed the order and turned the transmissions over to the DRMO on September 9, 1994. Furthermore, to avoid the potential financial ruin of an adverse damages award, plaintiffs entered into a pre-appeal stipulation agreement with the DRMO in which they agreed to pay liquidated damages if the appeals court held that plaintiffs had wrongfully converted the helicopter transmissions. In return the DRMO agreed that if judgment were entered for plaintiffs, it would return the transmissions. Plaintiffs subsequently appealed the district court’s judgment to the United States Court of Appeals for the Fourth Circuit on November 9, 1994. On June 14, 1995, the Fourth Circuit reversed and remanded with instructions to grant plaintiffs’ motion to dismiss for lack of subject matter jurisdiction. United [260] States v. J &E Salvage Co., 55 F.3d 985 (4th Cir.1995).

Subsequently, on August 3,1995, plaintiffs’ counsel sent a letter to the United States Attorney for the Eastern District of North Carolina requesting that the DRMO return the helicopter transmissions to plaintiffs. In response the DRMO sent plaintiffs a document written by Dan Harston, DRMO’s Sales Contracting Officer, who plaintiffs claim was not the cognizant contracting officer, entitled “Finding of Fact and Final Decision.” This document indicated that the DRMO would not return the transmissions to plaintiffs.

DISCUSSION

1. Jurisdiction

When evaluating a motion to dismiss pursuant to RCFC 12(b)(1), the court is “obligated to assume all factual allegations to be true and to draw all reasonable inferences in plaintiffs favor.” Henke v. United States, 60 F.3d 795, 797 (Fed.Cir.1995) (citing Scheuer v. Rhodes, 416 U.S. 232, 236-37, 94 S.Ct. 1683,1686-87, 40 L.Ed.2d 90 (1974)); Catawba Indian Tribe v. United States, 982 F.2d 1564, 1568-69 (Fed.Cir.1993). If the facts demonstrate any means by which the non-moving party might prevail, the court must deny the motion. W.R. Cooper General Contractor, Inc. v. United States, 843 F.2d 1362, 1364 (Fed.Cir.1988) (citing Scheuer, 416 U.S. at 236, 94 S.Ct. at 1686). The non-moving party, however, bears the burden of establishing jurisdiction. Reynolds v. Army & Air Force Éxch. Serv., 846 F.2d 746, 748 (Fed.Cir.1988).

Defendant argues that the court lacks subject matter jurisdiction because plaintiffs failed to comply with the requirements of the Contract Disputes Act, 41 U.S.C. §§ 601-613 (1994) (the “CDA”). Defendant first contends that plaintiffs did not submit a valid claim to the appropriate contracting officer. Defendant also asserts that plaintiffs’ failure to certify the alleged claim constitutes an additional jurisdictional bar. According to defendant, plaintiffs’ failure to comply with the requirements of the CDA renders any purported final decision by a contracting officer invalid and precludes this court from entertaining plaintiffs’ claim.2

1. Validity of claim

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J & E Salvage Co. v. United States, 41 Cont. Cas. Fed. 77,079, 37 Fed. Cl. 256, 1997 U.S. Claims LEXIS 24, 1997 WL 50611 (uscfc 1997).

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