Kellogg Brown & Root Services, Inc. v. United States

115 Fed. Cl. 46, 2014 U.S. Claims LEXIS 318, 2014 WL 939977
United States Court of Federal Claims·Decided March 7, 2014·No. 1:13-cv-00169·Published·Cited by 11 cases

Opinion

OPINION

Bush, Senior Judge.

Before the court is defendant’s fully briefed motion to dismiss, based on Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC). Oral argument was held on August 20, 2013; thereafter, supplemental briefing was permitted. 1 For the reasons set forth herein, defendant’s motion to dismiss is granted.

BACKGROUND 2

I. The Contract

The parties refer to the contract at issue in this case, Contract No. DACA63-03-D-0005, as the Restore Iraqi Oil (RIO) contract. Am. Compl. ¶¶ 8-9. According to plaintiff, the RIO contract services were provided to the United States Army Corps of Engineers (the Corps) by Kellogg Brown & Root Services, Inc. (KBR) in support of Operation Iraqi Freedom, beginning in 2003. Id. ¶¶2, 23. The services “assisted] in assessing, refurbishing, and rebuilding the Iraqi oil infrastructure.” Id. ¶ 8.

*49 II. The Dispute

According to the complaint, the RIO contract included an indemnification provision against “unusually hazardous” risks in contract performance, as well as other provisions relevant to plaintiffs claims in this suit. Am. Compl. ¶¶ 11-13, 19. While working at the Qarmat Ali Water Treatment Plant (Qarmat Ali), KBR personnel wére provided with “force protection” by the government, protection which involved National Guard personnel and British soldiers. Id. ¶¶21, 33. Sodium dichromate, a potentially hazardous chemical, had been used at Qarmat Ali and the site may have been contaminated with this chemical. Id. ¶ 31.

After the presence of sodium dichromate was discovered, plaintiff alleges that KBR was reimbursed for the additional costs of encapsulation of “potential sodium dichro-mate contamination” at the Qarmat Ali site. Am. Compl. ¶ 31. Nonetheless, KBR was eventually sued by persons involved in force protection at Qarmat Ali who claimed that they had been injured from exposure to sodium dichromate and that KBR was subject to tort liability for those injuries (hereinafter, the third-party suits). Id. ¶ 33. A dispute arose between KBR and the Corps as to whether the indemnification provision of the RIO contract required that the government provide “indemnification for claims asserted by third persons for personal injury allegedly arising out of risks previously defined as ‘unusually hazardous’ under Contract No. DACA63-03-D-0005 and that [the Corps] actively engage in the defense and resolution of certain claims and disputes arising under the contract.” Pl.’s Resp. Ex. 4 at 1.

III. The December 2010 Claim Was Denied by the Contracting Officer in November 2011

As discussed more thoroughly in KBR I, a claim was submitted to the contracting officer (CO) in December 2010, which, when standing alone as well as when interpreted in light of a June 2011 letter from KBR to the CO, contained requests for monetary and nonmonetary relief. The claim included a request for monetary relief, in the form of indemnification for the litigation defense and settlement expenses of KBR in the third-party suits, as well as a request that the Corps actively participate in the litigation of the third-party suits against KBR. These requests for money damages and participation were denied in a November 2011 letter from the CO.

IV.KBR I Was Pending when KBR Submitted Certified Claims to the Contracting Officer in December 2012 and February 2013

KBR submitted invoices to the Corps in July and August of 2012 for its litigation expenses in the third-party suits. Am. Compl. ¶ 46. These invoices also included legal fees and other costs incurred by KBR when responding to a Department of Defense Inspector General’s investigation of the “alleged sodium diehromate exposure at Qarmat Ali” and related events (“the IG costs”). Id. ¶¶ 41, 46. The vouchers were not paid. In November 2012, KBR filed suit in this court, Case No. 12-780C, contesting the denial of the December 2010 claim submitted to the CO (the 780 suit).

Approximately a month after filing the 780 suit and while the 780 suit was pending, KBR, on December 21, 2012, submitted a certified claim to the contracting officer for $23,146,997.59, which represented all of KBR’s litigation expenses in the third-party suits as of that date (the December 2012 claim). Def.’s Mot. Ex. A; Am. Compl. ¶ 49. However, although the December 2012 claim specifically alleged KBR’s entitlement to the IG costs, and KBR had attached copies of unpaid vouchers that included the IG costs, the December 2012 claim did not include or expressly set forth the IG costs in the quantum of the certified claim. See Def.’s Mot. Ex. A at 14, 16, 19, 21; id. Ex. B at 16 n.5; Am. Compl. ¶ 52.

While the 780 suit was still pending in this court, on February 21, 2013 KBR filed a second certified claim with the CO for $23,597,168.27 (the February 2013 claim), which again represented all of KBR’s litigation expenses in the third-party suits as of that date, but now included the IG costs as well. Am. Compl. ¶ 52. The increased quantum of $450,170.68 reflects that the February *50 2013 claim includes the IG costs and, possibly, two additional months of litigation costs in the third-party suits. Def.’s Mot. Ex. B at 16 & n.5; Am. Compl. ¶ 52 (stating that “the February certified claim updated the quantum sought to include outside legal costs KBR[ ] incurred in responding to the Department of Defense subpoena [the IG costs], which had been discussed but not included in the quantum sought in the December 2012 certified claim”). The proffered reason for the filing of the second certified claim was that the “instant Claim encompasses the same legal fees and involves many of the same underlying facts [as the December 2012 claim], but seeks recovery based on a separate and distinct theory.” Def.’s Mot. Ex. B. at 2; see Am. Compl. ¶ 52 (“The February certified claim arises from the same set of operative facts as the December 2012 claim, but was based on [the Corps’] failure to reimburse KBR[ ] for its legal costs because of an alleged lack of funding.”).

V. The Contracting Officer Declines to Issue a Decision on KBR’s Certified Claims, Citing Pending Litigation in This Court; KBR Files Another Suit in This Court and Later Amends the Complaint

On February 11, 2013, the CO acknowledged receipt of the December 2012 claim, but stated that because the pending 780 suit was “substantially the same” as the December 2012 claim, he was no longer “the federal authority with respect to this matter.” Pl.’s Resp. Ex. 2. On March 5, 2013, KBR filed its complaint in this case, Case No. 13-169C (the 169 suit). On March 29, 2013, the CO acknowledged receipt of the February 2013 claim, but stated that because the 780 suit and the 169 suit were “substantially the same” as the February 2013 claim, once again he was no longer “the federal authority with respect to this matter.” Pl.’s Resp. Ex. 3.

On April 30, 2013, plaintiff amended the complaint in the 169 suit. 3

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Kellogg Brown & Root Services, Inc. v. United States, 115 Fed. Cl. 46, 2014 U.S. Claims LEXIS 318, 2014 WL 939977 (uscfc 2014).

115 Fed. Cl. 46 (Kellogg Brown & Root Services, Inc. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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