Kenney Orthopedic, LLC v. United States

119 Fed. Cl. 88, 2014 U.S. Claims LEXIS 1214, 2014 WL 5499911
CourtUnited States Court of Federal Claims
DecidedOctober 31, 2014
Docket11-502 C
StatusPublished

This text of 119 Fed. Cl. 88 (Kenney Orthopedic, LLC 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
Kenney Orthopedic, LLC v. United States, 119 Fed. Cl. 88, 2014 U.S. Claims LEXIS 1214, 2014 WL 5499911 (uscfc 2014).

Opinion

Settlement; Summary Judgment, RCFC 56; 48 C.F.R. § 2.101 (Contracting Officer And Contracting Officer’s Technical Representative); 48 C.F.R. § 52.212-4(m) (Termination For Cause).

MEMORANDUM OPINION AND FINAL ORDER

BRADEN, Judge.

I. RELEVANT FACTUAL BACK *90 GROUND. 1

Kenney Orthopedic, LLC and Mr. John M. Kenney (collectively herein “Kenney” or “Plaintiffs”) provide prosthetic and orthotic devices and services. Compl. ¶¶ 2-3. On August 15, 2006, Kenney entered into Contract No. V249-P-0011 with the United States Department of Veterans Affairs (“VA” or “Government”) to supply prosthetic and orthotic devices and services to the VA Medical Center (“VAMC”) in Lexington,Kentucky (the “August 15, 2006 Contract”). See Kenney II, 88 Fed.Cl. at 691.

A dispute arose between Kenney and the VA about the August 15, 2006 Contract. See Kenney I, 83 Fed.Cl. at 36-41; see also Kenney II, 88 Fed.Cl. at 691-95. The VA asserted that Plaintiffs’- performance did not comply with the August 15, 2006 Contract. See Kenney II, 88 Fed.Cl. at 691-95. Plaintiffs maintained that the VA’s view was unsupported, requested that an independent party investigate the situation, demanded an acknowledgment of the VA’s efforts to defame it, and alleged that the VA violated the August 15, 2006 Contract. Id. at 693-95. On October 23, 2007, the VA terminated the August 15, 2006 Contract for cause, pursuant to 48 C.F.R. § 52.212-4(m), because Plaintiffs failed to respond to an August 29, 2007 “cure notice.” Id. at 695.

On January 2, 2008, Kenney filed a Complaint in the United States Court of Federal Claims alleging a breach of contract and three tort claims. See Kenney I, 83 Fed.Cl. at 41. On August 7, 2008, the court dismissed the tort claims for lack of jurisdiction and dismissed the breach of contract claim, without prejudice, because Plaintiffs did not satisfy the jurisdictional prerequisite of the Contract Disputes Act, 41 U.S.C. § 605(a), that Plaintiffs submit a certified claim to the Contracting Officer (“CO”) before filing suit in the United States Court of Federal Claims. See Kenney I, 83 Fed.Cl. at 46. 2

On January 16, 2009, Plaintiffs filed a second Complaint in the United States Court of Federal Claims, this time alleging claims for breach of contract and for breach of the implied covenant of good faith and fair dealing. See Kenney II, 88 Fed.Cl. at 696. On August 17, 2009, the court issued a Memorandum Opinion and Order determining that: Plaintiffs’ claims were not barred by the statute of limitations; the court had jurisdiction over Plaintiffs’ breach of the implied covenant of good faith and fair dealing claim; and the January 16, 2009 Complaint stated a claim for which relief could be granted. Id. at 701-02, 704-05.

Thereafter, the Government and Plaintiffs engaged in negotiations resulting in a Settlement Agreement. Compl., Ex. A (“Settlement Agreement”). Therein, Plaintiffs agreed to dismiss all outstanding claims against the VA, including any other political subdivisions, officers, agents, or employees of the Government. Compl., Ex. A at 3-4. In exchange, -Plaintiffs received a $200,000 payment, with other guarantees set forth in an Addendum to the Agreement. Compl., Ex. A at 2 & Addendum. Thereunder, the VA agreed to: (1) add Plaintiffs to “its list of contract vendors for prosthetics at the Lexington VA Medical Center” within 10 days of execution of the Settlement Agreement or on June 1, 2011, whichever was later; (2) treat Plaintiffs “in the same fashion as other simi *91 larly situated offerors in the solicitation for any future contract;” and (3) “designate a Contracting Officers’ [sic] Technical Representative (COTR), other than [Ms.] Peggy Allawat, [as the VA contact] for future interaction with Plaintiff.” Compl., Ex. A, Addendum.

On June 9, 2011, the VA circulated an updated list of eligible providers of prosthet-ics services included Plaintiffs. Gov’t Mot. at 3 & Gov’t Mot. App’x at 105,108.

On June 16, 2011, Ms. Allawat attended a VA staff meeting where Mr. Rick Sprinkles, an Orthotist, and Mr. Kurt A. Keeton, a Certified Orthotist were present. Compl. Ex. B (6/27/11 Sprinkles Dec!.), Compl. Ex. C (6/27/11 Keeton Deck). These declarations attest that Ms. Allawat stated at that meeting: “only prosthetic patients who [had] an existing history of care” with Plaintiffs could use their services. Compl., Exs. B-C. In addition, Ms. Allawat stated that the next VA solicitation should favor two other vendors over Plaintiffs. Compl, Exs. B-C. But, Ms. Allawat clarified that the new list of vendors, that included Plaintiffs, would be used at the VAMC clinic. Compl., Exs. B-C.

On July 11, 2011, Ms. Dawn Greene-Low-ry, the VA’s VISN 9 Prosthetic Manager sent a memorandum to the Lexington, Kentucky Prosthetic Staff directing them to treat Plaintiffs “as if it were a prosthetics contract provider for the near future” and advising the VA staff not to tell patients that only patients with a prior relationship with Plaintiffs could use their services. Compl, Ex. D. This memorandum also designated Mr. Jason Hurt as “the local point of contact” for any future issues involving Plaintiffs. Compl, Ex. D.

On March 12, 2012, the VA solicited proposals for prosthetics limbs services at the VAMC. Gov’t Mot. App’x at 44, 47. Plaintiffs submitted an offer and received a blanket purchase agreement (“BPA”) later that month. Gov’t Mot. App’x at 44, 47. On April 1, 2012, Plaintiffs’ received an effective BPA number. Gov’t Mot. App’x at 44.

II. PROCEDURAL HISTORY.

On June 3, 2011, Kenney I and Kenney II were dismissed with prejudice after the execution of a Settlement Agreement. See Stipulation of Dismissal, Kenney Orthopedic, LLC v. United States, No. 09-38C (Fed. Cl. June 3, 2011), ECF No. 86.

On August 5, 2011, Kenney filed another Complaint in the United States Court of Federal Claims (“Compl.”) alleging that the VA “failed to take the actions required under the Settlement Agreement until June 26, 2011.” Compl. ¶ 15. Instead, the VA’s actions “were directly contrary to the promises and assurances that resulted in the negotiated Settlement Agreement^]” Compl. ¶ 16. For example, “the VA waited until July 11, 2011 to issue any correction to the previous misrepresentations made by the VA, and to attempt to take any corrective action with regard to its breach of the parties’ Settlement Agreement.” Compl. ¶ 17.

On February 29, 2012, the court granted-in-part and denied-in-part the Government’s Motion To Dismiss. See Kenney Orthopedic, LLC v. United States, 103 Fed.Cl. 455, 465 (2012)

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119 Fed. Cl. 88, 2014 U.S. Claims LEXIS 1214, 2014 WL 5499911, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kenney-orthopedic-llc-v-united-states-uscfc-2014.