Sharman Co. v. United States

39 Cont. Cas. Fed. 76,606, 30 Fed. Cl. 231, 1994 U.S. Claims LEXIS 4, 1994 WL 5723
CourtUnited States Court of Federal Claims
DecidedJanuary 11, 1994
DocketNo. 90-108 C
StatusPublished
Cited by3 cases

This text of 39 Cont. Cas. Fed. 76,606 (Sharman Co. 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
Sharman Co. v. United States, 39 Cont. Cas. Fed. 76,606, 30 Fed. Cl. 231, 1994 U.S. Claims LEXIS 4, 1994 WL 5723 (uscfc 1994).

Opinion

POST-REMAND ORDER DIRECTING ENTRY OF JUDGMENT: (i) AFFIRMING VALIDITY OF DEFAULT TERMINATION and (ii) DISMISSING, WITH PREJUDICE, PLAINTIFF’S SECOND AMENDED COMPLAINT

WIESE, Judge.

I

After trial, a judgment was entered in this case on June 12, 1992, dismissing plaintiffs first amended complaint for failure of proof and granting defendant’s counterclaim for $1.4 million in unliquidated progress payments. Jurisdiction was based on (i) a final decision of the contracting officer terminating plaintiffs contract for default, and (ii) a subsequent demand by the contracting officer for repayment of progress payments. Taken together, these two actions of the contracting officer were seen by this court to be sufficient to satisfy then-existing jurisdictional requirements for the exercise of our authority under the Contract Disputes Act, 41 U.S.C. §§ 601-613 (1988 & Supp. IV 1992), namely, that the suit involve a claim to money presently due brought here after a final decision of the contracting officer.

An appeal was taken. On August 17,1993, the court of appeals issued a decision vacating the judgment for lack of jurisdiction. The court of appeals ruled that the Government’s demand for return of progress payments involved a separate contract event, distinct from the default termination, and, hence, could not be aired in this court in the absence of a separate contracting officer’s final decision. “There is no authority,” said the court of appeals, “that supports the combining of two separate letters from the contracting officer, one constituting a final decision on a default termination ... and the other demanding a specific amount ... to create a final decision on a monetary claim.” 2 F.3d 1564, 1570-71 (1993).

Athough the adjudication of the Government’s demand for return of progress payments could not be upheld (for lack of a contracting officer’s final decision), no such impediment existed in regard to an adjudication of the contractor’s challenge to the Government’s default termination. The court of appeals pointed out that amendments to the Tucker Act, 28 U.S.C. § 1491 (1988 & Supp. IV1992), enacted after the decision on appeal was issued, granted the Court of Federal Claims jurisdiction, retroactively, to decide non-monetary disputes (e.g., contractor challenges to default terminations) on which a contracting officer’s final decision had been entered. “This new jurisdiction applies retroactively to actions that were still awaiting final judgment upon enactment, as this one was.”1 2 F.3d at 1572. Based on this en[233]*233largement of jurisdiction, and in light of its decision reversing the money judgment in favor of the Government, the court of appeals concluded that the contractor’s challenge to the Government’s default termination was not moot and should therefore be remanded for decision. Accordingly, the case was returned to this court with an instruction to decide “the default termination challenge in the contractor’s original complaint.” Id. at 1573.

II

No sooner was the case restored to this court’s docket, then the parties were once again caught up in a procedural wrangle. This time, however, the issue is not whether the court has jurisdiction to test the correctness of the contracting officer’s default termination. Rather, the principal question now is whether this court may decide the issue of the validity of the default termination on the basis of the existing trial record or must provide plaintiff an opportunity to supplement that record.2

The arguments on this issue, which are before us now as part of defendant’s motion to dismiss plaintiffs second amended complaint, go like this: The Government contends that entry of judgment in its favor is appropriate because the earlier trial, though nominally directed towards resolution of the Government’s money demand (the return of progress payments) was, in reality, a test of the legitimacy of the default termination. Moreover, the Government adds, plaintiff was given every opportunity to put on all of its evidence at that time, and, most importantly, had every incentive to do so. According to the Government, plaintiff well understood that trial of the Government’s demand for return of progress payments necessarily brought into issue precisely the same facts and law that would arise in a trial testing only the correctness of a default termination. Thus, from the Government’s point of view, the default termination issue has been fully and fairly tried.

Plaintiff responds by saying that the remand to this court would be pointless if all that was intended was simply the performance of an administrative function, i.e., pronouncement of a decision upholding the default termination. Plaintiff notes that that task is one the court of appeals could readily have accomplished on its own. Therefore, according to plaintiff, what prompted the remand — and what now justifies its claimed right to supplement the trial record — is the fact that that record was compiled at a time when this court was without jurisdiction to entertain the matter in suit. Plaintiff expresses it this way: “Because the appellate court determined that this Court did not have jurisdiction over this matter at the time of trial and issuance of its decision, this Court must provide plaintiff with the opportunity to be heard.” To plaintiff, then, the existing trial record may be relied on only to the extent the parties have actually agreed to do so. But, absent such agreement, plaintiff insists that it has a right to put on new evidence.

Ill

The court does not agree with the contention that plaintiff is entitled, as a mat[234]*234ter of right, to offer further evidence in support of its attack on the default termination. That argument could prevail only if the want of jurisdiction that existed at the outset had not been retroactively remedied. Under those circumstances, the lack of authority in the court would indeed render it powerless to make any binding determinations, of fact or law, on the evidence initially presented. When jurisdiction is lacking “the only function remaining to the court is that of announcing the fact and dismissing the cause.” Ex Parte McCardle, 74 U.S. (7 Wall.) 506, 514, 19 L.Ed. 264 (1868).

That is not our case, however. As the court of appeals pointed out, the initial lack of jurisdiction in this court to entertain a non-monetary claim was addressed by legislative changes to the Tucker Act, enacted as part of the Federal Courts Administration Act of 1992, specifically granting such authority “with respect to all actions filed before, on, or after the date of the enactment of this Act” in which a final judgment had not yet been entered.3 Since final judgment had not been entered in this case on the date of enactment of the Act, the retroactive enlargement of jurisdiction applies foursquare to this case. By this legislation then, the Court of Federal Claims became vested with full power to address the root issue that has been present in this case from the start— whether the Government’s default termination of plaintiff’s contract was a contractually valid step.

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Cite This Page — Counsel Stack

Bluebook (online)
39 Cont. Cas. Fed. 76,606, 30 Fed. Cl. 231, 1994 U.S. Claims LEXIS 4, 1994 WL 5723, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sharman-co-v-united-states-uscfc-1994.