Skip Kirchdorfer, Inc. v. United States

6 F.3d 1573, 1993 WL 404764
CourtCourt of Appeals for the Federal Circuit
DecidedDecember 10, 1993
Docket93-5004
StatusPublished
Cited by80 cases

This text of 6 F.3d 1573 (Skip Kirchdorfer, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1993 WL 404764 (Fed. Cir. 1993).

Opinions

RADER, Circuit Judge.

The United States Court of Federal Claims determined that Skip Kirchdorfer, Inc. (SKI) did not show that the United States Navy took private property for public purposes without just compensation. Skip Kirchdorfer, Inc. v. United States, 26 Cl.Ct. 666 (1992). Because the trial court’s findings show a Fifth Amendment taking, this court reverses-in-part and remands.

BACKGROUND

The Navy awarded a contract for the construction of family housing at the Guantanamo Bay Naval Station to the joint venture (JV) of American Export Group, International Services, Inc. (AEGIS) and Zublin Delaware, Inc. (Zublin). SKI was a subcontractor on this family housing contract.

The prime contract called for the provision of 125 units of turnkey family housing at a fixed price of $11,595,000. SKI’s subcontract covered the construction of the housing at a fixed price of $4,250,000. Under the subcontract, the JV promised to supply all construction materials, while SKI promised to provide all necessary tools, equipment, and labor.

The JV’s contract with the Navy, and SKI’s subcontract with the JV, authorized construction of temporary buildings for storage, offices, and shops. The subcontract required SKI to store the JV’s construction materials and to provide an office for the JV’s representative.

Under these contracts, SKI constructed a warehouse. In the warehouse, SKI stored both the JV’s construction material and SKI’s own material, tools, and equipment for other contracts at the base. SKI did not maintain itemized inventory lists of property in the warehouse. However, SKI segregated roughly the various types of materials into separate areas within the warehouse.

SKI’s subcontract stated that the “temporary buildings and utilities shall remain the property of the Contractor and shall be removed by him at his expense upon the completion of the work.” In addition, custom and understanding on the base permitted a contractor to use a warehouse for contracts other than those for which it was specifically approved, and to extend the use of the warehouse as needed for other contracts. According to this understanding, SKI owned and continued to use the warehouse after the SKI-JV contract terminated.

[1577]*1577The JV-Navy contract required completion of the housing project by July 28,1987. The project suffered delays. AEGIS filed Chapter 11 Bankruptcy; Zublin undertook to complete the project alone. Disputes relating to performance under the subcontract erupted between SKI and Zublin. By August 30, 1988, the JV had no personnel in its office at the warehouse. Although the project was near completion, the project still required a substantial amount of work.

In September 1988, because of its ongoing dispute with Zublin, SKI stopped work on the project and asserted control of the warehouse. SKI rented office space in the warehouse to another company, Kelley Co. For the first time, Zublin lacked access to the warehouse.

In September 1988, the Navy notified Zub-lin of a potential termination for default. As a result, Zublin sought access to the materials in the warehouse. SKI denied Zublin access throughout October and November. In November, Zublin arranged for another contractor, APTCO, to finish the housing units. SKI asked the JV to supply an inventory of its materials in the warehouse. The JV refused, maintaining .that SKI was responsible for segregating and inventorying the SKI materials in the warehouse. Neither SKI nor the JV performed an inventory before December 8, 1988.

In early December) representatives of Zublin and SKI met on Guantanamo, but SKI still denied Zublin entry into the warehouse and access to .its materials. SKI’s president instructed its project manager to allow no one access to the warehouse.

Zublin then sought the assistance of the Navy. The Navy Base Commander issued an order requiring SKI to allow Zublin to enter the warehouse and remove JV property. The Commander ordered Zublin to sign an itemized receipt for any material removed. Under the order, SKI could note any disputes as to ownership of removed property on the receipt. The order contemplated that courts could resolve such ownership disputes later. SKI, refusing to follow the order, denied Zublin access to the warehouse.

On December 12, 1988, base security personnel detained SKI’s project manager. Early on December 13, Navy security personnel, Zublin representatives, and others arrived at the warehouse. The Navy personnel forced the warehouse door and cut locks to which only SKI’s project manager had a key. Representatives from the Navy, the JV, APTCO, and Kelley Co. gained access to the warehouse facility at that time.

The JV assumed control of the warehouse, opening it daily from 7:00 a.m. to 4:30 p.m. The JV hired an APTCO representative to remain at the warehouse during normal working hours and to monitor the removal of the JV’s property and compliance with sign-out procedures. Though the order permitted it, SKI did not monitor the removal process.

Neither the Navy nor JV personnel denied SKI access to the warehouse facility. On December 14, the Navy offered SKI “free, unhampered, unrestricted and continuous access to the warehouse and all [SKI] property therein.” During the first four months of 1989, SKI removed substantial amounts of material, tools, and equipment from the warehouse. SKI kept no inventory of the removed property. By the end of this period, all valuable materials, tools, and equipment had been removed.

In August 1989, the Navy told Zublin to remove the warehouse and restore the area to its original condition. Zublin told SKI, as the warehouse owner, to remove the warehouse and restore the site. SKI refused to dismantle the warehouse. In September 1989, Zublin contracted with Virginia Wrecking Company to remove the warehouse and restore the site in exchange for use of the warehouse. The Navy approved this sale. Virginia Wrecking used the warehouse until August 1991, then dismantled it, and took the parts to the dump.

On December 19, 1988, SKI filed a complaint in the District Court for the Eastern District of Virginia including takings claims. The takings claims were eventually transferred to the United States Court of Federal Claims and resulted in the decision now appealed.

[1578]*1578DISCUSSION

This court reviews judgments of the Court of Federal Claims “to determine whether they are ‘incorrect as a matter of law’ or premised on ‘clearly erroneous’ factual findings.” Whitney Benefits, Inc. v. United States, 926 F.2d 1169, 1171 (Fed.Cir.), cert. denied, — U.S. -, 112 S.Ct. 406, 116 L.Ed.2d 354 (1991).

Origins of the Takings Clause

The Fifth Amendment provides: “nor shall private property be taken for public use, without just compensation.” The first Congress proposed the Fifth Amendment against a backdrop of growing dissatisfaction with uncompensated Government seizures of private property. Before adoption of the Amendment, uncompensated seizures of private property for public roads and other public projects were common. Lucas v. South Carolina Coastal Council, — U.S. -, -, 112 S.Ct. 2886, 2915, 120 L.Ed.2d 798 (1992) (Blackmun, J., dissenting).

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Bluebook (online)
6 F.3d 1573, 1993 WL 404764, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skip-kirchdorfer-inc-v-united-states-cafc-1993.