Smelser v. United States

53 Fed. Cl. 530, 2002 U.S. Claims LEXIS 237, 2002 WL 2023218
CourtUnited States Court of Federal Claims
DecidedAugust 29, 2002
DocketNo. 95-635C
StatusPublished
Cited by4 cases

This text of 53 Fed. Cl. 530 (Smelser 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
Smelser v. United States, 53 Fed. Cl. 530, 2002 U.S. Claims LEXIS 237, 2002 WL 2023218 (uscfc 2002).

Opinion

OPINION & ORDER

BUSH, Judge.

In this lawsuit, plaintiff, who entered into a settlement agreement with the U.S. Department of Energy (DOE) pursuant to which he was permitted to remove equipment from various DOE facilities, seeks monetary damages for the government’s alleged breach of the agreement. Currently pending before the court is the defendant’s motion for summary judgment pursuant to Rule 56 of the Rules of the United States Court of Federal Claims (RCFC). Also pending before this court is the plaintiffs motion to compel discovery. For the following reasons, defendant’s motion for summary judgment is granted in part and denied in part, and plaintiffs motion to compel discovery is denied.

BACKGROUND

I. Factual Background

A. Factual Recitation

In 1985, Congress withdrew support for the Department of Energy’s Portsmouth Gas Centrifuge Enrichment Plant (GCEP), designed to enrich uranium, that was being constructed at DOE’s Piketon, Ohio facility (Portsmouth; Portsmouth facility). At the time funding was withdrawn, the buildings supporting the plant were nearing completion, but the actual equipment designed to accomplish the enrichment mission was in various stages of completion. Some of the equipment had been installed, but much of the equipment had not even been removed from the boxes used to ship it to the site.

Faced with the cancellation of the GCEP program, DOE entertained suggestions from the industry on how to minimize the financial loss of the almost completed GCEP facility. One such offer came from a group of scientists interested in using the centrifuge processes located at the plant to purify nonradioactive isotopes for commercial purposes. In turn, on November 27,1987, DOE entered into an agreement with these scientists, who had formed a company, All Chemical Isotope Enrichment, Inc. (AlChemIE), pursuant to which AlChemIE agreed to occupy a portion of DOE’s GCEP facility in order to conduct its planned business of refining non-radioactive isotopes for commercial purposes.

This agreement included a provision that enabled AlChemIE to remove and sell certain surplus equipment located at the GCEP facility at no cost to DOE. AlChemIE would then use the profits from these sales to help offset some of the startup costs it anticipated incurring. The agreement provided that once production commenced, the government would be reimbursed ten percent of the profits of the enterprise. Following execution of the agreement, AlChemIE retained John Smelser, the plaintiff in this matter, to assist in the start-up of the new company.

Before AlChemIE completed the removal/liquidation effort, and before commencing its planned activities, the agreement between AlChemIE and DOE expired. In the interim, AlChemIE was experiencing financial difficulties and subsequently declared bankruptcy. By order dated August 14, 1990, the bankruptcy court released the remaining unclassified and uncontaminated equipment not removed by AlChemIE for disposition by secured creditors. This unclassified/uncontaminated equipment was subject to a security interest filed by Anderson County Bank in connection with loans it had made to AlChemIE.

On November 28, 1990, Anderson County Bank (bank) and Mr. Smelser entered into an agreement whereby Mr. Smelser purchased from the bank such of the remaining unclassified/uncontaminated equipment as he might select. Mr. Smelser agreed to pay $700,000 for this right of selection, which was later reduced to $500,000, reflecting a settlement of certain unrelated disputes between Mr. Smelser and the bank. Eventually, Mr. Smelser paid between $250,000 and $300,000, which the bank accepted as full settlement as part of an overall settlement between Mr. Smelser and the bank, that included terms requiring the bank to return $50,000 to Mr. Smelser, and to forgive other claims it had against Mr. Smelser. In return, Mr. Smelser released the bank from his claims against the bank, including his claim against AlChe[534]*534mIE’s assets for a $400,000 finders fee, and transferred to the bank certain real estate valued at approximately $400,000 that had been in dispute between the parties.

By letter of September 30,1991, Mr. Smelser notified the bank and DOE that he had selected all of the remaining unclassified/uncontaminated equipment except for certain equipment stands. DOE challenged Mr. Smelser’s right to the equipment, and Mr. Smelser subsequently commenced a legal action to obtain the equipment. On January 23,1992, DOE and Mr. Smelser entered into two contracts in settlement of continuing litigation between the parties over the extent of Mr. Smelser’s rights to the GCEP equipment.

The first contract, entitled Access Agreement for Equipment Removal, No. DE-AC05-92OR22033 (Access Agreement) allowed Mr. Smelser access to DOE’s GCEP facility for the limited purpose of removing certain equipment. The other contract, Material and Services Order Form, ERD-92-1071, covered costs of DOE security, health and safety services as well as DOE assistance coordinating Mr. Smelser’s removal of equipment from the GCEP facility. The equipment to be removed pursuant to the Access Agreement was identified in a list prepared by DOE’s maintenance and operating contractor, Martin Marietta Energy Systems (later Lockheed Martin) that was incorporated into the contract. Both parties recognized at the time of contract formation that the list was not accurate. As many as 217 of the items contained on the list had already been removed by AlChemlE. However, the parties deferred any determination about the 217 items until the conclusion of the removal activities.

During the course of the removal operations as specified in the Access Agreement, the parties were in conflict over many issues, essentially relating to what Mr. Smelser was entitled to remove and certain DOE charges for its services. As a result, the parties entered into the Equipment Transfer and Settlement Agreement (Equipment Transfer Agreement; Settlement Agreement; Agreement), designed to resolve the differences between the parties. This Equipment Transfer Agreement is the contract that is at issue in this litigation.

The Equipment Transfer Agreement provided in paragraph 1 that Mr. Smelser could remove: (a) GCEP equipment specifically listed in exhibit A to the Equipment Transfer Agreement; and (b) certain types of additional GCEP equipment meeting the conditions identified in exhibit B to the Equipment Transfer Agreement. In paragraph 2, the Agreement provided that Mr. Smelser could remove: Excess equipment listed in exhibit C to the Equipment Transfer Agreement, along with other equipment determined to be excess by DOE during the term of the Equipment Transfer Agreement. In addition, the Equipment Transfer Agreement outlined the cost of security, health and safety services to be provided by DOE in connection with Mr. Smelser’s removal of equipment from DOE facilities.

Exhibit A to the Equipment Transfer Agreement consists of a list of GCEP property that Mr. Smelser had requested during the performance of the Access Agreement contract, but did not remove. The list identifies each piece of equipment by identification number, description, and location. Exhibit B to the Equipment Transfer Agreement consists of identified equipment located in three specific GCEP buildings at the Portsmouth Gaseous Diffusion Plant at Piketon, Ohio: the R/A building, Process Building No. 1 (PB-1; PB No.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Laboratory Corp. of America v. United States
108 Fed. Cl. 549 (Federal Claims, 2013)
Grand Acadian, Inc. v. United States
87 Fed. Cl. 193 (Federal Claims, 2009)
Smelser v. United States
62 Fed. Cl. 768 (Federal Claims, 2004)
Veit & Co. v. United States
56 Fed. Cl. 30 (Federal Claims, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
53 Fed. Cl. 530, 2002 U.S. Claims LEXIS 237, 2002 WL 2023218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smelser-v-united-states-uscfc-2002.