Thomas McCaffrey Co. v. United States

177 Ct. Cl. 387, 1966 U.S. Ct. Cl. LEXIS 97, 1966 WL 8895
United States Court of Claims·Decided November 10, 1966·No. No. 580-58·Published·Cited by 1 cases

Opinion

Pee Curiam:

This case was referred to Trial Commissioner Richard Arens with directions to make findings of fact and recommendation for conclusions of law. The commissioner has done so in an opinion and report filed on October 11, 1965. Exceptions to the commissioner’s opinion and report were filed by plaintiff and defendant requested that the court accept the report and opinion of the commissioner. The case was submitted to the court on the briefs of the parties and oral argument of counsel. Such facts as are necessary to the decision of the case are found in the commissioner’s opinion. Since the court is in agreement with the opinion and report of the trial commissioner, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Plaintiff is, therefore, not entitled to recover and its petition is dismissed.

OPINION OF COMMISSIONER*

Arens, Commissioner: This case arises out of a broker’s contract entered into between the General Services Administration (hereinafter referred to as GSA) and plaintiff with respect to the sale of a Government-owned industrial plant which was constructed with Government funds during World War II at New Castle, Pennsylvania. After a denial by the contracting officer of plaintiff’s claim under the disputes clause of the contract for commissions and reimbursement of expenses, plaintiff appealed to the GSA Board of Contract Appeals which conducted a hearing and thereafter denied the appeal.1

In this court, plaintiff, relying exclusively on the administrative record, seeks by way of an assignment of errors to overturn the Board’s decision. In the alternative, plaintiff seeks quantum meruit recovery for expenses and the fair value of its services, or damages for alleged breach of contract.

The entire administrative record is voluminous and contains numerous exhibits, but only those facts are herein recited which are necessary to decide the issues presented.

[390] The industrial plant which was the subject of the broker’s contract was at all pertinent times until the spring of 1954 leased to and operated by United Engineering & Foundry Company (hereinafter referred to as United). As successor to the War Assets Administration, USA had assumed custody and accountability for the plant, subject to United’s lease. During its lease occupancy, United discussed with GSA from time to time the purchase of the plant, but the parties were never able to get together on a sale.

On February 10, 1955, GSA and plaintiff entered into a broker’s contract in which plaintiff was designated the exclusive contract sales'broker of the plant until August 8,1955. Plaintiff agreed to exert its best efforts to obtain purchasers for the plant which had been declared Government surplus property, “to assist in closing the transaction after an offer to purchase has been accepted,” and to expend an amount not exceeding $10,000 in promoting and advertising the plant for sale. The contract provided a sliding scale for payment by GSA to plaintiff of a commission, depending upon the sales price. The commission was to “be payable after closing of title and delivery of the closing papers, resulting from any offer or offers accepted” through plaintiff by GSA during the term of the contract, “even though the sale or sales may not be consummated until after the expiration” of the contract. The contract also provided that “where a sale is consummated by the closing of title and delivery of the closing papers as the result of an offer not submitted by or through” plaintiff, the commission shall be payable to plaintiff “only if the offer is accepted during the term” of the contract.

Plaintiff agreed “that any offer to purchase must be accepted” by GSA “before any binding commitment” on behalf of GSA could be made. The sale was to be “subject to prior clearance with the Government Operations Committees of the Senate and the House of Representatives and, where appropriate, with the Antitrust Division of the Department of Justice.” The contract contained a disputes clause in conventional form. Finally, it was provided that all services rendered by plaintiff and amounts expended by it in the performance of the contract were to be at plaintiff’s own expense, unless GSA terminated the contract if it became necessary [391] to withdraw the plant from the market for use of the United States, in which event plaintiff was to be reimbursed for all reasonable direct out-of-pocket expenses incurred.

Plaintiff was informed of the GSA appraised value of the plant at $13,200,000, and was given a listing price of $14,520,000. Plaintiff immediately began to elicit the interest of potential purchasers by letters, advertising, and personal contacts. On plaintiff’s request, a sealed-bid sale procedure was approved by GSA but the only bid received was a bid of $4,500,000, made on August 5, 1955, by United and rejected by GSA on August 15, 1955, as inadequate. In the meantime, plaintiff asked for an extension of its broker’s contract, but was advised by GSA that the contract would not be extended or renewed.

Plaintiff’s further efforts to secure an extension or renewal of its contract were unavailing, but plaintiff was requested verbally by the GSA Administrator “to keep on trying to get a better price for GSA.” Plaintiff continued to deal with United which, in September 1955, told plaintiff that it preferred to negotiate directly with GSA and “was opposed to entering into any sales commission commitments for the purchase and/or sale of the plant.”

Thereafter, for the next 3 or 4 months, GSA and United negotiated on the sale of the plant. During the negotiations, United was told by GSA that the Government reserved the right to cancel a proposed sale in the event the Attorney General failed to advise that the proposed sale would not tend to create or maintain a situation inconsistent with the antitrust laws or if either of the Congressional Committees on Government Operations interposed objection. Finally, by letter of January 16,1956, United restated an offer which it had previously made to buy the plant for $7,459,203.92, plus $2,540,-796.08 as interest, payable in 20 annual installments.

At the hearing before the GSA Board of Review, Mr. Edmund Mansure, who was the GSA Administrator from May 2, 1953, until March 1, 1956, stated, in effect, that he accepted the offer of United, subject to adverse comment from the Attorney General or from the committees.

By letter dated January 19, 1956, the Director of GSA’s Real Property Disposal Division advised United “that the [392] Administrator had directed preparation of a report to the Congressional committees which would outline the disposal history of the plant and include a copy of United’s final offer with a statement that unless adverse comment was received from the committees, or from the Attorney General respecting antitrust clearance, sale to United on the terms of such final offer would be accepted.”

On January 25, 1956, United acknowledged the letter and expressed its understanding that there was nothing further for it to do until additional advice was received from GSA.

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Thomas McCaffrey Co. v. United States, 177 Ct. Cl. 387, 1966 U.S. Ct. Cl. LEXIS 97, 1966 WL 8895 (cc 1966).

177 Ct. Cl. 387 (Thomas McCaffrey Co. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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