United Sales, Inc. v. United States

40 Cont. Cas. Fed. 76,842, 34 Fed. Cl. 88, 1995 U.S. Claims LEXIS 172, 1995 WL 516627
CourtUnited States Court of Federal Claims
DecidedAugust 30, 1995
DocketNo. 178-88C
StatusPublished
Cited by8 cases

This text of 40 Cont. Cas. Fed. 76,842 (United Sales, Inc. 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
United Sales, Inc. v. United States, 40 Cont. Cas. Fed. 76,842, 34 Fed. Cl. 88, 1995 U.S. Claims LEXIS 172, 1995 WL 516627 (uscfc 1995).

Opinion

OPINION

HORN, Judge.

This case comes before the court on defendant’s motion for partial dismissal, filed pursuant to Rules 12(b)(1) and 12(h)(3) of the United States Court of Federal Claims.1 Plaintiff, United Sales, Inc., filed this suit pursuant to the Contract Disputes Act, 41 U.S.C. §§ 601-609 (1988 & Supp.1993) and the Tucker Act, 28 U.S.C. § 1491 (1988 & Supp.1993). The complaint alleges breach of contract and wrongful withholding of funds by the defendant. The plaintiff also has requested injunctive relief to preclude the defendant from an administrative offset and from the continued withholding of funds, which plaintiff alleges it is due from the government.

FACTS

The plaintiff, United Sales, is a commission broker and procurer of foodstuffs for government agencies on behalf of producers and manufacturers throughout the United States. Pursuant to Blanket Purchase Agreement N00189-86-A-7510, and in response to call numbers M26A and M27A set forth in the Blanket Purchase Agreement, United Sales delivered to the Department of the Navy, Naval Supply Center in Norfolk, Virginia (Navy), 1,267 cases of frozen spiney lobster tails, at 30 pounds per case and $10.01 per pound.

The complaint alleges that the lobsters procured by United Sales were supplied by the third-party plaintiff, Fulton Lobster Company, Inc. (Fulton), of Elizabeth, New Jersey. Prior to shipment to the Naval Supply Center, the seafood was examined for quality and condition by the United States Department of Commerce, which issued Lot Inspection Certificates CL 12756 and CL 12757 on November 17, 1986 and December [90]*909, 1986, respectively. These certificates attested to the size, quality and quantity of the seafood delivered pursuant to call numbers M26A and M27A of Blanket Purchase Agreement N00189-86-A-7150. Further, according to the complaint, “[t]he certificates were duly supplemented by the Commerce Department on March 19, 1987.” In addition, the complaint states that upon receipt of the seafood shipment at the Naval Supply Center in Norfolk, Virginia, employees of the Naval Supply Center inspected, approved and accepted the seafood. Thereafter, the defendant paid its obligation in full on call numbers M26A and M27A, by tendering the sum of $380,480.10 to United Sales. After deducting its commissions and expenses of sale, United Sales remitted the balance of the funds to Fulton, the supplier. The complaint also states that on March 5, 1987, after full payment had been made by the government to United Sales, the Navy notified United Sales, for the first time, that it wished to revoke its acceptance of 606 cases of the seafood as not conforming to the contract specifications.

Plaintiff, United Sales, alleges that the events associated with performance and payment under call numbers M26A and M27A pursuant to Blanket Purchase Agreement N00189-86-A-7510 were then reviewed by “an administrative contracting officer, who, after consideration of the matter, issued his final decision letter on November 23, 1987.” The correspondence between the contracting officer and United Sales leading to the November 23,1987 contracting officer’s decision is not included in the record before this court. The contracting officer’s decision, however, states, in part:

By letter dated 5 March 1987, you were officially notified of the Navy’s revocation of acceptance of certain non-conforming spiney lobster tails tendered in response to call numbers M26A and M27A of Blanket Purchase Agreement (“BPA”) N00189-86-A-7150. Review has disclosed that of the 1267 cases delivered under these BPA calls, 606 have significant deficiencies warranting revocation. At the contract price of $10.01 per pound and 30 pounds per case, the contracting officer hereby determines your firm indebted to the Navy in the amount of $181,981.80.
While numerous attempts have been made to resolve this problem, all have proved futile. Your firm apparently has taken the position that as a broker you are not responsible for non-conformities tendered by your supplier directly to the Navy. You fail to recognize, however, that BPA N00189-86-A-7510 is with United Sales, Inc.; calls M26A and M27A were placed against BPA N00189-86-A 7510; and, as such, United Sales, Inc. is primarily responsible for any material provided. Failings of your suppliers or subcontractors are your responsibility.

Subsequent to the issuance of the contracting officer’s final decision, the Navy administratively offset and withheld funds (apparently in the amount of $91,000.00), allegedly due to United Sales on separate contracts between the government and United Sales, unrelated to the lobster tails supplied by Fulton under call numbers M26A and M27A of Blanket Purchase Agreement N00189-86-A-7150. Plaintiff responded to the government’s offset and withholding of funds by filing the instant complaint in the United States Claims Court, now the United States Court of Federal Claims.

Count I, titled “The Claim of the United States,” alleges 1,267 cases of spiney lobster tails supplied by Fulton were initially accepted by the defendant and that the Navy paid $380,480.10 to United Sales, representing full payment for delivery under call numbers M26A and M27A of Blanket Purchase Agreement N00189-96-A-7150. After deducting its commissions and expenses of sale, United Sales sent the balance of the funds in payment to its supplier, Fulton. Subsequently, the Navy notified United Sales of its intention to revoke acceptance of 606 cases of the seafood on the basis of non-conformity to the contract specifications. United Sales further alleges that the seafood supplied was of the quantity and quality called for by the contract and had been accepted by the defendant. United Sales also maintains that if the seafood spoiled, it was the result of acts of the defendant after delivery, and, therefore, [91]*91a risk assumed by the defendant. According to plaintiff, United Sales, the Navy also failed to mitigate any alleged damages. Further, plaintiff United Sales argues that the defendant knew that United Sales was acting for a disclosed principal, Fulton, and, therefore, that United Sales is not liable to the government, but should look to Fulton for any relief or damages for the allegedly spoiled seafood.

Count II of the complaint, titled “United’s Claim for Damages,” addresses the funds withheld from United Sales by thé government, which according to plaintiff were due to United Sales on other contractual transactions between United Sales and the government, concluded after and unrelated to delivery under the call numbers at issue in the above-captioned case. In Count II, plaintiff alleges that the government also cancelled additional orders placed with United Sales, thereby breaching other contracts with plaintiff United Sales. Further, plaintiff United Sales asserts that the defendant engaged in premature collection efforts. For these alleged violations, United Sales claims $500,-000.00.

Count III of the complaint requests injunctive relief, as follows: “United asks this Honorable Court to determine that United is not indebted to the United States for any sum whatsoever ...

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Bluebook (online)
40 Cont. Cas. Fed. 76,842, 34 Fed. Cl. 88, 1995 U.S. Claims LEXIS 172, 1995 WL 516627, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-sales-inc-v-united-states-uscfc-1995.