Case ID: us-ct-cl_60/html/0654-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

FRED T. LEY & CO. v. THE UNITED STATES
    
    [No. C-932.
    Decided May 4, 1925]
    
      On the Proofs
    
    
      'Contract; cost-plus; public liability insurance. — Public liability insurance, not required or approved by tlie contracting officer, is not part of the cost of construction and can not be reimbursed plaintiff.
    
      The Reporters statement of the case:
    
      Mr. George A. King for the plaintiff. Mr. George R. Shields and King <& King tvere on the briefs.
    
      
      Messrs. John E. Hoover and O. B. McGuire, with whom was Mr. Assistant Attorney General William J. Donovan, for the defendant.
    The following are the facts as found by the court:
    I. Plaintiff is a corporation organized under the laws of the State of Massachusetts, with its principal office in the city of Springfield.
    II. Under date of June 14, 1911, plaintiff entered into a contract with the United States, represented by Major W. A. Dempsey, Q. M., U. S. R., as contracting officer, covering the construction on a cost-plus basis of certain cantonment buildings at Camp Devens, near Ayer, Massachusetts. A copy of the material parts of said contract is annexed to the petition herein as exhibit “A” and is by reference made a part of this finding. The contract was identical in form and provisions, except as to the work to be done thereunder, with contracts made at or about the same time for fifteen other cantonments in other parts of the United States, one of these being the contract involved in the case of Mason and Hanger Company, 56 C. Cls. 238.
    III. Major W. A. Dempsey was the contracting officer of the Government at and before the date of the contract and until July 21, 1911. He was then succeeded as such contracting officer by Colonel I. W. Littell, who remained as contracting officer until February 12, 1918, at which time he was in turn succeeded by Colonel R. C. Marshall, jr. (later brigadier general). Colonel Littell was also the officer in charge of cantonment construction up to the time he was relieved as contracting officer by General Marshall. The constructing quartermaster at Camp Devens was Captain Edward Canfield. Directly after entering upon the work plaintiff, in accordance with its usual practice, took out a policy of insurance covering public liability insurance and continued to carry same and paid premium costs thereof during the continuance of the work under the contract. On June 23, 1917, the officer in charge of construction, in a communication to plaintiff, informed plaintiff that it should carry such insurance as the contracting officer might direct and that the Government would carry its own risk against fire and public liability damage. The contracting officer disapproved of the action of the contractor in talcing out liability insurance and notified plaintiff that he did not consider the cost of such insurance a proper item in the cost of the work.
    ' IY. On June 28, 1917, a telegram or night message was addressed by the contracting officer, Major Dempsey, to plaintiff and to each of the other fifteen contractors, notifying them to obtain insurance protecting their material against fire between the time of delivery by the carrier and acceptance by the Government, and also such workmen’s compensation insurance as was required by the statutes, and further stating that other insurance risks were assumed by the Government and that the Government would not assume responsibility for losses and expenses resulting from the contractor’s fault or neglect. Subsequent to this night message and on July 5,1917, plaintiff inquired of the constructing quartermaster whether or not the public liability insurance then in force should be canceled or whether such risk should be assumed by plaintiff. On July 9, 1917, the officer in charge of cantonment construction wrote to the constructing quartermaster at Camp Devens, calling his attention to the fact that the contract, provided that insurance should be approved by the contracting officer and not by the constructing quartermaster.
    Y. On or about August 8, 1917, the constructing quartermaster sent to the officer in charge of cantonment construction several policies which had been taken out by the plaintiff and which had been delivered to the constructing quartermaster, among which were the public liability insurance policies taken out by the plaintiff, as hereinbefore stated. These policies for public liability insurance were returned to the constructing quartermaster on or about August 10, 1917, disapproved on account of that form of insurance not being authorized, and this disapproval was communicated to the plaintiff on or about August 13, 1917. These policies ran from month to month and carried a clause authorizing the cancellation within a limited period stated. In their letter of July 25,1917, transmitting policies, as above stated, to the constructing quartermaster, plaintiff gave a list of the insurance policies, two of which were for workmen’s compensation liability, two for teams’ liability damage, one for safe burglary, one for paymaster robbery, and two being policy CO-86, “ expiring July 19, 1911,” and policy CO-101, “ expiring August 19, 1911,” for public liability. These were the policies that were forwarded, as above stated, to the officer in charge of cantonment construction, and were returned on August 10 with the statement that they were not approved.
    On August 24, 1911, plaintiff -wrote the officer in charge of cantonment construction, expressing regret at the decision that public liability insurance would not be authorized and urging that it be approved. The Government officers adhered to their decision, and on August 31, 1911, plaintiff wrote to the officer in charge of cantonment construction claiming that the first set of policies had been taken out and authorized by the constructing quartermaster, and also added that the second set of policies expired on August 19 and were not renewed at the expense of the Government because of the orders received from the officer in charge of cantonment construction. In reply to this letter the officer in charge of cantonment construction on September 4, 1911, wrote to plaintiff, calling attention to the telegram of June 28, 1911, and stating that under the conditions mentioned in that telegram he could not understand why the policies for public liability and other insurance were not immediately canceled in spite of the .claimed authorization by the constructing quartermaster. This letter was responded to by the plaintiff on September 6 with the explanation of the alleged authorization by Captain Canfield and added: “ We sincerely trust we will secure your approval to carry public liability insurance.” A number of communications passed between the parties on the same general subject of public liability insurance, with the result that the contracting officer declined to approve the taking out of policies covering the same.
    VI. The actual cost incurred and paid by the plaintiff on account of public liability insurance under the said contract from June 14, 1911, to December 31, 1911, including the liability insurance policies CO-86 and CO-101 and four other policies, amounted to $10,190.15, no part of which has been paid back to the plaintiff.
    VII. The evidence fails to show that the public liability insurance taken out by the plaintiff was ever required, approved, or ratified by the defendant’s contracting officer or his successor in office or any other person to whom the duties of the contracting officer were assigned by the Secretary of War, or by any duly appointed representative of the contracting officer.
    The court decided that plaintiff was not- entitled to recover.
    
      
       Appealed.
    
   MEMORANDUM BY THE COTJRT

The plaintiff claims reimbursement of the cost of policies •of public liability insurance which were carried for the protection against claims for injuries sustained by the public on the work done under a contract with the Government of June 14, 1917. This contract was one of sixteen cantonment contracts of similar form and requirements, except as to the work, and was a contract with similar provisions to that involved in the Mason and Hanger Company case, 56 C. Cls. 238. In the case just mentioned it was made definitely to appear that the taking out of public liability insurance had been approved by the contracting officer. No such -fact appears in the instant case. On the contrary, the contracting officer continually objected to the taking out of public liability insurance and plaintiff was so informed of the fact and continued the policy in force or renewed the same after the ruling by the contracting officer. The plaintiff frankly states that in the instant case there was “no such specific individual approval of the policy in this case as there was in the Mason and Hanger case ” and adds that plaintiff relies on the approval in the Mason and Hanger case as having been intended as an approval of like action under all similar contracts. We think the approval in the Mason and Hanger case was for the purpose of submitting a question to the comptroller. But however this may be, each of these cases must stand upon its own facts. The contract authorizes insurance approved or required by the contracting officer. In the absence of any such requirement or any such approval or ratification by the contracting officer designated in this contract the plaintiff: can get no benefit from his action under some other contract and with some other contractor. The plaintiff knew almost from the inception of the work that this insurance would not be authorized. If it proceeded to carry this insurance for its own purposes it can not properly expect reimbursement. The petition is accordingly dismissed.