morning your honor i will pennington on behalf of our one road in construction company the intervenors a c i s c c j v admitted on page thirteen of their brief that they have no legal capacity under delaware law and should not be heard here today this case is about fairness the united states entered into them for one hundred million dollars of construction contracts with companies that had no more than a few million in revenue they waive the miller act pons knew that subcontractors like my client are wind were not paid by the prime contractor violated their duty to the regulatory duty to require the prime to so with all the subcontractors settled with the prime contractor to avoid its liability for no one unpaid sub contractors in a no cost settlement and have never satisfied the accord because or wanted mid on page thirteen of its brief there was no legally competent party to parrot it whatever happened with respect to the damages that district of dell where awarding twenty sixteen when they were being unsatisfied ok because that's tittie doesn't have any ongoing existence or why there's no one ongoing existence so we have no idea where those where those assets are  since the companies lack the capacity to receive the satisfaction the if there was any payment made it was a and accidental payment where the united states has the right to recover that money so the duty to pay the satisfaction still remains so if that satisfaction still remains then the basis of my client's claim is that it's entitle to receive that satisfaction now that stands in the place as the trustee of these defunct companies and as the asic need of all of their rights under the contract so for those two reasons that satisfaction is due and should be paid or won the court of federal claims has jurisdiction the court of federal claims held that it had no jurisdiction because the claims between the complaint  and the initial claims were the same however in looking at our once complaint all of the claims that arose arose after those initial claims were result and here the court in its order made no overlap in comparison the court just said the claims are the same but if you look at the claim count one of the our once complaint is for satisfaction so if i'm asking for satisfaction of a court that happened as a result of the claim that is as a specific example of how there could not have been a new overlap this is california  settle settlement so the is that fair to say states exercise of its economic power to force this prime to settle to the disadvantage of the subcontractors i believe count four is a breach of its regulatory duty so under fifty under forty eight c f r fifty two to forty nine dash two it requires a prime contractor to settle with its subcontractors but the relief being sought in those count is that is the invalidation of the settlement agreement right the relief sought is to allow the sub contractors who have not been paid to proceed so so for example right but in order to get there you have to you have to have a basis to say that the subcontractors not bound by the settlement  what that federal regulation provides is that the united states and a prime contractor apologies i missed except that the prime contractor is required to settle with all of its subcontractors before said it is setting sending its final settlement proposal to the united states in the event that the united states but the prime contractor for whatever reason cannot settle remaining claims so here those remaining claims remain viable if they have not already been settled because the united states remains why a bill under that bridge is under that regulation right  the right to four and five right you're talking about two four and five i mean it's four and five is what you're focusing on right now right yes so five is the economic dress i believe that four is the breach of the united states breach of its own regulatory duty right but ok so you have to have a theory of liability which is what you're talking about but then what is the duty are still able to produce proceed i but you're saying they were settled which means to the extent that the settlement agreement on its face purports to cover them you would have to set the settlement agreement si respectfully on that point i would disagree with you because the settlement agreement settles the claims of the prime prime contractor and so the prime contractor is required to settle its claims of the sub sub contract sub contractors if those claims have not been settled they still remain viable so so here and this is where forty nine want to wait dash dash six comes in because here the the united states can enter into a settlement with the prime contractor and those other claims of some contractors that were not subtle remains and so that it's really the position  that we're internet why doesn't the election and election doctrine just force you to go back to the board with that type of a claim because it's the same facts like and that partial completion was predicated on the work that the subcontractors did and so now you're saying well you know yours subcontractor claim is still alive theory is what you're telling us that you should be really before the or under the election after your look to respond your question and save a little bit of my time because i see five fifty  on the election doctrine there are two parts to the election doctrine the court made were federal claims made to findings related to that so one was related to  initial petition that our one filed to compel a final decision no final decision was made on one or one's claim on the second issue which is the one that the government has made that because there's an initial claims were filed in the in the before the s b ca that therefore these claims on the election doctrine it has to be on the same sort of transactional facts but here we really have a different set of transaction facts and even if that is the case the claims that our want has let's say for example in the satisfaction of satisfaction of the court should still be allowed to proceed in the in the court of federal claims and then under forty one u s c seventy one seventy one two three you can have a consolidation of those cases but here it's not the same there anything stopping you from pursuing these claims to the at the board things that benefit our way in the sub contractor so you're you're the trustee for n c i but i don't see how any of these counts what you're claiming and what you're seeking are actually directly benefit and u c i it's all for benefiting really here with you yourself are with so it's this strange scenario to me where it feels like pardon that crude analogy but are ones like this creature that is now inhabited this host called a c i and now you have taken over a c i brain and it's forcing a c i to do all these things not really to benefit a c i put really to benefit yourself the foreign organism that's now so here when the government enters into a contract it could say we're only going to have one prime contractor and we're not going to allow any use of contractors and so then it's only these two relationship but here with the united states doesn't say as we're going to enter into a contract with a prime contractor we're going to allow that private contractor to enter into sub contract we're going to require that the government name all of those subcontractors we're going to require that the prime settle with all of those subcontractors so here had the prime actually fulfilled its duty settled with all of the subcontractors there would be this assertion that because you're really here standing in the shoes of a c r but let me he back on that a c i entered into a settlement with the government right it did yes right and in that settlement agreement it agreed to convert the terminations to a terminations for convenience right yes and where there's a terminations for convenience a c i cannot see recovery for subprime years isn't that right i believe that is not does respect that i disagree with the court so in the in the term nation for convenience the terminations for convenience settlement proposal and this is even on the settlement proposal form you have to list out the settlement that you've made with every single subcontractor so yours the prime contractor in the letter that goes out from the united states to the prime contractor it says returning your contractor for convenience terminate all years of contracts with all of your subcontractors and you must settle with also contractors right you rat the prime contract right so so then the united states is told the prime you must sell then from that point there's a regulatory duty for the prime to settle with each and every of the each and every one of the sub contractors and then include that settlement proposal include the total of those settlements on its final proposal to the government here they're entering into a settlement proposal i think a few of them were no cost som in each of those cases they did not settle with the subcontractor but why is that the government's responsibility as opposed to the prime response well the government also has that regulatory duty to and the in this case in this case the united states agreed to leave its two other contracting parties which i think is f r for want to three so it allowed this prime to have other subcontractors here in this case this was attached to the motion for summary judgment and it's alleged in the complaint the prime the sub contractors were slowing work on the project they told the government that they were not paid the government told the prime this is taking up too much of our time in dealing with these subcontractors because they are contacting us about the payments that they say or do prove to us that you have paid that money no proof was provided then the united states said you've submitted claims you've submitted invoices we're withholding those payments until you prove that all of your subcontractors are satisfied so here even before the settlements were entered the united states knew that there were unpaid  known unpaid subcontractors and then knowingly entered into a settlement agreement that provides that what you did all of those claims of subcontractors knew that they were unpaid but work correctly concluded that it doesn't have jurisdiction to entertain the appellant suit and that's for several reasons first the settlement agreement with the prime contractors moves continued litigation on the subjects of that the settlement agreement was satisfied and then the board dismissed the complaints pursuant to those settlements as they were fully executed and so any continued comments with its there's nothing on the record to determine exactly other than the settlement agreement which is in the record at the supplemental fix that the government provided in the first starting with supplemental  through that assignment judicial assignment would be the one that would get to collect one point six million well our wants arguments on the hypothetical is that right  or one's argument on count one depends on their assertion that the party who received the settlement had no authorization to do so the problem with that argument for our want is that the same infirmity on which they relied to make that point took place before the settlement agreement was entered into in the first place so if they are correct that this infirmity prevented the ability of to receive satisfaction on the part of counsel for these entities then it also prevented those entities from entering into the contract in the first place in which case the only remedy which they haven't seek at any point would be rescission of that contract or invalidation of that contract rather than a different party getting to collect on the contract firstly well that's what i am trying to figure out is i had thought that's what they wanted in town for five y they didn't ever say that that would make sense given that they're alleging economic the rest for example but if you look at the relief requested in count five they say economic dress therefore pay us to full point something million dollars which makes no logical sense of course if they're saying that the contract is invalid because economic the rest was applied then the remedy would be to invalidate that contract not to pay that contract again to a different party and that's the problem that's consistent throughout our wants arguments here they want to take the benefits of the settlement agreement and say pay us the sue the prime contractor in district court and attain a judgment which they have done so they're just out alive they're out of luck to the extent that they've successfully sued and they have a judgment if they're unable to collect that judgment it's the it's a sympathetic position to be in but it doesn't mean that the government has to again satisfy an agreement that it is already satisfied they have no rights against the government which the trial court found that they are in the position of a subcontractor now they refer to some regulatory duties which just first of all do not apply to the purpose of that is just up just to finish up on account one even if it can one is based on a mistaken pavel's you know their view is the money was never actually paid and so through this judicial assignment  now they're the party that gets to collect that money from the government when that claim be allowed to go forward or at least that it shouldn't be dismissed under moved this i mean it might it might be able to very easily prove that well the fact that money was paid so there's the judicial side of it is worth less than the substance of count one as with count five and some of the arguments is that there was no capacity to accept that payment if that logic holds again that invalidates the entire agreement so what that leaves count one is a claim which was never made so that could never be analyzed by the trial court because it's not what are on presented but had they for example hypothetically presented presented a claim for recision of that contract there w still be no jurisdiction what about a claim to enforce the country so i mean you say the money was paid but there's nothing in the record to indicate that money again so that they are the court has corrected then if i that now settlement agreement altogether and leave the court in a position where the only remedy it could give would be rescission unfortunately although the court of federal claims can in certain circumstances water rescission it doesn't have jurisdiction to give only an equitable remedy which of course rescission is now typically where you have rescission the work and then consider well in light of this rescission can we give money damages unfortunately in this case because of the election doctor in the work to not do that because if that i don't understand that count and account why we're or not we're talking about a settlement agreement that didn't exist at the time of any proposed supported election right but if that's if the settlement agreements were to be invalidated rather than what we would be going even if it's not under count one what they're what they're seeking is what i've read they're seeking and the count one is the possibility of enforcing that so how is that how is there an election to not go forward with the settlement that was entered into after the supposed election of the election would take place election doctrine comes into play with regard to count one only if that so many removes invalidate it because they still haven't answered my question is there anything in the record to show that the government made any payments at all under that settlement the the only evidence in the record that we can point to is the dismissals by the s p c s were typically in court where a dismissal takes place after a settlement is concluded which typically is done reminder the trial court issued its decision before the government filed anything in this was no opportunity that the government had at that point to put that in the record but the record does establish that the settlement was made and that the s p c a dismissed pursuant to that so the other issue with count one which we've mentioned is that the whole logic of count one is not that there was no payment ever made that's not what count one of legends count one alleges that there was payment made to the wrong party because that party had no authority under delaware law to accept satisfaction of the agreement the problem is if you take that if you credit that argument if the port were to give the benefit of the doubt to the allegation of the complaint it would mean that the settlement agreement was invalid not that the settlement agreement remains valid and the government has to pay again because it's potentially paid the wrong part and so that leaves us with the possibility of rescission which would be barred from jurisdiction in the fourth because the result of that would be whatever liability end of the contract which has already been put into the a c c a by the prior to elect of crimes so under any logical outcome of the allegations that are made in the complaint the case is either moot precluded under a street of hot up or or by the election doctrine from jurisdiction of the invalid and of course the movement argument no longer applies but that's when the election doctrine comes in because as the trial court was clear our want can't sue the government for anything no privity of contract so it has to be standing in the shoes of the prime saying under these government contracts we are entitled to some payment proportional work that we've if the settlement agreement is invalidated then all that's left is a claim by the primes hey you need to pay us for this partial work that was done however the primes up already elected to pursue those suits in the c when they sue when they file their contract appeals there in prior years and so that's why the election to bars it so whichever way the court reads the allegations in our wants a complaint the result is it's part either by the parties are canceling the delegate law it does not mean that they do not have an interest in the case what's happening here is there are want to subcontractors trying to come in and usurp the j b s rights and also to undo what the j v has already done an agreement revive it any time tomorrow if the j v wanted to it could issue a certificate of a revival in delaware and what that would mean is that any of the we're going to do that because if they revive in delaware they're going to have to pay the judgment against them in delaware well right i mean it's pretty convenient that you want to be here and make an argument to us and say well we might revive at some point but then you tell the delaware court that you don't have to pay a judgment because you don't exist right your honor for th by frivolous lawsuit for the subcontractors payment from the prime that hired them your honor i'm really specifically referring to the situation that we're in right now i don't even understand why you're here defending the government it doesn't even make any sense while your honor for one the sub contractor is trying to undo an agreement that the prime had with the government and we felt compelled to having paid something but but that was before the contract was terminated correct so since the terminations the contract you paid them nothing that is correct and there's a judgment against you in delaware saying you have to pay them and you haven't paid the money that is correct right and so you're here saying don't go after the government for any of this money because we don't want you to i don't even under arrest this is the real really this is this is worst and that you know that the hydra headed thing that had that thing that that judge chen was worried about this makes absolutely no sense to me but if they have money to pay a lawyer to stand here then why don't they pay their subcontractors or pay the judgment that's against them in after the government on an alternative legal theory if the energy were ever revived this would come back or is it that if the settlement somehow gets voided and baby would have to return the money that was paid over by the government i would disagree with that judge i think what's important and i'm just trying to that's that's the one thing i could understand why you might have and press you don't want to have to fork over the money that you collected said it and that you're hiding from their subcontractors but what other purpose for why you're here trying to defend the settlement well i i think you touched on this  situation you can't possibly have any problem here even if that settlement that set aside you wouldn't have to pay back anything so you're all you're sitting in the cap or you don't have to pay your judgment you don't have to worry about paying any money back but you want to be here just nicely defend the government is not simply just to defend the government your honor it is also defending the interests of the j v the trustee is here but you've told us you just told us and you don't have any interest you just told them that there's no way you could have to pay this money back even if the settlement gets settled well those are some state issues your honor that i do not think was an issue of the court of federal claims and was not considered in you mean as counsel who is my contract with right who am i actually representing yeah i am representing the j v but it doesn't exist it is currently cancelled your honor right so you can't enter into a contract with  who's your contract you have to have a contract to be a lawyer the member who is the the former member of the l l c he has a sole one hundred percent interest owner in the l l c we represent him you're i suppose you may be right there on this issue of who we are actually representing your honor if you would like i can always file and be happy to accept one of refund issues i don't think we need so what what's what's  stake for your client that doesn't exist if you ever think through what is the injury to the cancelled entity a c i in j v that's identified in counts two through five what is the injury in fact there  so the injury is that its interest has to be measured the same as all of its subcontractors and here all of the remaining unpaid subcontractors have not been paid so from the government's perspective the government was required to protect all of that entity well i mean i'm sorry you're you're here as the trustee for  here to represent the interests of what doesn't exist doesn't have the capacity to sue or be sued that's another problem and why wouldn't one of their interests be not paying anything to r so within the regulations there is really a unified interest so if so from the trustees perspective the is to act fairly with all of the partners so this would be not only the prime but also with the the subcontractors so here in as a condition of settling the agreement the prime must settle with all of the the the subcontractors so the interest that the prime has the interest that the trustee has is to ensure that all of those subs are treated fairly and that could be one of t to pass on women apart from our settlement well i think there's you know if i could i believe there's two parts that the first part is is that as the trustee the trustee still has the right to assert those claims that have never been resolved this case i believe presents the first one i found related to the government's defensive use of a cancelled corporation in the case law that i found up to now in each of the cases in in either the board or the court of federal claims the united states is saying that corporation that entity can't bring this claim because they're cancelled the company then revives and then there's an issue about where's the case in this is the first one that i found w really been the reverse where it is the company the the asic need a trustee saying we have the right to proceed and the government's saying no no no  it's that cancellation does not matter because even though your cancelled we made a payment and we're still entitled to show that that payment was made to the the prime contractor only settled with some subcontractors but their claims that you are raising now for the first time were not before the court of federal claims were th three which is our winds claim was a claim that was filed to the contracting officer no decision was ever entered and i believe that that is count three the the other counts would