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Nature of Suit Code: 118
Nature of Suit: 
Cause of Action: 

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United States Court of Appeals 

for the Federal Circuit ______________________ 

CYNTHIA G. NUTT, INDIVIDUALLY AS 

SURVIVING SPOUSE AND AS THE EXECUTRIX OF 

THE ESTATE OF JAMES N. NUTT, SR., 

DECEASED, JAMES N. NUTT, JR., INDIVIDUALLY,

Plaintiffs-Appellants

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2015-5118

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:14-cv-00282-SGB, Judge Susan G. 

Braden.

______________________ 

Decided: September 12, 2016 

______________________ 

 ANDREW J. MALONEY III, Kreindler & Kreindler LLP, 

New York, NY, argued for plaintiffs-appellants.

 RYAN MAJERUS, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented 

by DEBORAH A. BYNUM, ROBERT E. KIRSCHMAN, JR.,

BENJAMIN C. MIZER, ALEXANDER ORLANDO CANIZARES. 

______________________ 

Case: 15-5118 Document: 57-2 Page: 1 Filed: 09/12/2016
2 NUTT v. US

Before DYK, MAYER, and STOLL, Circuit Judges.

STOLL, Circuit Judge.

Cynthia Nutt and her son, James Nutt, Jr., (collectively, “Appellants” or “Plaintiffs”) appeal a decision of the 

United States Court of Federal Claims granting the 

Government’s motion for summary judgment that it did 

not breach an agreement to pay a claim arising under the 

Federal Tort Claims Act (“FTCA”). Nutt v. United States

(Summary Judgment Order), 121 Fed. Cl. 579 (Fed. Cl. 

2015). For the reasons below, we affirm.

BACKGROUND

James Nutt, Sr. was hit and killed by a United States 

Army soldier driving an Army truck in 1983. Mr. Nutt’s 

wife, Cynthia Nutt—on behalf of herself as surviving 

spouse, the estate, and the couple’s son, James Nutt, Jr.—

filed a claim against the Government pursuant to 28 

U.S.C. § 2674 of the FTCA. The parties entered into a 

settlement agreement (“the Agreement”) in 1985, in which 

Appellants received payments “in full satisfaction and 

final settlement of all claims.” Joint Appendix (“J.A.”) 25. 

The Agreement provided for payments resulting from the 

Government’s purchase of an annuity to benefit the Nutt 

family, as well as lump-sum payments from the Government to the family and its attorneys.

In particular, the Agreement set forth two obligations 

for the Government. First, in section I, it stated that the 

Government “agrees to purchase annuities which will pay 

the following amounts:” (a) $60,000 per year “commencing 

30 days from the date of purchase of the annuity” to 

Cynthia Nutt, (b) lump-sum payments on specified “anniversaries of the purchase of the annuity” to Cynthia Nutt, 

and (c) lump-sum payments on specified “anniversaries of 

the purchase of the annuity” to James Nutt, Jr. Summary Judgment Order, 121 Fed. Cl. at 581–82; J.A. 25–

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NUTT v. US 3

26. Second, in section II, the Agreement stated that the 

Government “[a]s soon as practicable after approval of 

this agreement . . . agrees to pay the sum of” $240,000 to 

Cynthia Nutt and “twenty percent of the total cost to the 

United States of the entire settlement” to the Nutts’ 

attorneys. J.A. 26–27. The next paragraph of the Agreement provided that “[t]he payments by the United States 

set forth above shall operate as full and complete discharge of all payments to be made to and of all claims 

which might be asserted.” Summary Judgment Order, 

121 Fed. Cl. at 582; J.A. 27. 

In accordance with the Agreement, the Government 

purchased a structured annuity from Executive Life 

Insurance Company of New York (“ELNY”) in 1985. 

ELNY went into receivership in 1991. In 2011, the New 

York State Liquidation Bureau informed Appellants that 

“[d]ue to the liquidation, at this time it is anticipated that 

the amount of your benefit payments will ultimately be 

reduced.” Summary Judgment Order, 121 Fed. Cl. at 583. 

In 2013, Appellants began receiving payments reduced to 

approximately 45% of their expected benefits. Appellants 

were also informed that, as of 2015, they would not be 

receiving the anniversary payments. 

In 2014, Appellants filed a complaint in the Court of 

Federal Claims alleging that the Government “breached 

its agreement to pay plaintiffs’ scheduled annuity payments and refused to pay future periodic and lump sum 

payments pursuant to the terms of the 1985 Settlement 

Agreement.” J.A. 20. The parties then cross moved for 

partial summary judgment on liability. Appellants argued that the Agreement “states that the future payments 

‘shall be paid’ thereby rendering the future payments 

mandatory.” Summary Judgment Order, 121 Fed. Cl. at 

585. The Government maintained that the Agreement 

only required it to purchase the annuity, not to guarantee 

the annuity’s future payments. Id. at 586. 

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4 NUTT v. US

The court granted summary judgment in the Government’s favor, determining that “[b]ased on the four 

corners of the Agreement, . . . the Government was obligated to pay certain fixed sums to Plaintiffs and pay for 

an annuity.” Id. at 590. The court further concluded that 

the Government “was not obligated to guarantee or insure 

that annuity; its obligation ended at the initial purchase 

of the ELNY annuity.” Id. at 590–91. The court denied 

Appellants’ summary judgment motion and dismissed the 

complaint. The Nutts appealed to this court, and we have 

jurisdiction under 28 U.S.C. § 1295(a)(3). 

DISCUSSION 

“Summary judgment is appropriate when, drawing all 

justifiable inferences in the nonmovant’s favor, there is no 

genuine dispute as to any material fact and the movant is 

entitled to judgment as a matter of law.” Amergen Energy 

Co. v. United States, 779 F.3d 1368, 1372 (Fed. Cir. 2015)

(internal citations and quotation marks omitted). We 

review the Court of Federal Claims’ grant of summary 

judgment de novo, applying the same standard applied by 

the court below. Barseback Kraft AB v. United States, 121 

F.3d 1475, 1479 (Fed. Cir. 1997). 

I.

As a threshold issue, we first address the Government’s argument regarding alleged limits on how FTCA 

settlements may be paid by the Government. According 

to the Constitution’s Appropriations Clause, “funds may 

be paid out [by the Treasury] only on . . . the express 

terms of a specific statute.” OPM v. Richmond, 496 U.S. 

414, 432 (1990); see U.S. Const. art. I, § 9, cl. 7. The 

Government contends that the FTCA constitutes a limited 

waiver of the Government’s sovereign immunity and, as 

such, only Congress can set the terms for paying claims 

that fall within that waiver of sovereign immunity. The 

Government argues that, in this settlement, it did not 

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NUTT v. US 5

have authority from Congress to pay or guarantee future 

periodic payments under the FTCA. 

The FTCA “waive[s] the sovereign immunity of the 

United States for certain torts committed by federal 

employees,” FDIC v. Meyer, 510 U.S. 471, 475 (1994), but

restricts the type of remedy a court may order for injuries 

to a private person caused by the negligent or wrongful 

act of a Government employee. The FTCA states that 

federal district courts “have exclusive jurisdiction of civil 

actions on claims against the United States, for money 

damages.” 28 U.S.C. § 1346(b)(1) (emphasis added). The 

Government argues in this case that a court may only

award money damages under the FTCA in the form of a 

lump-sum payment. The Government insists that cases 

from other circuits dictate that “[a]bsent an additional 

waiver of sovereign immunity or specific statutory authority granted by Congress, no authority exists for payment 

of damages in future installments under the FTCA.” 

Gov’t Br. 36–37. Several of the cases the Government 

relies on to support its position, however, reject its narrow 

interpretation of the FTCA and specifically acknowledge 

Appellants’ argument here that parties can agree to 

structure a damages plan to include future installment

payments. 

For example, in Reilly v. United States, 863 F.2d 149

(1st Cir. 1988), it was the Government that proposed a 

damages structure where the award would be payable 

over time in periodic installments, much like the damages 

plan Appellants seek in this case. In that case, the First 

Circuit stated that “[p]eriodic damage awards are permissible in lieu of lump sums in certain situations,” such as 

“if a controlling statute permits.” Id. at 169 n.16 (internal 

citations omitted). Relevant here, it also specified that 

“[s]uch an outcome can also be achieved by agreement of 

the parties in interest . . . or where a trust, annuity, or 

other prophylactic arrangement is necessary to ensure 

that the injured party will in fact receive his due.” Id.

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(emphasis added) (internal citations omitted). Put another way, the First Circuit recognized that “[w]hen a tortfeasor loses at trial, then—absent a statute or the parties’ 

contrary agreement, . . .—it must pay the judgment in one 

fell swoop.” Id. at 170 (emphasis added). 

In Vanhoy v. United States, 514 F.3d 447, 454 

(5th Cir. 2008), the Fifth Circuit “refuse[d] to deviate from 

a conventional lump-sum award” by ordering that the 

district court create a reversionary trust. The Fifth 

Circuit, however, expressly recognized that “particular 

circumstances,” including “agreement of the parties in 

interest,” could warrant periodic damage awards. Id. at 

454 & n.34 (quoting Reilly, 863 F.2d at 169 n.16). The 

propriety of periodic damage awards when agreed to by 

the parties is explicitly contemplated by our sister circuits, but notably left out of the Government’s discussion 

of these cases here. Gov’t Br. 36–37. The Government’s 

persistence in this case—that no authority exists for 

paying damages in periodic installments—fails to account 

for circumstances where the parties expressly agree to 

such payments. Like the FTCA cases from the First and 

Fifth Circuits, we reiterate that periodic damage awards 

under the FTCA may be permissible in lieu of lump-sum 

payments with one of the recognized exceptions, including

by agreement of the parties. See Reilly, 863 F.2d at 169 

n.16; Vanhoy, 514 F.3d at 454. 

II.

We next turn to the language of the Agreement itself, 

which both parties argue is unambiguous in supporting

their respective positions. Appellants argue that the 

terms of the Agreement “unambiguously obligate the 

Government to ensure full payment of all annual payments and periodic lump sums it promised.” Appellant

Br. 11. The Government argues that the terms of the 

Agreement “unambiguously require[] only the purchase of 

annuities.” Gov’t Br. 18. Where the language is unamCase: 15-5118 Document: 57-2 Page: 6 Filed: 09/12/2016
NUTT v. US 7

biguous, as the court determined, the “inquiry ends and

the plain language of the Agreement controls,” so extrinsic evidence need not be considered. Coast Fed. Bank, 

FSB v. United States, 323 F.3d 1035, 1041 (Fed. Cir. 

2003). We thus determine whether the plain language of 

the Agreement is unambiguous, and if so, which party’s 

position it supports. 

The relevant provisions of the Agreement state as follows:

[3] As soon as practicable after approval of this 

settlement, the United States of America agrees to 

purchase annuities which will pay the following 

amounts:

I.

[4] 1. a. [$60,000 per year] to Cynthia G. Nutt, 

her estate or designated beneficiary for as long as 

[she] shall live or for thirty (30) years certain, 

whichever is later.

[5] b. On each of the following anniversaries 

of the purchase of the annuity, the following specified lump sum payments shall be paid to Cynthia 

G. Nutt, her estate or designated beneficiary:

[listing anniversaries and amounts]

[6] 2. On each of the following anniversaries of 

the purchase of the annuity, the following specified lump sum payments shall be paid to James N. 

Nutt, Jr., his guardian, his estate or designated 

beneficiary.

[listing anniversaries and amounts]

* * *

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8 NUTT v. US

II.

[10] As soon as practicable after approval of this 

agreement, the United States of America further 

agrees to pay [$240,000.00] to Cynthia G. Nutt . . . 

and a sum equal to twenty percent of the total 

cost to the United States of the entire settlement 

distributed to the [Plaintiffs’ attorneys].

[11] The payments by the United States set forth 

above shall operate as full and complete discharge 

of all payments to be made to and of all claims 

which might be asserted on behalf of [Plaintiffs,]

. . . provided, however, that if the insurance company hereinafter referred to defaults in the performance of its obligations under the annuity 

agreement with the United States, [Plaintiffs] . . . 

shall have standing to sue the said insurance 

company for breach of contract. In such event, the 

United States shall assist [Plaintiffs], their heirs 

or personal representatives, in the prosecution of 

said suit to the extent permitted by applicable 

laws and regulations.

[12] The United States represents to [Plaintiffs] 

that the insurance company it selects for the purchase of the annuities will be one which is generally regarded as very sound in the insurance 

industry and to be among the class or group of insurance companies which are rated Excellent or 

better by Best’s Guide to Life Insurance Companies, 1982 Edition, published by A.M. Best Company, Oldwick, New Jersey 07830.

*** 

[14]The United States will furnish to [Plaintiffs] 

. . . a certificate of insurance or other evidence of 

the purchase by the United States of annuities in 

an amount sufficient to satisfy those obligations of 

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NUTT v. US 9

the United States under this Settlement Agreement which are to be satisfied by the purchase of 

the annuities.

J.A. 25–27. 

At the outset, the Agreement provides that “the United States of America agrees to purchase annuities which 

will pay [certain periodic amounts].” J.A. 25 ¶ 3. We 

agree with the Court of Federal Claims that the “fairest 

reading” of this provision is that the Government did not 

agree to pay future sums, but agreed only to purchase 

annuities. Summary Judgment Order, 121 Fed. Cl. at 

588. As the sentence’s syntax dictates, the phrase “which 

will pay” modifies “annuities,” signaling that the annuities (and not the Government) will pay the future 

amounts. 

Appellants point to paragraph 11 of the Agreement, 

which states that the “payments by the United States set 

forth above shall operate as full and complete discharge of 

all payments to be made.” J.A. 27. Appellants argue that 

this reference to “payments by the United States” covers

the future sums of paragraphs 4–6, meaning that the 

Government promised to guarantee the payments resulting from the annuities. Appellants’ reading of paragraph 

11, however, conflicts with the overall framework and 

context of the Agreement. 

First, the provision “payments by the United States 

set forth above” more naturally refers to the purchase of 

the annuity referenced in paragraph 3 and the lump-sum 

payments in paragraph 10. These two paragraphs designate that “the United States of America agrees to purchase annuities” and “the United States of America 

further agrees to pay” the lump sums. J.A. 25–27. The 

Agreement does not provide for any other “payments” by 

the United States. The future payments set out in section 1, paragraphs 4–6, are specified as being paid by the 

annuity, and the Agreement does not indicate that the 

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10 NUTT v. US

United States agreed to guarantee these future payments. 

J.A. 25–26. The United States is not mentioned in the 

paragraphs specifying the future payments to be paid out 

by the annuity. In contrast, section 2 of the Agreement

sets out an obligation to pay, requiring the Government to 

“pay” certain lump-sum payments directly to Appellants. 

It is the fulfillment of the Government’s obligation to 

perform in section 1 and the obligation to pay in section 2 

that discharge the Government’s responsibility under the 

Agreement, as evident by interpreting these provisions 

together. 

Appellants’ view that “payment by the United States” 

includes the future sums paid out by the annuity conflicts 

with other provisions of the Agreement. Paragraph 11, 

for example, provides that if the insurance company 

defaults, Appellants have standing to sue the insurance 

company, and the Government will assist Appellants in 

such suit. J.A. 27. If “payments by the United States” 

referred to the future sums, making the Government a 

guarantor of the insurance company, it would be nonsensical for the Government to agree to assist Appellants in a 

suit against the insurance company. Similarly, the Government agreed in paragraph 12 to select a “very sound” 

insurance company rated “excellent or better.” Id. The 

Government’s agreement to select an insurance company 

of a certain quality, at minimum, suggests that Appellants sought to reduce their risk by having the Government select a “very sound” insurance company, rather 

than requiring that the Government act as a guarantor.

In addition, paragraph 14 of the Agreement provides 

clear support for the court’s interpretation of “payments 

by the United States.” Id. It states that the Government 

will furnish to Appellants “a certificate of insurance or 

other evidence of the purchase by the United States of 

annuities in an amount sufficient to satisfy those obligations under the settlement agreement which are to be 

satisfied by the purchase of the annuities.” Id. (emphases 

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NUTT v. US 11

added). This provision shows that the Government’s 

obligations with respect to the future sums that were to 

be made by the annuities were satisfied “by the purchase 

of the annuities.” Id. 

The plain language of the Agreement makes clear 

that the Government agreed to purchase annuities and 

pay certain lump-sum payments to Appellants, not to 

make future payments or guarantee that the future 

payments be made if the insurance company defaulted. 

Under the Agreement’s terms, the Government’s obligations were satisfied upon making the lump-sum payments 

and purchasing the annuity. Furthermore, the Court of 

Federal Claims’ interpretation of the Agreement and its 

analysis of the principle of sovereign immunity are in line 

with the FTCA cases discussed above. The court properly 

concluded that, in addition to the Agreement’s plain 

language, the “principle [of sovereign immunity] further 

compels a finding that the Agreement did not obligate the 

Government to guarantee future payments, because it did 

not unequivocally promise to do so.” Summary Judgment 

Order, 121 Fed. Cl. at 590 (emphasis added). Because the 

terms of the Agreement unambiguously show that the 

Government agreed to purchase annuities, not to guarantee future periodic payments, we need not address the 

parties’ arguments on extrinsic evidence. See Coast Fed. 

Bank, 323 F.3d at 1040–41. 

III.

Finally, we address the effect of Massie v. United 

States, 166 F.3d 1184 (Fed. Cir. 1999), on this case. In 

Massie, this court reversed the Court of Federal Claims’

grant of summary judgment that the Government did not 

breach an agreement to pay a claim made under the 

Military Claims Act (“MCA”). We concluded that the 

Agreement “requires [the Government] to guarantee all 

the annuity disbursements,” pointing to language that the 

annuity “will result in distributions” and that the payCase: 15-5118 Document: 57-2 Page: 11 Filed: 09/12/2016
12 NUTT v. US

ments were “guaranteed” and “shall be paid.” Id. at 

1190–91. The court in this case determined that Massie

did not control because it involved an MCA claim, whereas this case involves an FTCA claim. Summary Judgment Order, 121 Fed. Cl. at 588. We are not persuaded 

that this distinction makes a difference in the applicability of Massie. 

Nonetheless, we distinguish Massie on different 

grounds. In Massie, the agreement expressly stated that 

the “deferred lump-sum payments . . . are guaranteed” 

and the annuity payments “are guaranteed for fifteen (15) 

years.” 166 F.3d at 1186–87. With these express guarantee provisions, we reversed the trial court’s holding that 

the Government did not agree to guarantee the annuity 

payments. But the Agreement here does not have similar

guarantee language. Moreover, unlike the Massie settlement agreement, the Agreement here contemplates that 

in the event of a default by the insurance company, the 

plaintiffs “shall have standing to sue the said insurance 

company for breach of contract” and “the United States 

shall assist . . . in the prosecution of said suit.” J.A. 27. 

The Agreement says nothing about the Government’s 

obligations to pay the annuity in the event of a default. 

As such, we decline to extend Massie to the facts of this 

case, where the Agreement’s language does not unambiguously show that the Government agreed to guarantee 

the future payments by the annuity. 

CONCLUSION

For the reasons above, we affirm the judgment of the 

Court of Federal Claims. 

AFFIRMED

COSTS

No Costs

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