Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-20-01130/USCOURTS-ca13-20-01130-0/pdf.json

Parties Involved:
Manuella F. Milton
Appellant
Robert E. Milton, Jr.
Appellant
United States
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________

ROBERT E. MILTON, JR., MANUELLA F. MILTON,

Plaintiffs-Appellants

v.

UNITED STATES,

Defendant-Appellee

______________________

2020-1130

______________________

Appeal from the United States Court of Federal Claims 

in Nos. 1:18-cv-00021-MCW, 1:18-cv-00796-MCW, Senior 

Judge Mary Ellen Coster Williams.

______________________

Decided: March 5, 2020

______________________

ROBERT E. MILTON, JR., MANUELLA F. MILTON, 

Altadena, CA, pro se. 

 JAMES WILLIAM POIRIER, Commercial Litigation 

Branch, Civil Division, United States Department of Justice, Washington, DC, for defendant-appellee. Also represented by JOSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN,

JR., DOUGLAS K. MICKLE. 

 ______________________

Case: 20-1130 Document: 22 Page: 1 Filed: 03/05/2020
2 MILTON v. UNITED STATES

Before O’MALLEY, REYNA, and CHEN, Circuit Judges.

PER CURIAM.

Robert and Manuella Milton appeal an order of the 

United State Court of Federal Claims (“Claims Court”) dismissing their complaint for failure to state a claim and for 

lack of jurisdiction and, in the alterative, as barred by 

claim preclusion. See Milton v. United States, No. 18-21C, 

2019 WL 4137495 (Fed. Cl. Aug. 30, 2019). For the reasons 

discussed below, we affirm the Claims Court’s dismissal. 

I

The Miltons are the founders and sole owners of REM 

Engineering Company (“REM”), a professional engineering 

and construction services business. Mr. Milton is a combat-injured Vietnam veteran. REM thus qualifies as a Service-Disabled Veteran-Owned Small Business 

(“SDVOSB”).

In October 2011, the Department of Veterans Affairs 

(“VA”) awarded REM a $23,347,412 SDVOSB set-aside 

project, Contract Number 101CFM-C-0167 (“Contract”). 

Under the Contract, REM was to build a 10-acre solar farm

for the VA Southern Nevada Healthcare System in North 

Las Vegas, Nevada. As a condition of the Contract, REM 

was required to acquire performance and payment bonds, 

each equal to the Contract’s value. REM acquired the necessary bonds within days of the VA awarding the Contract. 

The Miltons personally indemnified the Bonds. 

A number of bid protests were filed, delaying the VA 

issuing a Notice to Proceed on the Contract. In August 

2012, the Government Accountability Office (“GAO”) sustained a protest that argued unreasonable valuation. The 

GAO recommended that the VA reevaluate REM’s offer to 

determine whether it was the best value to the government. Eleven months later, in July 2013, the VA terminated its contract with REM for convenience. REM, having 

Case: 20-1130 Document: 22 Page: 2 Filed: 03/05/2020
MILTON v. UNITED STATES 3

never received a Notice to Proceed, completed no work under the Contract. 

After receiving the VA’s Notice of Termination, REM 

submitted a settlement proposal to the VA, seeking 

$3,534,983. In January 2014, the VA denied REM’s settlement proposal and modified the Contract to reflect a final 

settlement amount of $39,303.28. REM appealed the final 

settlement to the Civilian Board of Contract Appeals 

(“Board”). 

REM filed another claim with the VA in May 2014, arguing that it had incurred damages due to the VA’s elevenmonth delay in releasing it from the Contract. REM argued that it had been unable to complete other work because its entire bonding capacity was consumed by the 

Contract. The VA denied this claim in July 2014, and REM 

appealed to the Board. 

In September 2015, REM accepted a settlement offer of 

$3,050,000 in full settlement of both Board appeals. 

The Miltons filed this suit in the Claims Court in January 2018, alleging four counts related to the Contract:

breach of written contract; breach of implied contract;

breach of oral contract; and breach of implied duty of good 

faith and fair dealing. The government moved to dismiss 

the case. 

The Claims Court granted the government’s motion. 

It found that the Miltons: (1) had failed to establish that 

they were third-party beneficiaries to the Contract, (2) 

failed to establish they were sureties for the purposes of the 

equitable subrogation doctrine, and (3) failed to allege conduct giving rise to a plausible implied-in-fact contract. In 

the alternative, the court found the Miltons’ claims barred 

by claim preclusion. 

The Miltons timely appeal. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

Case: 20-1130 Document: 22 Page: 3 Filed: 03/05/2020
4 MILTON v. UNITED STATES

II

We review legal questions, such as whether the Claims 

Court has jurisdiction over a claim, whether claim preclusion applies, or whether a party has failed to state a claim,

de novo. Frankel v. United States, 842 F.3d 1246, 1249 

(Fed. Cir. 2016); Biafora v. United States, 773 F.3d 1326, 

1334 (Fed. Cir. 2014); Bowers Inv. Co. v. United States, 695 

F.3d 1380, 1384 (Fed. Cir. 2012). We review the Claims 

Court’s jurisdictional findings of fact for clear error. Biafora, 773 F.3d at 1334.

A. Failure to State a Claim

The Claims Court found that the Miltons failed to plausibly allege an implied-in-fact contract with the VA. Milton, 2019 WL 4137495, at *4. To plead an implied-in-fact 

contract, a claimant must allege, “mutual intent to contract 

including an offer and acceptance, consideration, and a 

Government representative who had actual authority to 

bind the Government.” Trauma Serv. Grp. v. United 

States, 104 F.3d 1321, 1326 (Fed. Cir. 1997). 

The Miltons’ complaint alleges that Mr. Milton communicated with the VA about the negative effect that remaining on standby, with REM’s bonding capacity tied to the 

project, had on REM and the Miltons. Suppl. App. 18, ¶ 9. 

Despite this, the VA consistently stated that, if REM were 

to pull the bonds, REM would default on the Contract. Id. 

Such a default would have resulted in the Miltons becoming personally liable under the Contract. Id. The Miltons 

argued to the Claims Court that the VA’s threat of default 

constituted a meeting of the minds between Mr. Milton and 

the VA contracting officer. Milton, 2019 WL 4137495, at 

*4. 

The Claims Court correctly held that the Miltons failed 

to plausibly allege an implied-in-fact contract between Mr. 

Milton and the VA. Specifically, the Miltons do not allege 

a plausible offer or intent to contract by the VA. 

Case: 20-1130 Document: 22 Page: 4 Filed: 03/05/2020
MILTON v. UNITED STATES 5

Accordingly, we affirm the Claims Court’s dismissal of the 

Miltons’ allegations stemming from of an implied-in-fact 

contract. 

B. The Miltons’ Relationship to the Contract

The Claims Court found that it lacked jurisdiction over 

the Miltons’ remaining claims because the Miltons failed to 

establish that they were parties to the Contract. Milton, 

2019 WL 4137495, at *3. Under the Tucker Act, to established that the Claims Court has jurisdiction over a contract-based claim, a plaintiff must prove privity of contract 

between itself and the government. Cienega Gardens v. 

United States, 194 F.3d 1231, 1239 (Fed. Cir. 1998). The 

Claims Court found that REM, not the Miltons, was party 

to the Contract. Milton, 2019 WL 4137495, at *3. The Contract, which clearly establishes that the bound parties are 

REM and the government, confirms that the Claims 

Court’s finding was not erroneous. Supp. App. 47.

On appeal, the Miltons argue that Mr. Milton was necessarily a party to the contract based on VA regulations related to REM’s SDVOSB status. This argument is 

unavailing. VA regulations set out a scheme to provide 

preferential treatment to SDVODBs but do not establish a 

contractual relationship between the veteran business

owner and the VA. See 48 C.F.R. §§ 819.7001–819.7009. 

The fact that REM received an SDVOSB certification similarly does not create a contract. The certification merely 

establishes that the business meets the regulatory requirements for preferential treatment. See 13 C.F.R. §§ 125.12–

125.16. Thus, the Claims Court correctly found that Mr. 

Milton, as an individual, does not have privity of contract 

with the government based on REM’s SDVOSB status.

A plaintiff may also seek relief before the Claims Court 

as a third-party beneficiary to a government contract. See 

G4S Tech. LLC v. United States, 779 F.3d 1337, 1340 (Fed. 

Cir. 2015). To establish third-party beneficiary status, the 

contracting parties must intend to directly benefit the 

Case: 20-1130 Document: 22 Page: 5 Filed: 03/05/2020
6 MILTON v. UNITED STATES

third-party. Id. The intent may be express or implied, but

must be fairly attributable to the contracting officer. Id. 

The Miltons do not allege in their complaint that they are 

third-party beneficiaries of the Contract. They argued to 

the Claims Court, in response to the government’s motion 

to dismiss, that the VA is a third-party beneficiary to the 

contract. Pls.’ Resp. Def.’s Mot. Dismiss at 5, Milton, 2019 

WL 4137495 (Fed. Cl. Aug. 20, 2018) (No. 18-21), ECF No.

18. The Claims Court held that, because the Miltons did 

not articulate how the VA’s status as a third-party beneficiary gave them any rights in the Contract and because the 

Miltons did not allege that they themselves are third-party 

beneficiaries, the Miltons failed to establish this alternative basis for the Claims Court’s jurisdiction over the 

claims. Milton, 2019 WL 4137495 at *3. 

We agree. The Miltons have not alleged that they, 

themselves, were third-party beneficiaries to the Contract 

nor have they articulated why the VA’s status as such a 

beneficiary would give them any right to bring this suit. 

Accordingly, we affirm the Claims Court’s holding that it 

does not have jurisdiction over the Miltons’ contract claims. 

C. Implied Duty of Good Faith and Fair Dealing

Government contracts impose on the government an 

implied duty of good faith and fair dealing. See Metcalf 

Const. Co., v. United States, 742 F.3d 984, 990 (Fed. Cir. 

2014) (“Every contract imposes upon each party a duty of 

good faith and fair dealing in its performance and enforcement.”). No such duty arises, however, in the absence of a 

contract. As we explain above, the Miltons do not plausibly 

allege an implied-in-fact contract with the VA and they are 

not parties to the Contract. Absent a contract, the Miltons’ 

claim of breach of an implied duty of good faith and fair 

dealing is unsustainable. 

Case: 20-1130 Document: 22 Page: 6 Filed: 03/05/2020
MILTON v. UNITED STATES 7

III

We have considered the remainder of the Miltons’ arguments but find them unpersuasive. For the reasons discussed above, the Claims Court properly dismissed this 

case. Accordingly, we affirm the decision of the Claims 

Court.

AFFIRMED

COSTS

No costs.

Case: 20-1130 Document: 22 Page: 7 Filed: 03/05/2020