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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

ARCH INSURANCE COMPANY,

a Missouri corporation,

Plaintiff,

v. Case No.: 3:09-cv-395-RV-EMT

UNITED STATES OF AMERICA,

and AVENGE, INC., a Virginia

corporation,

Defendants.

___________________________/

ORDER

Pending is the United States of America’s motion to dismiss the crossclaim

of the defendant Avenge, Inc. (doc. 26).

I. Background

For purposes of this order, the facts of the case are undisputed and can be

stated briefly. On September 4, 2009, the plaintiff, Arch Insurance Company, filed

this tort lawsuit against the United States and Avenge. The action arose out of the

crash of a PC-12 aircraft at Hurlburt Field near Pensacola, Florida, on July 8, 2008.

At the time of the crash, the aircraft was on a training mission in which United

States Air Force (“USAF”) pilots were receiving instruction on how to fly the PC12. Under a contract with USAF, Avenge supplied the instructor pilots, and one of

Avenge’s pilots was on board the aircraft (along with two USAF pilots) at the time

of the crash. No one was seriously injured, although the aircraft sustained

considerable damage. Arch, which insured the aircraft, subsequently sued Avenge

and the USAF for negligence. Avenge filed a crossclaim against the United States

for (i) indemnification under the terms of the contract; (ii) breach of contract; and

(iii) promissory estoppel and detrimental reliance. The United States now moves to
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dismiss the crossclaim for lack of jurisdiction.

II. Discussion

The United States has raised two grounds in its motion. First, it contends

that this court lacks subject matter jurisdiction over the crossclaim because it is

based on a contract between the United States and Avenge and, accordingly, the

claim is controlled by the Contract Disputes Act (“CDA”), 41 U.S.C. § 601 et seq.

(doc. 26-1 at 3, citing Blanchard v. St. Paul Fire & Marine Ins. Co., 341 F.2d 351,

358 (5th Cir. 1965)). According to the United States, and the 45-year old Blanchard

case upon which it relies, jurisdiction over a contract claim such as this against the

government is vested in the Court of Claims. Second, the United States urges that,

assuming arguendo that this district court is otherwise authorized and empowered

to consider the crossclaim, jurisdiction would still be lacking here because Avenge

has failed to exhaust the administrative claims process under the CDA.

Avenge has filed a response in opposition to the United State’s motion. It

contends that, with respect to the first argument, the “jurisdictional landscape

today . . . is not the simple black-and-white picture that the USA attempts to

draw.” It maintains that case law provides district courts may now consider both

tort and contract claims involving the government, especially when the claim is a

“defensive claim” for indemnification “that flows out of the primary tort claim.”

I need not consider the United States’s first argument --- nor address the

arguments Avenge advances in response --- because it is clear the exhaustion

argument has merit. The CDA explicitly requires that a contractor submit its claim

to the contracting officer and exhaust the claim before initiating suit. 41 U.S.C. §

605(a). It is of no consequence that, on the facts of this case, Avenge’s claim is a

defensive crossclaim that seeks indemnification. This same issue was presented in

Richland-Lexington Airport Dist. v. Atlas Properties, Inc., 854 F. Supp. 400 (D.S.C.

1994). The court in that case dismissed an indemnification crossclaim for breach of

Case No.: 3:09-cv-395-RV-EMT
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contract against the United States, inter alia, for failure to exhaust and fully comply

with the CDA. The district court explained that there is no jurisdiction “to entertain

a contract dispute against the United States unless the administrative procedures

articulated in the CDA have first been satisfied. This is in keeping with the general

federal policy of requiring exhaustion of administrative remedies before seeking

review by a court of competent jurisdiction.” See id. at 415. Because the record in

that case did not show “that a contracting officer has ever issued a decision with

respect to [the crossclaim],” the district court held that the crossclaimant “failed to

comply with the CDA because it did not first exhaust its administrative remedies.”

Id. at 415-16.

The United States has filed a declaration from the contracting officer, and

she affirms that “Avenge Incorporated has not made any claims to me . . . under

the Contract for any losses or damages associated with the crash of a Pilatus PC12 on July 8, 2008.” Avenge does not deny or dispute this fact. It seems clear,

therefore, that Avenge did not exhaust its claim.1

 

III. Conclusion

Accordingly, the United State’s motion to dismiss (doc. 26) is GRANTED,

and Avenge’s crossclaim is DISMISSED for failure to exhaust.

DONE and ORDERED this 26th day of March, 2010.

/s/ Roger Vinson 

ROGER VINSON

Senior United States District Judge

1

 Avenge has perhaps impliedly conceded this point for nowhere in its

response does it make any attempt to address the United State’s exhaustion

argument.

Case No.: 3:09-cv-395-RV-EMT