Opinion ID: 221854
Heading Depth: 2
Heading Rank: 2

Heading: The Modification Six Claim

Text: Yannacopoulos' final claim on appeal is that Amendment H0006 to Contract 5/86 (Modification Six), executed on February 26, 1996, was also a reverse false claim. In Modification Six, Lockheed agreed to refund to Greece $29,926,515. Of that amount, $22,883,575 related directly to the aircraft sale and $7,042,940 related to the co-production program  an amount that Lockheed later paid to the United States to be credited to the Greek trust fund account. On appeal, Yannacopoulos contends that Modification Six constituted a reverse false claim designed to conceal Lockheed's purported obligation to refund tens of millions of ... unearned [loan] funds to the United States government, among other things. To establish a reverse false claim, Yannacopoulos must first show that Modification Six was objectively false in some way. See Wilson, 525 F.3d at 376. He asserts that Modification Six was false in two separate respects. First, he claims that Annex AK to Modification Six was false because it states that [the] defendants paid to the Government ... $29,047,706 GD collected from Greece for recoupment, despite the fact that $1,891,146 in additional facilities rental recoupment charges included in that amount was allegedly unpaid by that time. Second, he argues that Annex AG to Modification Six was false because it did not ... truthfully reconcile the payments received by [the] defendants with the value of the work they performed. Rather, it set forth new payment schedules ... to collect additional [loan] funds for the remaining contract work as if [the defendants'] had retained no advance payments. We address each of these claims in turn, finding neither sufficient to defeat summary judgment. [21]
In Article 8.3 of Modification Six, Lockheed and Greece agreed that line item 14, entitled U.S. Government Recoupments, would be in the amount of $6,097,706. (A. 408). As explained in Article 8.7 of Modification Six, this line item represented the amount of recoupment that the U.S. Government has directed to be collected by Lockheed from Greece. This amount was to be collected by [Lockheed] and paid to the U.S. Government and is not included in the Contract Price nor ... in the Payment Schedule. Article 8.7 went on to say that the method of payment, the frequency of payment[,] and other payment terms and information are included in ANNEX AK  U.S. GOVERNMENT RECOUPMENTS. Turning to Annex AK of Modification Six, one finds, as of September 30, 1991, a total recoupment amount of $29,047,706. This amount was comprised of two discrete components: (1) $1,891,146 for what Annex AK calls Additional Facility Rental Recoupment; and (2) $27,156,560 for Item Delivery Recoupment. At issue here is the amount for Additional Facility Rental Recoupment, which was a charge owed to the United States government for use of the United States' Fort Worth facility to produce F-16 aircraft for Greece. Yannacopoulos argues that, because Article 8.7 discussed Annex AK in terms of payment rather than collection, we must read that Annex as a representation that the defendants had paid the entire $29,047,706 recoupment amount to the United States Government by the time the parties executed Modification Six. But see Lamers, 168 F.3d at 1018 (noting that imprecise statements are not actionable false statements). Because General Dynamics allegedly never paid the $1,891,146 amount for Additional Facilities Rental Recoupment, Yannacopoulos insists that Annex AK was false. Yannacopoulos misreads the language of Modification Six. While Annex AK says that, between March 31, 1989 and September 30, 1991, General Dynamics had collected from Greece $29,047,706 in funds designated for recoupment, it cannot be read to say that this entire amount had already been repaid to the United States government. Footnote 4 to that Annex states that, out of that amount, $22,950,000 [was] refunded to the Greece commercial sales account of the [FMF] trust fund on [May 17, 1991]. That amount related solely to Item Delivery Recoupment, though, and not the Additional Facility Rental amount that Yannacopoulos says was never paid. Footnote 5 to Annex AK went on to explain that the remaining $6,097,706 recoupment amount  $1,891,146 for Additional Facility Rental and $4,206,560 for Item Delivery Recoupment  has been paid and moved below the line under [line item] 14. Footnote 5  the crucial provision of Modification Six  cannot reasonably be understood to say, falsely or otherwise, that the $6,097,706 in line item 14 had already been repaid to the United States government by the time Modification Six was executed. Line item 14 was the amount designated by the United States for collection from Greece. By saying that this amount has been paid, footnote 5 indicates that this designated amount has already been paid by Greece, not by Lockheed. [22] Because Modification Six never says that the $1,891,146 for facility rental had already been paid to the United States, it is irrelevant whether such a statement would have been false if it had actually been made.
Finally, Yannacopoulos argues that Annex AG of Modification Six implicitly represented that an agreed-upon refund of $29,926,515 to the United States government was the totality of [the loan] funds that [the] defendants had been paid for the value of ... work that they never performed. [23] This implicit representation, he says, was false because Lockheed secretly retained over $21 million in advance payments for the value of work it never performed. As noted above, a claim under the False Claims Act requires proof of an objective falsehood. See Wilson, 525 F.3d at 376. In the context of a contractual agreement such as Modification Six, an objective falsehood requires proof that the parties did not actually reach the agreement set forth therein. Yannacopoulos does not claim that Lockheed and Greece did not actually agree to the refunds set forth in Modification Six, however. Instead, he says only that they implicitly represented that the refunds provided for in that modification were the only funds that Lockheed had been paid for work it had not completed. But see Lamers, 168 F.3d at 1018 (noting that imprecise statements are not actionable false statements). Yannacopoulos provides no evidentiary support for such a strained reading between the lines of Modification Six, apparently believing that a bald assertion about that modification's meaning should suffice. It does not. See, e.g., Drake v. Minn. Min. & Mfg. Co., 134 F.3d 878, 887 (7th Cir.1998) (Rule 56 demands something more than the bald assertion of the general truth of a particular matter, rather it requires ... specific concrete facts establishing the existence of the truth of the matter asserted.) (quotation omitted). At its core, Yannacopoulos' complaint is that Lockheed and Greece reached an agreement that allowed Lockheed to collect additional [loan] funds for the remaining contract work as if it had retained no advance payments. But this is nothing more than an argument that the parties should have agreed in Modification Six to refund more than a mere $29,926,515. Even if that may be true as a matter of contract law and sound public policy, that would not make Modification Six false. And absent evidence of a knowing falsehood, Yannacopoulos' final claim stumbles right out of the gate. [24] The judgment of the district court is AFFIRMED.