Court Opinion

ID: 9631179
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:31:13.230092+00
Date Added: 2024-06-11T18:07:49.848855
License: Public Domain

*97SCHWELB, Associate Judge,
concurring:
To the limited extent that a lawsuit can be deemed a morality play, this one does not come out right. Because I believe that I am required to do so by statute and precedent — and only for that reason — I concur in the judgment of the court, and I join the court’s opinion as far as it goes. I agree that summary judgment in favor of the District must be affirmed, for two of the District’s ranking officials lacked the authority to bind the District when they deliberately or recklessly made significant misrepresentations of fact and law to the plaintiff. This is so even though these officials almost certainly knew, and indisputably should have known, that their assurances were false.
Nevertheless, the blithe and unapologetic tone in which the District now defends its reneging on the promises on which the plaintiff relied to its1 very substantial detriment strikes me as an embarrassment to the District and its citizens. Invoking the Anti-Deficiency Act to avoid paying money under a contract “proves to U.S. industry that the Government is an unreliable contracting partner that will make promises and then do everything in its power not to honor them.” The Anti-Deficiency Act: A “Normal” Government Defense?, 17 No. 12 Nash & Cibinic Rep. 63 (Dec. 2003). After Williams v. District of Columbia, a contractor can hardly be faulted if he or she is a trifle cautious about accepting assurances from officials of the District of Columbia government.2
The 1985 Tri-Party Agreement on which the plaintiffs case is founded included the following representation of historical fact:
Insofar as legally required, [the District] has committed sufficient funds to satisfy its obligations under the Agreement and will insure that such funds remain available for such purpose until required to be expended in accordance with the provisions hereof or until such obligations are otherwise satisfied or discharged.
(Emphasis added.) The officials of the District who made this representation included a Deputy Corporation Counsel, who was the chief negotiator for the District, and the Director of the District’s Department of Housing and Community Development (DCHD), who signed the agreement on behalf of the District. In fact, the District had not committed sufficient funds for this project; indeed, this was a multi-year contract and the funds could not have been appropriated for it in advance. Nevertheless, a high-ranking legal official in the District government and the head of DCHD assured the plaintiff that the District’s obligations had been fully funded, when they had not.
In the Tri-Party Agreement, the District also represented the following:
(2) “[ijnsofar as legally required,” the District “will insure that such funds remain available for such purpose until required to be expended in accordance with the provisions hereof or until such obligations are otherwise satisfied or discharged” ...;
(3) the Tri-Party Agreement has been “duly authorized” ...;
*98(4) the Tri-Party Agreement “constitute[s a] valid and legally binding obligation enforceable against [the District] in accordance with [its] terms” ...; and
(5) DCHD’s “execution of,” “performance pursuant to,” and “provisions of’ the Tri-Party Agreement “will not result in the breach or violation of any provision of any statute ... to which [the DCHD] is subject”....
(Citations to appendix omitted.) But all of these representations, the District now says, were unauthorized, and, according to the District, the plaintiff had no right to rely upon them and acted unreasonably in doing so. Another way of putting the proposition now advanced by the District is that any reasonable person or business entity in the plaintiffs position should have assumed that a Deputy Corporation Counsel and the head of DCHD were either lying or did not know what they were talking about, or perhaps both.
As the plaintiff points out in its brief, the District does not dispute — indeed, its litigation strategy has been to herald the fact — that the above-described representations were categorically false at the time its high-ranking officials made them. The District had not only failed to commit “sufficient funds” to satisfy its obligations under the Tri-Party Agreement, but it had not committed any funds to the project. Years after solemnly assuring the plaintiff that the contrary was the case, the District now asserts that the agreement had not been duly authorized, and that it was not then, and is not now, a valid and binding obligation. Although the District represented in this agreement that performance of its obligations thereunder “will not result in the breach or violation of any statute” to which DCHD was subject, the District now asserts, in stark contrast to the foregoing assurance, that if it were to carry out the promises it made to the plaintiff, this would run afoul of the Anti-Deficiency Act and comparable provisions of District of Columbia law.
The plaintiff claims that, as a result of the District’s breach, it has received three payments totaling only $2.1 million of approximately $14 million repayable under its loans. It is out-of-pocket to the tune of millions of dollars because it trusted the word of District officials when the District now says, correctly as a matter of law, that these officials’ solemnly given word was not to be trusted. As the court points out, one who contracts with a government agent is constructively notified of the limits of that agent’s authority, and cannot reasonably rely on representations to the contrary. Maj. op., ante, at p. 96. “Congress appropriates funds for only a single year’s obligations, and the Anti-Deficiency Act prohibits anyone from obligating the government in excess of the dollars appropriated by Congress.” Maj. op., ante, at p. 95 (citation omitted). I therefore cannot quarrel with the result that the trial judge and this court have reached.
The assurances in this case were not provided to the plaintiff by a low-ranking contracting agent, but by a Deputy Corporation Counsel and by the head of the relevant Department of the District’s government. At the very least, the District’s current officials might be expected to express some regret over the false representations made by their predecessors and to apologize to the party that relied on their predecessors’ words. They might also be expected to provide credible assurances to the citizens of the District, and to those who do business with the District’s government, that the conduct revealed in this record will not be repeated.3 Surely honor *99should play some role in the District’s dealings with its contractors.4
Sovereign immunity and related doctrines are all descended from the ancient belief in the divine right of kings and from the patent canard, exposed as such over many centuries of history, that the king can do no wrong. In some measure, these doctrines are still needed today to protect the public fisc. In this case, however, it is not much of an exaggeration to say that the liar is faulting the victim for having believed his lies. However diplomatically one might wish to phrase it, this is the underlying truth about the present dispute. Before Williams v. District of Columbia becomes history, this truth should be recorded for posterity, even if only in the Atlantic Second Reporter.
NEBEKER, Senior Judge:
As author of the court’s opinion, it is my duty to state the law as it is and the result dictated by that law. That said, I am constrained to state that I am in complete agreement with Judge Schwelb that the behavior of the District of Columbia officials in 1985 in the matter was highly unprofessional and disgraceful. Indeed, in my judgment, that conduct was official action “which would adversely affect the confidence of the public in the integrity of the District government.” See D.C. Personnel Regulations, Chapter 18, Part I, § 1800.1.

. I refer to the plaintiff as neuter because the underlying dispute is between the contractor and the District of Columbia.

. The false or reckless promises which formed the basis for this suit were made several administrations ago, but as recently as 2005, counsel for the District asserted in its brief and in oral argument, without the slightest indication of embarrassment, that the plaintiff is out of luck because it believed the District's officials’ solemn representations.

. That, in my view, is not the tone reflected in the District’s brief in this case.

. In my opinion, the following commentary fits the situation before us to a "T”:
Using a contract clause that leads the contractor to believe that Government is going to indemnify, it and then defending against the contractor’s claim on the grounds that the clause is illegal is not fair dealing. We know that Government contractors are supposed to know all of the legal rules and protect themselves, but the Government also has an obligation not to play shell games in the contracting process.
Recovering in the Face of an "Illegal” Indemnification Clause: Ingenious Solutions? 16 No. 11 Nash & Cibinic Rep. 54 (Nov. 2002).