Court Opinion

ID: 6495265
Source: CourtListenerOpinion
Date Created: 2022-06-27 13:00:14.721605+00
Date Added: 2024-06-11T08:46:16.576724
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -                                     )
                                                )
Aspen Consulting, LLC                           )   ASBCA No. 61122
                                                )
Under Contract No. W9127S-13-C-6003             )

APPEARANCES FOR THE APPELLANT:                      Gerald H. Werfel, Esq.
                                                    Ian A. Cronogue, Esq.
                                                     Baker, Cronogue, Tolle & Werfel, LLP
                                                     McLean, VA

APPEARANCES FOR THE GOVERNMENT:                     Michael P. Goodman, Esq.
                                                     Engineer Chief Trial Attorney
                                                    Allen S. Black, Esq.
                                                    Siobhan Fabio, Esq.
                                                     Engineer Trial Attorneys
                                                     U.S. Army Engineer District, Little Rock

                  OPINION BY ADMINISTRATIVE JUDGE MCILMAIL

       On October 14, 2020, we denied the appeal of appellant, Aspen Consulting, LLC,
in which Aspen seeks $264,470.79 (plus interest) that it says represents two contract
payments, pursuant to Invoice Nos. 201501-1 and 201501-2, that the U.S. Army Corps of
Engineers (government) misdirected to an account at Commerzbank (a German bank),
arising from work performed to outfit the U.S. Army Health and Dental Clinics in Rose
Barracks, Vilseck, Germany.1 Aspen Consulting, LLC, ASBCA No. 61122, 20-1 BCA
¶ 37,715 at 183,088. The United States Court of Appeals for the Federal Circuit
reversed, holding that the government materially breached the contract by making those
payments to an account other than the one listed in the Central Contractor Registration, in
violation of Federal Acquisition Regulation 52.232-33 (2003). Aspen Consulting, LLC v.
Sec’y of Army, 25 F.4th 1012, 2022 WL 385913 at *4 (Fed. Cir. 2022). Familiarity with
both opinions is presumed.

       In its opinion, the Court noted, regarding the government’s payment defense
(which our opinion had not addressed) that “[p]ayment is an affirmative defense, and the
defendant bears the burden of proof,” and directed that on remand “[i]f the government
establishes that the misdirected funds . . . were subsequently used for Aspen’s benefit. . .

1   In our opinion we stated that Aspen sought $264,470.70, which amount Aspen
         referenced in its brief (app. br. at 13). However, Aspen’s complaint seeks
         $264,470.79 (compl. at 7 ¶ 26).
the Board is ‘required to credit the government’ with the value of those funds used for
Aspen’s benefit,” stating that “[a] debtor who makes contractually required payments to a
third party or to a different account will have a ‘valid defense’ to a breach of contract
claim if it can show that the misdirected payments benefitted the creditor.” Id. In
support of its payment defense, the government points to the September 23, 2019
declaration of Anna Muth (gov’t br. at 26, 49; gov’t reply at 17, 19), who was a business
manager for Aspen’s operations in Germany (R4, tab I-22 ¶ 3). Ms. Muth states:

             In my position, I was personally responsible to insure that
             each Vilseck vendor and subcontractor got paid. That also
             included making sure that each employee who worked on the
             Vilseck project for Aspen was properly compensated. From
             the inception of the Vilseck contract until my last day
             working for Aspen, I made sure that every invoice that was
             presented and every hour that was worked was paid from the
             Commerzbank account. . . . Based upon my records, . . . I can
             state in good faith that the funds deposited by the U.S. Army,
             Corps of Engineers in the Aspen Commerzbank account
             pursuant to payment of Aspen invoices [Invoice Nos. 201501-
             1 and 201501-2] were all expended to satisfy the following
             expenses:

             a. Invoice #4530, D&T Shop, 43.638,73 Eur
             b. Invoice #N/A, Schabel, 10.043,60 Eur
             c. Invoice #PO0001, Andreas Schmidt, 5.820,29 Eur
             d. Invoice #39593, ITBoost, 2.257,91 Eur
             e. Invoice #D976453, SKSonic, 195,16 Eur
             f. Invoice #6, BFrench Consulting, GmbH, 2.038,47 Eur
             g. Invoice #17984, BFrench Consulting GmbH, 203,74 Eur
             h. Invoice #D80054, MediTrade, 733,04 Eur
             i. Invoice #1656882, Henry Schein, 2.652,51 Eur
             j. Invoice #PSI000246, SIOTS, $98,232.82
             k. Invoice #PSI000280, SIOTS, $7,539.65
             l. Invoice #6003VILSECK2015, Ben French Consulting,
             16.721,93 Eur
             m. Invoice #D005237, EWald, 5.243,14 Eur
             n. Invoice #DM1000LED, Leica Microsystems, 8.568,00 Eur
             o. Invoice #INT04221, Provita Medical, 7.110,25 Eur
             p. Invoice #N/A, Andreas Schmidt, 8.806,00 Eur
             q. Invoice #N/A, Andreas Schmidt, 10.512,46 Eur
             r. Invoice #414941, Siemens, 6.548,09 Eur
             s. Invoice #208963, HEAD, GmbH, 145,20 Eur
             t. Invoice #714, M. Mack-Transporte GmbH, 321,30 Eur

                                           2
               u. Invoice #173/15, Schabel, 32.656,79 Eur
               v. Invoice #6003VILSECK201509, 4.941,97 Eur
               w. Invoice #6003VILSECK201510-10, 4.000,00 Eur
               x. Invoice #013/15, Schabel, 9.246,30 Eur

               The amount of invoices paid was greater than the
               $264,470.79 paid into the Aspen Commerzbank account
               by the U.S. Army, Corps of Engineers. These invoices can be
               found in the exhibits to my deposition given
               in this matter. All of the funds deposited by the Corps were
               expended toward payments to vendors,
               subcontractors and employees on the Vilseck project.

(Id. ¶ 8 (alteration added)) Aspen’s post-hearing briefing ignores that declaration, but
points (reply at 9) to the declaration of Aspen’s Chief Financial Officer, who states:

               After the Misdirected Payments were made, Mr. French used
               funds from the Commerzbank account to satisfy many debts
               that his company, B. French Consulting GmbH, was
               contractually liable for paying. Aspen did not and would not
               have approved the use of the funds for this purpose. Aspen
               was not responsible for B. French Consulting GmbH’s
               contractual debts.

(App. reply, ex. 2 ¶ 17)

        We are more persuaded by, and credit, the more detailed and specific declaration
of Ms. Muth, and find based upon that declaration that the government has established
that the $264,470.79 in misdirected funds at issue in this appeal were subsequently used
for Aspen’s benefit. Accordingly, we credit the government with having paid that
misdirected $264,470.79 to the benefit of Aspen, and hold that the government has, thus,
proved its affirmative defense of payment. Consequently, Aspen is not entitled to any
recovery in this matter, and the appeal is denied.2

2   Aspen relies upon our decision in S.A.S. Bianchi Ugo fu Gabbriello, ASBCA
        No. 53800, 05-2 BCA ¶ 33,089 at 164,017 (app. br. at 1 n.1, 11-12; app. reply at 3,
        9-10), but the Federal Circuit rejected that reliance, holding that “[t]o the extent
        that Bianchi holds that the government cannot prevail on a payment defense even
        if it proves that the creditor ‘obtained a financial benefit from’ the misdirected
        payment, [] that decision is inconsistent with our decision here.” Aspen
        Consulting, 2022 WL 385913 at *5 n.1 (internal citation omitted).
                                              3
                              CONCLUSION

      The appeal is denied.

      Dated: June 3, 2022

                                                  TIMOTHY P. MCILMAIL
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur                                          I concur

 RICHARD SHACKLEFORD                               OWEN C. WILSON
 Administrative Judge                              Administrative Judge
 Acting Chairman                                   Vice Chairman
 Armed Services Board                              Armed Services Board
 of Contract Appeals                               of Contract Appeals

      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 61122, Appeal of Aspen
Consulting, LLC, rendered in conformance with the Board’s Charter.

      Dated: June 7, 2022

                                                 PAULLA K. GATES-LEWIS
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

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