Court Opinion

ID: 4515593
Source: CourtListenerOpinion
Date Created: 2020-03-12 18:00:05.788766+00
Date Added: 2024-06-11T08:11:32.735440
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                    )
                                               )
ASCT Group, Inc.                               )       ASBCA No. 61955
                                               )
Under Contract No. 000000-00-0-0000            )

APPEARANCE FOR THE APPELLANT:                         David J. Muchow, Esq.
                                                       Muchow Law
                                                       Arlington, VA

APPEARANCES FOR THE GOVERNMENT:                       Michael P. Goodman, Esq.
                                                       Engineer Chief Trial Attorney
                                                      James D. Stephens, Esq.
                                                      Rebecca L. Bockmann, Esq.
                                                       Engineer Trial Attorneys
                                                       U.S. Army Engineer District, Middle East
                                                       Winchester, VA

        OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN ON
    RESPONDENT'S MOTION TO DISMISS FOR LACK OF JURISDICTION

       Respondent, the U.S. Army Corps of Engineers (USACE), has moved to dismiss
portions of appellant ASCT Group's complaint for lack of jurisdiction. For the reasons
discussed below, we deny the motion.

          STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

        On March 31, 2011, USACE awarded a contract to Advanced Contractors
International, LLC (ACI) for construction of the Kandahar Regional Police Training
Center in Kandahar, Afghanistan. Appellant ASCT Group, Inc. (ASCT) was a
subcontractor to ACI for construction of the dining facility, student classrooms, and
latrines. On February 19, 2013, the prime contract with ACI was terminated for
default. USACE sent notice of the termination to ASCT and other subcontractors on
February 25, 2013, stating in part as follows:

              The prime contract between USACE and ACI, LLC for
              construction of the RPTC Project has been terminated by
              USACE for default. . . . When USACE selects the new
              prime contractor, it will give preference to potei:itial prime
              contractors that promise to award subcontracts to the
              companies that formerly had subcontracts under ACI.
                  Regarding your own company's materials that are on site
                  but were never paid for by ACI, we request that you
                  not remove them. As I explained in our meeting on
                  14 February, USACE has procedures that it can use to pay
                  you for those materials so that they can be used to finish
                  building the project. Please contact me if you are
                  interested in selling those materials to USACE.

    (R4, tab 8)

            Pursuant to this request, ASCT safeguarded the materials that were on site and also
    retained materials it had bought for performance of the contract that were stored in
    warehouses. Ultimately, on November 27 or 28, 2013, ASCT learned that USACE was
    cancelling the project, and was informed by USACE on December 7, 2013, that
    responsibility for any further construction was being transferred to the Afghan government.
    According to ASCT, after USACE turned over control of the construction site to the
    Afghan government, ASCT has been prohibited by the Afghan government from removing
    its materials and equipment from the site. Even if ASCT had been permitted to sell the
    materials, it believes there would be little to no market since most of the materials were
    built and custom-sized for the project. (R4, tab 3 at 3, 5)

           After unsuccessful attempts to secure payment for its materials from USACE,
    ASCT submitted a certified claim for $1,898,835.40 on June 27, 2018. 1 Specifically,
    ASCT claims compensation under a contract implied in fact for materials and equipment
    purchased for the project, compensation for security personnel and warehousing the
    equipment and materials, attorneys' fees for the Delaware action, continuing costs of
    storing the equipment and materials, and interest on the claim. (R4, tab 3 at 1, 3, 7-9)

           On October 31 or November 2, 2013 (the document contains both dates), the
    USACE contracting officer issued a decision on ASCT's claim. The decision found
    ASCT potentially entitled to the costs of securing the materials and equipment on site
    from February 25, 2013 to November 28, 2013, on an implied in fact contract theory.
    This finding was conditional on ASCT' s submission of adequate documentation of its
    incurred costs. All other aspects of ASCT's claim were denied. (R4, tab 2)

1
    ASCT also sued ACI in the Superior Court of Delaware and reached a settlement which it
         alleges reimbursed it only for a small portion of its losses (complaint, count IV,
         para. 3 at 33; R4, tab 3 at 3).

                                               2
      ASCT appealed from this decision and its appeal was docketed by the Board on
February 1, 2019. On September 9, 2019, the government filed the subject motion to
dismiss for lack of jurisdiction.

                                 DISCUSSION AND DECISION

        The government's motion to dismiss for lack of jurisdiction is somewhat unusual
in that it does not seek dismissal of all or even part of ASCT' s claim for compensation,
but rather seeks dismissal of only certain allegations contained in ASCT' s complaint. In
that respect, it more closely resembles a motion to strike under FED. R. CIV. P. 12(f) than
a motion to dismiss for lack of jurisdiction.

        The government posits that ASCT' s complaint "expresses a tort-based agency
theory of recovery" or a "negligence-based theory." (Gov't mot. at 2-3 ,r,r 5-7) One
example of the former is the statement "All materials, whether on-site or warehouses
[sic], were ordered and procured before the termination of the ... project and accepted by
the government through its agent, ACI." (Complaint, count II, para. 8.e. at 21-22) 2 An
example of the latter is the statement "The Government's Own Negligence in Failing to
Properly Investigate and Supervise ACI as a Prime Contractor, Directly Caused ASCT' s
Claimed Losses." (Complaint, count IV, para. 9 at 35)

        The government also points to language which it believes expresses a conversion
or just compensation (i.e., Fifth Amendment taking) based theory of recovery. An
example is the following statement: "Because of the Government's direction to leave
supplies and materials on the Project site, the Government has received a substantial
benefit without pay [sic] for its value. In effect, ASCT' s materials and equipment have
been essentially seized by the Government and turned over to the Afghan Government,
without just compensation in violation of Appellant's Fifth amendment rights."
(Complaint, count IV, para. 8 at 35)

       Appellant responds that its claim before this Board is clearly based on implied-in-
fact contract doctrine, that the allegations the government seeks to strike either reference
other potential causes of action which the appellant reserves the right to bring in
appropriate venues, or serve to place appropriate background facts before the Board (app.
"answer" mot. at 1-2).

2
    The structure of ASCT's complaint is unorthodox. There are five counts that do not
         represent distinct causes of action and a separate section of the complaint
         entitled Summary of the Factual Background. Paragraph numbering begins
         anew with each such section or count. Factual allegations are spread out among
         the five counts and the Summary. For clarity, citations to the complaint will
         include count or section, paragraph number, and page.
                                            3
        ASCT's complaint discusses at length why its claim satisfies the required elements
of an implied in fact contract (complaint, count III at 25-32). This section of ASCT's
complaint mirrors a similar section of ASCT' s claim submitted to the contracting officer
(R4, tab 3 at 7-9). In contrast, the "tort" or "just compensation" language of which the
government complains appears in what are largely factual allegations. We read ASCT's
complaint as seeking relief either arising out of an implied in fact contract or recoverable
as a result of breach of that contract. We do not construe any portion of ASCT's
complaint as seeking recovery based on tort or a Fifth Amendment taking.

        Both parties agree that the Board has jurisdiction over an implied in fact contract
claim. Both parties also agree that the Board does not have jurisdiction over claims
sounding in tort independent of a contract, and does not have jurisdiction of Fifth
Amendment taking claims. Since we do not find that we have before us any claim for
relief that is not based on contract, we deny the government's motion to dismiss portions
of ASCT's complaint for lack of jurisdiction.

        We note that under FED. R. CIV. P. 12(t) a court may "order stricken from any
pleading any insufficient defense or any redundant, immaterial, impertinent or scandalous
matter." A court, or this Board, has considerable discretion in deciding such a motion.
Such motions are generally disfavored, though, and have often been denied even when
literally correct where there has been no showing of prejudicial harm to the moving party.
Godfredson v. JBC Legal Group, 387 F. Supp. 2d 543, 547-48 (E.D.N.C. 2005).

                                    CONCLUSION

      The government's motion to dismiss for lack of jurisdiction is denied.

      Dated: February 27, 2020

                                                              ·.~ A~,,
                                                  L~!O'SULLI
                                                               I   I   f/~     ~·
                                                  Administrative Judge
                                                  Armed Services Board
                                                  of Contract Appeals

(Signatures continued)

                                           4
                                                 I concur

                                                      ,,,- ~ ~ " ?

RICHARD SHACKLEFORD                              OW~N C.    ~CSON ,, -
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. 61955, Appeal of ASCT
Group, Inc., rendered in conformance with the Board's Charter.

      Dated:

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

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