Case: MAXAN DRESS CORP., A CORPORATION, v. THE UNITED STATES
Abbreviation: Maxan Dress Corp. v. United States
Decision Date: 1953-10-06
Docket Number: No. 49509
Citation: 126 Ct. Cl. 434
Volume: 126
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: MAXAN DRESS CORP., A CORPORATION, v. THE UNITED STATES
Judges: Madden, Judge; Whitaker, Judge; and Littleton, Judge, concur.
Pages: 434–460

Head Matter:
MAXAN DRESS CORP., A CORPORATION, v. THE UNITED STATES
No. 49509.
Decided October 6, 1953.
Mr. Edwin J. McDermott for the plaintiff.
Mr. Ernest C. Baynard, with whom was Mr. Assistant Attorney General Warren E. Bwrger, for the defendant.

Opinion:
Jones, Chief Judge,
delivered the opinion of the court:
Plaintiff seeks to recover $2,325.38 which it claims represents the sum reasonably expended by it in protecting government property from damages incident to a fire in plaintiff's factory. Plaintiff took the action pursuant to the provisions of a contract between the parties.
The plaintiff is a New York corporation with its office and principal place of business in that state, and with a manufacturing plant located in Ware, Massachusetts. During the latter part of 1943 plaintiff entered into Purchase Order Contracts numbered 1353 and 4243 with defendant, in which it agreed to manufacture and furnish the Quartermaster Corps, War Department, 70,000 insect bars. Under the terms of these two contracts defendant furnished plaintiff with netting, cloth, and other materials necessary for the manufacture of such articles. Each contract contained a recapture clause which provided:
Eecapture Clause: In the event of loss or damage of any kind or description to Government-owned property, the Contractor shall give immediate notice thereof by telegram collect to the Contracting Officer. The Contractor shall protect said Government-owned property from further damage, forthwith separate the damaged and undamaged property, put it in the best possible order and furnish the Contracting Officer with a complete inventory stating separately the description and quantity of the destroyed, damaged and undamaged property.
*
Whenever appropriate on account of the happening of loss or destruction of Government-owned property or action taken under this Article, or both, an equitable adjustment will be made in the terms of this contract, and the contract will be modified in writing accordingly. Claim for adjustment under this Article may be asserted at any time prior to the date of final settlement of this contract. If the parties fail to agree on the adjustment to be made, the dispute will be determined in accordance with Article on Disputes, [see finding 4] but the Contractor shall follow the directions of the Contracting Officer notwithstanding the pendency of any such dispute.
Plaintiff's manufacturing plant was located in two old mill buildings in the town of Ware. The sewing room occupied the second floor of one building and was connected by a passageway to the cutting and storage rooms in the other. On January 4, 1944, a fire occurred in the building in which the sewing room was located, destroying all machinery, material, and manufactured goods therein. While the building in which the cutting and storage rooms were located was not destroyed by fire, windows were knocked out, a hole was made in the roof by firemen, and considerable damage resulted from smoke, water, and exposure to the elements. Defendant was promptly notified of the fire, and was advised that the extent of damage to the material was not yet known.
The following day plaintiff's employees were able to enter the cutting and storage rooms and ascertain the extent of damage. In addition to broken windows and a torn roof, the elevator between the two rooms was inoperative, the steam heat was off, and the plies of netting laid out on the cutting tables were water soaked and, in some instances, frozen.
In the storeroom on the second floor were 72 cases of completed insect bars ready for shipment and a quantity of cases containing netting and sheeting. Water had run down the stairwell and through the cracks in the floor, wetting an undetermined number of these cases.
By a letter dated January 7, 1944, the contracting officer acknowledged receipt of notice concerning the fire. This letter continued:
It is requested that immediate steps be taken to have this material dried in order that the damage may be minimized as far as possible and that this Depot be notified of the exact quantity of Bars and of each type of material found to be unusable as a result of the damage.
Plaintiff advised the contracting officer by letter on January 8,1944, that all steps possible to protect the government property not destroyed by the fire had been taken. Attached to this letter was an inventory of the government property remaining after the fire, which reflects a total of some 170,000 yards of cloth, netting and sheeting. Inasmuch as the cartons of materials had not been opened at that time, it is impossible to determine how much of the material was actually wet. It is for reimbursement of the expense incurred in drying and repacking this material that plaintiff now sues.
The defenses are asserted that plaintiff failed to appeal to the head of the department as required by the contract, was guilty of laches, and has not proved damages. We shall deal first with the factual question of damages, since a summary of tbe facts is essential to the disposition of the legal questions presented.
The recapture clause quoted supra provides for an equitable adjustment for expenses incurred in protecting or preserving government property. Our inquiry is therefore directed to a determination of what, under the circumstances, was reasonably expended to protect the property and the sufficiency of plaintiff's proof in this connection.
The employees at plaintiff's factory consisted of some 100 female operators of sewing machines, one bookkeeper, men who were skilled cutting room employees, a shipper, and two foremen. After the fire the women were discharged, except the bookkeeper, and six men were retained at their skilled-labor salaries to perform the salvaging work. The salvaging work is said to have occupied these men from January 5 to February 19, 1944. There is no exception to the commissioner's finding that unskilled male labor with one supervisor could have accomplished this work. While there is testimony to the general effect that unskilled labor of the type required for the salvaging work was not available in Ware at that time, the record establishes that no attempt was made to locate such labor. Inasmuch as plaintiff had another contract in addition to the two involved in this case, the manager desired to reestablish operations in Ware as quickly as possible and was therefore interested in retaining skilled and supervisory employees who would be difficult to replace. In fact, three of the four men who did most of the salvaging work remained on plaintiff's payroll after the salvaging was completed, moving directly into another manufacturing establishment.
. The evidence does not accurately establish the quantity of material that had to be unrolled, stretched, dried, and repacked. It is clear, however, that several thousand yards required such processing and plaintiff has shown by the weight of the evidence that the men engaged in this operation devoted their full time to it from January 5 to February 19,1944. The restricted space available, the condition of the building, lack of heat, and severe weather conditions no doubt accentuated the difficulties of an inherently tedious task.
Following the shipment of the salvaged material to defendant on February 24, plaintiff wrote to the contracting officer on February 28 regarding the possibility of subcontracting the manufacture of the insect bars, and further stated:
please accept this as our request for an equitable adjustment under the Recapture Clause in order that we be compensated for the costs and expenses which we have incurred in protecting the Government-owned property from further damages, separating the damaged and the undamaged property and putting it into the best possible order.
The contracting officer answered promptly, asking plaintiff to submit an itemized list of costs and expenses incurred under each purchase order, together with all substantiating evidence in the form of original papers and affidavits sworn to by parties having knowledge of the facts.
The Quartermaster Corps terminated Purchase Order Contracts Nos. 1353 and 4243 on March 20, 1944, for failure to complete delivery in conformity with the contract requirements.
By letter of April 12, 1944, the contracting officer again reminded plaintiff that unless the requested information was forwarded proper consideration could not be given to the claim. There was sporadic correspondence between the parties with reference to this claim (see findings 20, 21, and 22), but the data requested on March 7, 1944, was not actually furnished by plaintiff until December 29, 1948. The contracting officer replied that an investigation would be undertaken and a report forwarded to higher authority for consideration. No decision has been rendered by the contracting officer and the petition was filed in this court on February 20,1950.
In the list of expenses submitted to the contracting officer and presented to this court the plaintiff included its entire payroll for the period involved, including the Ware plant manager and bookkeeper, neither of whom was directly engaged in the salvaging, as well as certain miscellaneous expenses for telephone, items listed as "transportation and room rent," $1.74 for incidental hardware used in the packing, and $53 for new cartons required in shipping the salvaged materials to the defendant. On this basis the figure of $3,468.88 was submitted as compensable expenditures. This was subsequently reduced to $2,325.38 and it is this amount that plaintiff now claims. For the reasons stated below we think this amount is excessive.
While we do not feel that the facts now before us warrant the preclusion of any recovery by application of the doctrine of laches, the prolonged and unexplained delay in complying with reasonable requests for information fully justifies the resolution of doubtful issues of fact against the plaintiff. Assertions difficult to prove in 1951 could have been easily clarified in 1944 and pleas of poor recollection are not impressive when emanating from the litigant responsible for the postponement of judicial determinations.
The record leads us to the conclusion that plaintiff has not justified an allowance in excess of the wages of the men actually engaged in the salvage work, and the cost of incidental hardware and extra cartons required for the packing and transfer of the materials preserved. In computing the allowance for cost of direct labor the rate for unskilled labor should be used except for one supervisory employee. Plaintiff's manager testified that unskilled labor was paid at a rate approximating the minimum wages allowed by law, which was 40 cents per hour. The workmen were paid on the basis of a 40-hour week. Therefore, by allowing plaintiff the cost of the supervisory services of Morris Helf-ner, foreman of cutters, plaintiff's schedule of allowable wages set out in finding 21 should be modified as follows:
The wages paid to the bookkeeper, Phyllis McCarthy, and to plaintiff's manager, S. Sperling, are excluded because the record fails to establish that such expenses were incurred as a result of action taken in preserving government property. On the contrary, the indications are that these expenditures would have continued as an incident to the reestablishment of plaintiff's factory. The miscellaneous expenses listed in finding 21, with the exception of $53 for cartons and $1.74 for hardware, are not convincingly shown to have been necessarily connected with the salvage operation and are likewise excluded.
To recapitulate our conclusions on the issue of expenses allowable in an equitable adjustment as contemplated by the contract: we find that plaintiff has proved only that the labor indicated above was necessary and employed in the salvaging process; it has not established that the high wages paid the workmen were necessary for or entirely related to the preservation of the property; the miscellaneous expenses of $53 for the new cartons and $1.74 for incidental hardware were a necessary cost and are compensable. Plaintiff's total compensable expenditures for the protection and preservation of the property are $1,158.74.
We turn now to defendant's contentions that plaintiff is not entitled to recover because of its failure to appeal to the head of the department, and its laches in delaying the disposition of the claim. We do not think these defenses are sufficient in this instance.
The necessity of appealing a decision of the contracting officer within the scope of the disputes article of the contract as a prerequisite to suit in this court is beyond question. United States v. Blair, 321 U. S. 730. Equally clear, however, is the necessity of a finding or decision by the contracting officer before a failure to. appeal is a bar to the maintenance of a suit here. Manufacturer's Casualty Insurance Co. v. United States, 105 C. Cls. 342; Cape Ann Granite Co. v. United States, 100 C. Cls. 53; James McHugh Sons, Inc., v. United States, 99 C. Cls. 414. It is not contended that the contracting officer rendered a decision in the instant case, and the Blair and Wunderlich (342 U. S. 98) cases cited by defendant are therefore manifestly inapposite. Failure to appeal under these circumstances is not a bar to this action.
As indicated above, the plaintiff's unexplained delay in prosecuting this claim does not in any way lessen its burden of proof or warrant the acceptance of vague assertions as evidence, but we cannot say that the doctrine of laches is properly applicable to bar all recovery. The import of laches is much broader than the mere passage of time and delay as such. Implicit in the concept is the idea of prejudice to the opposing party by the surprising assertions of duties owed or rights violated at a time when the elements of proof are obscured by the passage of months or years, or subsequent to some prejudicial change of position by the party sued. It is the absence of this element of prejudice to the defendant which renders the invocation of this equitable doctrine inappropriate here. The defendant had notice as early as March 7,1944, that this claim was being asserted. The postponement of the litigation no doubt made some evidence more difficult to obtain, but we cannot say that the defendant was so inconvenienced as to justify the disallowance of compensation for services requested by and rendered to the Government.
We conclude that plaintiff is entitled to recover the sum of $1,158.74 and judgment for that amount will be entered in its favor.
It is so ordered.
Madden, Judge; Whitaker, Judge; and Littleton, Judge, concur.
FINDINGS OF FACT
The court, having considered the evidence, the report of Commissioner Marion T. Bennett, and the briefs and argument of counsel, makes findings of fact as follows:
1. The plaintiff is a corporation organized and existing under the laws of the State of New York, with its office and principal place of business being located in New York, New York, and with a manufacturing plant operated by plaintiff's subsidiary, Style Dress Company, a partnership composed of Samuel Sperling and Louis Beckerman, plaintiff's stockholders, located at Ware, Massachusetts.
2. On August 21,1943, the plaintiff entered into Purchase Order Contract No. 1353 with defendant, represented by the Quartermaster Corps, War Department, under which the plaintiff agreed to manufacture and furnish the Quartermaster Corps 40,000 insect bars at $1.30 each. Under Purchase Order Contract No. 4243, dated November 12,1943, the plaintiff agreed to furnish the Quartermaster Corps with 30,000 additional insect bars at $1.25 each. Under the terms of these two contracts, the plaintiff was furnished with the netting, cloth and other material necessary for the manufacture of the bars.
3. Purchase Order Contract No. 4243 contained a provision which read as follows:
Recapture clause : In the event of loss or damage of any kind or description to Government-owned property, the Contractor shall give immediate notice thereof by telegram collect to the Contracting Officer. The Contractor shall protect said Government-owned property from further damage, forthwith separate the damaged and undamaged property, put it in the best possible order and furnish the Contracting Officer with a complete inventory stating separately the description and quantity of the destroyed, damaged and undamaged property.
Upon the occurrence of loss or damage of any kind or description to Government-owned property, the Government shall have the right to enter upon the premises of the Contractor and shall have free access to inspect the damaged property. The government shall have the right, but is not required, to take such action as it deems proper and necessary to replace the destroyed Government-owned property and to take, remove, replace, repair, clean, renovate, save and preserve the damaged Government-owned property or any part thereof, but such acts of the Government shall be considered as done for the benefit of all concerned and without prejudice to the rights of either party.
The Contractor shall follow the directions of the Contracting Officer in respect to completing or terminating performance of so much of the contract as is affected by the loss or destruction of Government-owned property. In no event shall termination under this paragraph be regarded as a termination for the convenience of the Government.
Wherever appropriate on account of the happening of loss or destruction, of Government-owned property or action taken under this Article, or both, an equitable adjustment will be made in the terms of this contract, and the contract will be modified in writing accordingly. Claim for adjustment under this Article may be asserted at any time prior to the date of final settlement of this contract. If the parties fail to agree on the adjustment to be made, the dispute will be determined in accordance with Article on Disputes, but the Contractor shall follow the directions of the Contracting Officer notwithstanding the pendency of any such dispute. In no event shall action taken under this Article relieve the Contractor of the liability imposed upon him by Article on Liability for Government-owned Property.
It is understood and agreed that no insurance charges applicable to Government-owned property have been included as a factor in the contract price and further, the Contractor warrants that he has not procured and agrees that he will not hereafter procure insurance, covering Government-owned property, liability for which is fixed by paragraph captioned "Recapture Clause" hereof.
Purchase Order Contract No. 1353 contains a like "Recapture Clause" except that the final paragraph as set forth above is omitted.
4. Each contract contained an article which read as follows:
Disputes: Except as otherwise specifically provided in the contract, all disputes concerning questions of fact which may arise under the'contract, and which are not disposed of by mutual agreement, shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail a copy thereof to the Contractor at his address shown therein. Within 30 days from said mailing the Contractor may appeal in writing to the Secretary of War, whose written decision or that of his designated representative or representatives thereon shall be final and conclusive upon the parties hereto. The Secretary of War may, in his discretion, designate an individual, or individuals, other than the Contracting Officer, or a board as his authorized representative to determine appeals under this Article. The Contractor shall be afforded an opportunity to be heard and offer evidence in support of his appeal. The president of the board, from time to time, may divide the board into divisions of one or more members and assign members thereto. A majority of the members of the board or of a division thereof shall constitute a quorunj for the transaction of the business of the board or of a division, respectively, and the decision of a majority of the members of the board or of a division shall be deemed to be the division of the board or of a division, as the case may be. If the majority of the members of a division are unable to agree on a decision, or if within 30 days after a decision by a division, the board or the president thereof directs that the decision of the division be reviewed by the board, the decision will be so reviewed, otherwise the decision of a majority of the members of a division shall become the decision of the board. If a majority of the members of the board is unable to agree upon a decision, the president will promptly submit the appeal to the Under Secretary of War for his decision upon the record. A vacancy in the board or in any division thereof shall not impair the powers nor affect the duties of the board or division nor of the remaining members of the board or division, respectively. Any member of the board, or any examiner designated by the president of the board for that purpose, may hold hearings, examine witnesses, receive evidence and report the evidence to the board or to the appropriate division, if the case is pending before a division. Pending decision of a dispute hereunder, the Contractor shall diligently proceed with the performance of the contract. Any sum or sums allowed to the Contractor under the provisions of this Article shall be paid by the United States as part of the cost of the articles or work therein contracted for and shall be deemed to be within the contemplation of the contract.
5. The plaintiff's manufacturing plant at Ware, Massachusetts, was located in two old mill buildings. The plaintiff's sewing room occupied the second floor of one building and the cutting department and storage room occupied the second and third, or top floor, in the other building. There was a passageway between the cutting department and the sewing department.
6. On January 4,1944, at about 7:30 a. m. a fire occurred on the first floor of the building where the plaintiff's sewing room was located and as a result the plaintiff's sewing room, the machinery, the equipment and manufactured goods therein were completely destroyed. The building in which the cutting room and storage room were located was damaged by smoke, water and exposure to the elements. The fire was kept out of the cutting room by one of the plaintiff's employees who had sufficient presence of mind to close the fire door and thereby had barely time enough to get out of the building. All of the plaintiff's employees got out of the building without injury.
7. The plaintiff notified the defendant of the occurrence of the fire and under date of January 7, 1944, a letter was addressed to the plaintiff by D. W. Hewett, 1st Lt., QMC, acting for the contracting officer, as follows:
Information has been received at this Depot that a fire occurred in the plant of the Style Dress Co., Ware, Mass., on 4 January 1944, causing damage by water to 72 cases of Bars, Insect, Field, and to 52 cases containing Netting, Cotton and Drill, Unbleached. At present, the number of cases of each of .these two types of material which were affected by this damage is not known.
It is requested that immediate steps be taken to have this material dried in order that the damage may be minimized as far as possible and that this Depot be notified of the exact quantity of Bars and of each type of material found to be unusable as a result of the damage.
It- is further requested that you forward the names and addresses of the insurance companies under which your own or Government-owned material was protected, together with the policy numbers. In the event that your insurance adjuster has made an investigation of the fire, a copy of his Adjuster's Report should he submitted to this Depot at the earliest practicable date.
8. Meanwhile, on January 5, 1944, the day after the fire, plaintiff's employees were able to enter the adjoining building housing the cutting room and storeroom and ascertain the damage caused by the fire. It was found that the elevator was inoperative, the steam heat was off, and the windows in the cutting room were broken. The roof had a hole in it. At the time of the fire, there were piles of netting laid out on the tables in the cutting room. While this material and other loose goods had not been damaged by the fire, it was water-soaked and, in some instances, frozen.
In the storeroom on the second floor was a quantity of cases of netting and sheeting and 72 cases of completed bars ready for shipment. Water entering the building through the windows of the cutting room above had run down the stairwell and through the cracks in the floor, wetting some of these cases.
9. The plaintiff's employees at the Ware factory consisted of female operators of sewing machines, one bookkeeper, men who were cutting-room employees, a shipper and two foremen. After the fire the women were discharged with the exception of the bookkeeper. The men were kept on to perform the salvage job. While there was some testimony to the general effect that unskilled male labor was not available in Massachusetts at the time, plaintiff admittedly made no effort to contact the United States Employment Service, other government agencies, or use other available means to find unskilled employees for the salvage work. It was the plaintiff's desire to retain employees who would be hard to replace. The plaintiff had another contract, desired to retain the instant contracts and it was desirous, also, of reestablishing its Ware operations. The work of salvage would have been difficult for women because of the heavy lifting, physical discomfort and the necessity of working in the extreme cold. If unskilled male labor had been available it would have been adequate with supervision by one of the plaintiff's skilled employees.
Upon reentering the premises, the plaintiff's president, Samuel Sperling, instructed the male employees to make an inventory of the material saved from the fire and dry the wet materials. In the meantime, Mr. Sperling instituted a futile search for a new factory site.
10. Under date of January 8, 1944, a letter was addressed by the plaintiff to the Philadelphia Quartermaster Depot, to the attention of the contracting officer, as follows:
Be: P. O. No. 1353 and P. O. No. 4243
Eeference is made to telegram of January 4, 1944, wherein you were notified of a fire occurring in our plant in which Government materials under the above purchase orders were stored and in process of manufacturing into insect bars.
We have taken all steps possible to protect the Government-owned property which was not destroyed by the fire from further damages. We have separated the damaged Government property from the undamaged property and have put it in the best possible order. We herewith attach a complete inventory of the Government property which was not destroyed by the fire, showing separately the description and the quantity of the damaged and undamaged property. We estimate that there were 3,150 insect bars destroyed by the fire. Of this quantity, 2,550 were finished bars, folded and in bundles ready to be packed, and the remainder, viz. 600 bars, were in the process of manufacturing. The relatively large quantity of bars which were awaiting packing were on hand because we were awaiting receipt of shipping cases in which to pack them.
We have already made arrangements with the Singer Sewing Machine Company to replace our equipment. We have conferred with War Production Board officials at Spi'ingfield, Massachusetts, and have been assured that we will be granted a priority to buy replacement machinery. There is ample space in the City of Ware, Massachusetts, to set up this new equipment. We expect to be in operation within a very short period of time with the same personnel organization as we had before the fire. We therefore request that our contracts not be terminated. We will keep you informed of the progress we are making in reestablishing our factory.
The attachment to the letter read as follows:
INVENTORY
Materials in Gutting Room — P. O. No. 1853
846 Bars complete, cut_undamaged except for smoke odor
490 Sides only cut_ " " " " "
259 Ply 58" 15% yds. total laid up on cutting table, water
3917% yds- damaged and frozen
125 Ply 48" 16 yds. total laid up on cutting table, water
2000 yds_ damaged and frozen
816 Bars complete, cut_water damaged and frozen
1819 Yds. 48" netting in " " " " rolls_
150 Yds. 38" netting in rolls- " " " "
Government Case #H 1 marked 2,195 net yds. 48" width— actually contains 38" netting — undamaged—full case opened but none used — brought out of the store room to be used in cutting room for 48" parts but found to be 38" and therefore none used.
607% Yds. 35" Ctn. sheeting_undamaged
491 Net yds. 48" netting Case #H 5-undamaged
Materials in Store Room — P. O. No. 4248 — All Items Wet— (Not Frozen)
All cases unopened — information taken from markings on cases.
72 cases containing 30 bars each packed ready to ship.
40 bars in bundles ready for packing.
53 cases netting and 1 bale ctn. sheeting complete 1st shipment on P. O. No. 4243.
11. Under date of January 18,1944, a report was made by Murray E. Steeble, Captain, QMC, to the Philadelphia Quartermaster Depot, attention of the contracting officer, as follows:
1. On 17 January 1944, Murray E. Steeble, Captain, QMC, visited the plant of Style Dress Company, Ware, Massachusetts (Maxan Dress Corp.), operating under subject Contracts, in connection with fire damage and salvage of Government material.
2. Reference is made to report from Boston QM Depot dated 8 January 1944, and paragraph 5 thereof which indicates that the Inspector and the Contractor's employees would take proper steps to see that material would be dried as quickly as possible.
8. It was determined that a great deal of the material was still wet. Most of some 20 cartons of 88-inch cotton netting in rolls is still watersoaked or damp. Numerous other cartons in the storage room were not touched by water or fire.
4. A casual physical examination of the netting indicates that the netting has not been harmed by water. However, it is believed that possibly the mildew-resistant inhibitor has been washed out. There are inclosed herewith several samples of material taken from the factory which were watersoaked for a period of almost two weeks. On several samples it should be noted that there are chalk marks on portions of the netting that were actually wet for two weeks. Other samples were taken at random from the cutting room.
5. Under separate cover there is being forwarded to the special attention of A. B. Hawn, Jr., 1st Lt., QMC, one roll of cotton netting, Stock No. 27N-1240; 42 net yards shipped under bale #1763. This roll of netting is typical of some 10 to 20 cases of netting that were still in a watersoaked condition at the time of the visit from Captain Murray E. Steeble.
6. These samples mentioned in the above two paragraphs are being forwarded to your attention so that proper Laboratory analysis may be accomplished at Philadelphia QM Depot to determine whether or not the Contractor should be permitted to use this material in the completion of Bars, Insect, Field, under subject Contracts.
7. Your Office is advised that specific action was taken in regard to the delay in drying out the material. Contractor promised to have the material dry within two days and to mark all rolls of material with some identifying mark in case Philadelphia QM Depot decides that the material is not to be used without further processing.
8. Boston QM Depot, Inspection Branch, should be advised as to the progress in the settlement of this situation.
12. Although the plaintiff satisfactorily completed the drying and separating of the wet material and bars, its progress was slow in the opinion of the Quartermaster inspector who, in addition, found that the salvage work on the wet cartons of netting had not started by January 25, 1944. On the latter date Inspector Bruno J. Raco made the following report to the contracting officers
DUE TO SIRE WHICH OCCURRED IN THIS PLANT NO PROGRESS HAS BEEN MADE ON THIS CONTRACT.
CONTRACTOR HAD RECEIVED INITIAL DELIVERY OE GOVERNMENT MATERIALS CONSISTING OP 53 CARTONS OP NETTING, MILDEW RESISTANT, AND 1 BALE OP CTN, SHEETING. THE CARTONS TO DATE HAVE NOT BEEN OPENED AND ALTHOUGH THEY ARE TO SOME EXTENT WATER SOAKED IT WILL BE IMPOSSIBLE AT PRESENT TO DETERMINE IF ANY OP THE MATERIAL HAS BEEN DAMAGED.
UPON OPENING OF THESE CASES REPORT WILL BE SUBMITTED TO DEPOT TO WHAT EXTENT AND QUANTITY OP MATERIAL DAMAGED IP ANY.
13. Under date of January 26, 1944, the plaintiff made a shipment on Government Bill of Lading No. WQ 16429250 via Henry Jenkins Transportation Co. to the Boston Quartermaster Depot, Waltham, Massachusetts, of 2,190 bars (73 cartons), insect, field, mildew-resistant, under purchase Order No. 1353. These cartons of bars were completed and ready for shipment at the time of the fire and were undamaged.
14. Under date of January 28,1944, the plaintiff addressed a letter to the Philadelphia Quartermaster Depot, to the attention of H. B. Schneidewind, Captain, QMC, as follows:
This acknowledges receipt of. your letter of 24 January 1944 regarding the materials remaining in our plant after the fire which was previously reported to y°u.
It is our opinion that all of the materials listed in the inventory of January 8, 1944, are usable. We have kept men at the plant and arranged the materials in the best possible condition for drying. However, Captain Steepel [Steeble] of the Boston Depot, visited our plant on January 17, and it is suggested that you obtain Ms opinion as to the usability of the materials.
Regarding your inquiry as to the insurance companies, please be advised that' none of the Government material was insured.
15. Under date of February 1, 1944, Inspector Bruno J. Raco made the following report to the contracting officer:
Subject: Inventory of Gov't Materials (Salvaged from Fire)
Carton No. H-8 H-10 H-8 H-7 H-13 H-ll H-12 H-6 H-9 H-19 H-15 H-7 H-4 H-17 H-30 H-6 H-16 H-29 H-26 H-25 H-21 F-20 H-3 H-5 H-l Actual Yds. 2007V 2192 2032 2191 2206 2032V 1935 2256 2143 2109 V 2075V 2056 2053Vs 2036V 2067V 2107V 2094 2087 2055V 2046V 2060V 2062V 2147 Na Yds. 1899V 38" 2102 2000 2081 2182 " 2022V 38" 1928 38" 2236 38" 2123 38" 2089V 38" 1994V 38" 2027 38" 2027V 38" 2004V 38" 2034V 38" 2084V 38" 2038 38" 2077 38" 2032V 38" 2021V 38" 2038V 38" 2042V 38" (not marked) 48" 491 48" 38"-2195-case marked 48" width measure 38". 38" 38" 38" 38"
Loose pieces totaling 1,819 yds. 48''
" " " 150 38"
Cut parts for 2,020 complete bars " " 2,136 center pieces (doors)_38V
259 cut lengths-15% yds-1.38"
125 " " _16 yds_48"
Cart. No. H-35_607% yds_Sheeting, O. D_35"
Cloth, Ctn. Netting O. D. Mildew Bes: Cartons Nos. H-l to H-53_110,146 yds_38"
Cloth, Ctn. Sheeting O. D. 1 roll__1,118 yds-35"
Information taken from markings on cases.
16. Under date of February 24,1944, the plaintiff on Government Bills of Lading Numbered WT 839931, WT 840784 and WT 840785 shipped 53 cartons of cotton piece goods weighing 14,551 pounds and one bale of cotton piece goods weighing 372 pounds to the Atlas Curtain Company, Fall River, Massachusetts; 23 cases and 2 packages of netting weighing 6,089 pounds to the Pilgrim Curtain Company, Fall River, Massachusetts; and 21 cartons and 5 packages of cotton piece goods weighing 6,000 pounds to the Philadelphia Quartermaster Depot.
17. Under date of February 24, 1944, Inspector Bruno J. Baco made the following report:
Subject: Disposition of Government Materials.
To: The Commanding General, Philadelphia Quartermaster Depot, Philadelphia, Pa.
As requested in letter from Phila QM Depot addressed to Contractor dated 22 Feb 1944, disposition of Government Materials were as follows:
To: Atlas Curtain Co., Pleasant St., Fall River, Mass.
Netting O. D. Mild. Res_38"
53 cartons Nos. H-l to H-53 incl_110,146 yds.
Cloth, Ctn, Sheeting O. D_35"
1 roll-1,118 yds.
To: Pilgrim Curtain Co., Alden St., Fall River, Mass.
Netting O. D. Mild. Res_38"
23 cartons
1 package- 47,490% yds.
To: Phila QM Depot, 2800 S. 20 St., Phila., Pa.
1 carton H-3 Netting O. D_38"_2,147 yds.
1 " H-5 " " _"_491 yds.
1 " H-35 Ctn. Sheeting O. D. 35"_ 607% yds.
1 case (Loose Pieces)_1,819 yds.
14 cartons containing cut parts for 2,020 complete bars & 2,136 center pieces (doors).
4 cartons and 1 package containing:
259 cut lengths Netting, O.D-15% yds. ea.
125 " " " " _16 yds. each
18. The plaintiff's employees opened the wet cartons and in those instances where the bars in the cartons were wet they were dried and repacked. Not all of the cartons and contents were damaged. The conflicting evidence does not establish with certainty how much material had to be stretched or rolled out and dried by the plaintiff's employees. It is clear that an undefined quantity was stretched out for drying and that how long it took for it to dry depended on how wet it was, whether or not it was frozen and whether it was rolled out in the heated or unheated part of the building. The drying process was also circumscribed by the amount of labor available for the work and the space necessary.
19. On February 28,1944, the plaintiff's president, Samuel Sperling, wrote the contracting officer the following letter:
We received a telephone call from Mr. Gilbert with regard, to the contracts for Bars, Insect, Field, with respect to the delay in making deliveries under the contracts because of a fire which occurred on January 4, 1944, and destroyed our plant, and of which we notified you by telegram on January 4,1944, and also by letter of January 8,1944.
We are still protecting the Government-owned property from further , damage, according to our obligation under the Eecapture Clause, and have been put to considerable expense in so doing.' We have requested that we be permitted to subcontract to Berkshire Mills, Inc., of Stamford, Connecticut, and are awaiting your decision.
Pending your decision, please accept this as our re-?uest for an equitable adjustment under the Eecapture ¡lause in order that we be compensated for the costs and expenses which we have incurred in protecting the Government-owned property from further damages, separating the damaged and the undamaged property and putting it into the best possible order.
Your advice as to the form in which our claim should be presented will be greatly appreciated.
On March 7, 1944, the contracting officer replied, asking the plaintiff to submit an itémized list of the costs and expenses incurred under each purchase order, together with all evidence substantiating the same. It was suggested that this evidence be submitted in the form of original papers and affidavits sworn to by parties having knowledge of the same.
On March 20, 1944, the Quartermaster Corps terminated the plaintiff's Purchase Order Contracts Nos. 1353 and 4243 for failure to complete delivery in conformity with contract requirements. On April 12, 1944, the contracting officer again wrote the plaintiff referring to the letter of March 7, 1944, and stating that unless the requested information was forwarded it would not be possible for the Depot to give proper consideration, to the claim.
20. The Quartermaster Corps received no further communications from the plaintiff until November 5,1945, when the plaintiff wrote a letter to the contracting officer making a claim under the contracts for services rendered in salvaging operations said to have been required under the Eecap-ture Clause. Total expenses claimed amounted to $3,468.88 covering the period January 4, 1944 to February 19, 1944. It was also represented that the defendant had erroneously charged the plaintiff with $132.76 under the Delays-Damages clause whereas, actually, it was an excusable matter under the circumstances. The plaintiff advised that a complete explanation of the $3,468.88 figure would be submitted to the defendant in a few days.
On December 29,1945, the contracting officer, in referring to the above letter, pointed out to the plaintiff that the evidence promised had not been received and stated:
It is impossible for the contracting officer to ascertain the merits of your claim unless the information requested is furnished. Unless, therefore, you supply the evidence to support your claim there will be no alternative but to regard it as withdrawn and the matter closed.
Consideration is being given to your request that the charge of $132.76 be cancelled.
21. On January 7,1946, the plaintiff again assured the contracting officer that the evidence would be forthcoming but nothing was actually supplied until March 31,1948, at which time itemized expenses as set forth below, covering the period from January 4,1944 to February 19,1944, were submitted.
PAYROLL
Week Ending 1/8/44
Morris Helfner_$100.00
Meyer Hirshkowitz___ 40.00
A1 Ziviliek_ 75. 00
Sol Lichtenstein_ 70.00
Ben Weisman._ 100.00
Wm. Smulison_ 75.00
S. Sperling-"_ 60.00
Phyllis McCarthy_ 28.00
-$548. 00
Week Ending 1/15/44
AI Ziviliek_ 75.00
Morris Helfner___ 100.00
Sol Lichtenstein_ 70.00
Meyer Hirshkowitz_! 40. 00
Phyllis McCarthy_ 28.00
Wm. Smulison_j_ 37.50
S. Sperling- 60.00
410.50
Week Ending 1/22/44
Week Ending 1/29/44
Week Ending 2/5/44
Week Ending 2/12/44
Week Ending 2/19/44
Morris Helfner_ 100. 00 A1 Zivilick_ 110.00 Sol Lichtenstein_ 75.00 Meyer Hirshkowitz_ 40. 00 Phyllis McCarthy- 28.00 S. Sperling- 60.00 - $413.00
MISCELLANEOUS EXPENSES
Week Ending 1/8/44
Transportation & Boom Rent- 81.00
Week Ending 1/15/44
Week Ending 1 /22/M
Transportation & Room Rent- $133.00
Week Ending 1/29/M
Transportation & Room Rent- 75.00
Week Ending 2/5/M
Transportation & Room Rent- 75.00
Week Ending 2/12/M
Transportation & Room Rent_ 75.00
Week Ending 2/19/M
Transportation_ 16.00
Boxes from Powdrell & Alexander—
Express for Boxes_ 53.00
Total_$3,468.88
22. The Quartermaster Corps acknowledged receipt of the above letter on April 1,1948, and on July 9,1948, replied in part as follows:
The contents of your letter of 18 March 1948 above referred to have been carefully noted. You are advised that this Depot is not in a position to give consideration to your claim for adjustment as said contents are entirely inadequate for the purpose. It is essential, as you were previously informed, that evidence be submitted in proper form showing that the expenses alleged to have been incurred by you were necessary, and further, the cost of work undertaken by you to protect Government-owned property from further damage as a result of the fire.
Claim for adjustment under the applicable provisions of the contracts may be asserted at any time prior to the date of final settlement. The request for evidence substantiating your claim contained herein is not to be regarded as a waiver of any of the Government's rights at this time; it is understood that this letter is without prejudice to the Government in respect to any legal defense available under the terms of the contracts or in law.
23. On December 29,1948, the plaintiff wrote a long letter to the contracting officer at the Philadelphia Quartermaster Depot. This letter is in evidence as Plaintiff's Exhibit 7-H and is included herein by reference. The letter recited in detail the circumstances surrounding the fire, the quantities of material shown by the inventory of January 8, 1944, referred to in our finding 10, the efforts made by the plaintiff's employees to salvage the materials, the handicaps encountered and expenses allegedly incurred therefor. The plaintiff stated that it had all of the original checks for the payroll and expenses and an invoice for cartons used. The plaintiff requested action by the defendant on its claim for reimbursement of costs.
On January 12,1949, the contracting officer replied, stating that an investigation would be undertaken and a report forwarded to higher authority for consideration.
On May 6,1949, the plaintiff's attorney wrote .the contracting officer asking that the plaintiff be furnished information about the progress of the matter. A reply was made on June 8, 1949, with the advice that consideration was being given to the plaintiff's contracts by the Office of the Assistant Secretary of the Army and that all future inquiries regarding same should be addressed accordingly. The plaintiff's counsel wrote to the contracting officer again on November 7, 1949, and received no reply. There the matter rested until the plaintiff filed suit in this court on February 20,1950.
There is no evidence that the contracting officer ever made a finding of fact or decision in this dispute. The contracting officer's letter of July 9, 1948, as recited in finding 22, asserts that the defendant was not in a position to give consideration to the claim because insufficient evidence supporting it had been submitted and it was requested that it be shown that the expenses alleged to have been incurred were necessary and a result of the fire. The data submitted by the plaintiff in response thereto was its letter of December 29,1948, in affidavit form. There is no evidence that the defendant made an audit of these alleged expenses or that the plaintiff filed any appeal to the head of the department.
24. The plaintiff in this action claims as the amount reasonably and necessarily expended by it in the salvage operations the sum of $3,017.38, computed as follows:
Wages- to employees-•-$2,494. 00
Salary to Samuel Sperling- 420.00
Expenses to employees — - 56.00
Telephone_ — - 12.64
Hardware_•- 1.74
Cartons_ 33.00
Total_ 3,017.38
The claim for wages should be reduced to the salary of the men actually engaged in the salvaging operation, computed on the basis of unskilled labor rates of pay except for the salary of one supervisory employee. Plaintiff's manager testified that the minimum rate for unskilled labor was paid at the Ware plant. Under the contract and the applicable law $0.40 per hour was the minimum permitted. It is also found that the men listed below were engaged in the salvaging operation from January 5 to February 19,1944, working forty hours per week. Computed on this basis the direct labor cost is as follows: ,
Compensable Wages for Period Jan. 5 to Feb. 19, 1944
The plaintiff acquired cartons necessary for the shipment of the salvaged materials at a cost of $58 and items of hardware necessary in the packing operation for $1.74, which are sufficiently connected to the salvaging to be compensable under the recapture clause.
The plaintiff has not shown that the high wages paid the workmen were necessary to the preservation of government property. The record indicates that the retention of these skilled employees was more related to plaintiff's future operation than to the salvaging required. Except as indicated above, the miscellaneous expenses listed in plaintiff's schedule (finding 21) are not shown to have been incurred of necessity in protecting the material and are therefore excluded.
The total compensable expenses incurred and proved by plaintiff are found to be $1,158.74.
CONCLUSION OF LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is entitled to recover, and it is therefore adjudged and ordered that it recover of and from the United States one thousand one hundred fifty-eight dollars and seventy-four cents ($1,158.74).
See finding 10.
Two of these men worked less than two weeks.
See finding 21.
Paragraph S, sheet 9, of Purchase Order Contract No. 4243 provides as follows:
"WALSH HEALX ACT: Stipulation (b) of 'Representations and Stipulations pursuant to Public Act No. 846, Seventy-fourth Congress,' approved 30 June 1936 (49 Stat. 2036; 41 U. S. C. 35-45), with respect to wages is operative in view of the following determination relative prevailing minimum wage rate: COTTON GARMENT AND ALLIED INDUSTRIES — 40 CENTS PER HOUR OR $16.00 PER WEEK OP 40 HOURS, ARRIVED AT EITHER UPON A TIME OR PIECE WORK BASIS."
See also: 7 P. R. 4740.