B-109803, NOV. 6, 1962

B-109803: Nov 6, 1962

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OUR COMMENTS WERE REQUESTED ON A PROPOSED COMPROMISE SETTLEMENT AGREEMENT BETWEEN TREUAG. THE CLAIMS WERE ALLOWED IN THE TOTAL AMOUNT OF $250. THE GOVERNMENT FILED A COUNTERCLAIM AFTER WE CANCELED OUR SETTLEMENT ON THE BASIS OF NEW EVIDENCE INDICATING THAT MOST OF THE EQUIPMENT WAS PROPERLY FOR CLASSIFICATION AS WAR MATERIALS AND AS SUCH PROHIBITED FROM BEING TRANSFERRED TO OR SOLD TO AMERICAN AUTO PARTS COMPANY. IT APPEARS THAT THE COUNTERCLAIM IN THE SUIT WAS FOR THE AMOUNT OF $240. ASIDE FROM THE QUESTION AS TO WHETHER THE PARTICULAR SALES WERE PROHIBITED BY LAW. IT DID NOT APPEAR FROM THE INFORMATION IN OUR FILES THAT THE MARKET VALUE OF THE EQUIPMENT INVOLVED WAS MUCH IN EXCESS OF $100.

B-109803, NOV. 6, 1962

TO THE SECRETARY OF STATE:

BY FN/EPA MEMORANDUM OF OCTOBER 30, 1962, OUR COMMENTS WERE REQUESTED ON A PROPOSED COMPROMISE SETTLEMENT AGREEMENT BETWEEN TREUAG, AN AGENCY OF THE FEDERAL REPUBLIC OF GERMANY, AND OAKLAND TRUCK SALES, INC., PITTSBURGH, PENNSYLVANIA, CONCERNING "ANY CLAIMS ARISING FROM THE FACTS UNDERLYING THE CIVIL ACTION OAKLAND V. TREUAG (CASE 1 U. 32/59 OF THE APPELLATE COURT IN FRANKFURT/MAIN) AND THE CIVIL ACTION OAKLAND V. UNITED STATES OF AMERICA (COURT OF CLAIMS, CASE NO. 417-56).'

OUR RECORDS SHOW THAT ON MAY 8, 1952, THE DEPARTMENT OF THE ARMY FORWARDED TWO CLAIMS OF OAKLAND TRUCK SALES, INC., INVOLVING CERTAIN EQUIPMENT WHICH HAD BEEN REPOSSESSED BY THE UNITED STATES ARMY AFTER THE EQUIPMENT HAD BEEN MADE THE SUBJECT OF A SALE AGREEMENT BETWEEN A PROPERTY DISPOSAL AGENCY OF THE FEDERAL REPUBLIC OF GERMANY AND AMERICAN AUTO PARTS COMPANY, INC., WHICH LATER ASSIGNED ITS INTEREST IN THE EQUIPMENT TO OAKLAND TRUCK SALES, INC. IN ACCORDANCE WITH THE DEPARTMENTAL RECOMMENDATION, THE CLAIMS WERE ALLOWED IN THE TOTAL AMOUNT OF $250,000. WE DID NOT INSIST UPON ACCEPTANCE OF SUCH AMOUNT AS A FULL AND FINAL SETTLEMENT AND ON APRIL 9, 1953, OAKLAND FILED A PETITION IN THE COURT OF CLAIMS, SEEKING RECOVERY OF THE ADDITIONAL SUM OF $1,590,299, PLUS INTEREST FROM OCTOBER 1950. THE GOVERNMENT FILED A COUNTERCLAIM AFTER WE CANCELED OUR SETTLEMENT ON THE BASIS OF NEW EVIDENCE INDICATING THAT MOST OF THE EQUIPMENT WAS PROPERLY FOR CLASSIFICATION AS WAR MATERIALS AND AS SUCH PROHIBITED FROM BEING TRANSFERRED TO OR SOLD TO AMERICAN AUTO PARTS COMPANY, INC., BY THE GERMAN PROPERTY DISPOSAL AGENCY. IT APPEARS THAT THE COUNTERCLAIM IN THE SUIT WAS FOR THE AMOUNT OF $240,379.21, REPRESENTING WHAT WE CONSIDERED TO BE AN OVERALLOWANCE OF $247,573.08 ON THE PLAINTIFF'S CLAIMS, LESS AN EXCESS WITHHOLDING OF $7,193.87 ON CLAIMS WHICH THE GOVERNMENT HAD AGAINST OAKLAND ON ACCOUNT OF DEFAULTS IN PERFORMANCE OF CERTAIN CONTRACTS BETWEEN OAKLAND AND THE DEPARTMENT OF THE ARMY.

THE COURT OF CLAIMS PERMITTED THE PLAINTIFF TO DISMISS ITS PETITION SO THAT IT COULD PROCEED IN THE GERMAN COURTS. IN JANUARY 1956 THE DEPARTMENT OF JUSTICE REQUESTED OUR OPINION AS TO THE ACCEPTABILITY OF A COMPROMISE SETTLEMENT OFFER OF $350,000. THE PLAINTIFF HAD ALLEGED THAT IT HAD OBTAINED A JUDGMENT IN GERMANY FOR $1,238,000 AND EXPRESSED THE BELIEF THAT THE JUDGMENT WOULD BE SUSTAINED BY THE APPELLATE COURTS OF GERMANY. ASIDE FROM THE QUESTION AS TO WHETHER THE PARTICULAR SALES WERE PROHIBITED BY LAW, IT DID NOT APPEAR FROM THE INFORMATION IN OUR FILES THAT THE MARKET VALUE OF THE EQUIPMENT INVOLVED WAS MUCH IN EXCESS OF $100,000. WE THEREFORE RECOMMENDED THAT THE COMPROMISE OFFER BE REJECTED. THE PLAINTIFF REASSERTED ITS CLAIM FOR $1,590,299 IN THE COURT OF CLAIMS BY A PETITION FILED ON SEPTEMBER 28, 1956, COURT OF CLAIMS NO. 417-56, AND THE GOVERNMENT AGAIN FILED ITS COUNTERCLAIM.

UNDER THE TERMS OF THE PROPOSED SETTLEMENT AGREEMENT BETWEEN OAKLAND AND TREUAG AN ADDITIONAL PAYMENT OF $250,000 WOULD BE MADE TO OAKLAND, PLUS 5 PERCENT ANNUAL INTEREST THEREON COMPUTED FROM OCTOBER 1, 1950, UNTIL THE DATE OF THE CONCLUSION OF THE SETTLEMENT.

IT IS EXPLAINED IN AIRGRAM A-817 FROM THE AMERICAN EMBASSY IN BONN, GERMANY, THAT PRINCIPAL, INTEREST AND COURT COSTS WOULD BE PAID BY TREUAG, AND THAT THE UNITED STATES WOULD ALLOW CORRESPONDING DEDUCTIONS FROM THE INDEBTEDNESS OF THE FEDERAL REPUBLIC OF GERMANY UNDER ARTICLE I OF THE SURPLUS PROPERTY PAYMENTS AGREEMENT, MINUS AN ACCOUNT OF$57,957.50 REPRESENTING THE PURCHASE PRICE RECEIVED BY THE GERMAN PROPERTY DISPOSAL AGENCY FOR THE GOODS INVOLVED IN OAKLAND'S CLAIM. THE AIRGRAM FURTHER SETS FORTH THAT THE EMBASSY HAS BEEN INFORMED BY USAREUR THAT THE DEPARTMENT OF THE ARMY HAS APPROVED THE PROPOSED SETTLEMENT, THAT THE EMBASSY HAS MONITORED THE LITIGATION IN THE GERMAN COURTS AND THAT IT HAS CONSULTED THE DEPARTMENT OF JUSTICE IN REGARD TO PREVIOUS SETTLEMENT PROPOSALS.

IN THE CIRCUMSTANCES, AND SINCE WE ARE ADVISED THAT THE ACTING ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, HAS INFORMED THE DEPARTMENT OF THE ARMY THAT THE DEPARTMENT OF JUSTICE WOULD HAVE NO OBJECTION TO THE PROPOSED SETTLEMENT, WE DO NOT FEEL REQUIRED TO RAISE ANY OBJECTION THERETO.