B-133616 October 25, 1957

B-133616: Oct 25, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Attorney General: Reference is made to a letter dated October 9. Appears to be whether the Department of Justice is free to act on this claim since it was not referred directly to the Department by the Department of the Air Force with that Department's recommendation. The referred-to debt of the Alpina Insurance Company was determined by the Department fo the Air Force to be administratively uncollectible. Was referred to our office under the provisions of our General Regulations No. 129. Our jurisdiction extends to be settlement and adjustment of all claims in which the United States is concerned. For that reason and since the Attorney General has auathority to compromise claims which have been referred to him.

B-133616 October 25, 1957

The Honorable The Attorney General

Dear Mr. Attorney General:

Reference is made to a letter dated October 9, 1957, from the First Assistant to the Assistant Attorney General, Civil Division, concerning our letter of October 7, 1957, to you, in which we recommened that the offer of the Alpina Insurance Company, Genoa, Italy, to compromise the Government's claim in the amount of $9,132,30, representing damage to Government machine tools while in transit from Italy to the United States, for the sum of $5,029.21, be accepted for the reasons stated therein.

The first question presented in the letter of October 9, 1957, appears to be whether the Department of Justice is free to act on this claim since it was not referred directly to the Department by the Department of the Air Force with that Department's recommendation. We see no problem in this regard. The referred-to debt of the Alpina Insurance Company was determined by the Department fo the Air Force to be administratively uncollectible, and was referred to our office under the provisions of our General Regulations No. 129, dated July 30, 1956, 4 GAO 5050. Our jurisdiction extends to be settlement and adjustment of all claims in which the United States is concerned, either as a debtor or as a creditor (31 U.S.C. 71), but we recognize that such authority to settle and adjust claims does not include compromise authority. For that reason and since the Attorney General has auathority to compromise claims which have been referred to him, the compromise offer here in question was transmitted to you for your consideration. This was in accordance with our usual practice in such cases.

In our letter of transmittal we recommeded acceptance of the debtor's offer of $5,029.21 because that amount represented over 50 percent of the total indetedness involved and because oterhwise the matter would have to be litigated in an Italian court. This recommendation was based upon our understanding from the Department of State that as a pracatical matter and as a matter of foreign policy it is unwise for the United States to litigate debt cases in foreign courts, particularly, Italian courts except in the most extraordinary circumstances which it was believed were not present here.

In the letter of October 9 it is suggested that the compromise offer of the company of $5,029.21 should be rejected and that a suit should be instituted against the company for recovery of the full indetedness of $9,132.30. It is stated that this suggestion is based on the fact that there have been several settlements with foreign insurance companies in which the amounts accepted have been only fractions fo the losses sustained and it may be that a failure on the part of the Department of Justice to take court acation on one or more of these claims could set a pattern which could ultimately cost the United States considerably more that the amount here involved. In view of the representations now made with regard to settlements with foreign insurance companies, we have no objection to establishing the amount of the indetedness by court action.

In regard to the second question as to whether the file indicates the availability of documentary proof usable in Italy, where, under the terms of the insurance contract, the suit for recovery of the amount of damages must be brought, to show the expenditure of $9,000 for the repairs to the machine tools without the necessity of having a witness travel to Italy for the purpose of testifying it it suggested that the Department of the Air Force be contacted for such information, and for any other information which might bear on the relative difficulty of establishing a cause of action in court. Our Office does not have any additional information which might be of use in a suit against the insurance company.

Sincerely yours,

Joseph Campbell Comptroller Genreal of the United States