B-54624, FEB. 5, 1957

B-54624, FEB. 5, 1957

TO MCCORMACK-EVANS COMPANY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 11, 1956, FROM TYREE C. DERRICK, WRITTEN IN YOUR BEHALF, ADVISING THAT OUR DENIAL DATED NOVEMBER 9, 1956, OF YOUR CLAIM FOR MONEY ALLEGEDLY DUE UNDER CONTRACT NO. W-1103- ENG-3939 APPEARS TO PLACE A STRAINED CONSTRUCTION UPON THE OPINION OF THE UNITED STATES DISTRICT COURT UPON REHEARING OF THE GOVERNMENT'S COUNTERCLAIM, AND EXPRESSING AN OPINION THAT SUCH DENIAL IS BASED PRIMARILY UPON OUR BELIEF THAT IT WOULD BE TOO DIFFICULT, IF NOT IMPOSSIBLE, TO COMPEL US TO COMPLY WITH THE COURT'S DECISION IN THE MATTER.

YOUR ACTION IN THE DISTRICT COURT WAS BROUGHT UNDER THE PROVISIONS OF THE LUCAS ACT, 41 U.S.C. 106, AND ASKED FOR A DETERMINATION OF THE EQUITIES INVOLVED IN YOUR CLAIM, A JUDGMENT IN THE SUM OF $40,952.22 AND FOR AN ORDER DIRECTING THE UNITED STATES TO PAY THE JUDGMENT. THE DISTRICT COURT DECIDED (101 F.SUPP. 436) THAT YOU WERE NOT ENTITLED TO RELIEF UNDER THE LUCAS ACT, AND SUCH DECISION WAS AFFIRMED BY THE COURT OF APPEALS. (200 F.2D 201). YOUR ORIGINAL COMPLAINT, AND THE OPINIONS OF BOTH COURTS, INDICATE CLEARLY THAT THE AMOUNT OF $40,952.22 CLAIMED BY YOU CONSISTED OF $28,201.80 WHICH YOU CONSIDERED DUE AND UNPAID FOR WORK COMPLETED UNDER YOUR CONTRACT, PLUS AN AMOUNT OF $12,750.42, REPRESENTING EXCESS COSTS INCURRED BY THE GOVERNMENT IN COMPLETING THE PORTION OF THE WORK UPON WHICH YOU HAD DEFAULTED, FOR WHICH YOU HAD ALREADY BEEN NOTIFIED YOU WOULD BE HELD LIABLE.

IN SUSTAINING THE DISMISSAL OF YOUR ACTION AS NOT MAINTAINABLE UNDER THE LUCAS ACT, UNDER WHICH YOU HAD VOLUNTARILY ELECTED TO BRING IT, THE COURT OF APPEALS SAID, AT 200 F.2D 205:

"CLAIMS FOR RELIEF AS A MATTER OF RIGHT, AS, FOR INSTANCE, FOR DAMAGES RESULTING FROM A BREACH OF CONTRACT BY THE WAR DEPARTMENT OR FOR COMPENSATION EARNED UNDER A CONTRACT AND WITHHELD BY THE WAR DEPARTMENT, AFFORD NO BASIS FOR AN ACTION UNDER THE WAR CONTRACTS HARDSHIP CLAIMS ACT. FOR SUCH CLAIMS TO WHICH THE APPELLANTS MAY HAVE BEEN ENTITLED AS A MATTER OF RIGHT, APPELLANTS WERE GIVEN AN ADEQUATE REMEDY BY RESORT EITHER TO THE DISTRICT COURT OR THE COURT OF CLAIMS, DEPENDING UPON THE AMOUNT INVOLVED, UNDER TITLE 28, U.S.C. 1346 OR 1491.'

IT IS CLEAR THEREFORE THAT YOUR LEGAL CLAIM TO EARNED AMOUNTS RETAINED BY THE GOVERNMENT WAS NOT BEFORE THE DISTRICT COURT, AND THAT THE DECISION AND JUDGMENT OF THE DISTRICT COURT ON REHEARING OF THE GOVERNMENT'S COUNTERCLAIM HAD EFFECT ONLY AS AN ADJUDICATION THAT THE UNITED STATES WAS NOT ENTITLED TO RECOVER THE ADDITIONAL AMOUNT OF EXCESS COSTS CLAIMED.

THE JURISDICTION OF THIS OFFICE TO PAY CLAIMS AGAINST THE UNITED STATES IS LIMITED TO CASES IN WHICH A CLEAR LEGAL LIABILITY EXISTS ON THE PART OF THE UNITED STATES TO MAKE SUCH PAYMENTS. SEE CHARLES V. UNITED STATES, 19 C.CLS. 316; AND LONGWILL V. UNITED STATES, 17 C.CLS. 288. OUR DECISIONS ARE BINDING ONLY UPON THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT, AND OUR DISALLOWANCE OF A CLAIM HAS NO EFFECT UPON THE CLAIMANT'S RIGHT TO PURSUE ANY JUDICIAL REMEDY AUTHORIZED BY LAW. OUR DISALLOWANCE IN THIS CASE WAS IN NO WAY AFFECTED OR INFLUENCED BY ANY CONSIDERATION OF YOUR RIGHT TO PURSUE OTHER REMEDIES. SUCH ACTION WAS AND IS BASED UPON THE FACT THAT THE JUDGMENT OF THE DISTRICT COURT DISMISSING THE GOVERNMENT'S COUNTERCLAIM NEITHER IMPOSED NOR WAS INTENDED TO IMPOSE ANY LIABILITY UPON THE UNITED STATES TO PAY ANY PORTION OF THE AMOUNT RETAINED UNDER YOUR CONTRACT. IN THOSE CIRCUMSTANCES AND IN VIEW OF THE FURTHER FACT THAT THE UNITED STATES DID INCUR EXCESS COSTS AS A RESULT OF YOUR DEFAULT, WE FEEL THAT WE WOULD NOT BE LEGALLY JUSTIFIED IN PAYING ANY PART OF YOUR CLAIM ON THE PRESENT RECORD.