Depew Paving Co. v. United States

MadoeN, Judge,

delivered the opinion of the court:

This claim is presented under the War Contract Hardship Claims Act, known as the Lucas Act, 6.0 Stat. 902 as amended by 62 Stat. 869, 992, 41 U. S. C. § 106 note, to recover from the United States $65,510.52 as the net loss alleged to have been sustained by plaintiff in the performance of Government contracts between September 16, 1940 and August 14, 1945. The Government has moved for summary judgment on the ground that there is no genuine issue as to an essential preliminary requirement under the Lucas Act in that plaintiff did not file a proper written request for the type of relief contemplated by the Lucas Act with a department of defendant prior to August 14,1945.

The facts alleged in the petition and contained in the documents submitted by the parties in relation to the present motion reveal that plaintiff, as a joint venturer with the John B. Schultz Contracting Co., Inc., entered into a contract with the War Department on July 14, 1942, for the grading, draining, and paving of Modification Center Number 5 at the Buffalo, New York, Airport. On July 30, 1942, the joint venturers also entered into a contract with the Civil Aeronautics Administration, acting on behalf of the Department of Commerce, for the clearing, grading, draining, and paving of an airport at Dunkirk, New York. The Buffalo Airport contract was completed by the joint venturers at a net profit. However, unusually heavy rains resulting in extensive delays were encountered during the execution of the Dunkirk contract. During this period of delay, the joint venturers were required to keep large quantities of their own expensive equipment on this project which could have been used to advantage on other contracts. Consequently, increased labor costs were incurred and severe losses were suffered from the inability to put the machinery to profitable uses, which resulted in the joint venturers completing the contract at a loss. In the performance of these two contracts, which were the only Government contracts entered into by the joint venturers during the period between September 16, 1940 and August 14, 1945, a net loss, as that term is used in the Lucas Act, of $99,153.20 was incurred. Under the joint-venture agreement between plaintiff and John B. Schultz Contracting Co., Inc., plaintiff’s share of the profits and losses was 66.07 percent; hence, plaintiff’s share of the total net loss on these contracts was $65,510.52.

On August 18,1944, the joint venturers wrote to the Civil Aeronautics Administration a letter concerning the Dunkirk project, the pertinent parts of which letter read as follows:

Attached herewith please find invoice and recapitulation sheets showing the labor loss and Equipment loss as compared with the time the equipment was on the job and the time it was actually able to work, the loss being due to conditions not contemplated in Contract No. Cica 1486 for construction of the Dunkirk Airport. * * *

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In the execution of this Contract, we had in use equipment beyond what would be needed under normal conditions. The weather reports in your possession conclusively show that at no time during the execution of the Contract was there sufficient time, between rains, to efficiently operate. Our proposal was predicated only on normal conditions, and there was no way for us to definitely know that we would experience continued wet weather.

The Contract existing between us entered into the 30th day of July, 1942, stipulates in Article 4, on Page 3, that relief for losses can be obtained for “unknown conditions of an unusual nature”. For this reason we feel that we should be recompensed for not only our cash losses but for losses due to the necessity of prolonging the job beyond the time stipulated in the Contract.

Hs Hi Hi Hi ❖

On November 9, 1944, the Civil Aeronautics Administration sent a reply denying the request on the ground that it presented a claim for damages which could not be settled by the contracting agency, but which rather had to be presented to the Comptroller General for consideration. The reply of the Civil Aeronautics Administration contained the following statement with respect to the nature of the claim:

In accordance with the Act of April 10,1928, Title 31, Section 236 of the U. S. Code, the Comptroller General of the United States is authorized to submit the amount of any claim, which contains such elements of legal liability or equity as to be deserving of the consideration of the Congress, and request authorization for an appropriation to cover the sums favorably recommended by him. * * *

Following the passage of the Lucas Act, plaintiff, on February 5,1947, again presented a claim to the Civil Aeronautics Administration, on its own behalf only, relying on the- above-quoted letter of August 18, 1944, as constituting a request for relief from losses under the First War Powers Act. On December 24, 1948, this claim was denied in its entirety by ■ the Civil Aeronautics Administration on the ground that there was no evidence that plaintiff had filed a written request for an amendment of its contract, without consideration, under the First War Powers Act. Thereafter, on June 24,1949, and within six months after the Civil Aeronautics Administration’s refusal to grant Lucas Act relief, plaintiff filed this action.

The Government has moved for summary judgment on the ground that the request for relief on August 18, 1944, which is relied upon by plaintiff, does not satisfy the requirements of the Lucas Act because, instead of -asking for extra-legal relief without consideration under the First.War Powers Act, it requests relief under Article 4 of plaintiff’s contract. It is plaintiff’s position, however, that the request was sufficient to put the Civil Aeronautics Administration on notice that extra-legal relief was being requested.

Section 1 of the Lucas Act provides in part, as follows:

Where work, supplies or services have been furnished between September 16, 1940, and August 14,1945, under a contract or subcontract, for any department or agency of the Government which prior to the latter date was authorized to enter into contracts and amendments or modifictions of contracts under section 201 of the First War Powers Act, 1941 (50 U. S. C., Supp. IV, app., sec. 611), such departments and agencies are hereby authorized, in accordance with regulations to be prescribed by the President * * * to consider, adjust, and settle equitable claims of contractors, * * * for losses (not including diminution of anticipated profits) incurred between September -16, 1940, and August 14, 1945, without fault or negligence on their part in the performance of such contracts or subcontracts. * * *

Section 3 of the Lucas Act sets forth the following requirements for claims presented thereunder:

Claims for losses * * * shall be limited to losses with respect to which a written request for relief was filed with such department or agency on or before August 14,1945, * * *.

The Supreme Court of the United States in Fogarty v. United States, 340 U. S. 8, 13, also considered the nature of the written request required by Section 3, and concluded that:

* * * no particular form of notice is required. But whatever the form of notice, it must be sufficient to apprise the agency that it was being asked to grant extra-legal relief under the First War Powers Act for losses sustained in the performance of war contracts.

We see no suggestion in the plaintiff’s letter that it was asking for extra-legal relief. It is urged that, because certain decisions of this court, e. g., The Arundel Corporation v. United States, 103 C. Cls. 688, have interpreted Article-4 of the standard Government contract, providing' for an equitable adjustment when “unknown conditions of an unusual nature” are encountered, as not being applicable to adverse weather conditions, the Government’s officers, in considering the plaintiff’s letter, should have disregarded its assertion of contract rights, and treated it as a prayer for grace, since that was the only avenue of relief. Such a treatment of the request would be in the face of the Supreme Court’s interpretation of Section 3 of the Lucas Act. -,

The Government’s motion for summary judgment is granted, and the plaintiff’s petition is dismissed.

It is so ordered.

Whitaker, Judge; and Littleton, Judge; concur.