6601 Dorcheser Investment Group, LLC v. United States

In the United States Court of Federal Claims
No. 20-1427C
(Filed: July 27, 2021)
)
6601 DORCHESTER INVESTMENT )
GROUP, LLC, )
)
Plaintiff, )
)
v. )
)
THE UNITED STATES, )
)
Defendant. )
William B. Jung, Mount Pleasant, SC, for Plaintiff.
Sarah E. Kramer, Commercial Litigation Branch, Civil Division, United States
Department of Justice, Washington, D.C., for Defendant. With her on the briefs were
Brian M. Boynton, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director,
and Elizabeth M. Hosford, Assistant Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington, D.C.
OPINION AND ORDER
SOLOMSON, Judge.
This case arises under an alleged contract between Plaintiff, 6601 Dorchester
Investment Group, LLC (“Dorchester”), and Defendant, the United States, acting by and
through the United States Department of Housing and Urban Development (“HUD”)
and the United States Department of Veterans Affairs (“VA”), for the lease of apartment
units to veteran participants in the HUD-VA Supportive Housing (“HUD-VASH”)
program. Dorchester alleges that, in order to incentivize its participation in the HUD-
VASH program, the government agreed to reimburse Dorchester for physical
apartment damage caused by, and unpaid rent owed by, veteran participants.
According to Dorchester, however, the government ultimately failed to do so.
Dorchester now brings claims in this Court against the government for breach of an
express contract and an implied-in-fact contract. 1 The government moves to dismiss
Dorchester’s complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the
United States Court of Federal Claims (“RCFC”) for, respectively, lack of subject matter
jurisdiction and failure to state a claim upon which relief may be granted. In the
alternative, the government moves for a more definite statement under RCFC 12(e). For
the reasons explained below, the Court GRANTS the government’s motion to dismiss
pursuant to Rule 12(b)(6) for failure to state a claim.
I. LEGAL AND FACTUAL BACKGROUND 2
a. HUD’s Housing Choice Voucher Program
Congress created the Housing Choice Voucher (“HCV”) program “[f]or the
purpose of aiding low-income families in obtaining a decent place to live and of
promoting economically mixed housing.” 42 U.S.C. § 1437f(a). Through the HCV
program, HUD provides participants with HUD-funded vouchers via local public
housing agencies (“PHAs”). 24 C.F.R. § 982.1(a)(1). HUD funds the vouchers using
annual contributions contracts it enters into with individual PHAs: HUD makes
payments to a particular PHA, and the PHA in turn agrees to administer the HCV
program in accordance with HUD requirements. 24 C.F.R. § 982.151(a)(1). As part of
the HCV program, the PHA issues HUD-funded vouchers to eligible tenants, see 24
C.F.R. § 982.1(a), who then use the vouchers to rent units from property owners
participating in the program. 24 C.F.R. § 982.1(a)–(b).
The government does not lease the housing units from a landlord or a PHA.
Rather, each individual tenant participating in the HCV program signs a lease with the
1 Dorchester initially also brought claims for promissory estoppel and attorney’s fees, expenses,
and costs pursuant to the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412. Compl. at 8,
10. While Dorchester correctly concedes that these claims should be dismissed for lack of
jurisdiction, it continues to pursue its breach of contract claims. ECF No. 12 at 1-2; Int’l. Data
Prods. Corp. v. United States, 492 F.3d 1317, 1326 (Fed. Cir. 2007) (holding that this Court has no
jurisdiction over promissory estoppel claims); Johnson Lasky Kindelin Architects, Inc. v. United
States, 151 Fed. Cl. 642, 651 (2020) (holding that this Court has no jurisdictions over claims
sounding in tort).
2 The facts alleged in Plaintiff’s amended complaint are assumed to be true and do not
constitute factual findings by the Court. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[F]or the
purposes of a motion to dismiss we must take all of the factual allegations in the complaint as
true.” (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007))). The Court also has considered
“matters incorporated by reference or integral to the claim, items subject to judicial notice, [and]
matters of public record.” Dimare Fresh, Inc. v. United States, 808 F.3d 1301, 1306 (Fed. Cir. 2015)
(quoting 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed.
2004)).
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landlord of his or her unit and pays a portion of the rent according to the tenant’s ability
to pay. 24 C.F.R. § 982.515. The PHA then makes up the difference between the
tenant’s contribution and the allowable rent under a Housing Assistance Payment
(“HAP”) contract. 24 C.F.R. § 982.515. Each HAP contract is between the property
owner and the PHA, see 24 C.F.R. § 982.162(a)(2), and “must be in the form required by
HUD.” 24 C.F.R. § 982.451(a)(1). The property owner is responsible for “performing all
of the owner’s obligations under the HAP contract and the lease,” including collecting
from the tenant both the tenant’s portion of the rent (the amount not covered by the
PHA) and any charges for unit damage caused by the tenant. 24 C.F.R. § 982.452(a)–(b).
b. HUD-VASH Program
Established in 2012, HUD-VASH is a collaborative program between HUD and
the VA that combines HUD housing vouchers with VA supportive services (e.g.,
medical centers and community-based clinics) to assist homeless veterans and their
families with finding and sustaining permanent housing. 77 Fed. Reg. 17,086 (Mar. 23,
2012); Compl. at 1. To provide housing to eligible veterans, PHAs administer the HCV
vouchers provided to veterans under HUD-VASH in accordance with the HCV
regulations discussed supra. See 24 C.F.R. § 982; 77 Fed. Reg. 17,087 (Mar. 23, 2012)
(“[A]ll regulatory requirements and HUD directives regarding the HCV tenant-based
program are applicable to HUD–VASH vouchers, including the use of all HUD
required contracts and other forms.”). 3 Under the HUD-VASH program, as in the
general HCV program, a PHA contracts with a property owner to make monthly rent
subsidy payments directly to the owner on behalf of the veteran. 77 Fed. Reg. 17,087(Mar. 23, 2012). The participating veterans enter into separate leases with property
owners and pay their share of the rent in accordance with their individual leases. Id.c. Dorchester’s Alleged Involvement With HUD-VASH
Dorchester is a South Carolina limited liability company with its principal place
of business located in Charleston County, South Carolina. Compl. ¶ 2. At all relevant
times, Dorchester was the owner of the real property located at 6601 Dorchester Road,
North Charleston, South Carolina 29418, a multi-unit apartment dwelling (the
“Property”). Id. ¶ 7.
In 2014, Dorchester alleges that an agent of the VA solicited Dorchester to lease
apartment units at the Property to veteran participants in the North Charleston, South
Carolina HUD-VASH program. Id. ¶¶ 8–9. Pursuant to that VA agent’s representations
and guarantees, Dorchester alleges that it entered into a contract with the VA, whereby
3While HUD has modified how some specific portions of the HCV program apply to HUD-
VASH, none of the modifications are relevant to the instant case.
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Dorchester agreed to rent its apartment units to veterans participating in the program,
and the VA agreed to reimburse Dorchester for any physical damage to the apartment
units that the veterans caused, beyond ordinary wear and tear, as well as for any
unpaid rent (if the veterans defaulted under their individual leases). Id. ¶¶ 9, 26.
Between 2014 and 2017, Dorchester leased apartment units to veterans
participating in the program. Id. ¶ 10. At various times, several veteran participants
breached their individual leases, either by failing to pay rent or vacating the premises
prematurely. Id. ¶ 11. Additionally, in multiple instances, the apartment units were
damaged beyond ordinary wear and tear, requiring Dorchester to expend funds and
time to restore the damaged units in order to re-lease them to new tenants. Id. ¶¶ 12–
13. The government initially reimbursed Dorchester on behalf of the veterans for
unpaid rent and damage caused to the apartment units, but ultimately ceased making
such payments. Id. ¶¶ 14–15. Subsequently, the government either ignored or denied
Dorchester’s timely written demands for amounts due for property damage and unpaid
rent. Id. ¶¶ 16–17.
Based on these allegations, on October 21, 2020, Dorchester filed a complaint in
this Court, initially asserting four claims: (1) breach of express contract; (2) breach of
implied-in-fact contract; (3) promissory estoppel; and (4) EAJA fees. Id. ¶¶ 19–39. On
February 4, 2021, the government moved to dismiss the complaint pursuant to RCFC
12(b)(1) and 12(b)(6) for, respectively, lack of jurisdiction and failure to state a claim.
ECF No. 7. In Dorchester’s response to the government’s motion to dismiss, Dorchester
agreed that its claims for promissory estoppel and EAJA fees should be dismissed, but it
continues to pursue recovery on its claims of breach of express and implied-in-fact
contract. 4 ECF No. 12. Appended to its response, Dorchester provided various email
4Within its response to the government’s motion to dismiss, Dorchester requested leave to file
an amended complaint “should this Court determine that its pleadings with respect to
Plaintiff's First and Second Causes of Action are insufficient.” ECF No. 12 at 7, 8. On May 11,
2021, the Court held a telephonic status conference to discuss Dorchester’s request in light of the
government’s pending motion. ECF No. 14; Minute Entry, May 11, 2021. The Court informed
Dorchester that its complaint likely failed to allege that Dorchester dealt with a government
agent with actual authority to bind the United States in contract, particularly in light of the fact
that the express regulations governing the program at issue require a property owner to
contract with a public housing agency rather than an agent of the United States itself. Minute
Entry, May 11, 2021. After discussing the issues with the parties, the Court subsequently issued
an order instructing Dorchester to file a status report indicating whether it: (1) would
voluntarily dismiss its complaint without prejudice; (2) sought a ruling from the Court
regarding the government’s pending motion to dismiss and the sufficiency of the complaint as
currently filed; or (3) sought additional time in which to file an amended complaint. ECF No.
15. On May 19, 2021, Dorchester filed a status report indicating that it did not intend to seek
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exchanges between it and a VA employee, as well as several affidavits from
Dorchester’s management. ECF Nos. 12-1, 12-2, 12-3. The government filed its reply on
March 25, 2021. ECF No. 13.
II. STANDARDS OF REVIEW
Generally, “the jurisdiction of the Court of Federal Claims is defined by the
Tucker Act, which gives the court authority to render judgment on certain monetary
claims against the United States.” RadioShack Corp. v. United States, 566 F.3d 1358, 1360
(Fed. Cir. 2009). In relevant part, the Tucker Act grants the Court of Federal Claims
jurisdiction over “any claim against the United States founded . . . upon any express or
implied contract with the United States, or for liquidated or unliquidated damages in
cases not sounding in tort.” 28 U.S.C. § 1491(a)(1).
In order to invoke this Court’s jurisdiction over a breach of contract claim, the
plaintiff must plead “a non-frivolous allegation of a contract with the government.”
Engage Learning, Inc. v. Salazar, 660 F.3d 1346, 1353 (Fed. Cir. 2011) (emphasis in
original). To survive a RCFC 12(b)(1) challenge to jurisdiction based on breach of
contract, the plaintiff “bears the burden of establishing the court’s jurisdiction over its
claims by a preponderance of the evidence.” Trusted Integration, Inc. v. United States, 659
F.3d 1159, 1163 (Fed. Cir. 2011). If the Court determines that “it lacks jurisdiction over
the subject matter, it must dismiss the claim.” Villars v. United States, 126 Fed. Cl. 626,
631 (2016) (citing and quoting Matthews v. United States, 72 Fed. Cl. 274, 278 (2006)).
In deciding a motion to dismiss for failure to state a claim under RCFC 12(b)(6),
the Court views the facts in the light most favorable to the plaintiff and accepts as true
all factual allegations — but not conclusory legal assertions — contained in the
complaint. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Am. Bankers Ass’n
v. United States, 932 F.3d 1375, 1380 (Fed. Cir. 2019). Those facts must yield a
“reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009). A plaintiff may not simply plead “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly,
550 U.S. at 555 (citations omitted). The Court must dismiss a complaint “when the facts
asserted by the claimant do not entitle him to a legal remedy.” Lindsay v. United States,
295 F.3d 1252, 1257 (Fed. Cir. 2002).
leave to file an amended complaint and instead sought the Court’s decision on the pleadings as
currently filed. ECF No. 16.
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III. THE COURT HAS SUBJECT MATTER JURISDICTION OVER
DORCHESTER’S CLAIMS
At the outset, the Court must distinguish between a dismissal for lack of subject
matter jurisdiction pursuant to RCFC 12(b)(1) and a dismissal for failure to state a claim
pursuant to RCFC 12(b)(6). “[Subject matter] [j]urisdiction . . . refers to the power of a
court to hear and decide a case[.]” Gould, Inc. v. United States, 67 F.3d 925, 929 (Fed. Cir.
1995) (citing Spruill v. Merit Sys. Protection Bd., 978 F.2d 679, 686 (Fed. Cir. 1992)). In
contrast, a dismissal for failure to state a claim centers on “whether the complaint
contains allegations, that, if proven, are sufficient to entitle a party to relief.” Id.Because a dismissal for failure to state a claim necessarily requires a merits
determination, “the court must [first] assume jurisdiction to decide whether the
allegations state a cause of action on which the court can grant relief as well as to
determine issues of fact arising in the controversy.” Do-Well Mach. Shop, Inc. v. United
States, 870 F.2d 637, 639 (Fed. Cir. 1989) (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).
Our appellate court, the United States Court of Appeals for the Federal Circuit, has
explained the proper inquiry as follows:
[A] complaint alleging that the plaintiff has a right to relief on
a ground as to which the court has jurisdiction raises a
question within the court’s subject matter jurisdiction as long
as the asserted basis of jurisdiction is not pretextual, i.e., as
long as the jurisdictional ground asserted in the complaint
does not “appear[ ] to be immaterial and made solely for the
purpose of obtaining jurisdiction.”
Lewis v. United States, 70 F.3d 597, 603 (Fed. Cir. 1995) (citing The Fair v. Kohler Die &
Specialty Co., 228 U.S. 22, 25 (1913) and Excelsior Wooden Pipe Co. v. Pacific Bridge Co., 185
U.S. 282, 287 (1902)).
The Tucker Act, this Court’s primary jurisdictional statute, vests this Court with
jurisdiction “over claims against the United States based on contracts ‘either express or
implied in fact.’” Gonzalez-McCaulley Inv. Grp., Inc. v. United States, 93 Fed. Cl. 710, 714
(2010) (citing Hercules, Inc. v. United States, 516 U.S. 417, 423 (1996)); see also Barrett Ref.
Corp. v. United States, 242 F.3d 1055, 1059 (Fed. Cir. 2001) (“[T]he court does have
jurisdiction over implied-in-fact contracts.”). Consequently, “‘the question of whether a
contract exists’ generally appears not to be ‘a jurisdictional one,’ unless, however, a
plaintiff does ‘not plausibly allege the existence of a contract.’” Perry v. United States,
149 Fed. Cl. 1, 12 (2020) (emphasis in original) (quoting and citing Engage Learning, 660
F.3d at 1355), aff’d, 2021 WL 2935075, at *4 (Fed. Cir. July 13, 2021); see also Ibrahim v.
United States, 799 F. App’x 865, 867 (Fed. Cir. 2020) (“A non-frivolous allegation that a
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contract exists between a plaintiff and the United States is sufficient to invoke the
subject matter jurisdiction of the Claims Court, but dismissal may be proper for lack of
subject matter jurisdiction if the claim is wholly insubstantial and frivolous.” (quoting
Lewis, 70 F.3d at 602–04 (internal quotes omitted)). “The presumption . . . is that the
dismissal of even a very weak case should be on the merits rather than because it was
too weak even to engage . . . jurisdiction.” Carr v. Tillery, 591 F.3d 909, 917 (7th Cir.
2010).
Applying the above standards, the Court concludes that Dorchester has asserted
non-frivolous, factual allegations of a contract with the government sufficient to invoke
this Court’s jurisdiction. Dorchester alleges that “as a condition and incentive to gain
[Dorchester]’s agreement to lease its individual apartment units to the veteran
participant[s] in the HUD-VASH [program],” an agent of the VA agreed to reimburse
Dorchester for both physical damage caused by, and unpaid rent owed by, the veteran
participants. Compl. ¶ 9. Dorchester also maintains that the government initially did
reimburse Dorchester for damaged units and unpaid rent before ultimately ceasing
payment. Compl. ¶¶ 14–15. Whether these facts are sufficient to entitle Dorchester to
recover – or even whether they are sufficient to support the formation of a valid
contract at all – are not jurisdictional questions; rather, these questions require a merits
determination. Engage Learning, 660 F.3d at 1354 (“[W]hen the Court of Federal Claims
determines that the plaintiff has failed as a matter of law to establish the existence of an
alleged contract with the government, the proper disposition is to dismiss for failure to
state a claim, rather than for lack of jurisdiction.”). Accordingly, considering all of
Dorchester’s alleged facts as true – as the Court must at this stage – we find that
Dorchester plausibly has alleged the existence of a contract with the government
sufficient to invoke this Court’s jurisdiction.
IV. THE COURT GRANTS THE GOVERNMENT’S MOTION TO DISMISS
FOR FAILURE TO STATE A CLAIM
“To recover against the government for an alleged breach of contract, there must
be, in the first place, a binding agreement.” Anderson v. United States, 344 F.3d 1343,
1353 (Fed. Cir. 2003). In that regard, to survive a motion to dismiss for failure to state a
claim upon which relief may be granted, a plaintiff must allege adequate facts that, if
proven, establish: “(1) mutuality of intent to contract; (2) lack of ambiguity in offer and
acceptance; (3) consideration; and (4) a government representative having actual
authority to bind the United States in contract.” Anderson, 344 F.3d at 1353 (citations
omitted). In order for a government representative to bind the United States in
contract, he must have actual authority; apparent authority will not suffice to bind the
government by acts of its agents. Arakaki v. United States, 71 Fed. Cl. 509, 515 (2006),
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aff'd, 228 F. App'x 1003 (Fed. Cir. 2007) (citing H. Landau & Co. v. United States, 886 F.2d
322, 324 (Fed. Cir. 1989)). Actual authority may be implied, rather than express, “when
such authority is considered to be an integral part of the duties assigned to a
government employee.” Landau, 886 F.2d at 324. However, “apparent authority will
not suffice to hold the government bound by the acts of its agents[.]” Id. at 324; Jackson
v. United States, 573 F.2d 1189, 1197 (Fed. Cir. 1978) (“It is well established that the
Government is not bound by the acts of an agent who only has apparent authority.”).
Despite Dorchester’s conclusory allegation of a “a valid and enforceable
contract” with the United States, Compl. ¶ 20, Dorchester fails to allege any specific
facts to establish the required elements of such an agreement. In Dorchester’s
complaint, Dorchester offers no information on the identity of the VA “personnel” who
allegedly induced Dorchester’s involvement in the HUD-VASH program, nor does
Dorchester provide any specific terms of the purported agreement with the government
other than to generally contend that the government made “representations, warranties,
and guarantees” that it would reimburse Dorchester for the acts of the HUD-VASH
participants. Compl. ¶¶ 8–10. In its response to the government’s motion to dismiss,
Dorchester itself concedes that its complaint contains no such factual allegations and
instead argues only that “[t]he specific details as to who made the alleged agreement,
and when, etc., . . . may properly be addressed in the discovery process.” ECF No. 12 at
6. Discovery, however, is only available where a plaintiff has filed a sufficient
complaint; a plaintiff cannot survive a motion to dismiss pursuant to RCFC 12(b)(6)
simply by relying on conclusory allegations and speculation about what discovery may
unearth. See Brubaker Amusement Co., Inc. v. U.S., 304 F.3d 1349, 1361 (Fed. Cir. 2002)
(“[The Court of Federal Claims] is not required to permit discovery based merely on the
hope on the part of a plaintiff that it might find evidence to support its complaint.”)
(citations omitted). Accordingly, and as explained in more detail below, Dorchester has
failed to allege facts – even when accepted as true at this stage of the case – sufficient to
establish that: (a) there was any meeting of the minds with the government, and (b)
Dorchester reached a contractual agreement with a government official possessing
actual authority to bind the government in contract (i.e., even assuming arguendo there
were a meeting of the minds with some government official).
Dorchester’s allegation that an agent of the VA orally agreed to reimburse
Dorchester on behalf of HUD-VASH participants directly contravenes the express
regulations of the HUD-VASH program in several respects. First, as described supra, a
property owner participating in the HUD-VASH program is responsible for collecting
from the veteran tenant both the tenant’s portion of the rent (the amount not covered by
the PHA) and any charges for unit damage caused by the tenant. 24 C.F.R. § 982.452(a)–
(b). Despite this regulation, which expressly places collection responsibility on the
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property owner (not HUD or the VA), Dorchester alleges that an agent of the VA orally
agreed otherwise by promising that the government would reimburse Dorchester “for
any physical damage done to the apartment units by the veteran participants in the
HUD-VASH . . . [and] for any unpaid rent due from the veteran participants . . . in the
event said participants did not fully honor the payment terms of the individual leases
with the [Dorchester].” Compl. ¶ 9; ECF No. 12 at 5. Outside of simply acknowledging
the discrepancy between its allegations and the HUD-VASH requirements, Dorchester
offers no explanation for the VA agent’s purported disregard of this HUD-VASH
regulation. ECF No. 12 at 3, n.2; ECF No. 12 at 6, n.4. A government employee may not
bind the government to pay money contrary to law. Off. of Pers. Mgmt. v. Richmond, 496
U.S. 414, 414 (1990); Total Med. Mgmt., Inc. v. United States, 104 F.3d 1314, 1320 (Fed. Cir.
1997).
Although Dorchester alleges that it made an agreement with the VA directly,
rather than with a PHA, Compl. ¶¶ 8–9, the HUD-VASH regulations expressly provide
that each housing contract is between a property owner and a PHA, see 24 C.F.R. §
982.162(a)(2). Further, despite the HUD-VASH regulation requiring that every housing
contract within the program “must be in the form required by HUD,” 24 C.F.R. §
982.451(a)(1), Dorchester alleges that it formed an oral agreement with VA personnel in
contravention of that regulation and does not allege the existence of the requisite form.
Even assuming arguendo that a VA agent orally reached some agreement with
Dorchester in contravention of the HUD-VASH regulations, Dorchester alleges no facts
demonstrating that the agent had actual authority, whether express or implied, to bind
the United States in contract. Dorchester provides no information about the agent’s job
or duties such that any inference could be made that the agent may have had implied
actual authority – let alone express authority – to modify the HUD-VASH program
requirements. Given the facts alleged, a VA employee’s oral promise to reimburse
Dorchester for expenses incurred by the veteran participants is not enforceable, whether
under a contract theory or any other. See Liberty Ammunition, Inc. v. United States, 835
F.3d 1388, 1401 (Fed. Cir. 2016) (“The government is not bound by its agents acting
beyond their authority and contrary to regulation.” (citing CACI, Inc. v. Stone, 990 F.2d
1233, 1236 (Fed. Cir. 1993))); New Am. Shipbuilders, Inc. v. United States, 871 F.2d 1077,
1080 (Fed. Cir. 1989) (“Where an approving official exceeds his authority, the
government can disavow the official’s words and is not bound . . . .” (citing Empresas
Electronicas Walser, Inc. v. United States, 650 F.2d 286, 223 Ct. Cl. 686, 688, cert. denied, 449
U.S. 953 (1980))). In sum, Dorchester’s failure to identify any government agent acting
with actual authority is fatal to its breach of contract claim. Yifrach v. United States, 145
Fed. Cl. 691, 707 (2019), aff'd, 825 F. App’x 899 (Fed. Cir. 2020) (affirming the trial court’s
holding that the complaint failed to state a claim for breach of contract because it did
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not plausibly allege that any of the government officials with whom the plaintiff
worked had actual authority to bind the United States); see also Trauma Serv. Grp. v.
United States, 104 F.3d 1321, 1327 (Fed. Cir. 1997) (holding that the “alleged implied-in-
fact contract for the direct reimbursement of the x-ray technician [could not] be enforced
under the Tucker Act, even if TSG could show the remaining elements of contract
formation[,]” because the plaintiff failed to allege that the government agent with whom
it dealt had actual authority to bind the United States (emphasis added)).
In an attempt to supplement the allegations in the complaint regarding the
existence of an enforceable agreement with the government, Dorchester relies on an
email thread between its employees and a VA agent, purporting to show an
arrangement by the VA to reimburse Dorchester for excess damages caused by veteran
tenants. ECF No. 12 at 3. The email thread and accompanying affidavits, attached as
exhibits to Dorchester’s response to the government’s motion to dismiss, are likely
outside of the scope of material that this Court may consider when deciding a motion to
dismiss. See American Contractors Indem. Co. v. United States, 570 F.3d 1373, 1376 (Fed.
Cir. 2009) (“On a motion to dismiss, the court generally may not consider materials
outside the pleadings.”). On the other hand, when deciding a motion to dismiss, the
Court is permitted to consider, in addition to the complaint itself, “documents
incorporated into the complaint by reference,” “matters of which a court may take
judicial notice,” and documents that are “integral to the complaint.” Bell/Heery v. United
States, 106 Fed. Cl. 300, 307 (2012), aff'd, 739 F.3d 1324 (Fed. Cir. 2014) (citations
omitted). The Court is skeptical that Dorchester’s exhibits fall within any of these
categories.
Nevertheless, assuming the Court were permitted to consider the emails and
accompanying affidavits, we find them unpersuasive. Dorchester points to the
existence of a putative landlord mitigation fund, including a statement by the VA agent
that “[t]here is some money in the fund for damages that are over and beyond normal
wear and tear.” ECF No. 12 at 3; ECF No. 12-2 at 3. In that very same email thread,
however, the VA agent expressly informed Dorchester that “I cannot give you an
expected payment date as we do not control the fund.” ECF No. 12-2 at 5 (emphasis
added). While these emails suggest that certain VA staff assisted Dorchester in
navigating the process of applying for reimbursement from some sort of third-party or
government fund, the emails do not demonstrate that Dorchester had an enforceable
contract with the VA, or even that the agency provided Dorchester with an
(unenforceable) naked promise to pay upon which Dorchester may have relied.
Dorchester also relies on the email threads in an attempt to “demonstrate[] that
the VA acknowledged the existence of the agreement [that] is generally alleged in the
Complaint.” ECF No. 12 at 6. Dorchester appears to argue that because the VA agent
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purportedly acknowledged Dorchester’s claims for reimbursement, the VA itself is
indeed bound to reimburse Dorchester. Such ipse dixit at best is “a thinly veiled claim
for promissory estoppel, over which we do not have jurisdiction.” Carter v. United
States, 98 Fed. Cl. 632, 638 (2011) (emphasis omitted). Dorchester concedes as much. See
ECF No. 12 at 1 (“[Dorchester] concurs that its Third Cause of Action, stating claim for
recovery under promissory estoppel, should be dismissed with prejudice as a claim for
promissory estoppel, being related to [a] claim for an implied contract at law, is not
recognized by this Court.”).
V. CONCLUSION
For the foregoing reasons, the government’s motion to dismiss pursuant to
12(b)(6) for failure to state a claim upon which relief may be granted is hereby
GRANTED, and Dorchester’s complaint is DISMISSED. The government’s motion, in
the alternative, for a more definite statement is DENIED AS MOOT. The clerk is
directed to enter judgment accordingly.
IT IS SO ORDERED
s/Matthew H. Solomson
Matthew H. Solomson
Judge
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