[00:00:00] Speaker 04: Good morning. [00:00:04] Speaker 04: We have six cases on the calendar this morning. [00:00:08] Speaker 04: One from the Court of Contract Appeals, one from the Court of Federal Claims, two traffic cases, a trademark case from the TTAB and a government employee case illustrating the wide diversity in our caseload. [00:00:27] Speaker 04: The first case is from the [00:00:30] Speaker 04: Armed Forces, Board of Contractor Teals, Environmental Safety Consultants versus the Secretaries of Navy, 2014-1460. [00:00:42] Speaker 04: And we'll hear from Ms. [00:00:48] Speaker 04: Curran. [00:00:49] Speaker 04: Ms. [00:00:49] Speaker 04: Curran, sorry. [00:00:52] Speaker 02: Ms. [00:00:52] Speaker 02: Curran. [00:00:52] Speaker 02: Address the court. [00:00:54] Speaker 04: Please proceed. [00:00:59] Speaker 02: May it please the court. [00:01:00] Speaker 02: I am Diana Currens and I am here on behalf of my small disadvantaged business contract client, Environmental Safety Consultant Inc., whom I refer to as ESCI for ease today. [00:01:14] Speaker 02: Before you is the issue of invoice number seven. [00:01:16] Speaker 02: This is a $138,000 invoice that was presented to the Navy upon completion of work back in 1997. [00:01:27] Speaker 02: Before the court is whether this was a timely certification of this invoice in relation to a termination for convenience that occurred as a result of judicial action by the Armed Services Board of Contract Appeals that was not taken until September 2011. [00:01:44] Speaker 02: That body determined that a contract performed by ESCI was terminated for the convenience of the government rather than for reasons of default as declared by the Navy in June of 1998. [00:01:56] Speaker 01: So that's when you argued that your claim accrued, right? [00:02:01] Speaker 02: I think that is appropriately the earliest time, Your Honor, that the claim accrued when the termination occurred. [00:02:06] Speaker 02: That's because there were negotiations between the parties leading up to that actual termination and that my client did not understand [00:02:14] Speaker 02: But it was a disputed claim until that time, because there were the ongoing negotiations between the two parties to arrive at a way to complete the contract. [00:02:22] Speaker 01: I can understand that invoice number seven was a disputed claim? [00:02:26] Speaker 02: Not until the termination was taken, Your Honor. [00:02:28] Speaker 02: Until which termination? [00:02:30] Speaker 02: The termination for default, which was issued by the Navy in June of 1998. [00:02:35] Speaker 01: OK. [00:02:36] Speaker 01: So if the claim approves in June of 1998, your argument is that the claim is still timely? [00:02:42] Speaker 02: The claim was certified timely in that event, Your Honor, because the certification, first certification occurred in October of 2003, October 22, in fact. [00:02:52] Speaker 02: So it would have been within the six-year statute of limitations. [00:02:56] Speaker 02: If you take the government's position that it occurred 14 days after submission on non-payment, my client misses it by a few months. [00:03:07] Speaker 01: But I thought your argument in your brief was that [00:03:10] Speaker 01: that the claim didn't really accrue until the termination was converted? [00:03:17] Speaker 02: Your Honor, it's alternative argument. [00:03:19] Speaker 02: Certainly we would be delighted if the court determined that accrual means that the termination for default, which was later reversed, was the first instance of an actual claim accruing. [00:03:34] Speaker 02: Alternatively, [00:03:36] Speaker 01: So if your claim accrues in 1998, then why isn't it true that you have a problem with Grace Tuticata based on our dismissal of the earlier appeal for failure to prosecute after the lower court had found that the claim was untimely? [00:03:53] Speaker 02: Your Honor, we're arguing that the basis of the claim changed at the point of the court's determination in 2011. [00:04:01] Speaker 02: That determination was for convenience of the government. [00:04:03] Speaker 02: At that point a new basis arose specifically under the contract at paragraph or section 1.42 which is the termination for convenience clause which allows the contractor to submit. [00:04:26] Speaker 02: I'm not sure I understand the reference to another invoice, Your Honor. [00:04:30] Speaker 03: You are doing a change in the status of the contract. [00:04:33] Speaker 03: Correct. [00:04:34] Speaker 02: Termination for default to termination for convenience. [00:04:37] Speaker 03: What does that have to do with your dispute over invoice number 57? [00:04:43] Speaker 02: It's invoice number seven, Your Honor. [00:04:45] Speaker 02: Well, it has everything to do with it. [00:04:47] Speaker 02: The invoice number seven was for completed work that had been performed and then was never paid. [00:04:54] Speaker 02: The government at the point of [00:04:56] Speaker 02: declaring a determination for convenience stated that it was now offset, that this amount would not be paid and in fact there is another contract that this court has heard about that was also offset and determined in July of last year that my client would be paid $98,000 in interest and they have never been paid that amount. [00:05:16] Speaker 02: These may be accepted work, they have work that was performed and they have never paid for it under invoice number seven. [00:05:25] Speaker 02: we had a new basis arise for the justification of that payment upon the contract conversion to a termination for convenience. [00:05:34] Speaker 02: Because at that point, my client is allowed to submit a proposal for termination costs. [00:05:39] Speaker 01: But it's a different kind of claim, is it not? [00:05:42] Speaker 01: I mean, there's two different questions here. [00:05:46] Speaker 01: One is when your contract claim is approved and whether that's timely. [00:05:50] Speaker 01: And the other is whether you might have some other claim that arose after the termination for convenience in 2011. [00:05:58] Speaker 01: But they're different claims. [00:05:59] Speaker 01: And you never made the cost reimbursement claim, did you? [00:06:03] Speaker 02: I really don't believe that that's the subject matter of this appeal, regrettably. [00:06:07] Speaker 02: After this appeal was taken, the lower court did go about, and I believe is still continuing, to work through a proposal for termination. [00:06:17] Speaker 02: But what's become what I think is somewhat a circular argument for the government is that they are arguing that because invoice number seven was untimely, was uncertified, it will never be part of a claim that is compensated to my client. [00:06:29] Speaker 01: That's a different question, right? [00:06:32] Speaker 02: I don't know that it's really before the court at this field junction. [00:06:35] Speaker 01: I mean, that's the point. [00:06:37] Speaker 01: What's before us is whether a contract claim that you just conceded to me, approved in 1998, is actionable at this point, given all the prior litigation, especially the prior litigation that found that exact claim to be untimely and your failure to, and the fact that it was appealed and you didn't pursue that appeal. [00:06:58] Speaker 01: Why isn't that the end of that inquiry on the contract claim? [00:07:02] Speaker 02: Well, Your Honor, I believe that we need to look at the contract that provides a provision that allows my client to submit costs for that particular invoice number seven at the point of the termination being altered in a fundamental way. [00:07:23] Speaker 02: Well, I believe that this court has, we had really no control over what might happen at the ASVCA after filing this. [00:07:31] Speaker 02: We felt that we had to take action immediately because of the invoice at number seven being essentially not looked at by the ASVCA. [00:07:39] Speaker 02: What we're requesting the court do is to direct the ASVCA to include invoice number seven in its analysis or alternatively [00:07:49] Speaker 02: We would be delighted to actually find that we could be paid on that invoice for completed work that was accepted and performed and has never been paid. [00:07:58] Speaker 02: It is an invoice that has been outstanding since 1997. [00:08:01] Speaker 02: This case is utterly unique in terms of my experience with it, Your Honor, and I hope yours as well, in the amount of time that it took to get to the securities route that I am now before you to argue on behalf of this client. [00:08:14] Speaker 01: is an eight a contractor seems like you're premature on your twenty eleven and on our ability to exercise in jurisdiction [00:08:24] Speaker 02: I hope that this is not premature, Your Honor. [00:08:26] Speaker 02: I mean, we have been through almost 17 years of litigation since this initial action occurred in 1998. [00:08:33] Speaker 04: But the way you stated that suggests that other tribunals have been derelict in doing their duty, this was not properly certified to begin with, right? [00:08:44] Speaker 02: It was not properly certified until- This was not a claim. [00:08:47] Speaker 04: It was certified. [00:08:48] Speaker 04: It was a request for a routine payment, right? [00:08:51] Speaker 02: It was until it was a dispute. [00:08:52] Speaker 04: It wasn't done right. [00:08:54] Speaker 02: The argument was not that the work was not done right, that it would be set off against the government's claim of liquidated damage. [00:09:02] Speaker 04: Well, the claim wasn't done right. [00:09:04] Speaker 04: The work not being done right is a different issue. [00:09:10] Speaker 02: Your Honor, it was not certified until October 22, 2003. [00:09:16] Speaker 01: You didn't prosecute your appeal. [00:09:19] Speaker 01: You're trying to get us to be sympathetic to your cause of action, but there's two different places in which you had appeals that were dismissed for failure to prosecute. [00:09:27] Speaker 02: And of course, I was not counsel of record, Your Honor. [00:09:29] Speaker 02: I am a small solo practitioner myself, and this particular case speaks to my sense of justice and fairness as a former government counsel. [00:09:40] Speaker 02: But there are rules. [00:09:41] Speaker 02: Certainly, Your Honor. [00:09:42] Speaker 04: There are rules. [00:09:44] Speaker 04: You don't size white hats and black hats. [00:09:46] Speaker 04: Who's a good guy and who's a bad guy? [00:09:48] Speaker 02: And there's equity. [00:09:49] Speaker 02: Right. [00:09:49] Speaker 02: There's equity, and there is equity in an invoice that has never been paid and will apparently never be paid unless the court acts to assist. [00:09:58] Speaker 03: Was the invoice ever falsely certified? [00:10:01] Speaker 02: That was certainly one of the allegations, and Your Honor, I'd like you to consider there perhaps was some intimidation on the part of my client in that he was being told he had falsely certified the invoice. [00:10:09] Speaker 02: I think there was some confusion regarding precisely what type of certification was required. [00:10:14] Speaker 02: The contract contained a certification requirement which my client met. [00:10:18] Speaker 02: upon submission regarding certification of payment of subcontractors. [00:10:23] Speaker 02: The certification requirements, of course, for the CDA are somewhat magic language, which must be done and signed in a certain way for costs over $100,000. [00:10:32] Speaker 02: He was absolutely as admitted by the government in page 3 of their brief. [00:10:38] Speaker 02: He was an 8A contractor. [00:10:43] Speaker 02: He was [00:10:44] Speaker 02: unable to acquire consistent counsel in this matter. [00:10:48] Speaker 02: And he was eventually bankrupted. [00:10:52] Speaker 03: He had trouble performing. [00:10:55] Speaker 03: He was given various extensions on performance. [00:10:59] Speaker 03: He subcontracted out the work. [00:11:02] Speaker 03: Didn't pay the subcontractor. [00:11:04] Speaker 03: The government had to pay the subcontractor. [00:11:07] Speaker 03: And he wanted us to fund equities. [00:11:09] Speaker 02: Well, the government didn't pay the subcontractors. [00:11:12] Speaker 02: The subcontractors were paid by the bond. [00:11:14] Speaker 02: And if you did not pay an invoice of mine for $138,000, I too might be in a situation where I couldn't pay my subs or employees. [00:11:22] Speaker 02: By non-payment, the client immediately, my client immediately had issues in meeting its payroll. [00:11:27] Speaker 02: As a small 8A contractor, that is one of the things we'd like to bring to the attention of the forest, is that a small, this was a 8A set aside award, and there's a fiduciary duty owed, [00:11:38] Speaker 02: by the government to not put that particular kind of client in a situation where they cannot perform. [00:11:45] Speaker 02: And without payment for completed and accepted work, my client was in short order in terms of bankruptcy. [00:11:52] Speaker 01: You didn't file a claim saying that the government breached its contract by making it impossible for your client to perform. [00:11:59] Speaker 02: No, Your Honor, we've not alleged impossibility. [00:12:03] Speaker 02: What I am trying to make sure that the court understands is that I think in the 8A contact [00:12:09] Speaker 02: there is a higher fiduciary duty, and I've argued that in my reply brief, that the consistent requirement of the government to act in good faith and the great allowance of contracting officer discretion that is given in the termination for convenience clause permits them to entertain and pay costs for work that is actually done and that they've accepted. [00:12:34] Speaker 01: And that claim is still ongoing, right? [00:12:37] Speaker 02: Well, invoice number seven is not part of that claim as a result of the government's determination at the level of the ASPCA, the judge's determination that that claim is not before him because of the improper certification. [00:12:52] Speaker 02: Ms. [00:12:52] Speaker 04: Tarrant, you wanted to save five minutes? [00:12:55] Speaker 04: Yes, Your Honor. [00:13:01] Speaker 02: I'd like to say my five minutes are closed, is that allowed? [00:13:04] Speaker 04: Well, at this point you have three minutes. [00:13:06] Speaker 04: I will say that for you. [00:13:07] Speaker 02: Thank you, sir. [00:13:07] Speaker 02: I'll say that. [00:13:09] Speaker 04: Ms. [00:13:10] Speaker 04: Whitworth. [00:13:16] Speaker 00: May it please the court. [00:13:19] Speaker 00: We would concede that the conversion of the termination for default to a termination for convenience allows a contractor to submit a termination for convenience claim. [00:13:29] Speaker 00: That is not the claim that's at issue here. [00:13:32] Speaker 00: When the conversion occurred, ESCI did in fact submit a settlement proposal that then ripened into a claim and that was appealed before the board. [00:13:42] Speaker 00: That claim is currently pending before the board. [00:13:49] Speaker 01: attempt to seek cost reimbursement for activities that would have been reflected in invoice number seven? [00:13:57] Speaker 00: Yes, Your Honor. [00:13:57] Speaker 00: It actually included a request for payment for work performed under invoice seven as part of that termination for convenience settlement claim. [00:14:05] Speaker 01: So, as I understand your argument, you're simply saying that invoice number seven, which is a contract-based invoice, is not an invoice claim that can be made in a termination for convenience contact. [00:14:18] Speaker 00: That's correct, Your Honor. [00:14:18] Speaker 00: The claim that that issue here was submitted pursuant to the Payments Clause. [00:14:22] Speaker 00: Essentially, a routine invoice was submitted under the Payments Clause. [00:14:26] Speaker 00: The government rejected that invoice and withheld payment. [00:14:29] Speaker 00: That occurred back in 1997. [00:14:32] Speaker 00: The government rejected the invoice in June of 1997, and under the Payments Clause of the contract, that payment became due 14 days later in July of 1997. [00:14:42] Speaker 00: Now whether the cost incurred in performing the work that's captured in invoice number seven, whether that could be paid as part of a termination claim, that's currently pending before the board. [00:14:52] Speaker 00: And to the extent that might be paid, whether it's paid on a contract price basis or on a cost basis, that's not before the court at this time. [00:15:01] Speaker 01: Does our recent decision support the impact or race judicata argument? [00:15:10] Speaker 00: We had made the argument in the brief that... No, Your Honor, I don't think it does. [00:15:15] Speaker 00: We made the argument in the brief that the failure to submit a timely claim deprives this Court of jurisdiction. [00:15:20] Speaker 00: Obviously, in Sikorsky, the Court clarified that and said that it's not a jurisdictional issue. [00:15:26] Speaker 00: Here, the Board dismissed on jurisdictional grounds. [00:15:30] Speaker 00: However, we believe that the Court can affirm that judgment despite the fact that it was dismissed essentially on a 12b1 basis. [00:15:38] Speaker 01: Does that make any difference for your race judicata argument, given that there was the opportunity to appeal the timeliness finding and the question presented? [00:15:48] Speaker 01: And of course, he was never raised in that appeal? [00:15:52] Speaker 00: Well, I think, again, in the court's decision on the merits in 2011, the court was reviewing a decision by the court of federal claim [00:16:03] Speaker 00: in which it dismissed this particular claim. [00:16:06] Speaker 00: If I recall, it did so on the basis of jurisdiction. [00:16:11] Speaker 00: But again, we would argue that the court is affirming a judgment, not necessarily the basis for that judgment. [00:16:17] Speaker 00: So we don't think that would affect the res judicata argument here. [00:16:21] Speaker 00: But again, res judicata is only one basis upon which this court could affirm the board's decision in this case. [00:16:28] Speaker 00: We also raised issues of collateral stopple, the fact that [00:16:31] Speaker 00: both the board and the court of federal claims have reached factual findings in this case. [00:16:36] Speaker 00: The first being that EFCI's claim for payment of invoice number seven accrued in 1997 and that it did not file a claim or the first time it filed a claim was in October of 2003 and thus its claim was untimely. [00:16:51] Speaker 00: EFCI should not be permitted to continually re-litigate when its claim accrued or to argue new legal bases for that claim [00:17:00] Speaker 00: But it's barred by collateral stoppable from raising those arguments. [00:17:07] Speaker 00: I think the record is clear, even if this court were to reach the merits here, the record is clear that the claim accrued when payment was withheld, which occurred in 1997. [00:17:18] Speaker 00: And ESCI did not file a certified claim, despite being instructed to by the board until October of 2003. [00:17:28] Speaker 00: There are no further questions. [00:17:30] Speaker 00: We would ask that this court affirm the decision of the board. [00:17:34] Speaker 04: Thank you. [00:17:37] Speaker 04: Thank you, Your Honor. [00:17:43] Speaker 02: In close, I simply want to say that [00:17:47] Speaker 02: This court has an opportunity to assure that ESDI does not go away empty handed. [00:17:51] Speaker 02: They certainly, I believe, did what they needed to do to toll the equitable statute in that they were consistently and doggedly working to reverse and were successful in reversing a complete termination for their default into a termination for convenience. [00:18:11] Speaker 02: going to be very hollow justice if my client cannot recover any funds for their work that they performed that was accepted and at this point the benefit has been with the government since 1997. [00:18:27] Speaker 02: My client is not here today because this contract has been, it's really essentially broken this man in spirit not the case but certainly financially. [00:18:38] Speaker 02: He does not even have the funds sufficient to travel here today and to appear before you. [00:18:44] Speaker 02: That saddens him greatly, especially when this court issued a ruling in July of last summer indicating that he was due payment on another contract the government has offset for the same reason of a default termination, which has been reversed since 2011. [00:19:01] Speaker 02: I think it's ironic that the Navy's termination for default failed essentially due to the time that the Navy took to declare a termination for default while claiming time was of the essence. [00:19:10] Speaker 02: Similarly, ESCI has again been prejudiced because it took from 1998 when the termination for default claimed by the Navy was finally overturned in 2011. [00:19:22] Speaker 02: The amount of energy that my client has individually and unceasingly applied to get to that result is certainly [00:19:28] Speaker 02: the first tier of a tolling requirement that it be diligently pursued. [00:19:34] Speaker 02: And in terms of the second prong of that test, my client was obstructed because of the fact that he is an immigrant to this country, English is the second language, and while he values education greatly, in fact, he went to a night school to try to become a lawyer in Atlanta. [00:19:57] Speaker 02: complexities of government contracting are such that it is difficult. [00:20:02] Speaker 02: That became a brick in the wall that I think was an obstruction to him in sustaining this effort so that he was utterly successful. [00:20:12] Speaker 02: He missed the mark potentially from the Navy's perspective on when he would have needed to file by a few months. [00:20:18] Speaker 02: However, I do not believe my client understood intrinsically that his rights and that his issue of a [00:20:26] Speaker 02: dispute arose until he was actually terminated. [00:20:29] Speaker 02: And I ask the court to please consider the 8A situation of this contract's award and my client's unique circumstances and the extremely unique period of time that it's taken to get to this point to appear before you. [00:20:40] Speaker 04: Thank you very much.