[00:00:15] Speaker 00:
Are council here for our final case?

[00:00:21] Speaker 00:
Are council here for the Sheridan case?

[00:00:24] Speaker 00:
Yes.

[00:00:24] Speaker 00:
Please move up to the table.

[00:00:32] Speaker 00:
Our final case this morning is number 15-1858 Sheridan transportation versus GSA.

[00:00:52] Speaker 01:
Mr. Clow.

[00:00:55] Speaker 01:
May it please the court?

[00:01:08] Speaker 00:
So your client was providing transportation services to the government, correct?

[00:01:13] Speaker 00:
Yes, sir.

[00:01:14] Speaker 00:
And once the trailers were loaded, transported, and unloaded,

[00:01:21] Speaker 00:
Did the retention of those trailers by the government constitute a breach of contract at that point?

[00:01:28] Speaker 01:
No, sir.

[00:01:29] Speaker 01:
Our understanding is that the solicitation allowed for basically four types of performance.

[00:01:35] Speaker 01:
Delivery of the trailer loads of material, detention with power units, which is with a tractor, and detention without power units, which is without a tractor.

[00:01:47] Speaker 01:
and then return of those empty trailers back to the depot or the custody of the trailer.

[00:01:53] Speaker 00:
Well, how could it be that the government's retention of the trailers and use of them for storage would not be a breach of the contract?

[00:02:02] Speaker 01:
Well, the solicitation contemplated the material being stored on those trailers until they were utilized.

[00:02:09] Speaker 00:
Where?

[00:02:11] Speaker 00:
In the locations where they... No, where does it say that contemplated they're being stored?

[00:02:20] Speaker 01:
Well, it provides, Your Honor, that the trailers would be turned over to FEMA.

[00:02:26] Speaker 01:
And then once they were in FEMA's custody, they would be organically transported to the locations where they would be.

[00:02:35] Speaker 01:
And then there would be a notification of the completion of the use, and the carrier would then be allowed to pick up the trailers and return them.

[00:02:43] Speaker 00:
Yeah, but where does it say that the trailers could be used by the government for storage?

[00:03:04] Speaker 01:
Your understanding is that FEMA would determine where the trailers would be dropped.

[00:03:10] Speaker 01:
Carrier was to provide an initial trailer movement.

[00:03:14] Speaker 01:
Any movement of the trailer from the initial destination point would be transported and the responsibility of FEMA.

[00:03:21] Speaker 01:
DLA will report daily to the carrier the location of the trailer.

[00:03:27] Speaker 01:
And then the return of empty trailers

[00:03:33] Speaker 01:
would be based upon the notification from FEMA that they completed their use of them.

[00:03:38] Speaker 00:
That's in... Well, on page 850, for example, there's a list of things to be done.

[00:03:45] Speaker 00:
And it talks about unloading the trailer and then picking up the trailer.

[00:03:50] Speaker 00:
It doesn't say anything about storage.

[00:03:53] Speaker 00:
There's nothing in the solicitation about using the trailers for storage, is there?

[00:03:58] Speaker 01:
Well, I think part 7J of the solicitation, Your Honor,

[00:04:02] Speaker 01:
Exhibit 51 on the appendix details that the carrier will provide the return movement after completion of the utilization of the trailers, which included storage until they were empty.

[00:04:20] Speaker 00:
In fact, in this case... There's no reference to storage, right?

[00:04:25] Speaker 00:
Well, I'm saying in this case, when the... No, no, no, but in the solicitation, there's no reference to the government using the trailers for storage, correct?

[00:04:34] Speaker 00:
I think detention would contemplate storage, Your Honor.

[00:04:38] Speaker 00:
Well, there's a federal regulation that defines detention in terms of the time required for loading and unloading, correct?

[00:04:45] Speaker 01:
Well, it does, but it also...

[00:04:50] Speaker 01:
It expels out what you can charge, the circumstances under which you can charge when your driver and your equipment is delayed.

[00:04:59] Speaker 04:
Well, there is a difference, is there not, between the period of time trailer arrives at the FEMA destination

[00:05:09] Speaker 04:
they have a reasonable time within which to unload it, whatever that may be.

[00:05:15] Speaker 04:
During that period, I suppose you could say the goods are stored in the trailer.

[00:05:20] Speaker 04:
But that's different, is it not, from the situation where trailer gets unloaded?

[00:05:26] Speaker 04:
And by the way, how did the trailer, do you happen to know how did the trailer get from Louisiana to where it ended up four years later?

[00:05:36] Speaker 01:
Under the solicitation,

[00:05:39] Speaker 01:
the FEMA had the responsibility for transporting those trailers organically to wherever they needed to go once they were turned over to them from the carrier.

[00:05:48] Speaker 04:
But if FEMA wanted to use it after they unloaded it in Louisiana and parted it off somewhere, I can't remember offhand where it ended up.

[00:05:59] Speaker 04:
Fort Worth I believe, Texas I believe.

[00:06:01] Speaker 04:
I'm sorry?

[00:06:02] Speaker 04:
Texas I believe.

[00:06:03] Speaker 04:
Yeah.

[00:06:04] Speaker 04:
If they wanted to use it there for

[00:06:07] Speaker 04:
storage of other goods.

[00:06:12] Speaker 01:
What's the arrangement for that, as you understood?

[00:06:14] Speaker 01:
I don't believe the solicitation contemplates that.

[00:06:17] Speaker 01:
And in fact, in the instant case, that's what happened.

[00:06:20] Speaker 01:
The trailers departed their initial location with soldiers' rations.

[00:06:27] Speaker 01:
And then when the carrier was notified to pick up the trailer,

[00:06:31] Speaker 01:
They sent a driver and a power unit down to pick up the trailer.

[00:06:34] Speaker 01:
And while he was picking up one of the trailers, he and a security officer looked at the trailer, and it was loaded with water.

[00:06:43] Speaker 00:
So why isn't that a breach of contract, moving the trailer from its destination to some other place and using it to store some other commodity?

[00:06:51] Speaker 01:
Well, Your Honor, of course, please, I think it contemplates the organic movement of the trailers.

[00:06:57] Speaker 01:
Now, I'm not sure it contemplates using them

[00:07:00] Speaker 01:
to store something other than what was originally on there.

[00:07:03] Speaker 00:
Well, that's the problem.

[00:07:04] Speaker 00:
Because if it doesn't contemplate that, then it sounds as though using it for that purpose is a breach.

[00:07:10] Speaker 01:
Well, I'm not sure I understand the court's position as it relates to how the carrier would be aware of that.

[00:07:16] Speaker 01:
If FEMA or the agency has custody of your equipment and it does not notify you to pick up the equipment,

[00:07:24] Speaker 01:
And you don't know what they're doing with it, except that they have it under a solicitation and a bill of lading that they're allowed to have it.

[00:07:30] Speaker 00:
Well, you knew that the trailers that arrived at their destination were being unloaded, right?

[00:07:36] Speaker 01:
We knew that they arrived at their destination.

[00:07:38] Speaker 01:
It was our understanding that under the bill of lading, organic movements, until the material on the trailers were needed, were provided by FEMA.

[00:07:47] Speaker 00:
So why wouldn't you, knowing that it's arrived at its destination and knowing what a reasonable time for unloading would be, realize that something had gone amiss?

[00:07:59] Speaker 01:
Well, in this circumstance, Your Honor, there were differing times on the two trailers.

[00:08:03] Speaker 01:
I mean, one instance the trailer was dropped and there was no retransportation to another location of the carrier.

[00:08:11] Speaker 01:
In one instance,

[00:08:12] Speaker 01:
In another instance, there was relocation to another area.

[00:08:16] Speaker 00:
Yeah, but it was five and a half years after the trailers arrived at their destination.

[00:08:21] Speaker 00:
Nobody would suggest that it takes five and a half years to unload a trailer, right?

[00:08:26] Speaker 01:
Well, I don't think it did.

[00:08:27] Speaker 01:
And I understand that, Your Honor.

[00:08:28] Speaker 01:
But this solicitation basically had four elements of performance.

[00:08:33] Speaker 01:
You delivered the goods.

[00:08:35] Speaker 01:
You had detention with the power unit, where you were unloading like you referenced.

[00:08:40] Speaker 01:
you had detention without a power unit where you dropped the trailer full of material, and then you had a pickup of the empty trailer.

[00:08:48] Speaker 01:
And we maintained that there are three elements in these particular circumstances which we were performing services.

[00:08:55] Speaker 01:
One was the delivery, one was the detention without a power unit, and one was the pickup which occurred from Texas, different from where the

[00:09:05] Speaker 04:
How much are these trailers, the ones without power?

[00:09:10] Speaker 04:
I take it these are basically the 18 wheelers without the power unit.

[00:09:15] Speaker 01:
Yes, the power unit is the trailer.

[00:09:17] Speaker 04:
How much are those trailers worth?

[00:09:19] Speaker 04:
If you want to know.

[00:09:22] Speaker 04:
Probably 60,000.

[00:09:25] Speaker 04:
Do you think asking $10 million for the use of a $60,000 piece of equipment would probably deteriorate it over that time?

[00:09:34] Speaker 01:
I'm sure it did.

[00:09:35] Speaker 01:
And in fact, they provide it.

[00:09:36] Speaker 01:
You think that's a sensible thing to do?

[00:09:38] Speaker 01:
Well, there's no mechanism by which you can negotiate that.

[00:09:42] Speaker 01:
I mean, what happened was the government set and approved a rate of detention.

[00:09:48] Speaker 01:
And they determined what they would accept.

[00:09:51] Speaker 00:
The detention rate under the regulation is for the time required for loading and unloading, not for storage.

[00:10:01] Speaker 01:
Well, if you don't have a power unit and it's a trailer without a tractor, then you don't really have the ability to move it unless you, the customer, provide a tractor to transport the material on it to a dock and unload it.

[00:10:17] Speaker 01:
And in this case,

[00:10:18] Speaker 01:
It was in a location, or when it was picked up, it was in a location, loaded, and not in a position to be unloaded.

[00:10:26] Speaker 03:
Can I ask you a question?

[00:10:27] Speaker 01:
Yes.

[00:10:28] Speaker 03:
Does the contract provide for a time for the government to load or unload the shipments?

[00:10:38] Speaker 00:
No, sir.

[00:10:39] Speaker 03:
It does not?

[00:10:40] Speaker 00:
No, sir.

[00:10:40] Speaker 00:
It provides two free hours of detention, though, right?

[00:10:44] Speaker 00:
They're allowed that at no charge.

[00:10:46] Speaker 00:
Where is that?

[00:10:47] Speaker 00:
It's on P-50.

[00:10:50] Speaker 03:
to free hours, but it doesn't provide an agreed time to load or unload?

[00:10:56] Speaker 01:
No, sir.

[00:10:56] Speaker 01:
But in this solicitation, there was a daily rate for the occupancy of the trailers.

[00:11:02] Speaker 01:
When you had custody of the trailers, you were billed by the day.

[00:11:05] Speaker 04:
The original concept was that the trailer was loaded with food.

[00:11:13] Speaker 04:
Right.

[00:11:17] Speaker 04:
Did the contract contemplate, or did the contracting parties contemplate the possibility that the government would want to reload it and unload it somewhere else?

[00:11:28] Speaker 04:
Was that ever part of the contract?

[00:11:30] Speaker 01:
I don't think that was part of the solicitation, Your Honor.

[00:11:33] Speaker 01:
I think that what was contemplated was these trailer loads of material would be staged in various localities.

[00:11:40] Speaker 01:
And then based upon the whim of the weather, they would be transported to where they were needed.

[00:11:46] Speaker 01:
And that transportation would take place either by a FEMA tractor or by a contracted FEMA tractor, not the carrier.

[00:11:53] Speaker 01:
Who initially provided the tractor?

[00:11:55] Speaker 01:
Was that you?

[00:11:56] Speaker 04:
For the delivery initially?

[00:11:58] Speaker 04:
Yes, sir.

[00:11:59] Speaker 04:
To Louisiana?

[00:12:00] Speaker 04:
Yes.

[00:12:00] Speaker 04:
You all hauled it down to Louisiana and left it there?

[00:12:03] Speaker 01:
Yes, sir.

[00:12:04] Speaker 01:
We had a driver, we had a piece of equipment, and we had a trailer full of material.

[00:12:09] Speaker 01:
And we took it to Louisiana.

[00:12:11] Speaker 01:
They then told us to take it to some other place, which we did.

[00:12:14] Speaker 01:
And then we dropped the trailer, fully loaded, and returned our tractor back to our depot.

[00:12:22] Speaker 01:
They kept it.

[00:12:23] Speaker 01:
And they moved it around, apparently, because it wasn't done.

[00:12:26] Speaker 04:
Did you all negotiate with the government over a reasonable settlement of this at all?

[00:12:32] Speaker 01:
Basically, Your Honor, there was an offer to pay $50,000 and take it or leave it.

[00:12:37] Speaker 01:
And there was no negotiation.

[00:12:39] Speaker 01:
I'm sorry.

[00:12:39] Speaker 01:
Say that again.

[00:12:40] Speaker 01:
There was an offer by the contracting agent that they would pay $50,000 for both claims, and we could take it or leave it or be paid nothing.

[00:12:55] Speaker 03:
What is the status of this addendum that you put at the back of your blue brief?

[00:13:02] Speaker 01:
Your Honor, I believe the addendum, there was a slight dispute because they

[00:13:09] Speaker 01:
General counsel for one of the parties, the APLE's parties, wanted to include, I'm sorry, the council wanted to include a general counsel letter which was an argument and our objection to it was... No, I don't mean the status as appropriately before us.

[00:13:29] Speaker 03:
I mean, this is this document called SDDC Freight Traffic Rules Publication Number 1CR.

[00:13:35] Speaker 03:
Is that part of the contract?

[00:13:37] Speaker 03:
Does it govern the contract?

[00:13:38] Speaker 01:
It governs the contract.

[00:13:39] Speaker 01:
It's part of the regulations that govern the contract.

[00:13:43] Speaker 04:
You didn't file a takings claim against the government, did you?

[00:13:47] Speaker 04:
No, sir.

[00:13:47] Speaker 04:
No.

[00:13:48] Speaker 04:
OK.

[00:13:53] Speaker 00:
OK.

[00:13:54] Speaker 00:
You want to say the rest of your time for a moment?

[00:13:56] Speaker 00:
Yes, sir.

[00:13:57] Speaker 00:
OK.

[00:13:57] Speaker 00:
Thank you, Mr. Klatt.

[00:13:58] Speaker 00:
Thank you.

[00:14:01] Speaker 00:
Mr. Parada, am I pronouncing that correctly?

[00:14:04] Speaker 00:
Yes, sir.

[00:14:06] Speaker 04:
Sir, the government can't take someone's property, Mr. Perala, and cart it off and keep it for four years or five years, whatever it is, and say, by the way, come get it.

[00:14:20] Speaker 04:
You can't do that.

[00:14:22] Speaker 04:
Now, does the government think it can?

[00:14:28] Speaker 02:
Your Honor, the government has never taken the position in this case that

[00:14:34] Speaker 02:
Under no circumstances would Sheridan have been entitled to some form of compensation as a result of the movement of these trailers.

[00:14:41] Speaker 02:
The issue, though, is whether Sheridan has timely asserted such a claim, and is the government's position, as has been found by all three administrative levels below, that have reviewed the issue that the claim was untimely asserted.

[00:14:55] Speaker 02:
because it was asserted well more than three years after.

[00:14:58] Speaker 04:
Well, they could not have asserted it until you called up and said, oh, by the way, we're out here in Texas.

[00:15:05] Speaker 04:
We got a couple of your trailers.

[00:15:07] Speaker 04:
Come get them.

[00:15:07] Speaker 04:
How would they know otherwise where their trailers have gone?

[00:15:11] Speaker 04:
Because they're in the custody of the government.

[00:15:14] Speaker 02:
Your Honor, I don't believe that's correct that Sheridan could not have asserted such a claim until it was notified of the return pickup location of the trailers.

[00:15:24] Speaker 02:
The only obligation Sheridan had under the terms of the contract was to deliver the trailers loaded with the soldiers' rations.

[00:15:32] Speaker 02:
Once it did so and it dropped off those trailers in Louisiana, from that moment forward, it knew it had a detention claim that was accruing as of that point in time.

[00:15:42] Speaker 03:
But it was still accruing.

[00:15:44] Speaker 03:
So they could not have sued you for day 400 or day 402 or day 602 or day 702 until those days arrived.

[00:15:55] Speaker 02:
No, Your Honor, I don't believe that's correct.

[00:15:57] Speaker 02:
How could that not be true?

[00:15:58] Speaker 02:
The claim had, under general accrual principles, both under the court's case law and as defined elsewhere in the Interstate Commerce Act, of which this particular section 3726 is also a part, accrual generally is defined as the delivery of the goods, the completion of the delivery.

[00:16:22] Speaker 02:
And in this case, the trailers were delivered.

[00:16:24] Speaker 00:
Why shouldn't it be when the unloading is completed?

[00:16:28] Speaker 02:
Because, Your Honor, first of all, it's clear from the language of the contract itself and the underlying regulations that what the parties contemplated here for any detention that might have occurred was something of a brief nature.

[00:16:44] Speaker 00:
The purpose of the detention in the unloading of the trailer is to compensate the carrier for delay in unloading, correct?

[00:16:53] Speaker 00:
Correct.

[00:16:54] Speaker 00:
Right?

[00:16:55] Speaker 00:
So if there was a delay in unloading, they're entitled to sue for that.

[00:16:59] Speaker 00:
And that claim doesn't accrue until the unloading is completed, because you can't possibly know what the period of detention is until that happens.

[00:17:08] Speaker 04:
Your Honor.

[00:17:09] Speaker 04:
Particularly if you all reloaded it and hauled it off somewhere else.

[00:17:13] Speaker 02:
Right.

[00:17:14] Speaker 02:
Your Honor, what you would know clearly, though, is that the detention has occurred.

[00:17:20] Speaker 00:
Oh, you wouldn't know how much detention there was until the unloading was completed, would you?

[00:17:24] Speaker 02:
Your Honor, that is correct.

[00:17:26] Speaker 02:
You would not know the amount of the detention claim, but you would know that the detention claim.

[00:17:30] Speaker 03:
Take the word claim off that.

[00:17:32] Speaker 03:
You would not know the amount of the detention.

[00:17:35] Speaker 03:
I'm not aware of cases in which there is a new contractual charge for each day, and yet you have to sue before those days have even arrived.

[00:17:45] Speaker 03:
This is not about calculating a dollar value for the sequelae of an act that has already occurred.

[00:17:56] Speaker 02:
But it is, Your Honor, because the act has occurred.

[00:18:00] Speaker 02:
The detention.

[00:18:00] Speaker 03:
No, the act has not occurred.

[00:18:01] Speaker 03:
There are 800 days worth of acts that have not occurred until each day it occurs.

[00:18:09] Speaker 03:
So why can't they reach back from whenever they presented their claim in the summer or in May or something of 2013, three years?

[00:18:17] Speaker 02:
Well, Your Honor, there are a couple of reasons why.

[00:18:22] Speaker 03:
Can I get just one thing?

[00:18:24] Speaker 03:
You are not defending the board's rationale that even had detention, compensable detention, or detention occurred after the May 31, 2009 that the contract wouldn't have covered that.

[00:18:39] Speaker 03:
I didn't see any defense of that rationale in your brief.

[00:18:43] Speaker 02:
That's right, Jordan.

[00:18:43] Speaker 02:
And I think what the CBCA may have been attempting to say was that that was sort of the

[00:18:53] Speaker 02:
outside limit as to when a detention hardly might have started.

[00:18:58] Speaker 03:
It's said the contract doesn't cover any activity that occurs after that date, and that's just wrong and you don't defend it.

[00:19:05] Speaker 03:
So let's get back to the main point.

[00:19:08] Speaker 03:
You have a keeping of the trailers, day one, day two, up to day 100, day 800 or something.

[00:19:17] Speaker 03:
Why is not each one of those a newly compensable act?

[00:19:24] Speaker 02:
First of all, Your Honor, at no time before any of the CBCA, GSA, or DLA, or before this court, has Sheridan Transportation ever taken the position that this is some sort of continuing claim, that there's a three-year sliding window of time in which it could assert a claim, and so it can reach back three years, even if it can't reach back to day one, its position has always been

[00:19:50] Speaker 02:
its claim didn't accrue, no portion of its claim ever accrued until the trailers were returned.

[00:19:56] Speaker 03:
And so that's when it could assert its claim.

[00:20:01] Speaker 03:
too aggressive or maybe it's not too aggressive because of the provision of addendum page 12, item 90, paragraph 4, DET will end detention, will end when you notify the carrier that loading or unloading has been completed.

[00:20:19] Speaker 03:
You didn't do that until four years later.

[00:20:25] Speaker 03:
Why does that not

[00:20:28] Speaker 03:
established by contract.

[00:20:31] Speaker 03:
Do you agree that this is either part of or relevant to the contract?

[00:20:36] Speaker 02:
No, I don't, Your Honor.

[00:20:38] Speaker 03:
So what is the status of this document?

[00:20:40] Speaker 02:
This document, Your Honor, is not referenced in any way in the actual contract itself, the solicitation that became the contract.

[00:20:52] Speaker 02:
And the provision that Sheridan has been relying on

[00:20:56] Speaker 02:
at Addendum 13.

[00:20:56] Speaker 03:
It's not referenced, too.

[00:20:58] Speaker 03:
I just keep worrying about these little terms you're including in answers that are trying to avoid answering the question.

[00:21:06] Speaker 03:
Is the substance of this part of what the contractual relationship between you consists of?

[00:21:16] Speaker 02:
No.

[00:21:17] Speaker 03:
So what is this document?

[00:21:19] Speaker 03:
And why is it irrelevant?

[00:21:23] Speaker 02:
This document is a publication

[00:21:25] Speaker 02:
from the Service Deployment and Distribution Command.

[00:21:29] Speaker 02:
It's a publication that defines certain procedures.

[00:21:36] Speaker 03:
Does it apply the way a regulation would to contracts somehow made under its auspices, and is this such a contract?

[00:21:46] Speaker 02:
Potentially, Your Honor.

[00:21:49] Speaker 02:
This may be an agency interpretation of the underlying detention regulations that

[00:21:55] Speaker 02:
a court would afford some deference to, yes.

[00:21:59] Speaker 02:
But my point was only that this is not a document that's specifically referenced as incorporated in the contract itself.

[00:22:06] Speaker 03:
Well, one of the arguments that you sort of avert to on page six of your brief in footnote number three is a reference to a regulation, 41 CFR 102.117.25, that says,

[00:22:19] Speaker 03:
Detention is the penalty charged to an agency for delaying the agreed time to unload or unload shipments by truck.

[00:22:25] Speaker 03:
Is that regulation referenced in the contract?

[00:22:28] Speaker 03:
No, Your Honor, it's not.

[00:22:31] Speaker 03:
Okay, so you seem to be relying on some legal materials, agency issued materials that are not referenced in the contract, which may or may not have some bearing on the contract.

[00:22:42] Speaker 03:
So why is that regulation somehow relevant but not this agency interpretation?

[00:22:50] Speaker 03:
this addendum document.

[00:22:56] Speaker 02:
Your Honor, again, this document, we're not disputing that it may have some relevance as an agency's

[00:23:11] Speaker 02:
explanation of how detention may apply in certain circumstances.

[00:23:16] Speaker 00:
What the document makes clear and the regulation makes clear is that the purpose of detention is for to compensate the carrier for delays in loading and unloading, right?

[00:23:25] Speaker 00:
Correct.

[00:23:26] Speaker 00:
It does not suggest this document, nor the solicitation itself, suggests that the purpose of the contract is to allow

[00:23:34] Speaker 00:
the government to use the trailers in some other location to move them to another location and use them for storage, right?

[00:23:42] Speaker 00:
Correct.

[00:23:42] Speaker 00:
Is that a breach of contract to do that?

[00:23:45] Speaker 00:
Potentially, it may have been, Your Honor, but again, that was... But why isn't that their claim that that was a breach as soon as the unloading was completed and the government moved the trailer to some other location and used it for storage?

[00:23:59] Speaker 02:
Well, they certainly haven't framed it that way.

[00:24:00] Speaker 02:
But potentially, yes, Your Honor, they may have had such a claim that they could have asserted.

[00:24:04] Speaker 02:
Again, though, it brings you back to the question of timeliness, of asserting such a claim.

[00:24:10] Speaker 00:
Well, figuring out what their claim is is important, because unless we know what the claim is, we don't know how to apply the statute of limitations to that claim.

[00:24:19] Speaker 00:
I think you've heard from us some doubt.

[00:24:22] Speaker 00:
that it can possibly be that the claim accrued upon the delivery to the destination before the unloading was completed.

[00:24:31] Speaker 00:
But why doesn't the claim accrue when a reasonable time for unloading has been completed or when the trailer is moved to some other entirely new location for storage purposes?

[00:24:44] Speaker 00:
Yes, Your Honor.

[00:24:46] Speaker 00:
Yes, what?

[00:24:47] Speaker 02:
No, I'm agreeing, Your Honor, that

[00:24:49] Speaker 04:
You're implying that that's the proper way to look at the accrual issue?

[00:24:54] Speaker 02:
Yes, Your Honor.

[00:24:55] Speaker 02:
Again, if you look at the contract, which speaks of detention as it says that the government cannot be charged more than 10 hours of detention per day.

[00:25:10] Speaker 02:
It speaks of it in terms of hours.

[00:25:12] Speaker 02:
The actual detention rate that was agreed to in the contract is an hourly rate, not a daily rate or a monthly rate.

[00:25:19] Speaker 02:
And the underlying regulation that the court referenced moments ago defines detention as a delay that occurs in the loading or unloading of a trailer.

[00:25:27] Speaker 03:
No, no, I'm sorry.

[00:25:29] Speaker 03:
It says delayed in an agreed on, agreed time to load or unload.

[00:25:35] Speaker 03:
I'm not sure I see an agreed time.

[00:25:41] Speaker 03:
You get two hours free, the contract clearly contemplates more time because otherwise you wouldn't have the hourly rate for a number of days.

[00:25:51] Speaker 03:
So does that regulation even apply?

[00:25:53] Speaker 03:
There is no put it, just tell me why this is wrong.

[00:25:58] Speaker 03:
Why is there an agreed time to unload or load?

[00:26:03] Speaker 02:
The agreed time, I think, Your Honor, is, you're correct, it is not a precise, the contract doesn't say you have three hours.

[00:26:09] Speaker 02:
That's a reasonable time, right?

[00:26:10] Speaker 02:
Yes, a reasonable time and the regulation which speaks of delay in loading or unloading coupled with the contract that defines detention and the rate for that in an hourly basis seems to make clear that the parties were contemplating that should a detention occur at all,

[00:26:26] Speaker 02:
You're going to be talking about a detention of a limited duration of a few hours, maybe a day or two.

[00:26:30] Speaker 03:
Should one also couple it with this addendum document issued by the agency that says detention ends when you tell them to come pick it up?

[00:26:38] Speaker 02:
That may be when the detention ends, Your Honor, but that doesn't mean that that is when the claim for the detention accrued.

[00:26:45] Speaker 04:
Because again here, Your Honor, it's important to remember that for one of these two trailers... If detention ends at that point,

[00:26:52] Speaker 04:
How can you make a claim for the detention until the detention has ended so that you know what your claim is?

[00:27:06] Speaker 02:
Your Honor, I'd like to say two things to that.

[00:27:08] Speaker 02:
One is that you certainly can because as to one of the two trailers in this case, Sharon did exactly that.

[00:27:15] Speaker 02:
It submitted a detention claim shortly after it initially dropped that trailer off for a five-day period of time that related to the diversion of that one trailer.

[00:27:25] Speaker 00:
Yeah, yeah, yeah.

[00:27:25] Speaker 00:
But they didn't make a claim for the detention that occurred after it was dropped off at the destination at that point.

[00:27:34] Speaker 00:
Maybe you could say they should have known the reasonable time for loading or unloading was five days, two days, whatever it is, and made a claim for that.

[00:27:43] Speaker 00:
But that seems to me rather unlikely.

[00:27:48] Speaker 00:
I don't see how you could make a claim that they'd exceeded the reasonable time for unloading until you knew how long the unloading took.

[00:28:00] Speaker 04:
Let's test that.

[00:28:01] Speaker 04:
by a hypothetical.

[00:28:03] Speaker 04:
Let's assume the trailer circumstance.

[00:28:06] Speaker 04:
They bring the trailer down to Louisiana.

[00:28:08] Speaker 04:
It's got the stuff in it.

[00:28:10] Speaker 04:
And somebody down there says, don't unload it here.

[00:28:14] Speaker 04:
Take it to Texas.

[00:28:16] Speaker 04:
And off it goes to Texas unloaded.

[00:28:19] Speaker 04:
Four years later, somebody says, what's in that trailer, by the way?

[00:28:23] Speaker 04:
Oh, there's that old stuff.

[00:28:25] Speaker 04:
Let's unload it.

[00:28:25] Speaker 04:
They unload it at that point.

[00:28:29] Speaker 04:
Has there been a detention?

[00:28:32] Speaker 02:
Yes, Your Honor, there has been a detention.

[00:28:35] Speaker 04:
And they would owe for every day of detention?

[00:28:40] Speaker 02:
The government, that is.

[00:28:42] Speaker 02:
There's been a detention that has occurred from the moment that the carrier takes the trailer to the original destination that was in the contract document, wherever it was supposed to go.

[00:28:53] Speaker 02:
From that moment, when it's dropped off at that location, the detention has occurred.

[00:28:57] Speaker 02:
Now, the carrier might not, in a scenario like this, where

[00:29:01] Speaker 04:
Well, the contract doesn't specify the location for unloading, does it?

[00:29:08] Speaker 02:
No, Your Honor.

[00:29:08] Speaker 02:
The actual transportation order that follows from the contract for each specific shipment specifies where they're supposed to go.

[00:29:17] Speaker 00:
In that hypothetical where the trailer, it arrives at its destination and the government says, no, actually we need that trailer 20 miles away.

[00:29:27] Speaker 00:
Move that trailer 20 miles away and unload it.

[00:29:30] Speaker 00:
in the period that was taken to move the trailer to this new location and to unload it would potentially be recoverable, right?

[00:29:40] Speaker 02:
Yes.

[00:29:40] Speaker 02:
In fact, it was as to the one of the trailers for which Sheridan submitted it.

[00:29:43] Speaker 00:
So it changed the destination point.

[00:29:45] Speaker 02:
Correct.

[00:29:46] Speaker 00:
But the solicitation does not provide for storage as part of the services being supplied by the carrier, right?

[00:29:58] Speaker 02:
Not specifically, no, Your Honor.

[00:29:59] Speaker 02:
does not.

[00:30:00] Speaker 02:
I mean, it contemplates there's language that suggests that it's possible that a trailer may be moved from the original initial destination.

[00:30:09] Speaker 02:
But not for storage?

[00:30:11] Speaker 02:
No, it does not say for storage, correct.

[00:30:16] Speaker 00:
Okay, anything else?

[00:30:16] Speaker 00:
Okay.

[00:30:17] Speaker 00:
Thank you.

[00:30:17] Speaker 00:
Thank you.

[00:30:17] Speaker 00:
I have further questions here.

[00:30:25] Speaker 04:
Mr. Claude, your trailers cannot be worth $10 million, no matter how you look at it.

[00:30:31] Speaker 01:
I would not submit the trailer.

[00:30:32] Speaker 04:
I could buy a whole field of trailers for $10 million.

[00:30:36] Speaker 04:
What would be a reasonable value for what you presumably didn't have?

[00:30:41] Speaker 04:
It would be the use of a trailer for four years.

[00:30:44] Speaker 04:
Yes, sir.

[00:30:48] Speaker 01:
You mean a number, as to what that would be?

[00:30:53] Speaker 01:
These trailers generate approximately $1,000 a day even if they're not utilized from a depreciation standpoint.

[00:31:04] Speaker 01:
So I think the number would be in the hundreds of thousands of dollars for four years' worth of use for two trailers.

[00:31:12] Speaker 00:
Even though the trailer's worth $30,000?

[00:31:16] Speaker 01:
Well, I think the $30,000 is somewhat presumptuous, Your Honor.

[00:31:19] Speaker 01:
I mean, we pay far more than $30,000 for new trailers.

[00:31:23] Speaker 01:
And the government assumed the responsibility for maintaining these trailers.

[00:31:27] Speaker 01:
They were going to put together a maintenance plan, which they never did.

[00:31:30] Speaker 01:
So I think obviously the carrier is entitled to some compensation.

[00:31:38] Speaker 01:
Now, the only way in which we could present the claim was based upon the contract rates which we were subjected to.

[00:31:46] Speaker 01:
And that was the basis for the invoice.

[00:31:48] Speaker 00:
Well, which sort of suggests the contract didn't contemplate

[00:31:52] Speaker 00:
keeping the trailers for five and a half years.

[00:31:54] Speaker 01:
Well, I think that's true.

[00:31:56] Speaker 01:
Right.

[00:31:56] Speaker 03:
But Judge, if you would... But if you go down that path, don't you end up by saying the contract didn't contemplate this.

[00:32:06] Speaker 03:
This was storage.

[00:32:07] Speaker 03:
It was a breach.

[00:32:08] Speaker 03:
The breach began as soon as any outside reasonable period for unloading had come to an end.

[00:32:19] Speaker 03:
And so at that point,

[00:32:22] Speaker 03:
a claim of breach, which had just begun, had accrued, which I assume is more than three years before, what is it, May 2013 or something?

[00:32:34] Speaker 01:
Assuming the carrier had knowledge of that, Judge, they did not.

[00:32:38] Speaker 03:
Or should have known.

[00:32:41] Speaker 03:
I mean, from 2008, is that when these services took place, September 2008?

[00:32:45] Speaker 01:
Yes, I guess it was in the hurricane season, right?

[00:32:47] Speaker 03:
Right, so by early 2010, you might

[00:32:52] Speaker 03:
be charged with knowledge that something outside the contemplation of this contract was going on?

[00:33:00] Speaker 01:
Well, I would submit to you, Judge, that under the solicitation, this provision for organic movements, which is on the appendix, page 49, it says that any movement of the trailer from the initial destination point will be transported in the responsibility as an organic movement performed and controlled by FEMA.

[00:33:23] Speaker 01:
So I would submit to you that the solicitation contemplated longer than just a regular load and unload.

[00:33:32] Speaker 00:
Well, in other words, they might move it to a new location.

[00:33:35] Speaker 00:
Or several locations, right.

[00:33:36] Speaker 00:
But not that they would use it for storage.

[00:33:39] Speaker 01:
Well, I don't think storage is adequately addressed in the solicitation, Your Honor.

[00:33:43] Speaker 01:
It's contemplated that these supplies would be staged in an area.

[00:33:50] Speaker 01:
And I think implicit in that is some storage.

[00:33:54] Speaker 01:
But I can't tell you what the dimension of that storage is.

[00:33:56] Speaker 01:
It's like the SDDC freight rules, which define detention, are the organic rules that control all freight deliveries for the military.

[00:34:08] Speaker 01:
And those are incorporated in the standards under which the carrier is supposed to act.

[00:34:13] Speaker 01:
It says that detention ends when you're notified to come get your equipment.

[00:34:18] Speaker 01:
And there was no notification, nor an alleged notification.

[00:34:22] Speaker 01:
So I'm not standing here trying to justify the $10 million claim in its entirety, but to completely refuse to pay anything for the services that they received, I think is excessive.

[00:34:36] Speaker 00:
OK.

[00:34:36] Speaker 00:
Thank you, Mr. Cloud.

[00:34:37] Speaker 00:
Thank you, Your Honor.

[00:34:37] Speaker 00:
Thank both counsels.

[00:34:38] Speaker 00:
The case is submitted.

[00:34:39] Speaker 00:
That concludes our session for this morning.

[00:34:57] Speaker 00:
The honorable court is adjourned until tomorrow morning at 10 a.m.