[00:00:00] Speaker 02:
I think it's actually poker in Arkansas right now, surprisingly enough.

[00:00:04] Speaker 04:
Sad to hear.

[00:00:22] Speaker 05:
The next case for argument is 171584, Meridian Engineering versus the United States.

[00:00:57] Speaker 05:
We're ready.

[00:01:18] Speaker 05:
Let's give everybody a chance to get settled in their seats.

[00:01:31] Speaker 05:
Maria Panicelli.

[00:01:33] Speaker 00:
Good morning, Your Honor.

[00:01:34] Speaker 00:
My name is Maria Panicelli.

[00:01:37] Speaker 00:
I'm here representing Meridian Engineering Company.

[00:01:40] Speaker 00:
They were the plaintiff in the underlying Court of Federal Claims case and they are the appellant in the instant litigation for the panel this morning.

[00:01:48] Speaker 00:
The issues at the core of this case are exceedingly simple.

[00:01:51] Speaker 00:
This was a court-designed project and as such, they provided Meridian and the other offers with specific information

[00:02:01] Speaker 00:
upon which Meridian was meant to rely concerning how this project could be successfully constructed.

[00:02:08] Speaker 04:
Meridian was an experienced Southern Arizona contractor, right?

[00:02:11] Speaker 00:
It was, correct.

[00:02:12] Speaker 04:
It's familiar with the geology of Southern Arizona.

[00:02:15] Speaker 04:
It was, yes.

[00:02:17] Speaker 00:
But again, the geotechnical information provided as part of the contract is known to be, and it's accepted by the case law, the most reliable indicator

[00:02:28] Speaker 00:
of the subsurface conditions in one particular area.

[00:02:31] Speaker 00:
So consistent with the case law and as Meridian as a sophisticated contractor knew it could, it relied upon the information that was provided as part of that contract.

[00:02:41] Speaker 00:
Unfortunately, this information ultimately proved to be wholly inaccurate due largely to the fact that the design was outdated.

[00:02:49] Speaker 00:
As a result, Meridian incurred substantial damages and in analyzing Meridian's entitlement to recoup those damages,

[00:02:56] Speaker 00:
The court below made numerous errors.

[00:02:58] Speaker 04:
At page 28 of the blue brief, you say that CFC aired because it appears to require an independent geotechnical analysis in the claim.

[00:03:08] Speaker 04:
Yes.

[00:03:09] Speaker 04:
Where in the opinion below does the court require an independent site analysis?

[00:03:15] Speaker 00:
In its discussion regarding the second element of the differing site condition claim, which I believe is on page 36 to 37 of the opinion,

[00:03:24] Speaker 00:
which I think is pages 37 and 38 of the appendix.

[00:03:28] Speaker 00:
It talks about at the top of that page that meridian should have been reasonably foreseeable, the actual conditions, because meridian should have wanted to investigate whether there were unstable saturated conditions upstream.

[00:03:46] Speaker 00:
This is also consistent with

[00:03:47] Speaker 00:
things that the court, the judge, said during the trial to us, both on and off the record, including at appendix.

[00:03:55] Speaker 00:
You can find that in a second.

[00:03:57] Speaker 00:
But the court made it clear throughout the trial that her view was that the burden lay on the contractor to do an independent geotechnical investigation.

[00:04:08] Speaker 00:
That's simply not consistent with case law, Foster, Betcaff, which is this court's 2014 decision.

[00:04:15] Speaker 04:
And to the extent that the government has argued that, you know... Where in southern Arizona is there not hard-panned caliche?

[00:04:24] Speaker 00:
I think, again, it depends on each area is different.

[00:04:27] Speaker 00:
And you can't just make general assumptions about, you know, areas, geographic areas, either based on the state or based on even being in a floodplain.

[00:04:35] Speaker 00:
You always have to go back to the specific geotechnical information that was submitted as part of, I'm sorry, available as part of the solicitation.

[00:04:43] Speaker 00:
And here, the specific geotechnical information that was available to the contractors indicated hard unyielding material that could be easily dewatered, that was small, granular in size, and that even if it was plastic in some places, it was not in a fluid condition.

[00:04:59] Speaker 03:
Was that determination based on the boring test that they had conducted?

[00:05:05] Speaker 00:
Yes, Your Honor.

[00:05:06] Speaker 00:
It was based on the boring logs, as well as the test holes and the test trenches.

[00:05:11] Speaker 00:
And as explained in our brief and all the record sites that are cited therein, Meridian established at trial that a thorough expert analysis or experienced contractor analysis are both consistent and that those boring logs, test trenches, and test holes demonstrated that there was really no reason to think that the soils would be unstable or unsuitable for construction.

[00:05:33] Speaker 00:
They wouldn't be in a fluid condition based on what was reflected in those boring logs, test trenches, and test holes.

[00:05:39] Speaker 00:
To the extent the court reached an opposite conclusion, it was based on one page of non-expert testimony that dealt primarily with three test holes that were in a far off part of the project area, and actually not even technically part of the project area.

[00:05:55] Speaker 00:
Mr. Cicci's testimony, which is the sole piece of testimony that the court cites when talking about the first or second Elec- I guess I had the same impression as Judge Wallach.

[00:06:06] Speaker 03:
I grew up in New Mexico.

[00:06:08] Speaker 03:
I've been to Nogales a number of times.

[00:06:14] Speaker 03:
But it would be hard for me to say just that Nogales is sitting on hard rock.

[00:06:21] Speaker 03:
And there's not these problems with water.

[00:06:25] Speaker 03:
I mean, there the rivers are running north, from south to north.

[00:06:29] Speaker 03:
It's an odd situation.

[00:06:32] Speaker 03:
Now, I realize that the meridian is relying on the

[00:06:37] Speaker 03:
on these boring tests, but weren't those kind of outdated?

[00:06:40] Speaker 03:
And as you say, they were contradicted.

[00:06:42] Speaker 03:
Some showed a different type of soil condition.

[00:06:47] Speaker 00:
I think there's a couple answers to that question.

[00:06:50] Speaker 00:
Yes, they were outdated.

[00:06:51] Speaker 03:
And set aside my layman's view of

[00:06:53] Speaker 00:
No, but that's an interesting point, because I think that that's a lot of what plays into it.

[00:06:58] Speaker 00:
And to be frank, before I, you know, ever used to do this type of work, I would have made the same sorts of, you know, common sense assumptions.

[00:07:04] Speaker 03:
You guys are an experienced engineering company, and Tucson's not too far from Nogales.

[00:07:11] Speaker 00:
True.

[00:07:12] Speaker 00:
No, and I think they did have experience, but given the case law and given what the contractors are allowed to rely upon, they placed their reliance

[00:07:22] Speaker 00:
on the boring logs and on the test holes and the test trenches.

[00:07:25] Speaker 03:
And the reason for that is that's the most... Well, that's true, but it's also the place of reliance on part of their experience.

[00:07:30] Speaker 03:
They say, looking at these boring tests, and I guess in addition to our own experience and our own knowledge that we've built over time, we're willing to take this risk.

[00:07:43] Speaker 03:
And it's laid out.

[00:07:45] Speaker 00:
Well, it's laid out, but again, the case law, and this includes the Foster decision and also this court's 2014 Metcalf decision, is pretty straightforward about the fact that even the disclaimer that is written into boring logs or other sort of geotechnical information can't function to shift that risk from the government to the contractor.

[00:08:05] Speaker 00:
The whole purpose of the differing site conditions clause used to be called the Change Conditions Clause, but the purpose of both of those clauses

[00:08:11] Speaker 00:
is to take part of the gamble out of the bidding process for the contractors and to prevent them from building in contingencies into their bidding process.

[00:08:20] Speaker 03:
And under this type of contract, the risk is shifted over to Meridian, correct?

[00:08:25] Speaker 00:
No, Your Honor.

[00:08:26] Speaker 00:
It would still be on the government.

[00:08:28] Speaker 03:
Well, it's a firm fixed price contract.

[00:08:30] Speaker 00:
It is.

[00:08:31] Speaker 03:
And under those type of contracts, the contractor assumes the risk.

[00:08:35] Speaker 00:
It assumes the risk as long as the conditions are as they were indicated in the contract.

[00:08:39] Speaker 00:
To the extent that they weren't indicated in the contract, that's why the differing site conditions clause is incorporated in the contract to account for precisely this situation where a firm fixed price is given based on the bid and based on the, I'm sorry, the bid is based in turn on the geotechnical information that's provided as part of the contract.

[00:08:58] Speaker 00:
to hold anything different would in fact read the differing site conditions clause out of the contract and would shift all the risk back to the contractor and say that indeed there was no situation where the differing site conditions clause would apply.

[00:09:10] Speaker 00:
I think, again, Foster and Metcalf have made it pretty clear that the contractor is entitled to rely on those boring logs, and even to the extent they bring their own experience to bear, and that's what Meridian did here, but even an outside independent expert... Some of those samples, the boring log samples,

[00:09:28] Speaker 03:
that not all of the site was rocky ground or based on rock, that there was clay and that there was instability in some of the site.

[00:09:43] Speaker 04:
Silty clay with sand, black, wet, medium to high plasticity, and soft.

[00:09:49] Speaker 00:
Correct, Your Honor.

[00:09:52] Speaker 00:
And I think the thing is, again,

[00:09:54] Speaker 00:
the government's argument and the court of federal claims often when interpreting this to kind of a common sense or layperson's view.

[00:10:02] Speaker 00:
And this is geotechnical expert information and a geotechnical expert, our independent geotechnical expert, Dr. Mahar, took a look at these borings and drew a very specific distinction.

[00:10:13] Speaker 00:
Yes, there are places where some of the clay is wet.

[00:10:16] Speaker 00:
That doesn't necessarily mean that it's in a fluid state.

[00:10:19] Speaker 00:
Wet clay can be dewatered and can still be used as a state of foundation.

[00:10:23] Speaker 03:
So why didn't you ask for a clarification at that point, then?

[00:10:26] Speaker 00:
I'm sorry?

[00:10:26] Speaker 03:
Why didn't you ask for a clarification of the site conditions?

[00:10:30] Speaker 00:
Well, again, because the way that the contract is worded and based on the case law interpreting contracts and the FAR, you don't need to ask for clarification unless there's a patent error.

[00:10:39] Speaker 00:
Here, there wasn't a patent error.

[00:10:41] Speaker 00:
There was geotechnical information.

[00:10:43] Speaker 00:
And we were told to bid.

[00:10:44] Speaker 00:
as you see it.

[00:10:45] Speaker 00:
I mean, that's the general instruction that contractors are given.

[00:10:48] Speaker 00:
When you're given boring logs, test holes, test trenches, and you're told here are specific subsurface investigations that the court did in designing this project, you're entitled to rely upon those and bid according to what you think the conditions are represented in the contract.

[00:11:04] Speaker 00:
When you then encounter something different, something materially different at the contract site,

[00:11:09] Speaker 00:
That constitutes a differing site condition, and you're entitled under the differing site condition clause to then assert.

[00:11:14] Speaker 03:
There's no requirement that you make a site visit.

[00:11:16] Speaker 00:
No.

[00:11:17] Speaker 03:
But is that good business practice before you accept one of these contracts?

[00:11:21] Speaker 00:
It is in some cases.

[00:11:23] Speaker 00:
And I think, again, the Metcalf decision, I can find the page on page 996, speaks to that specific question.

[00:11:30] Speaker 00:
It says, the duty to make an inspection of the site does not negate the changed conditions clause.

[00:11:35] Speaker 00:
Again, that's what the differing site conditions clause used to be called.

[00:11:37] Speaker 00:
by putting the contractor at peril to discover hidden subsurface conditions or those beyond the limits of an inspection appropriate to the time available?

[00:11:45] Speaker 00:
And I think this was in our reply brief.

[00:11:48] Speaker 00:
But given the time available here, the contractors were only given, I think, between two and four weeks in between the time that the solicitation went out and the time that they were expected to respond.

[00:11:57] Speaker 00:
Moreover, those two to four weeks were during monsoon season, which is the whole purpose of this.

[00:12:02] Speaker 03:
Were the boring logs ambiguous or outdated or both?

[00:12:07] Speaker 00:
I wouldn't say they were ambiguous.

[00:12:08] Speaker 00:
I think there were some boring logs that indicated there were certain types of soils.

[00:12:11] Speaker 00:
There were some boring logs that indicated different types of soils.

[00:12:14] Speaker 00:
Meridian looked at all of them as you're supposed to when interpreting.

[00:12:17] Speaker 03:
Were they outdated in your?

[00:12:19] Speaker 00:
They were outdated.

[00:12:20] Speaker 00:
But again, that's the response.

[00:12:21] Speaker 03:
Why is that not a patent ambiguity?

[00:12:24] Speaker 00:
Because it happens all the time.

[00:12:25] Speaker 03:
Because it's still.

[00:12:27] Speaker 03:
Well, that doesn't answer the question.

[00:12:29] Speaker 03:
You know, the fact that there's patent ambiguities all the time doesn't help you.

[00:12:35] Speaker 00:
Well, because it's not an ambiguity just because the boring logs are old.

[00:12:38] Speaker 00:
In some cases, and in some areas.

[00:12:41] Speaker 03:
You just said it was.

[00:12:42] Speaker 03:
You just said it was an ambiguity that the boring logs are old.

[00:12:46] Speaker 00:
No, I'm sorry.

[00:12:47] Speaker 00:
If I said that, I misspoke.

[00:12:49] Speaker 00:
I said that there was some ambiguity in terms of there were some boring logs that indicated certain types of soils, and there were some boring logs or test holes or trenches that indicated different types of soils.

[00:12:59] Speaker 00:
It's not Meridian's position that there was an ambiguity regarding the outdated nature of the boring logs.

[00:13:04] Speaker 00:
They're the only boring logs the Corps provided.

[00:13:07] Speaker 03:
You can't just start... But at that point, you asked for a clarification or, you know, you sent somebody down there to look at the site.

[00:13:14] Speaker 00:
Again, that's not a possibility.

[00:13:16] Speaker 00:
We wouldn't have had time to do that.

[00:13:18] Speaker 00:
There was two to four weeks.

[00:13:19] Speaker 00:
It was during monsoon season.

[00:13:20] Speaker 03:
Tucson is 45 miles from Nogales?

[00:13:25] Speaker 00:
It's not a question of that, Your Honor.

[00:13:26] Speaker 00:
It's a question of the fact that the two to four weeks was during monsoon season, which means that we wouldn't have had access to actually be able to do any sort of subsurface investigation.

[00:13:35] Speaker 00:
And moreover, as I believe Mr. Hayward testified, and I believe it's laid out in our reply brief, there would have been permits required.

[00:13:42] Speaker 00:
And given the time involved, permits wouldn't have been issued to get onto the site.

[00:13:46] Speaker 00:
This is land that was owned by the Corps of Engineers at that point.

[00:13:49] Speaker 00:
It wasn't land, or I'm sorry, one of the coordinating state agencies.

[00:13:53] Speaker 00:
It wouldn't have been possible for Meridian to get the permits to go on the site, even if they had wanted to conduct a site visit, and even if the monsoons had let up.

[00:14:00] Speaker 00:
such that they would have had access to be able to do that.

[00:14:03] Speaker 04:
Oh, come on.

[00:14:03] Speaker 04:
They only rained for an hour in the afternoon.

[00:14:06] Speaker 00:
But the problem is, and this is why this project was being constructed in the first place, the soils in that area, as much as, ironically, it ultimately turned out to be unstable and liquid underneath, they don't absorb the water.

[00:14:19] Speaker 00:
So they're subject to flash floods.

[00:14:22] Speaker 00:
So again, the water would be flash flooding through the whole area.

[00:14:25] Speaker 00:
The whole purpose of this project was to build a channel where that water could flow.

[00:14:31] Speaker 00:
So because of that, they weren't able to get access.

[00:14:34] Speaker 00:
And again, you know, I think the case law is clear that there's no responsibility on the contractor to do an independent investigation or to ask for clarification.

[00:14:44] Speaker 00:
It's up to the contractor to rely on the boring logs that are provided.

[00:14:47] Speaker 00:
And they're often outdated when you're dealing with government agencies.

[00:14:50] Speaker 00:
It often happens that the government, you know, does certain investigations, does their site investigations, designs the project, and then has to wait for funding.

[00:14:59] Speaker 00:
And in fact, that's what happened here.

[00:15:00] Speaker 00:
It doesn't mean that the responsibility passes to the contractor or that it's akin to a contradiction or a conflict in the specifications, which is usually what you see when you're talking about a defective specification.

[00:15:13] Speaker 05:
So I think- You're well into your rebuttal.

[00:15:15] Speaker 05:
It's up to you if you want to use it, if there's a point you want to make or- No, I'll see what you say.

[00:15:19] Speaker 05:
All right.

[00:15:20] Speaker 05:
Thank you.

[00:15:24] Speaker 00:
Thank you, Alex.

[00:15:41] Speaker 02:
May it please the Court.

[00:15:43] Speaker 02:
As Your Honor recognized, Meridian entered into a phone fixed price contract with the United States.

[00:15:46] Speaker 05:
Before you get into the... I was going to go to a different issue, so if you want to ask about the site... No, no, unpaid contract.

[00:15:55] Speaker 04:
Go ahead.

[00:15:56] Speaker 04:
You want me to?

[00:15:56] Speaker 04:
Yes, go ahead.

[00:15:59] Speaker 04:
Your expert, Mr. Weather's testimony on which the CFC relied, was submitted two months prior to when Meridian submitted its second amended complaint.

[00:16:09] Speaker 04:
which alleged unpaid contract quantities in the amount of $358,000.

[00:16:15] Speaker 04:
Mr. Weather's only found $326,000.

[00:16:19] Speaker 04:
Even if we credit Mr. Weather's calculation, wouldn't we find that Meridian was still owed $31,000 and change?

[00:16:27] Speaker 02:
No.

[00:16:27] Speaker 02:
No, Your Honor.

[00:16:29] Speaker 02:
Our calculation is that there's an overpayment of $326,000, or at the time of Mr. Weather's calculation,

[00:16:39] Speaker 02:
It's now about $83,000.

[00:16:40] Speaker 02:
So $83,000 should come from Meridian to the government.

[00:16:45] Speaker 02:
Their position is that 383 should go from the government to Meridian.

[00:16:49] Speaker 02:
So the parties are, I guess.

[00:16:55] Speaker 04:
Wait a second.

[00:16:55] Speaker 04:
Has your number changed from when Mr. Weathers calculated it?

[00:16:58] Speaker 04:
Is that what you're saying?

[00:16:59] Speaker 02:
Yes.

[00:16:59] Speaker 02:
As part of our damages trial, the parties stipulated that one payment that Meridian had

[00:17:08] Speaker 02:
initially counted as two separate payments.

[00:17:10] Speaker 02:
It was something like $514,000.

[00:17:14] Speaker 02:
It agreed to previously credit a portion of that payment to Count 6 and then reallocated that payment to Count 8.

[00:17:23] Speaker 02:
So a portion of that payment was accounted for in Count 8 at the part of the damages trial in June of 2016.

[00:17:31] Speaker 02:
However, there is still a delta.

[00:17:33] Speaker 02:
There's still an overpayment.

[00:17:36] Speaker 02:
made by the government in approximately $80,000.

[00:17:42] Speaker 02:
So the delta between the parties has shrunk.

[00:17:46] Speaker 05:
Well, I don't know.

[00:17:46] Speaker 05:
What are we supposed to do with it?

[00:17:47] Speaker 05:
I mean, we're looking at this issue, the District Court, the Court of Federal Claims Judge, appendix 43 and 44.

[00:17:54] Speaker 05:
I mean, there's like two paragraphs discussing this whole thing.

[00:18:00] Speaker 05:
I'm having a hard time seeing how we can review that as it is, and now you're adding more stuff in that I guess undoes some of this stuff.

[00:18:09] Speaker 05:
I mean, does the inquiry remain the same?

[00:18:11] Speaker 05:
We're supposed to review this opinion and this decision by her.

[00:18:15] Speaker 05:
Yes.

[00:18:15] Speaker 05:
It's hard to, you know, we don't have very much meat on these bones, but now you're saying that this isn't any longer operable?

[00:18:24] Speaker 02:
No, that's not what we're saying.

[00:18:28] Speaker 02:
Whether Meridian would have to deduct

[00:18:31] Speaker 02:
from their judgment, $300,000 or $80,000, the overpayment still exists.

[00:18:36] Speaker 02:
So that's just an initial matter.

[00:18:39] Speaker 02:
The second issue is that the crediting of this payment was stipulated, and that's in the record.

[00:18:48] Speaker 02:
But there is still a delta of overpayment that the parties, even though they say, even though Meridian says in a footnote, that all of that overpayment or all of the payment

[00:19:00] Speaker 02:
was credited as part of the damages trial.

[00:19:02] Speaker 02:
That's simply inaccurate.

[00:19:04] Speaker 04:
Well, then it's not agreed to.

[00:19:06] Speaker 02:
OK.

[00:19:06] Speaker 02:
But to your question earlier, Judge Prost, the parties made a record in front of the court.

[00:19:16] Speaker 02:
Both experts submitted opinions and submitted their testimony concerning the overpayments.

[00:19:22] Speaker 02:
And ultimately, what the trial court found was that the United States was not liable.

[00:19:29] Speaker 02:
It didn't necessarily make a determination of the accounting, but it made a determination that whatever Meridian claimed it was underpaid, whatever delta between the parties, there is no money that was due Meridian for those unpaid contract quantities.

[00:19:56] Speaker 02:
There is testimony about those quantities.

[00:20:00] Speaker 02:
That was part of the resolution on count six.

[00:20:03] Speaker 02:
And to the extent that the court were to remand that, Meridian faces a risk that it will actually end up with less than the judgment that it already received.

[00:20:14] Speaker 05:
Well, we're not going to decide a case because the risk... I mean, they've appealed the question.

[00:20:19] Speaker 05:
We're not going to say, well, we're not going to send it back.

[00:20:21] Speaker 02:
Of course.

[00:20:22] Speaker 02:
It was just surprising that they were to appeal that.

[00:20:25] Speaker 05:
But can you look at appendix 44?

[00:20:27] Speaker 05:
Do you have that?

[00:20:30] Speaker 05:
I'm just trying to find, paragraph C is, 5C is the court's resolution.

[00:20:37] Speaker 05:
Yes.

[00:20:37] Speaker 05:
So what is your understanding of the resolution?

[00:20:40] Speaker 02:
Our understanding of the resolution is that we claim that we had overpaid Meridian for certain contract quantities.

[00:20:49] Speaker 02:
Because we had overpaid them for certain contract quantities,

[00:20:52] Speaker 02:
We were entitled to set off those amounts from other amounts that were due, that we acknowledge were due, for clown 788.

[00:20:58] Speaker 05:
And was that a disputed fact?

[00:20:59] Speaker 05:
I mean, you say because we were.

[00:21:01] Speaker 05:
First you said we claimed, and then say because we were.

[00:21:05] Speaker 05:
Was it disputed that you were owed this amount?

[00:21:09] Speaker 02:
Oh, Meridian disputed that we were owed that, that we were due a credit for overpayments.

[00:21:18] Speaker 02:
And the district court?

[00:21:20] Speaker 02:
And the trial court found that we

[00:21:23] Speaker 02:
We weren't liable to them for their claim for underpayments.

[00:21:28] Speaker 02:
Because?

[00:21:29] Speaker 02:
Because we were entitled to offset amounts due to the government from any amounts due to Meridian.

[00:21:41] Speaker 05:
Well, where's the analysis of the merits of your claim?

[00:21:43] Speaker 02:
Well, first of all, we didn't raise a claim.

[00:21:47] Speaker 02:
It was an affirmative defense.

[00:21:49] Speaker 02:
It was an affirmative defense of set off

[00:21:51] Speaker 02:
to their affirmative claim that unpaid contract quantities weren't paid.

[00:21:56] Speaker 05:
So where is the analysis of that there was an adequate set off?

[00:22:01] Speaker 04:
How do we discern the CFC's logic?

[00:22:07] Speaker 02:
Well, it's an initial matter.

[00:22:09] Speaker 02:
This court reviews judgments and unnecessarily the evidence.

[00:22:12] Speaker 02:
So in light of the fact that there is a

[00:22:15] Speaker 02:
Both parties put together an evidentiary record.

[00:22:18] Speaker 02:
They put on experts at trial to testify about these matters, about these quantities.

[00:22:23] Speaker 02:
And the court ultimately came to a resolution, and it's a claim for money, and a claim to a resolution that no money was due to Meridian.

[00:22:33] Speaker 02:
That's what you can discern from the opinion.

[00:22:36] Speaker 05:
Well, we can discern that from the opinion.

[00:22:37] Speaker 05:
But what you're suggesting is since we review judgments, and if we don't think we have an analysis, we should just go and do the analysis on our own.

[00:22:45] Speaker 02:
I'm not saying the analysis of, we don't expect the court to do some sort of accounting, but the court can certainly agree that no money, that the government isn't liable for these alleged contract quantities given that the trial court made implicit factual determinations that we were not liable.

[00:23:07] Speaker 02:
We would, so you should affirm is what you're saying.

[00:23:10] Speaker 02:
We would ask the court to affirm, yes.

[00:23:12] Speaker 03:
Did the court make in the first instance, did it apply the accordance satisfaction factors for count four?

[00:23:22] Speaker 03:
It did.

[00:23:23] Speaker 03:
Show me where that happened.

[00:23:28] Speaker 02:
With respect to count four or whether it's count five, the release and the release language are identical.

[00:23:35] Speaker 02:
So the principles and the rationale that would apply to the release.

[00:23:41] Speaker 03:
what the court said about count five and shifted on to count four?

[00:23:45] Speaker 02:
Well, the logic is exactly the same, and the modification language is exactly the same.

[00:23:49] Speaker 03:
Is that what the court said?

[00:23:51] Speaker 02:
Well, as an initial matter, Meridian doesn't allege that they didn't sign these releases or that these releases aren't binding.

[00:23:58] Speaker 02:
They're saying that there's an exception.

[00:24:00] Speaker 02:
So that's the underlying principle.

[00:24:02] Speaker 03:
Well, they do argue that the court did not apply those.

[00:24:06] Speaker 03:
They argue that, but that's not what the... Well, when I look at the court's judgment, I see that

[00:24:11] Speaker 03:
Perhaps it didn't.

[00:24:12] Speaker 03:
That's why I'm giving you the chance to say that the court did.

[00:24:17] Speaker 02:
Well, what the court did was consider Meridian's argument that an exception to a court and satisfaction applies.

[00:24:22] Speaker 02:
Meridian doesn't deny releasing the United States from liability concerning these flood events or from the sewer relocation.

[00:24:32] Speaker 02:
What they argue is that the release doesn't apply because the parties continued or because the government, there was some sort of conduct

[00:24:40] Speaker 02:
Internal conduct and internal deliberation prepared in the context of a potential settlement that Meridian had no idea about until discovery after it initiated.

[00:24:52] Speaker 03:
So that brings us to the point, one of the elements being a meeting of minds.

[00:24:59] Speaker 03:
It would seem to me, whether there's a meeting of the minds, that that may change from case to case.

[00:25:09] Speaker 03:
There's only one mind that's in accord.

[00:25:12] Speaker 03:
I mean, there is no meeting of the minds.

[00:25:15] Speaker 03:
I don't see that the two parties had the same viewpoint here.

[00:25:20] Speaker 02:
Well, let me show you, Your Honor.

[00:25:21] Speaker 02:
If you look at the record, it contains the actual modifications that are at issue.

[00:25:29] Speaker 02:
If you look at page.

[00:25:34] Speaker 03:
You're going to have to cite the volume of the record.

[00:25:36] Speaker 03:
Yeah.

[00:25:38] Speaker ?:
Oh.

[00:25:46] Speaker 05:
Do you have anything in the District Court of Claims opinion where she speaks to this?

[00:25:53] Speaker 05:
Maybe that would help.

[00:25:55] Speaker 05:
I am looking at 42, but I don't know if that is where she is talking about community heating and plumbing.

[00:26:15] Speaker 02:
Well, first in the context of on page 39 talks about a meeting of the minds in the context of the release for the sewer line.

[00:26:27] Speaker 02:
And she cites the contract language, the contract prices increases indicated above.

[00:26:31] Speaker 02:
which it reflects all credits due to the government and all debits due to the contractor, and it goes on.

[00:26:37] Speaker 02:
And she said that that language reflected the meaning of the mines.

[00:26:41] Speaker 02:
That precise language is in the same, is in the bilateral modifications that Meridian entered into with the government on the flood events claim, the late repeal.

[00:26:53] Speaker 02:
So- Or is that again?

[00:26:54] Speaker 02:
Take 40?

[00:26:55] Speaker 02:
In 39, she explains why the release language constitutes the meaning of the mines.

[00:26:59] Speaker 02:
That same language is a language that

[00:27:02] Speaker 02:
that applies to the flood events claim.

[00:27:06] Speaker 02:
So there's no basis for anyone to assume that language, which constituted a meeting of the minds with respect to one bilateral modification between the two same parties, would not constitute a meeting of the minds with respect to another bilateral modification.

[00:27:23] Speaker 03:
But what about the memorandum, the government's memorandum that stated it owed, in regard to this issue, it owed

[00:27:31] Speaker 03:
Meridian, close to half a million dollars.

[00:27:34] Speaker 03:
Oh, the internal one?

[00:27:35] Speaker 03:
The internal one, yeah.

[00:27:36] Speaker 03:
Well, the internal one... Why isn't that relevant to the meeting of the mines?

[00:27:39] Speaker 02:
No, it's not, Your Honor, because that was prepared after any of these, after these modifications were signed.

[00:27:47] Speaker 02:
The fact that one party, you know, considers in the context of potential settlement, you know, in an effort to close out a contract, paying more money... But you're asking for information from Meridian in this regard, and they're not giving it to you.

[00:28:00] Speaker 02:
Well, the government didn't want a litigation.

[00:28:04] Speaker 02:
I mean, there was strong federal policies for having the government resolve things at the administrative level.

[00:28:09] Speaker 02:
I mean, this was a case filed in 2011 for a project performed in 2008 and 2009.

[00:28:14] Speaker 02:
The government's hopeful that it could resolve that in 2009.

[00:28:20] Speaker 02:
So to the extent that it puts together a potential, as part of a potential package that, first of all, wasn't signed by all the necessary parties,

[00:28:30] Speaker 02:
and wasn't presented to Meridian, and no negotiations were held as reflected in the language of that draft modification.

[00:28:38] Speaker 02:
I mean, that's not binding on the government, and that doesn't reflect any sort of continuing negotiations or any of the other factors that this court has considered.

[00:28:47] Speaker 03:
But on the other hand, the government is asking for additional information from Meridian.

[00:28:52] Speaker 03:
It asked several times, and Meridian wasn't giving you that information.

[00:28:56] Speaker 03:
Doesn't that indicate ongoing negotiation of some sort?

[00:29:01] Speaker 02:
If you can ask somebody, first of all, it's not to say with respect to those identical releases.

[00:29:10] Speaker 02:
If the government wants to sit down with the contractor knowing that they have potential claims against it in an effort to resolve it at the administrative level, just doing that could undermine the comfort that either party receives from entering into a bilateral modification

[00:29:30] Speaker 02:
then what's the point of entering into a bilateral modification?

[00:29:33] Speaker 04:
Well, you have a different point, too.

[00:29:36] Speaker 04:
My understanding is that the government's internal discussions in order to represent a government position have to be approved in certain fixed ways by certain fixed people.

[00:29:53] Speaker 02:
That's correct.

[00:29:54] Speaker 04:
And that didn't occur here.

[00:29:55] Speaker 02:
That didn't occur here.

[00:29:59] Speaker 02:
And first of all, this is very important.

[00:30:02] Speaker 02:
First of all, the argument is that community heating and plumbing allows the court to consider, I guess, after modification, post-modification conduct.

[00:30:15] Speaker 02:
That's a fact question, whether or not the parties entered into negotiations or continued to consider that.

[00:30:21] Speaker 02:
The court looked at the evidence presented and determined that it didn't establish.

[00:30:26] Speaker 02:
OK, so it's a fact question.

[00:30:27] Speaker 03:
Why would we impute?

[00:30:29] Speaker 03:
the court's reasoning under count five to count four.

[00:30:31] Speaker 02:
Well, the important part of count five is not in count four.

[00:30:41] Speaker 02:
And for both counts, it's not that they didn't really enter into a release or really didn't enter into these bilateral modifications.

[00:30:49] Speaker 02:
They're saying that continuing negotiations.

[00:30:52] Speaker 03:
What I'm concerned is whether the court actually undertook an accord and satisfaction

[00:30:59] Speaker 03:
analysis for count four.

[00:31:01] Speaker 03:
I know it did for count five.

[00:31:06] Speaker 01:
All of the elements for both are the same.

[00:31:09] Speaker 02:
So even if the court didn't copy and paste the same language and just change the modification numbers, the analysis is identical.

[00:31:19] Speaker 03:
How do I know that?

[00:31:21] Speaker 02:
How do you know that?

[00:31:21] Speaker 02:
Yeah.

[00:31:22] Speaker 02:
Or I shouldn't say the analysis, the underlying information on which the court is.

[00:31:25] Speaker 03:
Well, that's true.

[00:31:27] Speaker 03:
But how do I know how the court viewed that underlying information?

[00:31:31] Speaker 03:
It could have viewed it differently for count four than it did for count five.

[00:31:35] Speaker 03:
You're arguing on behalf of the court, and what I'm pointing out and I want you to help me with, it just seems to me that this analysis is missing with respect to count four.

[00:31:48] Speaker 02:
You're correct.

[00:31:48] Speaker 02:
The court didn't go through each one of those steps.

[00:31:51] Speaker 03:
All right.

[00:31:51] Speaker 03:
Shouldn't the court have to do that?

[00:31:53] Speaker 02:
I can't speak to what the court should or shouldn't have to do.

[00:31:56] Speaker 02:
I think that's our job.

[00:31:58] Speaker 03:
That's our job.

[00:31:59] Speaker 03:
But I'm asking you, as an officer of the court of appearing, help me with that.

[00:32:03] Speaker 02:
And our argument is that you have bilateral modifications between the same two parties containing the exact same release language.

[00:32:16] Speaker 02:
So unless there's some information that Meridian could point to,

[00:32:20] Speaker 02:
to show that the analysis would somehow be different with respect to the flood events than it would with respect to the sewer line.

[00:32:28] Speaker 02:
Without that, we have every reason to believe that the analysis was the same, because the release language that reflected the meeting of the minds is identical.

[00:32:38] Speaker 05:
Thank you.

[00:32:40] Speaker 02:
Is my time up?

[00:32:41] Speaker 02:
It's long enough.

[00:32:44] Speaker 02:
Well, respectfully, we request that the court affirm the judgment below with the correction regarding interest.

[00:33:00] Speaker 00:
I just wanted to first, I guess, clear up going back to what we had talked about while I was up here for my opening statements.

[00:33:07] Speaker 00:
If you look at the case law that is summarized on page 34 to 35 of the opinion, the Court of Federal Claims opinion itself, and then the arguments on page 28 through 31 of our opening brief, I think you'll find a lot more information regarding whether or not the contractors are required to go and do any sort of site investigation.

[00:33:28] Speaker 00:
With regard to the accord and satisfaction issues that my opposing counsel just touched upon, I think the Court has hit the nail right on the head.

[00:33:36] Speaker 00:
No analysis of the meeting of the minds or any other element with regard to the meridians count for flood events with regard to the meeting of the minds analysis if the underlying facts are the same with respect to count for account five Is it is it should we impute?

[00:33:53] Speaker 03:
the satisfaction and accord test from count five to count four and

[00:33:57] Speaker 00:
I don't believe so, no, Your Honor.

[00:33:59] Speaker 05:
I think the case law is clear that if the conclusions are sparse or conclusory... Well, if the conclusions are looking at the same release language and the same conduct afterwards and saying with respect to one count, this is not sufficient to displace the accord and satisfaction conclusion, why not?

[00:34:18] Speaker 05:
What's different?

[00:34:19] Speaker 05:
What factual difference?

[00:34:21] Speaker 00:
I understand what you're saying.

[00:34:22] Speaker 00:
I think the key is that the court still did not go through the analysis, and it would be unfair.

[00:34:28] Speaker 04:
No, no.

[00:34:28] Speaker 04:
You understand what I'm saying, then answer it.

[00:34:31] Speaker 04:
What factual difference?

[00:34:33] Speaker 00:
I'm sorry, Your Honor.

[00:34:34] Speaker 00:
There were no factual differences.

[00:34:35] Speaker 00:
And I think in either case, then, it's nonetheless both accord and satisfaction defenses are barred by community heeding.

[00:34:42] Speaker 00:
The court's interpretation focused on the negotiations.

[00:34:44] Speaker 04:
So if we disagree with you on one, we disagree with you on the other.

[00:34:50] Speaker 00:
Perhaps with regard to the language in the modification, yes.

[00:34:53] Speaker 00:
But I think even in that case, then you have to take community heating into account.

[00:34:57] Speaker 00:
And that bars any account of court and satisfaction defense.

[00:35:02] Speaker 05:
Thank you.

[00:35:03] Speaker 05:
We thank both sides for the pieces submitted.

[00:35:06] Speaker 04:
I just want to add to what Ed Raina said.

[00:35:09] Speaker 04:
When I was a little boy in the mountains in southern Arizona, when I crossed the dry wash, we didn't have stop, walk, don't walk signs.

[00:35:20] Speaker 04:
My parents would say, look up on the mountain and see if there's a cloud because you know there's a flash flood coming.