[00:00:00] Speaker 00:
We're here today on the construction of the settlement agreement contract with the Shah versus United States.

[00:00:22] Speaker 01:
A Neil Diamond song said, except for the names and a few other changes, the story's the same one.

[00:00:27] Speaker 01:
That happens to be the case with the Shaw case and the Massey case.

[00:00:31] Speaker 01:
In Massey, I will refer to Massey 1, the interpretation of the contract of Massey 2, which was the follow-up appeal dealing in principle with the payment of damages that arose from that.

[00:00:45] Speaker 01:
I also have just one small correction that I noted in reading.

[00:00:49] Speaker 01:
In my statutes, I cited 32 CFR 536.63.

[00:00:54] Speaker 01:
Excuse me, .53.

[00:00:55] Speaker 01:
It's technically .63.

[00:00:58] Speaker 01:
That's my error.

[00:01:01] Speaker 00:
Well, this is different from Massey, right?

[00:01:06] Speaker 00:
There were guarantees in Massey.

[00:01:11] Speaker 00:
And here, the guarantees were only for 20 years, which have expired.

[00:01:17] Speaker 01:
There were guarantees in both.

[00:01:19] Speaker 01:
There was a guarantee for 40 years in Massey as well to part of it.

[00:01:24] Speaker 01:
But part of it was a guarantee that would be paid later on on some of the lump sums.

[00:01:29] Speaker 01:
The fact is the use of the term guarantee is in both of them as opposed to the nut case.

[00:01:35] Speaker 01:
And I will say that it's not true.

[00:01:40] Speaker 03:
No, it's not true.

[00:01:41] Speaker 03:
It is true.

[00:01:42] Speaker 03:
in the Massey case that the word guarantee is used with respect to some of the payments, but that it is not true that the word guarantee is used with respect to other payments.

[00:01:55] Speaker 01:
OK.

[00:01:55] Speaker 01:
My argument on the guarantee theory is I think we're getting lost in the idea of guarantee anyway in these cases and analysis.

[00:02:04] Speaker 01:
It's not the standard third party guarantee where you're not a party to enact and you agree somebody to guarantee somebody else's performance.

[00:02:12] Speaker 01:
Guarantee was referred to when you deal with insurance, or particularly with annuities as we do in structured settlements, that the guarantee is for a specified period of time, meaning nothing more than should the child, such as the Massey child, or in my case, the Shaw child, die before that prescriptive period has expired, those payments will continue, and then they won't be guaranteed after that point in time.

[00:02:38] Speaker 01:
But you know, that's really no different.

[00:02:40] Speaker 03:
There's other language in here which cuts against you.

[00:02:44] Speaker 03:
If you look at page 47 of the appendix, in paragraph 6, it says, the annuities purchased by the United States shall make the following payments.

[00:02:55] Speaker 03:
It doesn't say that the United States will make the payments.

[00:02:58] Speaker 03:
It says that the annuities will make the payments.

[00:03:01] Speaker 03:
And then in Massey, there is language

[00:03:05] Speaker 03:
in a couple of places that talks about distribution being made on behalf of the United States, which suggests, perhaps, that the United States remain liable if the payments weren't made, and that on behalf of language does not appear here in the agreement.

[00:03:26] Speaker 01:
I would argue that the on-behalf language, which is in Massey in one part,

[00:03:31] Speaker 01:
but in most of the parts where they refer to the shall or the will do things are referring to the annuity.

[00:03:37] Speaker 01:
But really all of these are guarantees in the sense that if you're paying something for life, first of all it's on behalf of the government in any situation because they're the only party to the lawsuit that we sued.

[00:03:53] Speaker 01:
The insurance company, the annuity company is not.

[00:03:56] Speaker 01:
And secondly, you would say that if

[00:04:00] Speaker 01:
It shall pay you for your life.

[00:04:03] Speaker 01:
That's really a guarantee, too, if you really think of it.

[00:04:07] Speaker 01:
You're guaranteeing that you're going to receive those payments until you die, and then they'll stop.

[00:04:10] Speaker 01:
That's really no different than a guarantee for 20 years as a prescriptive period that it will continue.

[00:04:16] Speaker 01:
This guarantee is these payments will continue for that life period, and then it will cease just as the 20 year.

[00:04:22] Speaker 00:
The question is, who's liable?

[00:04:25] Speaker 01:
It definitely boils down to that.

[00:04:26] Speaker 01:
And I would say when you look at all of the similarity in the language

[00:04:30] Speaker 01:
in Massey, a settlement agreement, and in Shaw, that I think you have to come to a conclusion that they are very close and very similar, though there is a little bit of difference in language.

[00:04:41] Speaker 03:
And in fact, as I barked... To please address for me why the difference in language that I've pointed out to you.

[00:04:48] Speaker 03:
isn't significant.

[00:04:49] Speaker 03:
That here we have the statement, the annuities purchased by the United States shall make the following payments.

[00:04:55] Speaker 03:
Not the United States, but the annuity shall make the payments.

[00:04:59] Speaker 03:
And whereas in Massey, the language is that these payments will be made on behalf of the United States.

[00:05:06] Speaker 01:
Massey refers to that in place, but Massey also talks about, I believe language in Massey also is that the annuities will make certain payments as well, not just

[00:05:16] Speaker 01:
the government or on behalf of the government.

[00:05:18] Speaker 01:
I think that is referenced in one place, but I believe under background in Massey 1, it's talking about the agreement states that the annuity will result in distributions on behalf of the United States.

[00:05:40] Speaker 01:
That's talking about the annuity.

[00:05:43] Speaker 01:
And the monthly payment shall be paid

[00:05:45] Speaker 01:
Guaranteed.

[00:05:52] Speaker 01:
So everything is on behalf of the government, be it in Massey because it's said on behalf of the government, but also in our case because they are the only defendant.

[00:06:02] Speaker 01:
And that is my answer, I think, to your question, that everything is on behalf of the United States.

[00:06:08] Speaker 01:
And I would say that when you talk about the government trying to

[00:06:15] Speaker 01:
Bootstrap their argument that all they agreed to do was to buy an annuity.

[00:06:20] Speaker 01:
That's the argument they've been making that Massey really contradicted and just refused to buy because even our language is The government will purchase annuity, but it's qualified the government will purchase an annuity that will do some things not just the government will Purchase an annuity that might pay your clients some money down the road that may or may not continue to do it

[00:06:44] Speaker 02:
or that the government will just pay you an annuity, buy you an annuity, period, with no... If the government wanted to limit its liability to purchasing an annuity that would make certain payments, what language would it use?

[00:07:01] Speaker 01:
The government could have said, number one, that it is not responsible for the failure of the annuity company.

[00:07:07] Speaker 02:
Well, so that's a different question, though.

[00:07:10] Speaker 02:
That's whether you have to put in

[00:07:12] Speaker 02:
a specific waiver of liability or things like that.

[00:07:15] Speaker 02:
Affirmatively, if all the government wants us to agree to is, we will purchase an annuity for you that will make these payments over a certain schedule, how would it do that without making itself liable for guaranteeing the payments?

[00:07:33] Speaker 02:
I think if it's your view, the only way is to put in a specific non-liability clause?

[00:07:37] Speaker 01:
Yes, I think so.

[00:07:38] Speaker 01:
And the government Why?

[00:07:39] Speaker 02:
Because why isn't language that says,

[00:07:42] Speaker 02:
The government agrees to purchase an annuity just that.

[00:07:46] Speaker 02:
That's their agreement.

[00:07:47] Speaker 02:
Their agreement is not to guarantee that annuity.

[00:07:50] Speaker 02:
Why shouldn't the argument actually be that in order to have a guarantee, you have to point to specific language showing that the government guarantees the annuity?

[00:08:00] Speaker 01:
I would agree that you do have to if you are talking about guarantee.

[00:08:04] Speaker 01:
Massey is talking about a primary liability, not a guarantee situation, as I indicated.

[00:08:10] Speaker 01:
The language used in Massey, as in ours, creates in the government a primary liability as the only defendant for ensuring that those payments are made.

[00:08:22] Speaker 02:
And Massey, too... Can we just stop talking about Massey?

[00:08:27] Speaker 02:
I'm hypothetically trying to ask, how would the government, if they just want to agree, the bargain is, you come in, you sue them, they say, to resolve this, we're going to purchase you an annuity that makes these payments.

[00:08:40] Speaker 02:
That's all we agree to do is to purchase the annuity.

[00:08:43] Speaker 02:
How would that be written?

[00:08:46] Speaker 02:
Wouldn't it just say the government agrees to purchase an annuity?

[00:08:50] Speaker 01:
No, I think under the circumstances, if they said we agree to a purchase an annuity that will perform or that will do certain things, I think they're bound by that.

[00:08:58] Speaker 01:
They could say we'll do that, but they could go further.

[00:09:01] Speaker 02:
They did purchase an annuity that was supposed to do that.

[00:09:03] Speaker 02:
What happened is it failed.

[00:09:06] Speaker 02:
And so now you're coming back to them and say,

[00:09:08] Speaker 02:
you implicitly have to, because of that language, have to serve as a backup and make those payments.

[00:09:14] Speaker 01:
Because the agreement said that those payments shall be made, not that they might be made.

[00:09:19] Speaker 01:
That the annuity shall make the payments.

[00:09:21] Speaker 02:
Not that the government shall make the payments, that the annuity shall make the payments.

[00:09:24] Speaker 02:
No, but that's what the government is... You're reading in an implicit requirement that the government is guaranteeing those payments.

[00:09:30] Speaker 02:
As much as you want to run away from the notion that you're requiring a guarantee, that's exactly what you're trying to do.

[00:09:39] Speaker 02:
They bought an annuity that, when it was bought, was required to make these payments.

[00:09:45] Speaker 02:
There's no question, right, that they funded it properly.

[00:09:48] Speaker 02:
You agree that they fulfilled all the bargain on that point.

[00:09:53] Speaker 02:
So in order to do something, you have to either find that the government implicitly agreed that it would cause those payments to be made

[00:10:04] Speaker 02:
in the event the annuity failed or that it somehow guaranteed it.

[00:10:09] Speaker 02:
In Massey, we found based upon specific language on behalf of the United States that there was such a requirement.

[00:10:16] Speaker 02:
You don't have that language here, do you?

[00:10:18] Speaker 02:
You're now asking us to infer something that we found plain in Massey.

[00:10:25] Speaker 01:
Well, I beg to differ that we are not because I think that everything

[00:10:31] Speaker 01:
that occurs in this is on behalf of the government, whether it says that or not.

[00:10:36] Speaker 01:
You can ask counsel, but I know in the case argued a couple weeks ago in Hendrickson before this Court, Judge O'Malley asked counsel about, gee, how do we resolve this?

[00:10:46] Speaker 01:
Because there are four other cases coming up through the system.

[00:10:48] Speaker 00:
Why don't we stick to this case?

[00:10:50] Speaker 01:
Okay.

[00:10:51] Speaker 01:
But the point is the government could have put language in there that says,

[00:10:56] Speaker 01:
If there's a failure, we are not going to be responsible for it.

[00:10:59] Speaker 01:
We are just buying it.

[00:11:00] Speaker 02:
You could have put in language that said, if there is a failure, the government is responsible for it.

[00:11:05] Speaker 01:
Well, you know.

[00:11:07] Speaker 02:
I mean, it sounds like you're asking us to infer something one way.

[00:11:12] Speaker 02:
The government wants us to infer something the other way.

[00:11:15] Speaker 02:
All we can do is look at the plain language.

[00:11:17] Speaker 02:
And it doesn't speak to this either way.

[00:11:19] Speaker 01:
Well, there are some things about plain language.

[00:11:21] Speaker 01:
The contract law is we're looking at what would an intelligently reasonable person do

[00:11:26] Speaker 01:
under the prevailing circumstances at the time.

[00:11:29] Speaker 01:
And at the time of the settlement, you've got a young couple with a profoundly disabled infant that's going to need care for the rest of its life.

[00:11:38] Speaker 01:
And something that's not in our case that was in Massey was Massey at least said, you shall have a AAA rated annuity contract.

[00:11:49] Speaker 01:
Ours is totally silent as to anything, and the inference being,

[00:11:53] Speaker 00:
from that is that if we care... Were they represented by counsel?

[00:11:57] Speaker 01:
They were.

[00:11:59] Speaker 01:
But the inference being that if they thought that the government wasn't ultimately responsible should something happen to these, they would have required, like in maybe Massey and you'll see in some of these other cases, that there is requirements that they have a high quality rated bond annuity.

[00:12:15] Speaker 01:
And the government has argued in all of these cases, not always successfully, that gee,

[00:12:22] Speaker 01:
If we really thought we were going to be responsible for this, we'd just go out and buy the cheapest bond, save some money, or cheapest annuity that we can.

[00:12:31] Speaker 01:
But because there's AAA language or the quality to be purchased, that that should be evidence that we're not responsible.

[00:12:37] Speaker 01:
And that's been the government's argument on all of these cases.

[00:12:39] Speaker 00:
Counsel, you wanted to say five minutes?

[00:12:41] Speaker 00:
I do, yes.

[00:12:42] Speaker 00:
Halfway through, so we'll save it for you.

[00:12:44] Speaker 01:
Thank you.

[00:12:44] Speaker 01:
I will.

[00:12:46] Speaker 00:
Ms.

[00:12:46] Speaker 00:
Finner.

[00:12:56] Speaker 04:
On behalf of the United States, we request that this court affirm the trial court's judgment.

[00:13:01] Speaker 04:
The trial court correctly affirm.

[00:13:02] Speaker 03:
The judgment may have been right, but the reasoning is problematic, I think.

[00:13:07] Speaker 03:
And because it relies so heavily on the word guarantee, first of all, I don't read Massey as relying on the word guarantee.

[00:13:17] Speaker 03:
And indeed, the word guarantee is absent with respect to some of the payments.

[00:13:24] Speaker 03:
I think the guarantee language on the face of it is clearly not talking about a guarantee by the United States.

[00:13:30] Speaker 03:
It's talking about a guarantee that these payments will continue for a period of years, even if the individual dies.

[00:13:38] Speaker 03:
So I'm not very satisfied with the reasoning of the Court of Federal Plaintiffs, but at the same time, it does seem to me, as we were discussing with the President of the Council, that there was language

[00:13:52] Speaker 03:
that is different between the two in the sense that the Massey language talks about being made on behalf of the United States, whereas here it talks about the annuities making the payments.

[00:14:04] Speaker 03:
Is that part of the government's argument?

[00:14:07] Speaker 04:
Yes.

[00:14:07] Speaker 04:
So from the government's perspective, there are a number of ways to distinguish Massey.

[00:14:12] Speaker 04:
principle among them is the fact that the Massey agreement contained the provision that the annuity would make payments, quote, on behalf of the United States.

[00:14:20] Speaker 04:
And that phrase, on behalf of the United States, appears twice in the Massey agreement.

[00:14:24] Speaker 04:
It does not appear anywhere in, didn't appear in the Nutt agreement that was up before this circuit, didn't appear in the Hendrickson agreement that was here last month, and it doesn't appear in this agreement, the Shaw agreement either.

[00:14:34] Speaker 04:
So just on the plain language alone, we have that critical phrase that's missing in this agreement.

[00:14:39] Speaker 04:
But in addition, what the,

[00:14:42] Speaker 04:
There are other ways to distinguish Massey as well.

[00:14:44] Speaker 03:
I mean, Massey.

[00:14:45] Speaker 03:
Do you believe that the guarantee language isn't helpful?

[00:14:48] Speaker 04:
That it's not helpful?

[00:14:50] Speaker 04:
Yeah.

[00:14:50] Speaker 04:
Of course it's not helpful.

[00:14:51] Speaker 04:
But it's also irrelevant to this litigation, because to the extent the Shaw agreement did use the word guarantee twice, it did so in paragraphs 6a and 6b, a guarantee for 20 years to Mr. Shaw and a guarantee for 20 years to Mrs. Shaw, that 20 years had come and gone long before a suit was filed in this case.

[00:15:11] Speaker 04:
The shortfalls that the Shaw's are now seeking for a breach of the settlement agreement are pursuant to the other paragraphs of the settlement agreement in which there is no use of the word guarantee.

[00:15:23] Speaker 03:
Massey was- The word guarantee doesn't mean guaranteed by the United States in Massey or here either.

[00:15:32] Speaker 03:
It means guaranteed that if the person dies, the payments will continue.

[00:15:37] Speaker 04:
Yes.

[00:15:38] Speaker 04:
And in this case, the Shaw agreement is also very specific in that the prefatory phrase in paragraph 6, before we get to the mentions of guarantee, provides, the annuities purchased by the United States shall make the following payments.

[00:15:52] Speaker 04:
There is no reference to the United States making payments.

[00:15:55] Speaker 04:
In stark contrast, where it was the United States obligation to pay, as in paragraph 5,

[00:16:01] Speaker 04:
that provision is very cleanly stated.

[00:16:03] Speaker 04:
So paragraph five provides the defendant, United States of America, will make the following payments.

[00:16:09] Speaker 04:
That's an active verb.

[00:16:11] Speaker 04:
It's a clear requirement of the United States.

[00:16:13] Speaker 04:
Following that opening phrase, we have the disbursement of $4.8 million, some in cash at settlement to the parties and their attorneys, and some to purchase the annuities.

[00:16:24] Speaker 04:
That's a very clear provision.

[00:16:25] Speaker 04:
The United States will make

[00:16:27] Speaker 04:
the following payments equal to $4.8 million, which coincidentally is also the limits of the AUSA's actual authority to have settled in 1985.

[00:16:36] Speaker 04:
Then comparing that paragraph 5 to paragraph 6, we have in contrast the annuities purchased by the United States shall make the following payments.

[00:16:44] Speaker 04:
And those are those future payments pursuant to the annuity.

[00:16:48] Speaker 04:
We also have to read paragraphs 4 and 5, 4, 5, and 6 in the context of the agreement as a whole.

[00:16:53] Speaker 04:
So if we move forward then to paragraph 7, we have

[00:16:57] Speaker 04:
In exchange for payment of the sum set forth in paragraph five, that's the 4.8 million disbursed at settlement, not future annuity payments, but the 4.8 disbursed at settlement, and contemporaneous with the delivery of the checks for that 4.8 million, plaintiffs shall file with the clerk of the court a dismissal of this action with prejudice and with costs.

[00:17:15] Speaker 04:
Further down in the paragraphs, it then provides explicitly, this compromised settlement is contingent on a total final cost of $4.8 million.

[00:17:24] Speaker 04:
which again, coincidentally, is the same as the AUSA's actual authority to have settled in 1985.

[00:17:31] Speaker 04:
The United States has to admit that there's no basis.

[00:17:34] Speaker 02:
I get you all want to make this authority argument, but if we had the Massey language, would that authority argument overcome it if this clause actually said the annuity shall pay out these sums on behalf of the United States, which is what we found

[00:17:53] Speaker 02:
compelling in Massey, does the fact that the authority was only purported to be a certain amount limited us in any way from finding the United States was still obligated under the terms of the agreement to do that?

[00:18:09] Speaker 04:
We would submit that it would.

[00:18:10] Speaker 04:
The problem with making that comparison in this case, however, is that back in Massey in 1999, Massey was a dispute over the breach of a settlement agreement of a military claims act.

[00:18:22] Speaker 04:
claim, not a Federal Court Claims Act claim.

[00:18:26] Speaker 04:
So the individual with authority to settle in Massey was the military branch secretary.

[00:18:33] Speaker 04:
What authority he did and didn't have at that time is not anywhere in the record.

[00:18:37] Speaker 04:
All this court's Massey decision says is that authority was not at issue.

[00:18:42] Speaker 03:
So we don't know it.

[00:18:42] Speaker 03:
Would you essentially reject this argument and not?

[00:18:47] Speaker 04:
Reject which argument and not?

[00:18:49] Speaker 03:
The argument about lack of authority and, you know,

[00:18:53] Speaker 03:
Which strikes me as a very problematic argument.

[00:18:57] Speaker 03:
Didn't we reject that in Nutt?

[00:18:59] Speaker 04:
No, I don't believe so.

[00:19:00] Speaker 04:
Respectfully, Your Honor.

[00:19:02] Speaker 03:
How is the argument different from the one we rejected in part one of Nutt?

[00:19:06] Speaker 04:
Understood.

[00:19:07] Speaker 04:
So in Nutt, our primary defense to liability in all of these cases was the scope of the waiver of sovereign immunity under the Federal Tort Claims Act.

[00:19:17] Speaker 04:
And we argued that the Federal Tort Claims Act did not, as a statute,

[00:19:21] Speaker 04:
permit the United States government to enter into obligations for the future contingent payment of damages.

[00:19:29] Speaker 04:
That argument, which we put forth before this circuit, was rejected by the circuit and is now the law of the circuit.

[00:19:35] Speaker 04:
In not, this court held that the Federal Tort Claims Act does not prohibit the United States government from entering into settlement agreements that would involve the future disbursement of damages.

[00:19:50] Speaker 04:
But the fact that this court found that as a general matter, the Federal Tort Claims Act does not prohibit that kind of arrangement says nothing about whether or not in any one individual case, the parties involved, or the government representatives specifically, had the actual authority to do that.

[00:20:08] Speaker 04:
That's a separate question.

[00:20:09] Speaker 04:
It's a subsidiary question that the NUT Court never had to reach because it rejected our sovereign immunity argument and the rule of the claim language.

[00:20:19] Speaker 04:
Yes, not held, but the Federal Trade Claims Act does not prohibit the United States government from entering into settlement agreements that involve the future disbursement of damages.

[00:20:28] Speaker 02:
So the settlement official here, presumably, was it the deputy?

[00:20:32] Speaker 02:
Or is it the associate?

[00:20:33] Speaker 02:
Whoever would have had unlimited authority could have signed an agreement that said, we'll pay you $4.8 million.

[00:20:40] Speaker 02:
And under the terms of the settlement agreement, we'll guarantee that these annuity payments covered by the settlement agreements will be paid.

[00:20:48] Speaker 04:
Under the, if we look solely at, I want to be careful with my response here, if we look solely at the Federal Tort Claims Act, and this court's interpretation of the Federal Tort Claims Act, yes, theoretically, the Deputy Attorney General or the Attorney General, who were the only individuals at that point in time who had settlement authority above 750,000, could have

[00:21:09] Speaker 04:
authorized something different than they did, right?

[00:21:12] Speaker 04:
In this instance, they authorized a settlement.

[00:21:14] Speaker 02:
We have the cover page that says they authorized 4.8 or whatever it is.

[00:21:19] Speaker 02:
We don't know what the actual memo says, because it's all a delivery process, I assume, but whether it talks about the terms of the settlement agreement and the like, and about whether this annuity would be guaranteed.

[00:21:32] Speaker 04:
Well, we don't know that, but it's also

[00:21:35] Speaker 04:
The memo that would have underlied that authority is simply a recommendation to the deputy attorney general or the attorney general.

[00:21:43] Speaker 04:
Once the attorney general or the deputy attorney general, what they are authorizing is what they have signed.

[00:21:47] Speaker 02:
But if the Litigating Division sends up a memo and say they send up a draft settlement agreement, which I understand is sometimes now the practice, and that draft settlement agreement had included a provision like Massey on behalf of the United States.

[00:22:05] Speaker 02:
and the Attorney General had signed the cover page setting forth the amount, but didn't say one way or another about the specific terms.

[00:22:17] Speaker 02:
What would we do then?

[00:22:21] Speaker 02:
Because it's my understanding, those cover pages never really specifically go through the specific terms of the settlement agreement.

[00:22:27] Speaker 02:
They're usually talking about the numbers, right?

[00:22:29] Speaker 04:
That's correct.

[00:22:29] Speaker 04:
But a guarantee has a number attached to it.

[00:22:32] Speaker 04:
It's a financial obligation.

[00:22:34] Speaker 04:
It's not a timing obligation or something that's more qualitative.

[00:22:38] Speaker 04:
A financial guarantee is a financial guarantee.

[00:22:41] Speaker 04:
There needs to be authority to do that.

[00:22:43] Speaker 02:
I, as a trial attorney, cannot- So you think that cover page would have to say that settlement is authorized to purchase an annuity in the amount of X dollars that will guarantee payments of this amount, or that will make payments?

[00:22:57] Speaker 02:
That it would actually have to put that it will make those payments in the authority memo?

[00:23:03] Speaker 04:
Yes.

[00:23:04] Speaker 04:
But I would also submit that it needs then a third phrase, because we also have to read the Federal Tort Claims Act and Settlement Authority in the context of other laws.

[00:23:13] Speaker 04:
So then we have the Anti-Deficiency Act and other requirements that have to be read together.

[00:23:18] Speaker 04:
And the Anti-Deficiency Act precludes the United States government from entering into agreements for open-ended future contingent liability.

[00:23:26] Speaker 04:
If in this hypothetical that you're discussing, we have a deputy attorney general, the attorney general say, I authorize settlement for $4.8 million.

[00:23:33] Speaker 04:
I also authorize that we will guarantee.

[00:23:35] Speaker 02:
But it's not really contingent if we know what the schedule of payments is going to be.

[00:23:39] Speaker 04:
Well, it depends on which schedule we're talking about.

[00:23:41] Speaker 04:
So in Massey, Massey recognized a guarantee.

[00:23:44] Speaker 04:
But the guarantees in Massey were finite amounts.

[00:23:47] Speaker 04:
There was a guarantee for 15 years which one could put a schedule together and say, you know, the starting dollar amount plus the

[00:23:56] Speaker 04:
cost of living increase or whatever is the interest rate for 15 years.

[00:23:58] Speaker 04:
And we have a sum certain of the maximum guarantee obligation for that, right?

[00:24:04] Speaker 04:
We can run that math out.

[00:24:05] Speaker 04:
Then we had also in Massey deferred lump sick payments, three or four on the 22nd anniversary, 25th anniversary, 27th anniversary, in sum certain.

[00:24:15] Speaker 04:
So we could put those numbers together, add them all together, and know that if they're- Excuse me, what's the difference between Massey and this case in that respect?

[00:24:23] Speaker 04:
Well, in this case,

[00:24:25] Speaker 04:
What the Shaws are seeking is for the United States government to have an open-ended continuing guarantee obligation for payments that, yes, we can run out how much.

[00:24:36] Speaker 03:
For the life of a person, which was the same thing as in Massey.

[00:24:39] Speaker 04:
Except that we don't know how long a person will live.

[00:24:41] Speaker 03:
Well, we didn't know that in Massey either.

[00:24:43] Speaker 04:
Except that in Massey, the guarantee was limited to the guarantee provisions were for some certain.

[00:24:52] Speaker 03:
No, there were specific amounts per month for the remainder of her life, for example.

[00:25:10] Speaker 04:
If I were to go to Massey, what we've been calling Massey 1, which is 166 F3D at 1186 to 1180.

[00:25:18] Speaker 03:
I'm looking at the card of

[00:25:19] Speaker 03:
federal claims opinion in Massey at page 155, where it sets forth the actual agreement.

[00:25:26] Speaker 03:
And the actual agreement requires payments for life, just as this one does.

[00:25:34] Speaker 04:
But the use of the words guaranteed are very specific, right?

[00:25:38] Speaker 04:
So in looking at 155 Fed claims, or sorry, 40 Fed claims at 155, we have

[00:25:46] Speaker 04:
paragraph of that Massey Settlement Agreement, C subparagraph I, providing for the funding of an annuity.

[00:25:54] Speaker 04:
And then midway down the paragraph, it says the monthly payments provided for under this paragraph are guaranteed for 15 years.

[00:26:00] Speaker 04:
So there's a cap there, right?

[00:26:02] Speaker 03:
The guarantee has a cap.

[00:26:03] Speaker 03:
No, it's not a cap.

[00:26:03] Speaker 03:
It's a floor.

[00:26:06] Speaker 03:
It says they should be paid for the remainder of her life, and it's guaranteed for 15 years.

[00:26:12] Speaker 04:
I apologize, Your Honor, I think we're talking about two different issues.

[00:26:15] Speaker 04:
So I was talking about the, you're right, that it provides for guarantee payments for life, but the guarantee provision is for 15 years, which is capped.

[00:26:24] Speaker 03:
The guarantee provision is irrelevant.

[00:26:26] Speaker 03:
That's not what Massey relied on.

[00:26:28] Speaker 03:
You said earlier you agree it's irrelevant.

[00:26:30] Speaker 03:
The guarantee provision is just saying the minimum payments under here will be for 15 years.

[00:26:37] Speaker 03:
It's not saying anything about the United States responsibility, right?

[00:26:41] Speaker 04:
for a future?

[00:26:42] Speaker 04:
No, there is no.

[00:26:42] Speaker 03:
No, the guarantee provision is irrelevant.

[00:26:45] Speaker 03:
That's not the relevant language of the Massey agreement.

[00:26:49] Speaker 04:
We're going back now to the other principal difference between the cases, which was that.

[00:26:52] Speaker 03:
No, but I mean, you're trying to distinguish between Massey and this case in terms of the contingency.

[00:26:58] Speaker 03:
And it seems to me that the contingency is exactly the same.

[00:27:02] Speaker 00:
Is the Settlement Agreement ambiguous?

[00:27:09] Speaker 04:
No, it is not.

[00:27:10] Speaker 04:
We have argued before the trial court, and here, that the agreement is not ambiguous.

[00:27:15] Speaker 04:
It's plain and unambiguous in its face, and that it provides, consistent with not this court's plainly interpretation of not, that the United States is required to dispense cash at settlement and to purchase annuities at settlement, but not to make or guarantee those future annuity payments.

[00:27:34] Speaker 04:
I actually believe that the Shaw agreement is stronger than the Nutt agreement, and that we have, in paragraph seven,

[00:27:40] Speaker 04:
a very explicit phrase that this compromise settlement is contingent on a total final cost of $4.8 million, which is about as plain and unambiguous on its face as the government could have hoped for in that regard.

[00:27:53] Speaker 04:
If the panel has no further questions.

[00:27:55] Speaker 00:
Thank you, Counselor.

[00:27:56] Speaker 00:
Mr. Gronowski has a little time left, two and a half minutes.

[00:28:05] Speaker 01:
Just quickly, regard to the settlement is contingent upon

[00:28:09] Speaker 01:
There's evidence in the record that you'll see that shows that the purpose for the contingency was, and the final amount not to exceed, was because there would be a lap between the settlement agreement and the purchase of the annuity.

[00:28:24] Speaker 01:
And annuity prices fluctuate literally on a daily basis.

[00:28:27] Speaker 01:
And it was to allow the government an escape if they had gotten a quote, obviously, for this annuity.

[00:28:35] Speaker 00:
How much was actually paid under this agreement?

[00:28:39] Speaker 01:
at the time of the settlement?

[00:28:42] Speaker 00:
No.

[00:28:43] Speaker 01:
Over the years?

[00:28:44] Speaker 01:
Over the years.

[00:28:45] Speaker 01:
A lot of money.

[00:28:46] Speaker 00:
More than 4.8?

[00:28:48] Speaker 01:
Oh, definitely.

[00:28:50] Speaker 01:
Definitely.

[00:28:50] Speaker 01:
And in fact, if Scotty Shaw were to die today, there's about $4.8 million in the medical trust fund that has not been utilized.

[00:29:02] Speaker 01:
And that would revert to the government.

[00:29:04] Speaker 01:
So if Scotty were to die today, the government would have never paid anything.

[00:29:09] Speaker 00:
Who's Scotty?

[00:29:10] Speaker 01:
Scotty is the young child who's now 39 years of age on July the 4th of this year, who is profoundly disabled, Richard Scott Shaw.

[00:29:18] Speaker 01:
I'm sorry.

[00:29:19] Speaker 01:
I've lived this case since I tried it with my partner.

[00:29:22] Speaker 01:
So I've lived it since he was born.

[00:29:25] Speaker 01:
But we call him Scotty.

[00:29:27] Speaker 01:
So that was just a contingency to do that.

[00:29:31] Speaker 01:
And the court is right.

[00:29:33] Speaker 01:
Massey did not rely on the guarantee language at all.

[00:29:36] Speaker 01:
The plaintiffs had argued that and the court mentioned that in its decision, but the court also hung its hat, even though the language about on behalf of is in there.

[00:29:45] Speaker 01:
They say the language specifying that the annuity quote will result in distributions quote and that the disbursements quote shall be paid quote is unambiguously mandatory.

[00:29:55] Speaker 01:
It doesn't, they don't couch the fact that it was the language on behalf of.

[00:30:00] Speaker 01:
And then I would also say if there's any question about Massey one, Massey two,

[00:30:05] Speaker 01:
reiterated exactly what Massey once said, and I think it's very pertinent and will be my close.

[00:30:10] Speaker 01:
They said that the purpose of the original settlement agreement was to guarantee the payment of a specified amount of money to provide for Autumn Massey.

[00:30:18] Speaker 01:
It was not reasonable for the government to argue, as it did, that its obligations ended with the purchase of an annuity from a private entity.

[00:30:26] Speaker 01:
While the trial court thought the agreement could be interpreted in several ways,

[00:30:29] Speaker 01:
The law of this case is that the terms of the settlement imposed an unambiguously mandatory duty on the government.

[00:30:36] Speaker 01:
To argue to the contrary was not reasonable.

[00:30:39] Speaker 01:
When the result would be to deprive the injured child of the benefits the government agreed she needed and for which it was responsible.

[00:30:47] Speaker 01:
And I think when we look at that and you look at the policies that are illuminated that we have brought out, that the government is there

[00:30:55] Speaker 01:
And the purpose of these structured settlements, they are encouraged, and they are to ensure, they use the word ensure, that the payments that are necessary for the care of this child will be made.

[00:31:06] Speaker 03:
Before you sit down, just one question.

[00:31:08] Speaker 03:
I think you mentioned that there were four cases.

[00:31:11] Speaker 03:
How many cases have not been resolved?

[00:31:13] Speaker 03:
There was Hendricks.

[00:31:14] Speaker 03:
I have that, yes.

[00:31:14] Speaker 03:
Which was argued last month.

[00:31:16] Speaker 01:
There is Stathis, a case called Stathis versus US.

[00:31:24] Speaker 01:
Where is that?

[00:31:25] Speaker 01:
That's 14.

[00:31:26] Speaker 01:
That's it.

[00:31:28] Speaker 01:
These are all the Court of Claims level.

[00:31:31] Speaker 01:
Not resolved by the Court of Claims.

[00:31:33] Speaker 01:
Court of Claims.

[00:31:34] Speaker 01:
Let's see.

[00:31:35] Speaker 04:
I can answer.

[00:31:37] Speaker 01:
Yeah, some have been, some have some decisions, but some are still in the trial process.

[00:31:43] Speaker 01:
But there's Stathis, Lanclos, Lencamp, and Fell.

[00:31:47] Speaker 01:
Councilor Kiddy.

[00:31:49] Speaker 04:
Yes, Stathis, Lencamp, and Fell are all still pending with various judges of the courtroom.

[00:31:55] Speaker 01:
And Hendrix was argued here.

[00:31:57] Speaker 01:
Hendrix was argued here a while back.

[00:32:01] Speaker 01:
And Langkloos, there was a decision by the court in Langkloos.

[00:32:06] Speaker 01:
Our court?

[00:32:07] Speaker 01:
Court of Claims.

[00:32:08] Speaker 01:
No.

[00:32:09] Speaker 01:
Yes.

[00:32:10] Speaker 00:
Thank you, counsel.

[00:32:11] Speaker 00:
We'll take the case on the phone.

[00:32:12] Speaker 01:
Thank you all very much.