Trauma Service Group v. U.S.

• Decision Date: 16 January 1997
• Docket Number: No. 95-5129,95-5129
• Citation: 104 F.3d 1321
• Parties: TRAUMA SERVICE GROUP, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1321

104 F.3d 1321

TRAUMA SERVICE GROUP, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 95-5129.

United States Court of Appeals Federal Circuit.

Jan. 16, 1997.

Ruth E. Ganister, Rosenthal & Ganister, West Chester, PA, argued, for plaintiff-appellant. Of counsel was Glenn L. Blackwell.

Sharon Y. Eubanks, Deputy Director, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, argued, for defendant-appellee. On the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Jeanne A. Davidson, Assistant Director, and Mary L. Smith, Attorney. Of counsel was R. Alan Miller, Attorney.

Before ARCHER, Chief Judge, MICHEL, and RADER, Circuit Judges.

RADER, Circuit Judge.

Trauma Service Group (TSG) appeals the United States Court of Federal Claims' decision to dismiss its complaint without prejudice. Trauma Service Group, Ltd. v. United States, 33 Fed.Cl. 426 (1995). Defendant, the United States, moved to dismiss plaintiff's complaint for lack of subject matter jurisdiction, RCFC 12(b)(1), for failure to state a claim, RCFC 12(b)(4), or, in the alternative, for summary judgment. Because the trial court properly granted the motion to dismiss under RCFC 12(b)(4), this court affirms.

BACKGROUND

The Dependents' Medical Care Act, now codified as 10 U.S.C. §§ 1071-1106 (1994), grants health care benefits to certain dependents of members of the uniformed services and to certain retired members of these services. The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), a field agency of the Department of Defense, administers this program. See 10 U.S.C. § 1072(4).

To facilitate "delivery of health care [under the 1956 Act] ... in a more effective, efficient, or economical manner," 10 U.S.C. § 1096(a) (1994), military treatment facility (MTF) commanders may enter into partnership agreements between MTFs and civilian health care providers. These partnership agreements provide the use of Government facilities to civilian medical specialists. This arrangement saves the Government the expense of reimbursement for treatment in expensive civilian medical facilities. This additional expense would otherwise be billed to CHAMPUS. See 32 C.F.R. § 199.1(p)(1)(ii) (1996).

In April 1990, TSG submitted a proposal to participate in the Military-Civilian Health Services Partnership Program at Winn Army Community Hospital (WACH), Fort Stewart, Georgia. On August 20, 1990, TSG and WACH entered into a Memorandum of Agreement (MOA) for the sharing of medical resources. The stated purpose for this MOA was "to integrate specific WACH and CHAMPUS program resources to provide Primary Care/Pediatrics services for CHAMPUS beneficiaries."

The MOA established general relations and procedures between TSG and WACH in Section B. The Commander of WACH agreed to provide facilities for the proper care of patients and to encourage CHAMPUS beneficiaries to use TSG's services rather than other CHAMPUS providers' services. TSG agreed to abide by hospital, Department of Defense, and Military Department regulations; to use available Army resources; and to adhere to CHAMPUS Health Care Provider Agreement requirements. In section C, entitled "Other Considerations," the MOA provided:

6. The participating health care entity shall provide the following to support this effort:

(a) Two physicians, one RN, one LPN, one appointment clerk/receptionist, one billing clerk, Xerox machine, and office supplies during duty hours.

(b) Three physicians, one each RN, LPN, nursing assistant, appointment clerk/receptionist, billing clerk, pharmacy technician, lab technician, x-ray technician, a Xerox machine, and office supplies during off duty times, weekends and holidays.

This MOA lasted until September 30, 1992. On June 30, 1992, TSG and WACH entered into a new Memorandum of Understanding (MOU) to extend TSG's services through September 30, 1994. ¹ However, on December 8, 1993, Dr. Joseph Nowaslawski, President of TSG, sent a letter to Joseph Windham, Chief of Coordinated Care at WACH, specifying that TSG would terminate all services on March 8, 1994. TSG stopped providing services under the MOA on the date specified. On March 10, 1994, Dr. Nowaslawski sent a letter to Colonel Daniel Perugini, Commanding Officer of WACH. Dr. Nowaslawski sought reimbursement for the salary of an x-ray technician, Diana P. Willoughby, for the years 1990 through 1993 in the amount of $95,816.71.

TSG alleges that the Government, in contravention of the MOA, demanded that TSG provide an x-ray technician solely for support of Government in-patient services. TSG further alleges that the Government threatened to terminate the MOA if TSG did not comply. TSG thus provided an x-ray technician in support of non-CHAMPUS in-patient services. TSG seeks reimbursement for the Government's use of the x-ray technician.

DISCUSSION

The Court of Federal Claims based its decision to dismiss the complaint on both lack of subject matter jurisdiction, under RCFC 12(b)(1), and on failure to state a claim, under RCFC 12(b)(4). To affirm the trial court, this court need only find sufficient justification for one of these grounds. See Fromson v. Advance Offset Plate, Inc., 755 F.2d 1549, 1556 (Fed.Cir.1985) ("[T]his court reviews judgments, not opinions."). Because the trial court's dismissal for lack of subject matter jurisdiction and for failure to state a claim are both questions of law, this court reviews this matter without deference. Wheeler v. United States, 11 F.3d 156, 158 (Fed.Cir.1993) (citing Dehne v. United States, 970 F.2d 890, 892 (Fed.Cir.1992)).

Dismissal for Lack of Subject Matter Jurisdiction

The Tucker Act supplies the Court of Federal Claims with jurisdiction for claims against the United States founded upon the Constitution, an Act of Congress, a regulation of an executive department, or an express or implied contract. 28 U.S.C. § 1491(a)(1) (1994); Gould v. United States, 67 F.3d 925, 928 (Fed.Cir.1995). The party invoking jurisdiction has the burden to show compliance with the Tucker Act. See Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed.Cir.1988). TSG bases its allegations solely on a contract theory. Jurisdiction based on contract "extends only to contracts either express or implied in fact, and not to claims on contracts implied in law." Hercules, Inc. v. United States, --- U.S. ----, ----, 116 S.Ct. 981, 985, 134 L.Ed.2d 47 (1996).

To show jurisdiction in the Court of Federal Claims, TSG must show that either an express or implied-in-fact contract underlies its claim. A well-pleaded allegation in the complaint is sufficient to overcome challenges to jurisdiction. Spruill v. Merit Sys. Protection Bd., 978 F.2d 679, 686 (Fed.Cir.1992). TSG's complaint alleges that an express and, in the alternative, an implied-in-fact contract underlies its claim. This allegation suffices to confer subject matter jurisdiction in the Court of Federal Claims. See Gould, 67 F.3d at 929; see also Do-Well Mach. Shop, Inc. v. United States, 870 F.2d 637, 639-40 (Fed.Cir.1989) ("Jurisdiction, therefore, is not defeated ... by the possibility that the averments might fail to state a cause of action on which petitioners could actually recover.") (quoting Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946)). This court next turns to dismissal for failure to state a claim upon which relief can be granted.

Dismissal for Failure to State a Claim

In evaluating a RCFC 12(b)(4) motion, this court construes unchallenged allegations in the complaint in favor of the pleader. Hamlet v. United States, 873 F.2d 1414, 1416 (Fed.Cir.1989). Further, a court may not dismiss unless the plaintiff can prove no set of facts which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Hamlet, 873 F.2d at 1416. To state a claim upon which relief can be granted, TSG must allege either an express or an implied-in-fact contract, and the breach of that contract. TSG does not show either.

In the absence of factual disputes, the question of contract formation is a question of law, reviewable de novo. See Mahboob v. Department of Navy, 928 F.2d 1126, 1128 (Fed.Cir.1991); Ransom v. United States, 900 F.2d 242, 244 (Fed.Cir.1990). The question of whether a contract creates a duty is also a question of law. San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 957, 959-60 (Fed.Cir.1989).

The general requirements for a binding contract with the United States are identical for both express and implied contracts. See, e.g., Russell Corp. v. United States, 210 Ct.Cl. 596, 537 F.2d 474, 482 (1976); Thermalon Indus. v. United States, 34 Fed.Cl. 411, 414 (1995). The party alleging a contract must show a mutual intent to contract including an offer, an acceptance, and consideration. City of El Centro v. United States, 922 F.2d 816, 820 (Fed.Cir.1990); see also Thermalon, 34 Fed.Cl. at 414; Fincke v. United States, 230 Ct.Cl. 233, 675 F.2d 289, 295 (1982). A contract with the United States also requires that the Government representative who entered or ratified the agreement had actual authority to bind the United States. City of El Centro, 922 F.2d at 820. Anyone entering into an agreement with the Government takes the risk of accurately ascertaining the authority of the agents who purport to act for the Government, and this risk remains with the contractor even when the Government agents themselves may have been unaware of the limitations on their authority. Id.; Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1947).

First, TSG contends that the MOA is an express contract obligating the payment of the X-ray technician's salary. To prevail, TSG must allege facts showing both the formation of an express contract and its breach. Turning first to the second inquiry, a breach of contract is a failure to perform...