JJ Henry Co. v. United States

• Decision Date: 20 June 1969
• Docket Number: No. 116-64.,116-64.
• Citation: 411 F.2d 1246
• Parties: J. J. HENRY CO., Inc. v. The UNITED STATES.
• Court: U.S. Claims Court

411 F.2d 1246 (1969)

J. J. HENRY CO., Inc. v. The UNITED STATES.

No. 116-64.

United States Court of Claims.

June 20, 1969.

Michael Lesch, New York City, for plaintiff. Jesse Climenko, New York City, attorney of record.

Russell W. Koskinen, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

OPINION^*

LARAMORE, Judge.

Plaintiff, a New York corporation engaged in naval architecture and engineering, was a subcontractor to Gibbs Corporation of Florida which had a prime contract with defendant, acting through the Department of the Navy. The prime contract called for construction by Gibbs of an oceanographic research vessel known as the AGOR-3. Plaintiff's contract with Gibbs was to perform certain design work and to prepare certain plans and drawings which have given rise to this suit.

This case has been before the court on two prior occasions. Plaintiff's original petition, filed April 30, 1964, asserted a cause of action for $101,313.28 as the value of its lien rights in the AGOR-3 (pursuant to Fla.Stats.Ann. §§ 85.01 and 85.11) acquired when the prime contractor failed to pay. Plaintiff alleged that defendant destroyed these lien rights when title in the AGOR-3 vested in it.

Defendant filed its motion for summary judgment on August 14, 1964, and as an exhibit thereto submitted the prime contract (and modifications thereto) between defendant and the Gibbs Corporation. One of these modifications revealed to plaintiff (for the first time) that defendant still retained a fund of $100,000 under the prime contract. In addition, plaintiff learned that defendant had used its AGOR-3 plans in the construction of subsequent AGOR vessels. (Plaintiff claims to have retained the right to be compensated for the use of such plans in future vessels in its agreement with Gibbs Corporation.)

Plaintiff opposed defendant's motion and cross-moved asking for leave to amend its petition by adding two causes of action based on the above newly revealed facts. On December 14, 1964, the court granted plaintiff's cross-motion and denied defendant's motion without prejudice to renewal after plaintiff amended its petition.

Plaintiff filed its amended petition and alleged as a second cause of action that it was sole owner of the plans, designs and drawings furnished Gibbs Corporation and that therefore it should have been compensated for any use of these plans on projects other than the AGOR-3. Defendant, without plaintiff's consent, had made these plans available to other builders and thereby, plaintiff argued, it had appropriated said plans by a "taking" in violation of the Fifth Amendment.

For its third cause of action, plaintiff alleged that Gibbs Corporation had assigned the AGOR-3 contract to Gibbs Shipyards, Inc. as part of a purchase agreement and that Shipyards, Inc. was substituted for Gibbs Corporation as prime contractor. By agreement, Gibbs Shipyards, Inc. assumed all obligations and liabilities of Gibbs Corporation, Inc. and agreed to act as if it were the original party.

At the time of the filing of the petition, defendant possessed a fund of $100,000 owed to the prime contractor (Aerojet General Shipyards, Inc., the successor to Gibbs Shipyards, Inc.) which defendant had not then paid, and plaintiff alleged that it was entitled to this fund. Subsequent to the filing of the petition, defendant paid Aerojet the $100,000 subject to an indemnity agreement whereby Aerojet agreed to reimburse defendant to the extent of plaintiff's recovery, if any.

Defendant filed a second motion for summary judgment and on March 25, 1966 the court, by order, partially allowed defendant's motion by dismissing plaintiff's first cause of action, denying the motion as to the second and third causes without prejudice, and remanding the case to the commissioner for trial on the two remaining causes of action.¹ Plaintiff's cross-motion was denied without prejudice and the case has been tried. We agree with the trial commissioner's conclusion that plaintiff cannot recover on either cause of action.

Second Cause of Action

The general provisions of the contract between Gibbs Corporation and the Department of the Navy, provided in part:

ARTICLE 11. PLANS AND OTHER DATA — * * *

(c) If the Department shall so require, the Contractor will, at the cost of reproduction, furnish to other contractors constructing similar types of vessels copies of working and finished plans (including reproducibles), booklets, material schedules, purchase specifications, lists and other data relating to the construction of the vessel.

* * * * * *

(e) The furnishing or delivery of any of the copies of plans, booklets, material schedules, material orders, lists or other data required by the provisions of this Article shall not, either expressly or impliedly, constitute (i) any guaranty or warranty by the Contractor other than that they are correct copies of such data or (ii) any license for the use of any patented article or invention shown or listed. The Government shall have the right to use such data for the construction of other vessels or for any other purpose.

The subcontract between Gibbs and plaintiff did not expressly incorporate any of the terms of the main contract, which in fact was not seen by plaintiff prior to commencement of this suit. The plaintiff's contract was actually only a purchase order issued by Gibbs on July 28, 1960, which read:

Drawings necessary for construction of AGOR-3 vessel. Price $6.75 per hour plus 2,000 per month for minimum period twelve months. Terms — work to be billed per month or oftener if required.

It is clear that nothing in the purchase order indicates any restriction on use of the drawings ordered. Plaintiff now says that negotiations with Gibbs leading up to the purchase order supplement it and show that plaintiff never consented to use of its plans for construction of any vessels other than AGOR-3. Some color is given to this assertion by the testimony of one of Gibbs' officials, David Jackson, who testified that prior to issuance of the purchase order he understood that, in view of conversations had with plaintiff's officials during negotiations, plaintiff would receive additional compensation for other use of its plans. Plaintiff had originally made a bid which Gibbs rejected because it was considered too high. The ultimate arrangement was for plaintiff to do less than the whole design and engineering job, Gibbs assuming a considerable part of it. The trouble with this understanding is at least six-fold. (1) It is uncorroborated by Mr. Gibbs, president of Gibbs Corporation, who signed the purchase order and participated in the negotiations leading thereto. (2) No such understanding is reflected by the terms of the purchase order or by any contemporaneous papers. (3) There is nothing on the drawings furnished by plaintiff which indicates any restriction on their use and plaintiff asserted no such restriction during the life of the contract or procurement of similar vessels. (4) Plaintiff admittedly prepared the plans in accordance with the specifications of the prime contract which came into existence before plaintiff's contract with Gibbs was completed and before the plans and drawings were made. This contract provided, in part:

All plans, including tracings, vandykes, and blueprints, specified to be furnished by the contractor to the Bureau or its representatives, shall become the property of the Government.

(5) Mr. Jackson had no authority to modify this contract between his employer and the defendant and could not remember telling the Navy that he did so. (6) In any contract, prior negotiations are merged into it and the writing will be considered complete on its face, absent ambiguity.

Plaintiff's president testified that his understanding of the custom of the trade at the time of the purchase order in 1960 was that title to plans and drawings for commercial vessels remained in the architect. He admitted no acquaintance with respect to the trade practice on government contract work in 1960 but confessed knowledge of development of a definite trend in government contracts to vest title in the United States.

Plaintiff prepared 35 plans for Gibbs and billed the latter $113,111.98. Plaintiff was paid only $11,643.27, leaving $101,468.71 due and owing.

On August 31, 1960, defendant issued invitations for bids for construction of additional vessels of the AGOR class. Bidders were advised that if successful they could get copies of the AGOR-3 drawings at their own expense from Gibbs Corporation. Contracts were let for six additional vessels, the AGOR-4, -5, -6, -7, -9 and -10. The successful bidders for these vessels did obtain copies of some of the AGOR-3 plans and drawings from Gibbs Corporation at the cost of their reproduction. Many of these plans and drawings were used. It is plaintiff's evidence that, considering the value thereof, as represented by reduced billing costs to defendant, since the plans used did not again have to be paid for at their original cost, defendant saved $144,104.67² This is the sum plaintiff now claims, in requested findings under its second cause of action, as the reasonable value of the plans and drawings allegedly taken by defendant for public use without payment of just compensation, in violation of the Fifth Amendment to the Constitution. We find, however, that a taking has not occurred.

The cases have evolved certain standards to identify takings compensable under the Fifth Amendment. Generally, there must be an intent to take or such definite invasion of private property as to imply it. See, B. Amusement Co. v. United States, 180 F.Supp. 386, 389, 148 Ct.Cl. 337, 341 (1960); Biggs Rental Co. v. United States, 353 F.2d 1013, 173 Ct.Cl. 789 (1965), cert. denied, 384 U.S. 927, 86 S.Ct. 1443, 16 L.Ed.2d 531 (1966); Eyherabide v. United States, 345...