Mendez v. United States
| Decision Date | 29 May 2015 |
| Docket Number | No. 14-497C,14-497C |
| Parties | JOSE MENDEZ, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Confidential Informant; Compensation, Restitution, or Reward; Judicial Forfeitures; Breach of Express or Implied-In-Fact Contract; Express or Implied Actual Authority; Subject-Matter Jurisdiction; Statute of Limitations; RCFC 12(b)(1); RCFC 12(d) Conversion of RCFC 12(b)(6) Motion to RCFC 56 Motion
Kenneth Foard McCallion, New York, N.Y., for plaintiff.
Alexander Orlando Canizares, Trial Attorney, with whom were Joyce R. Branda, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Bryant G. Snee, Deputy Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., for defendant.
Plaintiff Jose Mendez (Mendez) was a confidential informant whose assistance and cooperation, over roughly nine years, contributed to the government's successful criminal prosecution of numerous mafia principals and subsequent forfeiture of their significant assets. See generally Compl., Jun. 10, 2014, ECF No. 1. Mendez alleges that, despite his contributions, the government later reneged on its promises to pay Mendez for his services as an informant, which was in breach of their alleged agreement and of the implied duty of good faith and fair dealing. Id. ¶¶ 29-37 (Counts II and III).
Before the court is defendant's motion to dismiss plaintiff's breach claims for lack of jurisdiction or alternatively, for failure to state a claim under Rules 12(b)(1) and 12(b)(6) of the Rules of the Court of Federal Claims (RCFC or Rule), respectively. Def.'s Mot. Dismiss (Def.'s Mot.), ECF No. 12. Defendant argues there were never any promises or agreements to pay Mendez for his confidential informant services and the evidence on which Mendez relies to substantiate his claims actually refutes them. Id. at3. Alternatively, even if government officials made promises or purported to enter agreements with Mendez, defendant contends that the government cannot be liable because the officials either lacked actual authority to bind the government or were divested of such authority by intervening statutes. Id. at 3, 22-23. Furthermore, plaintiff's claims allegedly accrued, if at all, beyond the statute of limitations. Id. at 3. The court held oral argument on defendant's motion on April 8, 2015. See Tr., Apr. 8, 2015, ECF No. 24.
From December 1995 through April 1997, plaintiff Jose Mendez managed a casino in Peru pursuant to a professional services contract with casino principals Jose Miguel Battle Sr. (Battle) and others. See Compl. ¶ 4; id. at Ex. B (Mendez Aff., Mar. 28, 2007, ¶ 1). In May 1997, Mendez sued his employers in Florida Circuit Court for nonpayment of back wages, expenses, and commissions ($794,712), but the case was dismissed for improper venue owing to a contract clause requiring suit in Peru. See Compl. ¶¶ 4, 6; Mendez Aff. ¶ 7.
In preparing Mendez's employment case, his attorney John Spittler (Attorney Spittler) concluded, "Battle and his associates were using the Casino to facilitate a huge racketeering and money laundering operation, which involved the 'laundering' of illegally obtained funds originating in the United States." Compl. ¶ 5; see also Mendez Aff. ¶ 3 (). Attorney Spittler then communicated with representatives of the United States government who expressed interest in seeing "all of the original accounting, financial and international banking records of the Casino and its owners that were in the possession of Mendez." Compl. ¶ 7; Mendez Aff. ¶ 13. Apparently the government was already investigating Battle as the "undisputed leader of La Corporacion, the largest Cuban organized crime syndicate in the United States [that for decades] had profited from illegal gambling, narcotics distribution[,] and extortion, enforcing its objectives through contract murder." See Compl. at Ex. J (O'Bannon Mem., Apr. 6, 2005, at 1); see also id. ¶ 25 (); Tr. 12:8-16 (similar).
By "late April of 1998," Mendez began acting as an "agent/informant in the investigation and prosecution of members of the . . . cartel headed by Battle." Compl. ¶ 8. Mendez contends that he provided the government with significantly helpful information: (i) "original books and records of the Casino, all original bank financial documents, and other relevant files;" (ii) "the names, addresses, and telephone numbersof the individuals working with Battle in his racketeering enterprise . . ., e.g., attorneys, accountants, bankers, businessmen, couriers, etc., many of whom were later named in the indictment;" (iii) "evidence relating to the participation of Battle and his 'partners' in the racketeering enterprise;" (iv) "detailed information concerning the properties and bank accounts of these individuals;" and (v) "the identification of corroborating witnesses." Id. ¶¶ 14-15; see generally id. at Ex. D (Spittler Narrative, Jun. 8, 2005, at 3); O'Bannon Mem. 2; Mendez Aff. ¶ 9; Tr. 28:8-16. Mendez avers that, at the government's request, he worked with government accountants to unpack the illegal financial activities of Battle and his associates. Mendez Aff. ¶ 20. Mendez also purports to have "provided all, or virtually all, of the information" used by the government to identify and tally an estimated $1.57 billion in assets held by Battle and his associates that were later subject to criminal forfeiture by the government. Compl. ¶ 17; Spittler Narrative 3; see infra Part I.D (discussing United States v. Battle, No. 04-20159 (S.D. Fla.)).
In order to provide this wealth of information and services, Mendez and Attorney Spittler allegedly met with various government officials on numerous occasions over the course of approximately nine years, from 1998 to 2007. See Mendez Aff. ¶¶ 10-11; Tr. 28:21-24. Mendez's primary point-of-contact appears to have been Agent Dave Shanks. See Compl. ¶ 15; Mendez Aff. ¶ 10. Among others in contact with Mendez and Attorney Spittler were Supervisory Special Agent (SSA) Robert O'Bannon of the Diplomatic Security Service (DSS) at the State Department who led the Battle investigative team, and who was succeeded later by Special Agent in Charge (SAC) Mike Foster. Id. ¶¶ 18-19. Assistant U.S. Attorney (AUSA) Robert Lehner was the initial lead prosecutor in Battle, and was succeeded later by AUSA Tony Gonzalez. Compl. ¶ 19. AUSA Alison Lehr of the Miami Civil Forfeiture Division also became involved in Battle as the criminal forfeitures took center stage later in proceedings. Id. ¶ 21.
Mendez testified in June 2002 before a grand jury in Miami regarding Battle, his associates, and their activities. Mendez Aff. ¶ 12. Mendez further contends that, throughout these nine years, his life and the lives of his family members remained under physical threat from Battle and his associates. See Tr. 28:21-24.
In dispute is whether Mendez and government officials ever entered an agreement to compensate Mendez for his assistance as a confidential informant (CI). Mendez avers that, on his behalf, Attorney Spittler met with AUSA Lehner in early 1998 at the Miami office of the United States Attorney. Compl. ¶ 9. Also in attendance were representatives of "other relevant agencies." Tr. 32:6; O'Bannon Mem. 1. At the meeting, Mendez alleges that the parties verbally agreed that "[i]n consideration for Mendez's cooperation, services and assistance, . . . Mendez would be paid, as compensation and/or restitution, the outstanding salary and commissions owed him as general manager of the Casino, namely $791,712, plus accrued interest, reasonable fees and costs." Compl. ¶¶ 8-9; cf. O'Bannon Mem. 1 (). Ostensibly, Mendez would be paid out of assets seized by the government in the course of its criminal prosecution of Battle and his associates for racketeering and money laundering. See Compl. ¶ 19; see O'Bannon Mem. 1.
The terms of this verbal agreement allegedly were "memorializ[ed]" in a letter from Attorney Spittler to AUSA Lehner dated March 18, 1998. Compl. ¶ 9. Attorney Spittler wrote, in relevant part:
Id. at Ex. A (Spittler Letter, Mar. 18, 1998). The letter further provided, "in consideration for the above," Mendez would provide documentation, testify before a grand jury, and comply with other requests. Id. Attorney Spittler asked AUSA Lehner to call him "regarding drafting of the appropriate agreement(s) and scheduling Mr. Mendez for debriefing." Id. at 2.
According to Mendez, the government refused this invitation to reduce the verbal agreement to a formal writing signed by the parties. See Compl. ¶ 11. Mendez avers, "[...
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