Richfield Oil Corporation v. United States

• Decision Date: 21 August 1957
• Docket Number: No. 15296.,15296.
• Citation: 248 F.2d 217
• Parties: RICHFIELD OIL CORPORATION, a corporation, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

248 F.2d 217 (1957)

RICHFIELD OIL CORPORATION, a corporation, Appellant, v. UNITED STATES of America, Appellee.

No. 15296.

United States Court of Appeals Ninth Circuit.

August 21, 1957.

COPYRIGHT MATERIAL OMITTED

David Guntert, Los Angeles, Cal., for appellant.

George Cochran Doub, Asst. Atty. Gen., Leavenworth Colby, Keith R. Ferguson, Sp. Assts. Atty. Gen., Graydon S. Staring and George Jaffin, San Francisco, Cal., Laughlin E. Waters, U. S. Atty., Los Angeles, Cal., for appellee.

Before STEPHENS, Chief Judge, and HEALY and POPE, Circuit Judges.

POPE, Circuit Judge.

Appellant filed its amended libel in the court below seeking recovery from the United States under the provisions of the Suits in Admiralty Act (46 U.S.C.A. § 741 et seq.), of a sum alleged to have been improperly exacted from the appellant and unjustly received by the United States.

The early history of the controversy between Richfield and the United States, and the circumstances out of which this suit arose, is related at some length in the earlier case of Richfield Oil Corp. v. United States, 9 Cir., 207 F.2d 864. This court affirmed the decision of the district court dismissing that former action, in part upon the ground that it was prematurely brought.

A familiarity with the facts of that case will be assumed and they will not be restated here. However, following this former decision, the parties continued negotiations for a settlement of the controversy between them. In dispute was the amount properly due Richfield under the terms of time charters of seven steamships owned by Richfield and hired by the United States during the Second World War. This depended upon which party was required to pay the cost of extra compensation and overtime owing to crew members.

On January 28, 1954, Richfield, through its general counsel, suggested to the Maritime Administration that it have its auditors compute what would be the amount of the additional charges payable by Richfield if these were calculated on the basis of Richfield paying 50% of the disputed overtime. The letter stated that upon receipt of these computations, "We will check them and in all probability make payment under protest as a preliminary step to suing for recovery; unless some satisfactory compromise settlement based upon such revised billing can be worked out."

On May 10, 1954, the district counsel for the Maritime Administration forwarded to Richfield a summary sheet showing the figures computed on the suggested 50-50 split of crew overtime, and stated that the Administration was offering to make settlement of similar disputes which it had with other companies on the basis of the assumption by the Administration of 55% thereof and the owner assuming 45% Settlement on that basis with Richfield was proposed. Richfield in response protested that it should not be asked to make settlement on the same basis as that chosen for adjustment with other vessel owners since Richfield, alone of all such owners, had had its time charter business with the Government renegotiated. It asked a better offer.

Then followed the final exchange of letters between the parties. On July 25, 1955, the Assistant General Counsel for the Maritime Administration wrote to Richfield advising that its counter offer could not be accepted and concluded as follows: "In view of the foregoing, we cannot make a departure in respect to your company from the common terms of settlement offered to and accepted by the other West Coast oil companies against whom the Administration has similar claims for manning watch overtime. Accordingly, unless we receive word from your company within 30 days that you are prepared to accept settlement of the manning watch overtime on the 55-45 formula agreed to by the other West Coast oil companies and to accept the other WSA charter claims of the Administration in the above mentioned total sum of $34,158.02, the Administration will have no other recourse except to institute suit or effect set-off against sums due your company from the Government, as may be appropriate."

On August 26, 1955, Richfield replied enclosing its check in the amount of $34,158.02. The introductory paragraphs of the letter were as follows: "Gentlemen: Attached hereto please find Richfield Oil Corporation check No. 37498 in the amount of $34,158.02, representing payment under protest of various items totalling $33,658.02 set forth in the attached statement prepared by your District Comptroller's Office at San Francisco, together with $500.00 claimed to be additional crew's overtime shown on records heretofore destroyed. This payment is protested on the following grounds: * * *." The letter then went on to state that the whole controversy had been previously adjusted by renegotiation which constituted an accord and satisfaction of the accounts; that it, Richfield, owed nothing to the Maritime Administration; and that under the terms of the charter the Maritime Administration was chargeable with all of the accrued overtime. This suit, to recover the amount thus paid, followed.

The amended libel sets out in general terms the history of Richfield's time charter arrangements with the United States. It alleges the proceedings renegotiating the contracts between the parties relating to these charters; the provisions of the charters relating to the extra wages and overtime; the claim made by the United States of an overpayment to Richfield in the neighborhood of $75,000, (the amount referred to in the previous litigation); the exchange of letters between the parties setting out as exhibits the last two letters above described, and makes the following allegations respecting libelant's payment of $34,158.02:

"That being convinced that respondent would summarily seize funds of libelant in the hands of other departments and agencies of respondent and/or summarily offset its claims against debts owing libelant; being informed and believing that such action by respondent would put libelant at great financial and legal disadvantage and would tarnish libelant\'s otherwise clean record as a supplier of petroleum products, the maintenance of which record was important to libelant; and acting under the compulsion of respondent\'s coercion, duress and threats, libelant, for the purpose of preventing such seizure of its property, did pay all of respondent\'s claims aggregating $34,158.02 under protest, as evidenced by letter dated August 26, 1955, and attachment, being pages 1, 2 and 5, respectively, of exhibit `K\' hereof.

* * * * * *

"That such claims collected under duress by the respondent as aforesaid had the effect of annulling, modifying and setting aside the Renegotiation Contracts and of redetermining downward the amount of profits which had been allowed libelant, contrary to the provisions of the Renegotiation Contracts.

* * * * * *

"That had such alleged indebtedness been timely asserted and paid prior to the renegotiation, the amount of alleged excessive profits eliminated thereby would have been reduced by exactly the same amount of said claim, and it follows, therefore, that the respondent had already received the amounts claimed, and the said $34,158.02 collected under duress by respondent has the effect of increasing the amount of alleged excessive profits eliminated notwithstanding that said Renegotiation Contracts provided that said contracts shall be `a final and conclusive determination of the excessive profits.\'

* * * * * *

"That as a direct and proximate result of the demands and duress of respondent herein and said payment under protest required thereby, respondent has been unjustly enriched under said charter parties in the amount of $34,158.02 and libelant has been damaged in the same amount."

The Government filed exceptions and exceptive allegations to this amended libel. With respect to the libel, the exceptions recited that it "shows upon its face that the said demand upon libelant by respondent in the reduced amount of $34,158.02 was based upon a compromise settlement formula referred to in the said letter as `the 55-45 formula.'" The respondent set forth further portions of the correspondence above referred to other than the last two letters which had been attached as exhibits to the amended libel, and alleged that this additional correspondence and the exhibits set forth "show that respondent's said demand upon libelant in the reduced amount of $34,158.02 was a compromise settlement resulting from a course of negotiation between the parties." These allegations then concluded: "Libelant, in Articles XIX and XXIV of its amended libel together with Exhibit `K' attached thereto alleges that it paid respondent $34,158.02, the amount of respondent's reduced demand in compromise settlement, in such circumstances that such payment constituted a voluntary payment by libelant to respondent which cannot be recovered by libelant."

Richfield then filed its "Answer to Respondent's Exceptions and Exceptive Allegations to the Amended Libel". This answer set out additional portions of the correspondence had between the parties during the period of the negotiations previously referred to, and after referring to the Assistant General Counsel's letter of July 25, 1955, stated:

"* * * Shortly before expiration of the thirty day period set forth in said letter from Mr. Pimper, counsel for libelant telephoned Mr. Pimper and advised that if respondent would recede from its position stated by the District Counsel, that payment under protest would not be accepted, libelant would pay the claim under protest to prevent the threatened offset and would institute suit to recover. This Mr. Pimper agreed to do, whereupon, reserving the right to sue for recovery, libelant made the payment under protest to prevent seizure of its property.

"5. Promptly thereafter and on November 30, 1955, libelant instituted suit herein to recover the payment pursuant to the reservation of right to do so as aforesaid and upon the grounds

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