United States v. Ameco Electronic Corporation

• Decision Date: 31 December 1963
• Docket Number: No. 61-C-604.,61-C-604.
• Citation: 224 F. Supp. 783
• Parties: UNITED STATES of America, Plaintiff, v. AMECO ELECTRONIC CORPORATION, Doscher's Moving and Storage Company, Inc. and Premier Welding Company, Inc., Defendants.
• Court: U.S. District Court — Eastern District of New York

224 F. Supp. 783

UNITED STATES of America, Plaintiff, v. AMECO ELECTRONIC CORPORATION, Doscher's Moving and Storage Company, Inc. and Premier Welding Company, Inc., Defendants.

No. 61-C-604.

United States District Court E. D. New York.

December 31, 1963.

Joseph P. Hoey, U. S. Atty., Eastern District of New York, Donald N. Ruby, Asst. U. S. Atty., of counsel, for plaintiff.

Goldfeld, Charak & Goldman, New York City, George Charak, New York City, of counsel, for defendant Premier Welding Co., Inc.

BARTELS, District Judge.

This is an action of replevin by the United States of America (Government) against the defendant Premier Welding Company, Inc. (Premier), to recover certain chattels which plaintiff alleges were wrongfully detained by Premier, the other defendants being no longer involved. The pertinent facts are admitted.

On June 30, 1959, the Government and Ameco Electronic Corporation (Ameco) entered into a contract whereby Ameco agreed to furnish and deliver to the Government 525 Frequency Meters AN/URM-80 for the sum of $504,803.98. The contract provided that certain progress payments were to be made by the Government in an amount equal to 100 per cent of the total costs incurred by Ameco and that when a progress payment was made under the contract, title to all parts, materials, inventories, etc. theretofore acquired or produced or thereafter acquired or produced by Ameco and allocated or properly chargeable to the contract should forthwith vest in the Government upon said acquisition, production or allocation. On October 28, 1959, the first progress payment was made by the Government to Ameco in the sum of $15,997.82. Numerous other progress payments were made by the Government to Ameco and the parts and materials described in Schedule C of the complaint as amended by Item K of the Pre-Trial Order were acquired by Ameco for use in the performance of said contract and were allocated or properly chargeable to said contract. These parts and materials were fabricated by Ameco and were then sent by Ameco to Premier sometime in 1960 to have certain spot welding work performed upon them, and Premier accordingly performed such spot welding work upon the chattels referred to in Schedule C of the complaint between July 8, 1960 and October 28, 1960.

On May 24, 1961, the Government notified Ameco that the contract was terminated and duly demanded of Ameco that it give the Government possession of all parts, materials, inventories, etc. allocated or properly chargeable to said contract. Accordingly, on June 6, 1961, the Government demanded that Premier surrender possession to it of all parts and materials set forth in Schedule C of the complaint. Premier having refused to surrender possession, the chattels were replevied and delivered to the Government.

In its answer Premier, among its denials, asserts six counterclaims for damages ranging from $651 to $4,986.93, based primarily upon the value of services performed upon the replevied chattels. Various theories are asserted in support of these counterclaims, chief among which are (1) deprivation of mechanic's lien upon the chattels, (2) unjust enrichment, (3) laches and estoppel, (4) confirmation of the contract between Premier and Ameco, and (5) the Government's promise to pay for services performed.

The Government claims title to the property and moves to dismiss the counterclaims (pursuant to Rule 12(b) (1) (2) and (6), Fed.Rules Civ.Proc., 28 U.S.C.A.) on the ground that this Court lacks jurisdiction to entertain the same. Premier contends that the waiver of sovereign immunity contained in the Tucker Act, 28 U.S.C.A. § 1346(a), extends to counterclaims as well as original suits. The Act provides, in effect, that the district court shall have original jurisdiction of civil actions against the United States not in excess of $10,000, founded upon any express or implied contract. Subdivision (c) of Section 1346 provides that the jurisdiction conferred "includes jurisdiction of any set-off, counterclaim, or other claim or demand whatever on the part of the United States against any plaintiff commencing an action under this section". This section is limited to set-offs and counterclaims on the part of the Government. There is no reciprocal provision authorizing set-offs and counterclaims against the Government in actions in which the Government is the plaintiff. The courts in other circuits have held that this omission is immaterial and that Congress by the Tucker Act has waived the Government's sovereign immunity to the extent of an affirmative recovery up to $10,000, and that for this purpose there is no distinction between a counterclaim and an original suit. United States v. Springfield, 5 Cir., 1960, 276 F.2d 798; United States v. Silverton, 1 Cir., 1952, 200 F. 2d 824; United States v. Buffalo Coal Mining Co., D.C.Alaska, 1959, 170 F. Supp. 727; see National City Bank of New York v. Republic of China, 1955, 348 U.S. 356, 359, 75 S.Ct. 423, 99 L.Ed. 389. In this circuit, however, the rule is firmly established that under the Tucker Act no affirmative recovery may be had by means of a counterclaim against the Government, and that the only relief against the Government by means of a counterclaim is in the nature of recoupment or set-off. United States v. Nipissing Mines Co., 2 Cir., 1913, 206 F. 431; United States v. Carey Terminal Corp., E.D.N.Y., 1962, 209 F.Supp. 385; United States v. Frank, S.D.N.Y., 1962, 207 F.Supp. 216; United States v. Anasae International Corp., S.D.N.Y., 1961, 197 F.Supp. 926; United States v. Double Bend Mfg. Co., S.D.N.Y., 1953, 114 F.Supp. 750, 751; United States v. Wissahickon Tool Works, Inc., S.D.N.Y., 1949, 84 F.Supp. 896, affirmed, 2 Cir., 1952, 200 F.2d 936; see also United States v. United States Fidelity & Guaranty Co., 1940, 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894; United States v. Shaw, 1940, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888; United States v. Joseph Behr & Sons, Inc., N.D.Ill., 1953, 110 F. Supp. 286.

Defendant suggests that the time has come to depart from this rule, asserting that the result is not required by the wording of the Tucker Act as demonstrated by the reasons given in support of the decisions in the other circuits. Considering the modern trend and attitude away from the...