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UNITED STATES v. DADE BROS. CO.

March 9, 1960

UNITED STATES of America, Plaintiff,
v.
DADE BROS. CO., Inc., Defendant



The opinion of the court was delivered by: BYERS

The plaintiff seeks summary judgment under Rule 56, 28 U.S.C.A. because of asserted lack of genuine issue as to any material fact.

The complaint, filed March 27, 1957, seeks judgment under the False Claims statute, 31 U.S.C.A. § 231 et seq., because of an alleged illegal charge for idle time of cranes operated and controlled by defendant, in connection with a certain contract known as purchase order N.Y. 184, during the last four months of the year 1951.

 That order had to do with a contract between the Government and a group known as Atlas Constructors, concerning operations conducted at Claremont, N.J. during the calendar year 1951. The details thereof are of no importance in this motion.

 The defendant, Dade Bros. Inc., was a subcontractor which was paid on a cost plus basis. It rendered invoices to Atlas, which when approved by it, were paid through the Engineering Department of the U.S.A.

 A supplemental agreement was entered into between the contractor and subcontractor on October 20, 1954, entitled Change No. 22, which is before the court, the material provisions of which disclose that the subcontractor had charged $ 8,627,012.17 (presumably through December 31, 1951) of which $ 7,334,516.95 had been paid; that the recomputed amount which should have been paid was agreed to be $ 6,993,236.57; that the difference and other items, should be repaid by the subcontractor according to other provisions of the Supplemental Agreement.

 That agreement would seem to constitute a reconciliation between the parties of their correct financial relations entered into pursuant to the original purchase order.

 The present dispute turns upon the narrow question of whether the subcontractor had rendered invoices or bills through December 31, 1951 for the idle time of the cranes, which can therefore be deemed to have been comprehended in the adjustment so contrived.

 There is no argument advanced for the defendant that the Government is not in a position to recover in this action, for its asserted overpayment to Atlas. That matter is discussed in the brief of the Government, to which no answering brief has been filed.

 Therefore the sole question now to be passed upon is whether the said alleged overcharges for idle crane time constituted a thing apart from all that the Supplemental Agreement of October 20, 1954 comprehended, and now provide a sufficient basis to support the claim for relief asserted in the complaint.

 It will be seen that the latter was filed about two and one-half years after the date of the Supplemental Agreement, and that the latter was concluded some two years and ten months after the close of the year in which the subcontractor's services were rendered. The lapse of time thus revealed has its place in the consideration of this motion.

 In behalf of the plaintiff, there is submitted an affidavit of Bobzien (verified January 6, 1960) an executive assistant, Office of Division Engineer at Richmond, Virginia, who participated in the negotiations of the Supplemental Agreement. He deposes that according to his notes, records, and memory, '* * * no provision was made, either directly or by implication, for any item, sum of money or potential claim relating to overpayments to Dade Bros. Inc. for times when cranes were, in fact, idle. * * * No question of claims respecting rental fees for idle time of cranes in use at Claremont Terminal under Purchase Order No. N.Y. 184 was or was intended to be resolved, settled or discharged by the aforesaid Supplemental Agreement.'

 The obvious purpose of this affidavit is to assert that the subject matter of this cause did not enter into the adjustment reflected in the Supplemental Agreement of October 20, 1954, according to Bobzien's memory as stated some six years later.

 That assertion must be weighed against the recitals in the affidavit of Moore, verified December 10, 1959. He was a Special Agent of the F.B.I. who participated 'in certain aspects of an ...


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