ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
Expresser Transport Corporation ) ASBCA No. 61464
)
Under Contract No. N00033-82-C-1013 )
APPEARANCE FOR THE APPELLANT: Patrick H. Mccaffery, Esq.
General Counsel
APPEARANCES FOR THE GOVERNMENT: Craig D. Jensen, Esq.
Navy Chief Trial Attorney
Robert R. Kiepura, Esq.
Senior Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE MELNICK
GRANTING SUMMARY JUDGMENT FOR THE GOVERNMENT
This is an appeal from the government's denial of an indemnification claim.
Because the claim was waived by the contract's express terms, summary judgment is
granted to the government and the appeal is denied. The following facts are undisputed.
In 1983, the contractor, Expresser Transport Corporation, and the United States
entered into the time charter contract identified above (which was then amended and
restated in 1985) for the Military Sealift Command (MSC) to hire MV 1s1 Lt Alex
Bonnyman to support the prepositioning of military equipment and supplies (compl.
111-2; R4, tab 1 at 1-6, 55). 1 The 145-page agreement (not counting annexes)
contained extremely detailed language governing the parties' relations, obligations,
and responsibilities (R4, tab 1). Consistent with the nature of a time charter, Expresser
remained responsible for operating the ship, which it contractually accomplished
through its parent company, Maersk Line, Limited (compl. 1 1; R4, tab 1 at 6).
However, the government could place civilian contractors aboard for communications
and cargo maintenance (compl. 13; R4, tab 1 at 77). The government agreed to
"indemnify [Expresser] for liabilities resulting from the carriage of such personnel"
(compl. 1 4; R4, tab 1 at 78).
1
While discussing the vessel bearing his name, it is worth noting that Lt Bonnyman
was a United States Marine posthumously awarded the Congressional Medal of
Honor for heroic actions in 1943 during the battle of Betio Island, Tarawa. See
http://www.marinemedals.com/bonnymanalexander.htm.
Article 38 of the charter was entitled "WAIVER OF CLAIMS." It stated:
All claims whatsoever for moneys due the
Contractor under this Charter must be submitted in
accordance with the applicable Military Sealift Command
billing instruct~ons within two years of the date of
redelivery of the Vessel, except as otherwise provided in
Article 44(a). Except as so provided, all claims not
submitted within the two-year limit shall be deemed to
have been waived by the Contractor.
(R4, tab 1 at 120)2 The charter also incorporated Defense Acquisition Regulation
(DAR) 7-103.12, DISPUTES (JUN 1980) (R4, tab 1 at 149). This clause stated the
charter was "subject to the Contract Disputes Act of 1978 (P.L. 95-563)" (CDA), and
in relevant part described the procedures for pursuing a claim. See Santa Fe Eng 'rs,
Inc., ASBCA No. 36292, 92-2 BCA ,r 24,795 at 123,677. 3
On May 11, 2007, a government contract employee stationed aboard Bonnyman
suffered an injury leaving him a paraplegic. In June of 2008, the employee filed suit in
the United States District Court for the Southern District of Ohio against, among
others, the government and Maersk. (Compl. ,r,r 5-6) The complaint sought damages
for maintenance, cure, wages, attorney fees, and punitive damages (R4, tab 2).
Expresser was added as a defendant by an amended complaint (R4, tab 5.18).
The charter was terminated by the government for its convenience on July 15,
2009 (compl. ,r 2). Neither party disputes that Bonnyman was redelivered on that date
(gov't mot. at 4; app. opp'n at 4).
In May of 2010, the district court dismissed the government from the employee's
suit (compl. ,r 7). On March 21, 2011, the employee settled with Expresser and Maersk,
releasing them from liability in exchange for $2,500,000 (compl. ,r 9; gov't mot. ,r 7).
Slightly less than six years later, on March 15, 2017, Mr. Steven E. Hadder, President of
Expresser and Vice President of Maersk, submitted a certified claim to the contracting
officer seeking $2,782,088.62 in reimbursement for the settlement and for legal fees
(compl. ,r 10; R4, tabs 3-4). Mr. Hadder contended that Expresser and Maersk were
entitled to recover based upon the government's indemnification of Expresser for liabilities
2
Article 44(a) contained exceptions neither party contends are relevant here (R4,
tab 1 at 139).
3
The Board requested the government to provide a copy of the actual clause as it
existed in 1980, but it was unable to do so. Santa Fe Engineers recites its
relevant portions.
2
resulting from the carriage of private civilian contractors aboard Bonnyman. The
contracting officer denied the claim on October 3, 2017 (R4, tab 3). This appeal followed.
DECISION
I. The Merits
The government moves to dismiss the appeal for failure to state a claim upon
which relief may be granted. 4 Because the parties rely upon statements and materials
outside the pleadings, the motion is treated as one for summary judgment. 5 See FED.
R. CIV. P. 12(d). Summary judgment should be granted if there are no genuine issues
of material fact and the moving party is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317,322 (1986).
The government's argument is fairly simple. Article 38 of the charter stated
that "[a]ll claims ... for moneys due ... under [the] Charter must be submitted in
accordance with the applicable Military Sealift Command billing instructions within
4
The claim letter opens by referring to Maersk as MLL. Later it states that
"Expresser and MLL are hereinafter referred to collectively as 'MLL. "'
Mr. Hadder's certification, located at the end of the letter, included the
statement "that the amount requested accurately reflects the contract adjustment
for which MLL believes the Government is liable; and that I am duly authorized
to certify the claim on behalf of MLL." By order issued September 18, 2018,
the Board inquired of the parties whether this language complied with the
reference to "contractor" contained in 41 U.S.C. § 7103(b)(l)(C).
In response, the government advances a request to dismiss the appeal for
lack of jurisdiction, observing that Maersk is not the contractor and suggesting that
"[t ]he fact that the letter indicates that the claim was being certified by 'MLL,'
meaning Maersk, means that the claim contains no certification at all" (gov't resp.
to Bd. inquiry -
R1C1{] SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
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I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 61464, Appeal of
Expresser Transport Corporation, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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