Justia Government Contracts Opinion Summaries

In 2004-2005, Costa & Son Construction performed site work for the general contractor (Braitt) on such a project in Bridgewater. After Braitt terminated the relationship Costa sued, alleging breach of contract and violations of G.L. c. 93A. Costa sought to recover damages under a payment bond obtained by Brait from Arch Insurance, G.L. c. 149, 29. Brait asserted similar counterclaims against Costa. Arch argued that Costa had relinquished any right to claim against the bond pursuant to a provision of his subcontract with Brait. The trial court granted Brait and Arch directed verdict with respect to claims under the bond. A jury returned a verdict for Costa, against Brait. The Massachusetts Supreme Court vacated the directed verdict. A subcontractor on a public construction project for which a payment bond has been obtained by the general contractor pursuant to G.L. c. 149, 29, may not by private agreement forgo its right to pursue payment under the bond. The court also vacated the portion of the amended judgment granting consequential damages to Costa; consequential damages were precluded by the contract. View "Costa v. Brait Builders Corp." on Justia Law

Sea Hawk Seafoods, Inc. sued the City of Valdez for damages after Valdez applied for a grant from the State of Alaska for funding to convert Sea Hawk's seafood processing facility into a fish meal plant but then declined to accept the $600,000 grant that the State conditionally awarded to Valdez. On pre-trial motions, the superior court dismissed Sea Hawk's claims for breach of contract, breach of an agreement to negotiate, and breach of a duty to negotiate in good faith. Valdez and Sea Hawk filed cross-motions for summary judgment on Sea Hawk's remaining claim for promissory estoppel, which the court denied. Shortly before trial, the court dismissed Sea Hawk's promissory estoppel claim as a discovery sanction. Sea Hawk and Valdez both appealed. Upon review, the Supreme Court affirmed: Sea Hawk's claims were based on statements made and a letter sent by the Valdez City Manager to the owner of Sea Hawk. Because these communications, even when viewed in the light most favorable to Sea Hawk, were insufficient as a matter of law to support Sea Hawk's claims. The Court reversed the lower court's ruling denying Valdez summary judgment on Sea Hawk's promissory estoppel claim.View "Sea Hawk Seafoods, Inc. v. City of Valdez" on Justia Law

The Regional School District (Mahar), entered into a price watch agreement with Northeast Energy Partners, a licensed broker of energy services based in Connecticut, pursuant to which Northeast would negotiate and secure contracts for the provision of Mahar's electricity from energy suppliers. Mahar did not enter into the agreement to obtain Northeast's services pursuant to the competitive bidding procedures contained in G.L. c. 30B. When Mahar questioned the validity of the agreement, Northeast sought a declaratory judgment that the agreement is valid and enforceable because, under G.L. c. 30B, 1 (b ) (33), the agreement is exempt from the competitive solicitation and bidding procedures set forth in G.L. c. 30B. The Massachusetts Supreme Court ruled in favor of Northeast, holding that a contract between a school district and an energy broker for procurement of contracts for electricity is exempt from the requirements of G.L. [c.] 30B as a contract for 'energy or energy related services' pursuant to G.L. c. 30B, 1 (b ) (33). View "NE Energy Partners, LLC v. Mahar Reg'l Sch. Dist." on Justia Law

Monte Sano Research Corporation ("MSRC"), Steven L. Thornton, and Steven B. Teague appealed a preliminary injunction entered against them in an action brought by Kratos Defense & Security Solutions, Inc.; Digital Fusion, Inc. ("DFI"), and Digital Fusion Solutions, Inc. ("DFSI") alleging breach of the duty of loyalty, breach of contract, tortious interference with business and contractual relationships, and civil conspiracy. Additionally, Kratos sought injunctive relief. Thornton and Teague were employees of DFI, which also engaged in government subcontract work; they became employees of Kratos when Kratos Defense merged with DFI in 2008. In February 2009, Thornton and Teague met with Doyle McBride, a NASA consultant who had never been employed by Kratos, to discuss starting a new company to perform government contract work. Several months later, MSRC was incorporated, with McBride and Teague each owning 50 percent. Thornton had no legal interest in MSRC at its formation. McBride acquired office space, issued stock, filed tax returns, obtained business licenses, registered to engage in government contracting, attended meetings, and talked with prime contractors on MSRC's behalf. In June 2011, Thornton's supervisor at Kratos learned that several employees under Teague's supervision had resigned in a short period. Following an investigation, Kratos terminated Teague's employment on June 23, 2011; Thornton resigned four days later. Teague and Thornton then went to work for MSRC. Thornton subsequently purchased MSRC from McBride and became its CEO and president. Subsequently Kratos filed a complaint against MSRC, Thornton, and Teague alleging specifically that Thornton and Teague, while employed by Kratos, assisted in the creation of MSRC, solicited Kratos employees, wrongfully diverted business opportunities, and misappropriated confidential and proprietary information. Kratos also alleged that MSRC wrongfully diverted business opportunities and misappropriated confidential and proprietary information. Kratos applied for a temporary restraining order ("TRO") and for a preliminary injunction on June 29, 2011. On appeal, MSRC, Thornton, and Teague argued that the preliminary injunction should be dissolved. MSRC, Thornton, and Teague raised several issues on appeal; however, because the Supreme Court concluded that the trial court's order was overbroad and that it failed to comply with Rule 65, Ala. R. Civ. P., the Court did not reach any of their other issues.View "Monte Sano Research Corp. v. Kratos Defense & Security Solutions, Inc." on Justia Law

Monte Sano Research Corporation (MSRC), Steven L. Thornton, and Steven B. Teague appealed a preliminary injunction entered against them in an action brought by Kratos Defense & Security Solutions, Inc., a California-based aerospace and defense contractor, Digital Fusion, Inc. (DFI), an Alabama-based holding company, and Digital Fusion Solutions, Inc. (DFSI), a Florida corporation and a subsidiary of DFI (referred to collectively as Kratos), alleging breach of the duty of loyalty, breach of contract, tortious interference with business and contractual relationships, and civil conspiracy. Additionally, Kratos sought injunctive relief. MSRC was formed in 2009 to procure government subcontract work at Redstone Arsenal in Huntsville. Thornton and Teague were employees of DFI, which also engaged in government subcontract work; they became employees of Kratos when Kratos Defense merged with DFI in 2008. Kratos terminated Teagues employment on June 23, 2011. Thornton resigned from Kratos four days later. A dispute arose between the parties which implicated the employment contracts for Thornton and Teague when they sought subsequent work. Upon review of this case, the Supreme Court found that because the provisions of Rule 65(d)(2) of the Alabama Rules of Civil Procedure were not complied with and because there was no evidence of an irreparable injury or the lack of an adequate remedy at law, the trial court erred in issuing the preliminary injunction. The Court reversed the trial courts order entering the preliminary injunction and remanded the case to the trial court with directions that it dissolve the injunction it issued September 10, 2011. View "Monte Sano Research Corp. v. Kratos Defense & Security Solutions, Inc." on Justia Law

Pursuant to a contract with the State of New York, defendant agreed to provide various courier services via air and ground transportation. Plaintiffs own a trucking company and served as an independent contractor to defendant, providing ground shipping services to defendant within the state. In this qui tam action, the court was asked to consider whether plaintiffs' claims on behalf of the State of New York, pursuant to the New York False Claims Act (FCA), State Finance Law 187 et seq., were federally preempted by the Airline Deregulation Act of 1978 (ADA), 49 U.S.C 47173[b][1]. The court held that they were and that the market participant doctrine was inapplicable. Plaintiffs' remaining contentions were deemed without merit.View "State of New York v DHL Express (USA), Inc." on Justia Law

At issue in this case was a claim for damages relating to a drilling contract Petitioner Elcon Construction and Respondent Eastern Washington University. Elcon alleged tort and contract claims. The contract claims were resolved by arbitration. In dismissing the tort claims, the trial court applied the independent duty rule formerly known as the "economic loss rule," which the Court of Appeals similarly applied in affirming. Upon review, the Supreme Court concluded the trial court and Court of Appeals misapplied the independent duty doctrine to bar Elcon's tort claims in this case. The Court found Elcon's claims failed factually. Viewing the facts and reasonable inferences in the light most favorable to Elcon, no genuine issues of material fact existed with respect to Elcon's fraud in the inducement or tortious interference claims. The Court affirmed on different grounds reached by the trial and appeals courts.View "Elcon Constr., Inc. v. E. Wash. Univ." on Justia Law

Roxco, Ltd., was hired as the general contractor for several public-construction projects for the State of Mississippi, including four building projects at the University of Mississippi, Jackson State University, and Alcorn State University. State law requires that a certain percentage of the cost of construction be retained to ensure completion. However, Mississippi Code Section 31-5-15 (Rev. 2010) allows the contractor to access that retainage by depositing with the State other acceptable security. Pursuant to Section 31-5-15, Roxco substituted securities valued at $1,055,000, deposited in a safekeeping account at Trustmark National Bank. Upon being notified of Roxco's default, the State instructed Trustmark to transfer the funds from the treasury bills into the state treasury account. By letter, Roxco directed Trustmark not to transfer the funds from the treasury bills to the State's account. Notwithstanding Roxco's letter, Trustmark deposited the funds into the State's account. Roxco filed suit against Trustmark for breach of contract and conversion. Trustmark argued that Section 31-5-15 permitted the release of the funds in the safekeeping account. A jury found in favor of Roxco and awarded $3,720,000 in damages. Aggrieved, Trustmark appealed. Finding that the trial court should have granted the motion for judgment notwithstanding the verdict, the Supreme Court reversed and remanded for further proceedings.View "Trustmark National Bank v. Roxco Ltd." on Justia Law

In this appeal the Supreme Court was asked to determine whether the parties' indemnity agreement clearly and unequivocally indemnified the Snohomish County Public Transportation Benefit Area Corporation (doing business as Community Transit) for losses resulting from its own negligence. Upon review, the Court concluded that the language of the agreement, and in particular language providing that indemnity would not be triggered if losses resulted from the sole negligence of Community Transit, clearly and unequivocally evidenced the parties' intent that the indemnitor, FirstGroup America, Inc. (doing business as First Transit) indemnify Community Transit for losses that resulted from Community Transit's own negligence. The Court reversed the Court of Appeals' decision to the contrary and remanded the case to the trial court for further proceedings.View "Snohomish County Pub. Transp. Benefit Area Corp. v. FirstGroup Am., Inc." on Justia Law

Defendant, a school district, leased portable classrooms from plaintiff under contracts including penalties for early cancellation or default. Under the Downstate School Finance Authority for Elementary Districts Law (105 ILCS 5/1F-1) the state later created the Authority to manage the District's finances. The Authority canceled the leases before expiration, but did not authorize payment of the cancellation fees. The trial court granted summary judgment, finding it was legally impossible for the District to pay the cancellation fees, but also finding that the Authority had to comply with the cancellation terms of the leasing contracts. The appellate court affirmed the judgment in favor of the District on the cancellation fees and vacated as moot the declaratory judgment in favor of plaintiff. The Illinois Supreme Court concluded that the legislature intended the Act to permit the Authority to cancel a school district's contract with a third party, but that cancellation must be consistent with the contractual terms agreed to by the school district and the third party. The Authority can cancel the leasing contracts, but must pay the contractual fees for early cancellation. View "Innovative Modular Solutions v. Hazel Crest Sch. Dist. 152.5" on Justia Law