Filing 47

PUBLISHED OPINION(redacted) to opinion 43 filed under seal. Signed by Judge Francis M. Allegra. (si)

Download PDF
N O R T H R O P GRUMMAN COMPUTING SYSTEMS, INC. v. USA D o c . 47 In The United States Court of Federal Claims N o . 07-613C (F ile d Under Seal: May 20, 2010) R e is s u e d : June 9, 2010 1 __________ N O R T H R O P GRUMMAN COMPUTING S Y S T E M S , INC., P l a i n t i f f, v. T H E UNITED STATES, D e fe n d a n t . * * * * * * * * * * C r o s s - m o t io n s for summary judgment; G o v e rn m e n t contract case; Internet i n t e r c e p t software leasing agreement; G e n u i n e questions of material fact; M o tio n s denied. _________ O PIN IO N __________ D a v i d C. Aisenberg, Looney, Cohen, Reagan & Aisenberg, LLP, Boston, MA, for p l a i n t i f f. A r m a n d o A. Rodriguez-Feo, Commercial Litigation, United States Department of Justice, W a s h in gto n , D.C., with whom was Assistant Attorney General Tony West, for defendant. ALLEGRA, Judge: P la in tiff, Northrop Grumman Computing Systems, Inc. (Northrop), brings this action s e e k in g damages for the alleged breach of an agreement with the Department of Homeland S e c u r it y, Bureau of Immigration and Customs Enforcement (DHS/ICE).2 Under that agreement, N o r th r o p leased surveillance software to DHS/ICE to be used in intercepting the internet An unredacted version of this opinion was issued under seal on May 20, 2010. The o pin io n issued today incorporates the majority of the parties' proposed redactions and corrects some m in o r typographical errors. The redacted material is represented by brackets [ ]. The Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135 (Nov. 25, 2 0 0 2 ), created the Department of Homeland Security (DHS). The Act also consolidated the U n i te d States Immigration and Naturalization Service and the United States Customs Service into a newly-formed Bureau of Immigration and Customs Enforcement, which is now known as U n i te d States Immigration and Customs Enforcement (ICE). 2 1 c o m m u n ic a tio n s of the targets of criminal investigations arising under Title III of the Omnibus C rim e Control and Safe Streets Act of 1968, 18 U.S.C. 2510, et seq. The case is pending before t h e court on the parties' cross-motions for summary judgment under RCFC 56. Because there are ge n u in e issues of material fact, the court denies the cross-motions and will set this case down for t ri a l . I. P r io r to entering into the lease agreement, DHS/ICE used other software to gather e v i d e n c e , during a criminal investigation, of a subject's internet usage. This software, however, c o u ld capture data only from [] and thus could not []. In September of 2004, DHS/ICE decided th a t it needed software that could overcome this [] limitation. After conducting market research, it chose Northrop's Internet Observer software, also known as the Oakley software. That s o ftw a re , unlike [the prior] software, was []. To acquire the right to use this software, DHS/ICE relied on a preexisting contract it had w i th plaintiff Contract No. NAS5-01143 (the SWEP III contract). Pursuant to this contract, on S e p t e m b e r 24, 2004, DHS/ICE awarded Delivery Order COW-4-D-1025 (Delivery Order), l e a s i n g from plaintiff the Oakley software and obtaining associated equipment, technical support a n d training. The Delivery Order provided that plaintiff would deliver the Oakley software to D H S /IC E and perform specified support services for a one-year base period in return for payment o f $900,000. It further provided for three one-year options at $899,186 per year, at the c o n c lu s io n of which DHS/ICE was to have a perpetual license in the software. On September 28, 2 0 0 4 , DHS/ICE supplied an "essential use statement" to Northrop that included, inter alia, a d e s c r ip t io n of the intended use of the Oakley software. This statement, apparently designed to fa c i l i ta t e third-party funding for the Oakley software, also indicated that funding for the Delivery O rd e r would be provided from "[f]orfeiture funds obtained through criminal investigations." On or about October 13, 2004, plaintiff timely delivered the Oakley software and, th e r e a fte r, performed all its obligations under the contract. DHS/ICE, however, continued to use th e previously-utilized [] software and, for reasons unexplained, never, in fact, employed the O a k le y software in an actual investigation. Nonetheless, DHS/ICE paid plaintiff $900,000 for the b a s e year, using discretionary asset forfeiture funds supplied by the Department of Treasury's E x ec u tiv e Office For Asset Forfeiture. From September 30, 2004, to October 18, 2004, DHS/ICE e x e c u te d three modifications to the Delivery Order. The second of these, issued on October 14, 2 0 0 4 , indicated that It is expressly understood and agreed that the Department of Homeland Security s h a l l use its best efforts to seek and utilize funding from all sources, and to request a n d reserve funds from the annual budget as a first priority designation to pay the re q u ire d lease payments under this lease Agreement. If the lease is discontinued d u e to non-appropriation of funds . . . , the Department of Homeland Security a g re e s that it will not replace the software, nor pursue outsource contracting, with s o ftw a re which performs similar or comparable functions, of which the acquired -2- s o ftw a re was intended to perform, for a period of the remaining full term of the le a s e or a period of twelve (12) months from the date the Department of Homeland S e c u r it y discontinues its performance obligations under the lease, whichever is l o n g e r. N o similar language is found in the SWEP III contract. A s the beginning of Fiscal Year 2005 approached, the Technical Operations Program O ffic e at DHS/ICE (Tech Ops) designated the Oakley software as "mission critical" in its funding re q u e s ts , although it did not specifically designate the Oakley software as a "first priority" for fu n d i n g . While Tech Ops made several attempts to secure funding for the Oakley software, those e ffo r ts ultimately proved unsuccessful. Yet, Tech Ops managed to fund several other initiatives fo r Fiscal Year 2005 in an amount totaling $3,000,000. On September 27, 2005, DHS/ICE in fo r m e d plaintiff that it was not renewing the contract owing to a lack of available funds; formal n o tific a tio n of this was provided to Northrop on September 30, 2005. On February 22, 2006, N o rth ro p requested further information as to the agency's basis for this decision. On April 14, 2 0 0 6 , DHS/ICE responded by indicating that the Oakley software contract was "one of a number o f discretionary IT contracts that were considered to be of insufficient priority to continue to be fu n d e d ." In response, on September 21, 2006, plaintiff filed a claim under the Contract Disputes A c t of 1978, 41 U.S.C. 601, et seq., seeking $2,697,558, plus interest, and asserting that D H S / IC E had not complied with the contractual restrictions contained in the licensing agreement, a s amended. On December 29, 2006, the contracting officer denied this claim. On August 20, 2007, plaintiff filed suit in this court, asserting that defendant failed to c o m p ly with the contract's restrictions on its exercise of the options and had breached a covenant to seek funding for the options. After fact discovery was completed, the parties filed crossm o tio n s for summary judgment, which have now been fully briefed and argued. II. S u m m a ry judgment is appropriate when there is no genuine dispute as to any material fact a n d the moving party is entitled to judgment as a matter of law. RCFC 56; Anderson v. Liberty L o b b y , Inc., 477 U.S. 242, 247-48 (1986). Disputes over facts that are not outcomed e te rm in a tiv e will not preclude the entry of summary judgment. Id. at 248. However, summary ju d gm e n t will not be granted if "the dispute about a material fact is `genuine,' that is, if the e v i d e n c e is such that a reasonable [trier of fact] could return a verdict for the nonmoving party." Id.; see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); B e c h o , Inc. v. United States, 47 Fed. Cl. 595, 599 (2000). W h e n reaching a summary judgment determination, the court's function is not to weigh th e evidence, but to "determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 2 4 9 ; see also Agosto v. INS, 436 U.S. 748, 756 (1978) ("[A] [trial] court generally cannot grant s u m m a r y judgment based on its assessment of the credibility of the evidence presented"); Am. In s . Co. v. United States, 62 Fed. Cl. 151, 154 (2004). The court must determine whether the -3- e v i d e n c e presents a disagreement sufficient to require fact finding, or whether it is so one-sided th a t one party must prevail as a matter of law. Anderson, 477 U.S. at 250-52; see also Ricci v. D e S te fa n o , 129 S. Ct. 2658, 2677 (2009) ("`Where the record taken as a whole could not lead a ra tio n a l trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" (quoting M a t s u s h i ta , 475 U.S. at 587)). Where there is a genuine dispute, all facts must be construed, and a l l inferences drawn from the evidence must be viewed, in the light most favorable to the party o p p o s in g the motion. Matsushita, 475 U.S. at 587-88 (citing United States v. Diebold, 369 U.S. 6 5 4 , 655 (1962)); see also L.P. Consulting Group, Inc. v. United States, 66 Fed. Cl. 238, 240 ( 2 0 0 5 ) . Where, as here, a court rules simultaneously on cross-motions for summary judgment, it m u s t view each motion, separately, through this prism. Chevron U.S.A., Inc. v. Mobil Producing T e x . & N. Mex., 281 F.3d 1249, 1252-53 (Fed. Cir. 2002); see also Estate of Hevia v. Portrio C o r p ., 602 F.3d 34, 34 (1 st Cir. 2010); Travelers Prop. Cas. Co. of Am. v. Hillerich & Bradsby C o . , Inc., 598 F.3d 257, 264 (6 th Cir. 2010). Issues involving contract interpretation often are resolved through summary judgment, b e c a u s e contract interpretation generally is a matter of law. See NVT Techs., Inc. v. United S t a t e s , 370 F.3d 1153, 1159 (Fed. Cir. 2004); Govt. Sys. Advisors, Inc. v. United States, 847 F.2d 8 1 1 , 813 n.1 (Fed. Cir. 1988); Dick Pacific/GHEMM, JV ex. rel. W.A. Bottling Co. v. United S t a t e s , 87 Fed. Cl. 113, 126 (2009). This certainly holds true when a contract is clear and u n a m b i gu o u s on its face, making parol evidence antecedent or contemporaneous to the contract in a d m is s ib le to vary, contradict, or add terms to the contract. See CW Gov't Travel, Inc. v. U n i te d States, 63 Fed. Cl. 369, 390 (2004); Vassar v. United States, 63 Fed. Cl. 166, 171 (2004). Yet, it also remains true that "[t]o the extent that the contract terms are ambiguous, requiring w e igh i n g of external evidence, the matter is not amenable to summary resolution." Beta Sys. Inc. v . United States, 838 F.2d 1179, 1183 (Fed. Cir. 1988) (citing Samuel Williston, A Treatise on t h e Law of Contracts 616, at 649, 652 (3d ed. 1961)); see also Dick Pacific/GHEMM, 87 Fed. C l . at 126; Burchick Constr. Co. v. United States, 83 Fed Cl. 12, 20 (2008). As it turns out, the la tte r is the case here. A s a threshold matter, the court rejects defendant's claim that, under the Federal A c q u i s i ti o n Regulation (FAR), 48 C.F.R. 2.101, it had broad, unfettered discretion not to " e x te n d " the contract. While the cited provision, which was incorporated by reference in the c o n tra c t, defines an "option" as a "unilateral right" by which the government "may elect to extend th e term of the contract," it is well-accepted that such an option may, nevertheless, be limited by o th e r contractual provisions. See, e.g., Gov't Sys. Advisors, 847 F.2d at 813; Mun. Leasing Corp. v . United States, 1 Cl. Ct. 771, 774 (1983); Northrop Grumman Computing Sys., Inc. v. Gen. S e r v s . Admin., 06-2 B.C.A. 33, 324 (2006); Varo, Inc., 70-1 B.C.A. 8099 (1969); see also B e t a Sys., Div. of Velcon Filters, Inc. v. United States, 16 Cl. Ct. 219, 228 (1989).3 Accordingly, t h e FAR provides defendant with no sockdolager here. Complicating matters further, it appears t h a t what might, at first glance, be an option contract may, upon closer examination, be a multi- Defendant emphasizes the regulation's use of the word "unilateral." But, that word m e re ly refers to an action that can be undertaken or done by one side to an agreement, and does n o t connote that such a right is necessarily unconditional. See XIX The Oxford English D ic tio n a ry 62 (2d ed. 1998). 3 -4- ye a r contract subject to termination if funds are unavailable. See Int'l Tel. & Tel. v. United S t a t e s , 453 F.2d 1283, 1292 (Ct. Cl. 1972); see also James A. Harley, "Multiyear Contracts: P i tfa lls and Quandaries," 27 Pub. Cont. L.J. 555, 561-62 (1998). Controversies over such q u e s tio n s commonly arise when a contractor's expectation to recover unamortized nonrecurring c o s ts over the life of the contract is frustrated by the "early" conclusion of the contract. See id. When that happens, the court must determine whether that expectancy was actually part of the b a rgain e d for exchange. See Green Mgmt. Corp. v. United States, 42 Fed. Cl. 411, 434 (1998); C o n tin e n ta l Collection & Disposal, Inc. v. United States, 29 Fed. Cl. 644, 650 (1993). T h ere was no such bargain here, defendant claims. Rather, it asserts, it negotiated for, and h a d , an unfettered right to decline the options available under the contract. It recites, inter alia, l a n g u a g e in the second modification, which states that "[i]f the lease is discontinued due to te rm i n a tio n for convenience, non-appropriation of funds or non-renewal, [DHS/ICE] agrees that it will not replace the software" (emphasis added). But, language elsewhere in the supplemental l e a s i n g terms casts doubt on defendant's claim and implies the existence of limitations. Consider, fo r example, defendant's obligation in the second modification to use its "best efforts" in seeking fu n d in g for the Oakley software. Similar, albeit not identical, language has been held to cabin the go v e rn m e n t 's nonrenewal discretion.4 Additionally, although the Delivery Order specifies a " tw e lv e (12) month base year and three twelve (12) month option years," the supplemental le a s in g terms specify, at several points, a 36-month leasing period.5 It is unclear what, if any, l im i ta t i o n s this language which defendant concedes is ambiguous imposes on defendant's d is c re tio n to discontinue the contract. While one must assume that a consistent meaning can be d iv in e d from these sibylline leaves, that meaning is hardly apparent, at least at this juncture. Contrary to discussions at oral argument, a limiting interpretation of the contract under w h i c h defendant would have been obliged, in some circumstances, to renew the contract would n o t necessarily run afoul of the Anti-Deficiency Act (ADA), 31 U.S.C. 1341(a)(1)(A). The A D A , of course, prohibits the obligation of funds in advance of an appropriation.6 But, while an in te rp re ta tio n of the contract that would contravene that statute would be disfavored, see Cray 4 See Mun. Leasing Corp., 1 Cl. Ct. at 774 (Air Force promised "to use its best efforts to o b ta in appropriations of the necessary funds to meet its obligations and to continue this contract i n force"); Northrop Grumman, 06-2 B.C.A. 33,324 (General Services Administration promised th a t it would "use its very best efforts to effect an extension of each lease . . . into subsequent fi s c a l years"); see also S.A. Healy Co. v. United States, 576 F.2d 299, 307 (Ct. Cl. 1978). See Modification 1, Statement to Leasing Terms & Conditions ("This is a lease for a p e r i o d of 36 months, subject to availability of annually appropriated funds."); see id. ("[stating G o v e r n m e n t 's representation that Oakley software is] essential and critical to the Government's p ro p e r, efficient and economic operation for the full 36 month term of the lease agreement and a n y renewals thereof"). That Act states that "[a]n officer or employee of the United States Government . . . may n o t involve [the] government in a contract or obligation for the payment of money before an a p p ro p ria tio n is made unless authorized by law." 31 U.S.C. 1341(a)(1)(B). 6 5 -5- R e s e a r c h v. United States, 44 Fed. Cl. 327, 333 (1999) (citing Hobbs v. McLean, 117 U.S. 567, 5 7 6 (1886)), some forms of binding options or multiyear contracts have been held not to violate th is statute. See RCS Enters. v. United States, 57 Fed. Cl. 590, 594-95 (2003); Cray Research, 44 F e d . Cl. at 332; see also Solar Turbines Int'l v. United States, 3 Cl. Ct. 489, 494-95 (1983). The q u e s tio n then is whether this is such a contract a question that can be answered only, in turn, w h e n various other terms in the contract are clarified. Hence, the court finds that genuine issues o f material fact exist as to whether the leasing terms impose limitations on defendant's right not to exercise an option, precluding summary judgment on this issue. B u t , this is hardly the only dispute here over the meaning of the contract. The parties also d i s a gre e , for example, over what was meant by requiring DHS/ICE to "use its best efforts to seek a n d utilize funding from all sources, and to request and reserve funds from the annual budget as a firs t priority designation, to pay the required lease payments under this lease agreement." Like a S o m a cube, this factual dilemma exists on a number of interlocking levels. First, the parties cannot agree as to whether the "best efforts" requirement applied to the t a s k of obtaining funds for future contract years, or merely required defendant to obtain funds to c o v e r the cost of an option already invoked. While the latter position seems odd as contracts do n o t ordinarily commit a purchaser to employ "best efforts" to find funding for what it has already a c q u i re d the language of the provision is unclear and evidence explaining the purpose of this c la u s e would undoubtedly aid in resolving this dilemma. Second, the parties disagree as to what w a s meant by the language requiring the agency to request and reserve funds for the software as " a first priority designation." Defendant asserts that this requirement was met when the agency c a te go riz e d the Oakley software as "mission critical," but plaintiff espouses a stricter definition, u n d er which the Oakley program and only that program was to be given "first priority." Of c o u rs e , neither the Delivery Order, the three amendments, nor the SWEP III define what is meant b y "first priority," again leaving the court to consider parol evidence as to the parties' intent in u s in g this language, as well as, perhaps, the nature of the agency's budgeting process. Lastly, the p a rtie s strongly disagree as to whether DHS/ICE actually employed its "best efforts" in seeking fu n d i n g to continue the contract. Resolving this question requires knowledge not only of what D H S /IC E did, but could have done, to obtain this funding and while the record contains e v id e n c e of the former, it, as yet, sheds no light on the latter.7 Consequently, with its many Typically, "best efforts" require some affirmative action made in good faith. In re C a m b r i d g e Biotech Corp., 186 F.3d 1356, 1375 (Fed. Cir. 1999) ("best efforts requires `that the p a r ty put its muscles to work to perform with full energy and fairness the relevant express p ro m is e s and reasonable implications therefrom'") (quoting Macksey v. Egan, 633 N.E.2d 408, 4 1 4 (Mass. App. 1994)); see also E. Allan Farnsworth, Farnsworth On Contracts 7.17 (2d ed. 1 9 9 8 ). This standard "cannot be defined in terms of a fixed formula; it varies with the facts and th e field of law involved." Pinpoint Consumer Targeting Servs., Inc. v. United States, 59 Fed. C l . 74, 82 (2003). Not surprisingly, courts often have held that disputes as to the application of " b e s t efforts" clauses present fact issues that preclude summary judgment. See Whitesell Corp. v. W h ir lp o o l Corp., 2009 WL 3327241, at *3 (E.D. Mich. Oct. 13, 2009) ("the existence of good fa ith [in making best efforts] is normally a question of fact for the jury and should not be resolved 7 -6- fa c t u a l strata, this issue more accurately viewed as a group of issues is also not amenable to s u m m a ry resolution. Questions of fact also abound regarding the meaning of the nonsubstitution clause in the c o n tra c t. That clause, recall, provided that DHS/ICE would "not replace the software, nor pursue o u ts o u rc e contracting, with software that performs similar or comparable functions, of which the a c q u ire d software was intended to perform." The parties are at odds over the meaning of the p h ra s e "similar and comparable." Defendant asserts that products are not "similar and c o m p a ra b le " unless they are capable of performing all, or nearly all, the same functions. It thus c o n te n d s that the [previously-utilized] software was not "similar and comparable" to the Oakley s o ft w a r e because the former [], and thus could not []. Plaintiff, however, argues that products are " s im ila r and comparable" as long as they serve the same basic purpose. In its view, then, the two s o ftw a re products at issue were "similar and comparable" because both could be used to intercept in te rn e t communications. Both formulations are tenable, given the sundry definitions of the t e r m s "similar" and "comparable" meanings that, individually and in conjunction, require d iffe re n t degrees of commonality.8 The result is a quintessential case of contractual ambiguity, o w i n g to this key language being reasonably susceptible of two or more interpretations. 9 That, in a nutshell, is what we have here. To crack that nut, the court again must have evidence of the in te n t behind the drafting and negotiating of these terms, thereby making summary judgment on by summary disposition unless the evidence is undisputed or conclusive"); Brown v. Buschman, 2 0 0 2 WL 389139, at *5 (D. Del. Mar. 12, 2002) (stating that "best efforts" is "a fact-intensive i n q u i ry" ) ; Dogwood Assoc. LLP v. Douglas Elliman-Gibbons & Ives, Inc., 1993 U.S. Dist. LEXIS 1 2 6 7 0 , at *13 (S.D.N.Y. Aug. 30, 1993) (holding that use of "best efforts" in renewing leases p re s e n te d triable issue of fact precluding summary judgment). See III The Oxford English Dictionary 590 (2d ed. 1998) (compare: "able to be c o m p are d , capable of comparison;" "worthy of comparison; proper, or fit to be compared"); XV T h e Oxford English Dictionary 496 (2d ed. 1998) (similar: "of the same substance or structure th ro u gh o u t;" "having a marked resemblance or likeness; of a like nature or kind;" "a thing or p e r s o n . . . resembling another; a counterpart"). As the question was posed at oral argument are a n apple and orange "similar and comparable" because they are both fruit and can be eaten, or d is s im i la r and incomparable because of differences in color, taste, texture, and chemistry? The l a t te r features might prove critical if, for example, one is baking a fruit pie, but not so if one is p a c k in g an unfussy child's lunch. As oft-noted by the Federal Circuit, "a contract is ambiguous if it is susceptible of two d i ffe re n t and reasonable interpretations, each of which is found to be consistent with the contract la n g u a ge ." Community Heating & Plumbing Co. v. Kelso, 987 F.2d 1575, 1579 (Fed. Cir. 1993) (c ita tio n s omitted). See also E.L. Hamm & Assocs., Inc. v. England, 379 F.3d 1334, 1341 (Fed. C i r. 2004); Metric Constructors, Inc. v. Nat'l Aeronautics and Space Admin., 169 F.3d 747, 751 ( F e d . Cir. 1999); North Star Alaska Housing Corp. v. United States, 76 Fed. Cl. 158, 193-94 (2 0 0 7 ). 9 8 -7- th is issue also inappropriate.10 Moreover, the parties have widely differing views as to how the s o ft w a r e programs in question functioned differences highlighted in competing expert d e c la ra tio n s , which themselves provide further indication that a trial is necessary.11 F in a lly, the parties disagree as to whether defendant breached an express warranty in the c o n tra c t. This dispute centers on that part of the first modification which states that "[ICE] has r e p r e s e n t e d to the [plaintiff] that the aforementioned Oakley software products are absolutely e s s e n tia l and critical to the Government's proper, efficient and economic operation for the full 36 m o n th term of the lease agreement and any renewals thereof." Plaintiff asserts that this language c re a te s an express warranty that was breached by defendant's decision not to fund the Oakley s o ftw a re . Not so, claims defendant. The parties agree that a breach of warranty occurs when "(i) the Government assured the plaintiff of an existence of fact; (ii) the Government intended th a t plaintiff be relieved of the duty to ascertain the existence of the fact for itself; and (iii) the G o v e rn m e n t 's assurance of that fact proved untrue." Oman-Fischbach Int'l v. Pirie, 276 F.3d 1 3 8 0 , 1384 (Fed. Cir. 2002); see also Kolar v. United States, 650 F.2d 256, 258 (Ct. Cl. 1981). They disagree, however, as to whether each of these prongs was met here and, particularly, over w h e t h e r defendant's representation regarding the essentiality of the Oakley software was an a s s u r a n c e of the "existence of [a] fact," let alone the sort of assurance that defendant intended p l a i n t i ff to rely upon. Without more telling evidence, the court is hesitant to conclude, at this s u m m a r y stage, that defendant assumed the risk that no intervening events entirely outside its c o n tro l, including the development of new intercept or [] technology that might render the s o ft w a r e obsolete, would render the Oakley software less than "essential and critical" for the full te rm of the lease. In short, in the court's view, the plain language of the agreement is too a m b igu o u s to establish vel non an obligation of this magnitude. Further evidence on this point is n e e d e d , again precluding the court from recognizing the existence of a warranty as a matter of la w . Discerning the proper meaning of the nonsubstitution clause might also shed light on q u e s tio n s involving the extension of the lease. See Frankenmuth Mut. Ins. Co. v. Escambia Cty., F la ., 289 F.3d 723, 727 n.5 (11 th Cir. 2002) (noting that, under Florida law, the inclusion of a n o n s u b s t i tu t io n clause in a contract may be viewed as "compelling the lessee to continue to a p p r o p r ia t e funds throughout the full lease terms"). See Town of Southold v. Town of E. Hampton, 477 F.3d 38, 52 (2d Cir. 2007) (courts " m u s t be wary of granting summary judgment when conflicting expert reports are presented"). This is particularly true where, as here, resolution of the dispute between the experts requires the c o u rt to weigh other evidence. See Metro Life Ins. Co. v. Bancorp Servs. L.L.C., 527 F.3d 1330, 1 3 3 9 (Fed. Cir. 2008); SunTiger, Inc. v. Sci. Research Funding Group, 189 F.3d 1327, 1336-37 ( F e d . Cir. 1999); Scharf v. United States Attorney Gen., 597 F.2d 1240, 1243 (9 th Cir. 1979) ( h o l d i n g that resolution of issue of fact based on conflicting expert testimony is "not the court's fu n c t i o n on summary judgment"); Nat'l Westminster Bank PLC v. United States, 69 Fed. Cl. 128, 1 4 7 -4 8 (2005). 11 10 -8- III. A l th o u gh there is the temptation, in pursuit of judicial economy, to think otherwise, "[t]he fa c t that both the parties have moved for summary judgment does not mean that the court must gra n t summary judgment to one party or the other." Bubble Room, Inc. v. United States, 159 F.3d 5 5 3 , 561 (Fed. Cir. 1998). Rather, "[c]ross-motions are no more than a claim by each party that it a lo n e is entitled to summary judgment, and the court must evaluate each motion on its own m e rits , taking care in each instance to view the evidence in favor of the nonmoving party." Id.; s e e also Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1302 (Fed. C ir. 2005), cert. denied, 552 U.S. 1022 (2007). In the case sub judice, each party firmly believes th at the facts which support its own claims are uncontested, but just as vigorously contests some o f the facts underlying the other's claims. The cross-product of these positions yields numerous ge n u in e questions of material fact as to whether defendant breached the specified provisions (and a s s o c i a te d warranties) in the subject contract. Accordingly, the court must deny the parties' c r o s s - m o t io n s for summary judgment.12 A t the conclusion of oral argument, the parties jointly requested additional time in which t o complete expert discovery in this case. The court indicated that it would grant this request. 13 O n or before May 28, 2010, the parties shall file a joint status report proposing a schedule for the c o m p l e tio n of expert discovery. Following the completion of that discovery, this case will be set d o w n for trial. I T IS SO ORDERED.14 s / Francis M. Allegra Francis M. Allegra J u d ge Reinforcing this conclusion, during oral argument, plaintiff indicated that the court s h o u ld consider its motion to be for partial summary judgment, reserving the issue of damages for a later time. The parties likewise requested additional time to conduct further factual discovery in th i s matter. The court, however, denied that request, noting that the parties have already received te n months in which to conduct that discovery. This opinion shall be publicly released, as issued, after June 4, 2010, unless the parties i d e n t ify protected and/or privileged materials subject to redaction prior to said date. Said m a te ria ls shall be identified with specificity, both in terms of the language to be redacted and the re a s o n s for that redaction. 14 13 12 -9-

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?