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Edward Hayes, as Liquidator of Base Operation Services GmbH
ASBCA No. 59829, 59907
A.S.B.C.A.
Feb 27, 2017
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Background

  • Appellant (Edward Hayes, liquidator of Base Operation Services GmbH — BOS) moved to dismiss/for summary judgment challenging BOS's capacity to be sued at the time the contracting officer issued her final decision.
  • BOS was a German GmbH formed as a joint venture between SKE International GmbH (German) and Burns & Roe Services Corp. (U.S.).
  • Appellant relied on materials outside the pleadings, including an expert opinion on German law, but did not produce the joint venture agreement or governing documents.
  • The Board treated the motion as one for summary judgment because the capacity issue depends on facts and matters outside the pleadings.
  • The Board concluded the record is insufficient to determine whether BOS (or its partners) remained liable for the contract claim after dissolution and therefore whether the Board has jurisdiction to dismiss the claim as a nullity.
  • The Board denied reconsideration, finding (1) summary judgment was the correct procedural standard and (2) further factual development (including review of the joint venture agreement and possible discovery) is necessary.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Proper procedural standard for challenging capacity to be sued Hayes styled the motion as dismissal for failure to state a claim Government argued capacity challenge relied on matters outside the pleadings and should be treated as summary judgment Board: Treat as summary judgment because it depends on evidence outside the pleadings
Whether BOS lacked capacity to be sued at time of COFD BOS (via Hayes) contends under German law BOS ceased to exist and thus claim is a nullity Government: Record insufficient; joint venture structure may leave partners liable despite corporate dissolution Board: Record insufficient to decide; must examine joint venture agreement and partnership-law consequences; deny dismissal
Need to consider foreign law to resolve capacity issue Hayes presented a German law expert opinion asserting lack of capacity Government/Board: Expert did not address joint venture agreement or relevant German partnership principles Board: Must determine foreign law under Rule 44.1, but expert evidence insufficient; further factual/legal development required
Whether Board may examine joint venture agreement to determine jurisdiction Hayes focused solely on corporate dissolution under German law Government: Board may interpret joint venture agreement and apply partnership principles to determine continuing liability Board: May and should examine the joint venture agreement and partners’ obligations to determine jurisdiction

Key Cases Cited

  • Adelsberger v. United States, 58 Fed. Cl. 616 (2003) (capacity-to-sue challenge based on matters outside the pleadings is properly treated under summary judgment procedures)
  • Twohy v. First Nat’l Bank of Chicago, 758 F.2d 1185 (7th Cir. 1985) (Rule 44.1 permits wide discretion in determining foreign law, including reliance on various sources)
  • Sadelmi Joint Venture v. Dalton, 5 F.3d 510 (Fed. Cir. 1993) (a joint venture is governed by partnership law and is a partnership created for a limited purpose)
  • Pine Prods. Corp. v. United States, 945 F.2d 1555 (Fed. Cir. 1991) (general partnership principles apply to joint ventures; partners may be jointly and severally liable)
  • Marshall N. Dana Constr. v. United States, 229 Ct. Cl. 862 (1982) (Board may interpret joint venture agreements to determine authority and related jurisdictional matters)
Read the full case

Case Details

Case Name: Edward Hayes, as Liquidator of Base Operation Services GmbH
Court Name: Armed Services Board of Contract Appeals
Date Published: Feb 27, 2017
Docket Number: ASBCA No. 59829, 59907
Court Abbreviation: A.S.B.C.A.