Sullivan v. United States
2010 U.S. App. LEXIS 24413
| Fed. Cir. | 2010Background
- In 1995, a TNT Transportation truck contracted with the USPS collided with the Sullivans’ car in Easton, MA, injuring Mrs. Sullivan.
- TNT’s contract with the Postal Service required additional liability insurance of at least $750,000 beyond the statutory minimum.
- At the time of the accident TNT carried only the Massachusetts minimum coverage of $20,000 per person.
- The Sullivans filed suit in the Court of Federal Claims, alleging the Government breached the contract by failing to enforce the insurance provision.
- The trial court held the Sullivans were intended third party beneficiaries and awarded liability and damages; the Government appealed.
- The Federal Circuit reversed, holding no breach by the Government regardless of beneficiary status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Third-party beneficiary status | Sullivans fall within the beneficiary class of the contract. | Sullivans are not within the intended beneficiary class; no privity breach by the Government. | Sullivans not entitled to enforce; privity required for standing; status uncertain but reversible anyway. |
| Breach of contract by the Government | Government breached by failing to enforce insurance provision. | TNT breached; the Government merely failed to enforce, which is not a breach. | No breach by the Government; TNT breached, not the United States. |
Key Cases Cited
- Anderson v. United States, 344 F.3d 1343 (Fed. Cir. 2003) (privity required for contract claims against the United States)
- Erickson Air Crane Co. of Wash. v. United States, 731 F.2d 810 (Fed. Cir. 1984) (government consents to sue only by those with privity)
- First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279 (Fed. Cir. 1999) (limited exceptions: standing in the shoes of a privity party)
- Montana v. United States, 124 F.3d 1269 (Fed. Cir. 1997) (third-party beneficiary must be within class clearly intended to benefit)
- Sullivan v. United States, 2005 WL 6115387 (Fed. Cl. 2005) (trial court’s reasoning on third-party beneficiary status (referred to in opinion))
- Norfolk Dredging Co. v. United States, 375 F.3d 1106 (Fed. Cir. 2004) (standards for reviewing summary judgment and factual findings)
- Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) (definite standard for reviewing factual findings on appeal)