OPINION and ORDER
On August 4, 2009, plaintiff, Insurance Company of the West (“ICW”) filed this action, pursuant to the Contract Disputes Act
I. BACKGROUND
In September 1999, Chavez entered into Contract Number N68711-99-D-6203 with the U.S. Department of the Navy (“the Navy”) to design and construct the “Live Fire Survivability Test & Evaluation Complex,” (“the project”) located at Naval Mr Weapons Station China Lake in California. Am. Compl. ¶ 5. Pursuant to the Miller Act, Chavez was required to obtain payment and performance bonds. See 40 U.S.C. § 3131 (requiring a prospective contractor to furnish performance and payment bonds before the federal government awards a construction contract in excess of $100,000). In the event that a contractor defaults on a contract, a performance bond guarantees that a construction project will be completed, while a payment bond guarantees that subcontractors and suppliers will be paid for their contributions to a project. See United Pacific Ins. Co. v. United States,
On March 26, 2001, Chavez executed a General Indemnity Agreement for the benefit of plaintiff. See Ulibarri Deck Ex. A at 1 [hereinafter “GIA”]. In the General Indemnity Agreement, Chavez assigned to plaintiff “all monies due or to become due to [Chavez] as a result of the contract covered by [the] Bonds, including ... proceeds of any delay or other damage claims” and “all other rights of [Chavez] in or growing out of the contract covered by [the] Bonds.” GIA ¶ 5. The General Indemnity Agreement provided that “[t]his assignment shall be effective as of the date of [the] Bonds, but only in the event of a Default of this Agreement.” Id. The General Indemnity Agreement also defined default to include failure to perform any contract covered by the bonds, failure to pay bills incurred in connection with any contract covered by the bonds, and failure to comply with the terms of the General Indemnity Agreement. Id. ¶ 4.
In August 2002, Chavez and plaintiff jointly notified the Navy that Chavez would not be able to meet its obligations under the bonds issued by plaintiff. Am. Compl. ¶ 6. At that time, Chavez and plaintiff also requested that the Navy direct to plaintiff all future payments that would otherwise be owed to Chavez, including payments for the settlement of any claims Chavez had against the Navy. Id.; Ulibarri Deck ¶ 10.
Following this request, Chavez continued working on the project with the assistance of
In late January 2004, Chavez’s principals, Wilfred and Deborah Chavez, each executed a “Compromise Settlement and Mutual Release Agreement” (“Compromise Settlement”) with plaintiff. See Am. Compl. Ex. B. Each Compromise Settlement established the rights of the respective parties in light of the fact that Chavez was unable to perform its construction contracts and had defaulted on the bonds issued by plaintiff. See id.
Despite plaintiff and Roel’s assistance, Chavez was unable to complete the project, and plaintiff, as the issuer of the performance bond, became responsible for its completion. Id. ¶ 7. Plaintiff, Chavez, Roel, and the Navy entered into a four-party agreement on May 26, 2004 (the “Four-Party Agreement”) under which Roel would complete all remaining work on the project. Id. Ex. A ¶ 1. The parties agreed that Roel would find its own surety to furnish payment and performance bonds for the project’s completion. Id. Ex. A ¶ 2.
On March 8, 2007, Chavez submitted a written claim to the Navy seeking $1,466,799.34 as compensation for alleged project delays and additional work. Id. ¶ 17. In its claim, Chavez noted that “[d]ue to [Chavezj’s inability to complete the project, ICW ... assumed responsibility for completing the project. [Chavez] thereafter assigned to ICW all rights to any claims against the [government.” Def.’s Reply App. at 5. The contracting officer (“CO”) for the Navy issued a written decision on November 2, 2008, granting Chavez additional compensation in the amount of $6,068 for delays resulting from base closures following the attacks on September 11, 2001, but otherwise denying Chavez’s claim. Am. Compl. ¶ 18. However, the Navy also asserted its own claim against Chavez for $85,043.00 because the government allegedly changed the contract specifications in a way that reduced Chavez’s cost of performance. Id.; Def.’s Mot. to Dismiss App. at 35.
Plaintiff then filed this action seeking compensation under the CDA on the claims denied by the CO in his November 2, 2008, decision. See Am. Compl. ¶¶ 18, 20. In its complaint, plaintiff relies on its alleged status as Chavez’s equitable subrogee and assignee as the basis for this action. See id. ¶20. Defendant thereafter filed a motion to dismiss for lack of subject-matter jurisdiction, arguing that the plaintiff is not a “contractor,” which is a prerequisite to plaintiffs suit under the CDA. Def.’s Mot. to Dismiss at 1. Thus, defendant argues that equitable subro-gation provides no basis for plaintiffs claims. Id. at 7. Furthermore, according to defendant, plaintiff has failed to show an assignment from Chavez to plaintiff that is effective against the government. Id. at 1. After the parties completed briefing, the court conducted a hearing on the motion to dismiss. See Tr. at 1.
II. JURISDICTION AND STANDARD OF REVIEW
A. Jurisdiction and Procedure Under the CDA
It is historically true that the United States cannot be sued in law or equity without its consent. See United States v. Mitchell,
To be sure, as long recognized by the Federal Circuit, examples of such statutory bars are the Assignment of Claims Act, 31 U.S.C. § 3727, and the Assignment of Contracts Act, 41 U.S.C. § 15 (collectively the “Anti-Assignment Acts” or the “Acts”). In essence, these Acts withdraw the Tucker Act’s waiver of sovereign immunity. See Ins. Co. of the W.,
Furthermore, to add some complexity to the sovereign immunity waiver analysis, the Tucker Act confers upon this court “jurisdiction to render judgment upon any claim by or against ... a contractor arising under” the CDA. 28 U.S.C. § 1491(a)(2), amended by Pub.L. No. 111-350, § 5(g)(7),
B. Standard of Review for Motion To Dismiss Pursuant to Rule 12(b)(1)
It is black letter law that the plaintiff, as the party invoking federal jurisdiction, has the burden of establishing jurisdiction by a preponderance of the evidence if the facts
In contrast to the “facial” challenge is the “factual” challenge, whereby the defendant contests “the factual basis for the court’s subject matter jurisdiction.” In such a case, “the allegations in the complaint are not controlling and only uncontroverted factual allegations are accepted as true for purposes of the motion.” Id. (citations omitted). Disputed facts in the motion to dismiss are subject to fact-finding by the court, which “may weigh relevant evidence” to determine the factual basis for jurisdiction. Ferreiro v. United States,
III. DISCUSSION
A. Plaintiff’s Jurisdictional Arguments
The dual issue of jurisdiction in this case revolves around the status of plaintiff, that is, whether the court may entertain this action under the CDA when plaintiff litigates, not as a contractor,
But this argument dies an unnatural death because it was raised for the very first time in plaintiffs briefs. See Pl.’s Opp’n at 8. Plaintiff, in fact, admits that no equitable subrogation claim based on the Tucker Act can be found in the complaint. Tr. at 40:20-41:1.
This, however, does not end the matter of plaintiff proceeding as an equitable subrogee because still to be decided is whether an equitable subrogation claim under the CDA is jurisdictionally viable. See Am. Compl. ¶¶ 9, 20. It is not. Federal Circuit precedent, binding on this court, see, e.g., Principal Mut. Life Ins. Co. v. United States,
The holdings of these eases all rest on the plain meaning of “contractor” contained in the CDA. See 41 U.S.C. § 7101(7). When interpreting a statute, a court must first divine the plain meaning of the applicable text. See, e.g., McNeill v. United States, — U.S. -,
This leaves as the sole remaining issue the question of whether plaintiff may proceed under the CDA as the assignee of Chavez. Defendant makes several arguments in support of its motion to dismiss. In denying that plaintiffs status as an assignee provides jurisdiction, and echoing the Federal Circuit’s definitional argument in Fireman’s Fund, defendant argues that an assignee may never bring an action under the CDA because an assignee, like an equitable subro-gee, is not a contractor as defined by the CDA. See Def.’s Reply at 2-3 (citing Fireman’s Fund,
But resolution of the pending motion does not require radical measures. See Morse v. Frederick,
Therefore, the court need not address the broader issue of whether the Court of Federal Claims can ever have jurisdiction over a case in which an assignee seeks to bring suit under the CDA. Instead, the court needs to address only the issue of whether the protections of the Anti-Assignment Acts here have been waived by defendant. This requires some explanation.
B. The Anti-Assignment Acts
In general, the Anti-Assignment Acts together bar the assignment of: (1) a claim against the government, (2) a government contract, or (3) some lesser or future interest in a government contract.
As the Anti-Assignment Acts make apparent, an assignment of the right to receive payments is different from an assignment of the right to assert claims. See Fireman’s Fund,
Indeed, the prevention of the burden of facing multiple claims is a significant purpose behind the CDA as well. CDA was also intended to prevent the government from having to deal with multiple and duplicative claims by making the contractor the government’s “single point of contact.” Admiralty Const., Inc. v. Dalton,
To be sure, in the context of this case, it would be strange for the court not to give some effect to the dual statutory purpose— that of proscribing multiple lawsuits — found in both sets of acts. And it would equally be remiss for the court not to require a clear showing of any governmental relinquishment of that enhanced dual protection, given the importance of those two statutes to this ease. In fact, that is current law. Precedent binding on this court recognizes the prerogative of the government to waive its protection, to lift its immunity to suit. See Delmarva,
Regardless of whether the Assignment of Claims Act or the Assignment of Contracts Act is implicated, the legal analysis for waiver is the same. See Delmarva,
To determine whether the government has implicitly waived the Anti-Assignment Acts, courts look at all conduct that can be construed as amounting to a waiver. The Supreme Court’s opinion in Johnson v. Zerbst,
To be sure, Tuftco Corp. v. United States, binding authority for this court, uses slightly different, but materially the same, core component language as Zerbst to find waiver. Tuftco,
In holding that the assignment of the payments was valid (ergo, payments should have been made to the assignee Tuftco and not to the original contracting party), the court observed that the government may waive its rights under the Assignment of Contracts Act through conduct that shows ratification— or as the court termed it, “recognition” — of the assignment. See id. at 745 (citing Maffia v. United States,
The court in Tuftco noted that the soundest method for the government to manifest assent to an assignment would have been to enter into a novation agreement.
Nevertheless, the above summary comparison reveals a tension in the law. On the one hand, a reasonable inference in Tuftco was sufficient to satisfy a totality of the circumstances test. See Tuftco,
On the other hand, the general rule in law is that when something must be clearly shown then mere inference will not suffice. See, e.g., White Mountain Apache Tribe,
Finally, in addition to the “core components” of Zerbst and Tuftco, which give form to the gelatinous “all the circumstances” waiver test, other formulations have been derived to ascertain when waiver occurs in the context of the Anti-Assignment Acts. While not as fundamental as core components, the fulfillment of which is conceptually mandatory for any waiver, certain “guideposts” have been established that are helpful in ascertaining waiver. These guideposts establish factors that may help define assignments and waivers of the Anti-Assignment Acts in a government contract setting.
For instance, in Riviera Finance, this court developed four guideposts to aid its analysis: (1) Did “the assignor and/or the assignee sen[d] notice of the assignment”; (2) Did the contracting officer “sign[] the notice of assignment”; (3) Did the contracting officer “modiffy] the contract according to the assignment”; and (4) Did the contracting officer “sen[d] payments to the assignee.” Riviera Fin. of Tex., Inc. v. United States,
Nevertheless, these guideposts are not talismanic tests that substitute for the process of applying the law. See Gasperini v. Ctr. for Humanities, Inc.,
C. Application of Anti-Assignment Acts to This Case
It is initially helpful to explain exactly what plaintiff believes the source of the relevant assignment is and what law applies to both the assignment and the waiver of that assignment. Plaintiff relies on the so-called “assignment” mentioned in the General Indemnity Agreement (“GIA”) to support its assignment claim.
But, it is uncertain exactly which Anti-Assignment Act statute plaintiff contends was waived. In its opposition to defendant’s motion to dismiss, plaintiff refers to “the Assignment of Claims Act” but then cites both 31 U.S.C. § 3727 (the Assignment of Claims Act) and 41 U.S.C. § 15 (the Assignment of Contracts Act). See Pl.’s Opp’n at 5. And Chavez, in its claim, stated that it “assigned to ICW all rights to any claims.” Def.’s Reply App. at 5. But at the hearing, plaintiffs counsel stated that “what’s being asserted here is that it was a waiver of the Anti-Assignment Act as to contract rights.” Tr. at 38:5-7. That being said, it is clear that the Assignment of Claims Act is the relevant act in this case because plaintiff seeks to assert claims for work that it alleges to have already been performed. See Tuftco,
It is also clear that plaintiffs argument that the Navy waived the Assignment of Claims Act’s protection against lawsuit, see Pl.’s Sur-Reply at 5, is based on a proffered set of facts that, when taken together, allegedly demonstrate waiver, see PL’s Opp’n at 6. Therefore, according to plaintiff, the “totality of the circumstances” test has been met. Id. (quoting Tuftco,
To be sure, plaintiff does concede that the Riviera Finance guideposts are inapplicable here. According to plaintiff this is so because, applying the guideposts, it did not send written notice of the assignment to the Navy, the Navy’s CO neither signed any notice of assignment nor modified the contract to reflect an assignment, and the Navy never paid plaintiff pursuant to any assignment. See Tr. at 36:2-19 (plaintiffs counsel
• According to plaintiff, after Chavez defaulted on its obligations to plaintiff, both Chavez and plaintiff in August 2002 notified the Navy of the default and requested that the Navy make any future payments to plaintiff, rather than to Chavez. Am. Compl. ¶6; PL’s Opp’n at 6; PL’s Sur-Reply at 7;
• The Navy was aware that plaintiff provided assistance to Chavez, including the hiring of Roel to assist and consult with Chavez on the project. PL’s Opp’n at 6; PL’s Sur-Reply at 6;
• The Navy included plaintiff and Roel in settlement discussions regarding Chavez’s claims, with the Navy instructing plaintiff and Roel to submit a request for equitable adjustment for Chavez’s claims. PL’s Sur-Reply at 6;
• To show the Navy’s notice and recognition of an assignment, plaintiff relies upon language in a March 8, 2007, claim that Chavez submitted to the Navy that allegedly stated that the claim was made “on behalf of ICW.” See PL’s Opp’n at 6; Am. Compl. ¶ 17. In its only explanation made to justify its facts, plaintiff contends that the Navy’s failure to object to this language in the claim demonstrates waiver by the government because the government “did not reserve its right to claim the protections” of the Anti-Assignment Acts. PL’s Opp’n at 6.
Taken together these alleged facts could conceivably raise an inference that the Navy may have known of an assignment of claims and assented to it. After all, the Navy was aware that Chavez was receiving assistance from plaintiff and had agreed to have any future payments on the project sent to plaintiff. See PL’s Opp’n at 6. Employees from the Navy also held discussions with plaintiff about the settlement of Chavez’s claims and told plaintiff to submit a request for equitable adjustment to pursue Chavez’s claims. See PL’s Sur-Reply at 6. And when Chavez ultimately did assert its claims, it specifically declared that it had assigned all the rights to those claims to plaintiff. See PL’s Opp’n at 6. Thus, taking all these circumstances into account, it was not wholly unreasonable for plaintiff to believe that the Navy considered plaintiff to be entitled to Chavez’s claims. This belief could have been reinforced by the Navy’s silence.
Ultimately, however, the inference is judged not by plaintiffs subjective view, but rather by an objective look at the totality of the circumstances. See Zerbst,
Take plaintiffs first bullet point allegation — that waiver of the statutory prohibition against assignment was shown by the August 2002 notice to the Navy both of Chavez’s default on plaintiffs bonds and the request to the Navy to forward all future payments to plaintiff. It is ambiguous because there is a reasonable explanation other than the one plaintiff proffers. For instance, the notice requested payments from the Navy, but did not make mention of any assignment. The import of this is that the August 2002 notice at most informed the Navy that plaintiff had been assigned the right to any payments by Chavez. It says nothing about plaintiffs vicarious right to assert claims that Chavez
The facts alleged in the second bullet point suffer from the same malady. The Navy’s knowledge that plaintiff and Roel were assisting Chavez to complete the project does not by itself equate to knowledge or recognition of an assignment. Clearly put, it was in plaintiffs interest to assist Chavez even without any assignment because plaintiff, as the performance bond surety, would ultimately be responsible for performing any work left uncompleted by Chavez. See United Pacific Ins. Co.,
The third bullet point suffers from a failure of proof. Here, plaintiff argues that the Navy recognized its right to assert Chavez’s claims when, following Chavez’s default, plaintiff and Roel participated in settlement discussions with the Navy during which time they were told to submit a formal request for equitable adjustment to pursue Chavez’s claims. Significantly, plaintiff does not indicate who specifically from the Navy relayed this offer or whether the alleged person had authority to act for the government. See id. It is well-established that only certain government employees can bind the government. See, e.g., Flexfab, L.L.C. v. United States,
Regardless of the authority issue, plaintiffs reliance on one unattributed statement instructing it to submit Chavez’s equitable adjustment claim ignores the surrounding circumstances that demonstrate patent ambiguity. It certainly raises questions. Why were both plaintiff and Roel told by this unnamed official to bring the alleged equitable adjustment claim if what plaintiff seeks to prove is that it was the sole assignee of Chavez’s claim? See Ulibarri Decl. ¶ 8. In any event, a vague statement made under ambiguous circumstances by some unnamed, unidentified government official is not sufficient to show the intentional relinquishment and clear assent or recognition required for waiver of the Assignment of Claims Act. See Zerbst,
Plaintiffs final waiver argument, found in the fourth bullet point, is based on the claim Chavez filed with the Navy that purportedly
It is dubious whether the language in the claim by itself is enough to clearly show that the Navy recognized the ostensible assignment — especially since it was Chavez, and not plaintiff, who brought the claim. Simply put, this (and other factors surrounding the purported assignment) indicates that it is highly unlikely that the Navy gave its clear assent to the assignment. See D & H Dis-trib.,
Plaintiffs argument that silence is golden, see Pl.’s Opp’n at 6, is based on a doctrine at least as old as Roman law: qui tacet consen-tiré videtur (one who is silent may be seen to have given consent).
Accordingly, the resolution of plaintiffs tacit consent argument requires the court to apply the ancient “all the circumstances” standard by reviewing the circumstances surrounding a possible waiver of the statutory right or privilege created by Congress in the Assignment of Claims Act. See Zerbst,
To be sure, plaintiff misunderstands the nature of both Anti-Assignment Acts and misconstrues Tuftco. It is not incumbent upon the government to reserve the protections of the Anti-Assignment Acts. Rather, the Anti-Assignment Acts protect the government unless they are clearly waived, see Delmarva,
Furthermore, plaintiff misconstrues Tuftco because the waiver in Tuftco did not stem from the government’s silence, as plaintiff asserts, but in reality from the words and conduct of the government’s CO. See Tuftco,
Indeed, looking at the Navy’s silence in context, the court finds its significance vague at best. It was Chavez that made the claim against the Navy. The conflict to be resolved was between them. Any other declaration or writing in the claim relating to a third party, not necessary to the underlying dispute, without more, can hardly be said to bind the Navy to a future commitment to that third party.
What happened after Chavez submitted its claim to the Navy was quite simple. The Navy’s CO thereafter issued a decision to Chavez, the submitter of the claim. See Def.’s Mot. to Dismiss App. at 35-36. Unlike what happened in Tuftco, the Navy did not address or respond to the ostensible assign-ee, our plaintiff, see id. at 1, nor did it make any payments to plaintiff, see Tr. at 36:2-19. The court finds that the circumstances surrounding this case do not demonstrate that the Navy’s silence clearly amounted to a tacit acceptance, or, as the Tuftco court would put it, a “recognition” of an assignment from Chavez to plaintiff.
In sum, without both knowledge and assent the Navy cannot be found to have intentionally relinquished the protections of the Anti-Assignment Acts. See Zerbst,
IV. CONCLUSION
For the reasons stated above, defendant’s MOTION to dismiss this action for lack of jurisdiction is GRANTED. The Clerk is directed to take the necessary actions to dismiss this matter.
IT IS SO ORDERED.
Notes
. As this court explained in Redland Co., Inc. v. United States, the enactment of Public Law No. 111-350 reorganized Title 41 of the United States Code and in particular the CDA. See
. Instead of filing in the Court of Federal Claims, the contractor may elect to appeal the contracting officer’s decision to the appropriate agency board of contract appeals within ninety days of the contracting officer’s decision. 41 U.S.C. § 7104(a).
. See Tr. at 31:18-19, 52:6-8 (plaintiff’s counsel acknowledging that Chavez, not ICW, is the contractor).
. THE COURT: Okay. So show me in the complaint where [the Tucker Act allegations are]. I’m having trouble figuring [it] out. It sure looks to me like it’s an appeal under the [CDA] and that’s what you’re alleging here.
[PLAINTIFF’S COUNSEL]: It is, Your Honor. That’s exactly what it is. Maybe inartfully pled, but in the alternative, there is a Tucker Act cause of action that ICW can pursue. It was briefed in my—
THE COURT: No, no, no, no, no. I just want to know where in the amended complaint there [are] Tucker Act allegations.
THE COURT: [I]t sure looks like solely a[CDA] case. [PLAINTIFF’S COUNSEL]: I would agree, Your Honor. I would agree. I mean, perhaps like I said inartfully pled, but for the purposes of today [the hearing on the motion to dismiss] I would agree it’s a CDA Claim____ Tr. at 39:7-40:25.
. THE COURT: Let’s turn to the Firem[a]n's Fund case for the statutory analysis, which seems to prohibit equitable subrogation cases under the CDA and may or may not allow it where there’s a valid assignment because the [c]ourt didn’t really get to that issue.
[PLAINTIFF’S COUNSEL]: Right.
THE COURT: Okay. Are you dropping the equitable subrogation claim under the CDA in light of that case?
[PLAINTIFF’S COUNSEL]: In light of that case, yes, Your Honor.
Tr. at 29:16-30:1.
. Although the Anti-Assignment Acts bar the types of assignments referred to above, they do contain an exception not relevant here for assignments to "financing institutions,” a classification that does not include plaintiff. See Fireman’s Fund,
. The Supreme Court has recognized other purposes for the Anti-Assignment Acts. One is to prevent "persons of influence from buying up claims against the United States” and using their influence to exert political or other improper pressure in prosecuting those claims. United States v. Shannon,
. The definition of waiver as an intentional relinquishment or abandonment of a known right or privilege predates Zerbst, which is a Sixth Amendment right to counsel case. See, e.g., Hox-ie v. Home Ins. Co.,
. A novation agreement substitutes an original party to a contract with a new party. See Ginsberg v. Austin,
. The full quote of the language used by the Tuftco court is as follows: “It is enough to say that the totality of the circumstances presented to the court establishes the [gjovemment’s recogni
. Originally, plaintiff argued that the Settlement Agreements signed by Chavez’s principals contained the relevant assignment. Pl.’s Opp'n at 5. However, plaintiff now relies solely on the GIA. Tr. at 54:7-12 (plaintiff’s counsel stating that "the only effective assignment as to [Chavez] was through the indemnity agreement” and therefore the indemnity agreement is "what we need to focus on”).
. John Adams, Argument in Defense of the Soldiers in the Boston Massacre Trials (December 1770), quoted in John Bartlett, Bartlett's Familiar Quotations 351 (Justin Kaplan ed., 17th ed. 2002).
. Plaintiff asserts that Chavez filed this claim "on behalf of ICW." Am. Compl. ¶ 17. However, the words "on behalf of ICW" do not appear in the claim. See Def.'s Reply App. at 1-11.
. See United States v. Irvine,