Langkamp v. United States

In the United States Court of Federal Claims

No. 15-764C

Filed March 20, 2017

)

TREVOR LANGKAMP, )

)

Plaintiff, )

)

Motion for Summary Judgment; RCFC

v. )

56; Breach of Contract; Annuity.

)

THE UNITED STATES, )

)

Defendant. )

)

Patrick James Attridge, Counsel of Record, King & Attridge, Rockville, MD, for

plaintiff.

Mollie L. Finnan, Trial Attorney, Deborah A. Bynum, Assistant Director, Robert E.

Kirschman, Jr., Director, Benjamin C. Mizer, Principal Deputy Assistant Attorney General,

Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington,

DC, for defendant.

MEMORANDUM OPINION AND ORDER

GRIGGSBY, Judge

I. INTRODUCTION

Plaintiff, Trevor Langkamp, brought this breach of contract matter alleging that the

government breached a stipulation for compromise settlement that his parents entered into with

the United States to resolve a personal injury lawsuit brought on his behalf (the “Settlement

Agreement”). Plaintiff and the government have filed cross-motions for summary judgment on

the issue of liability, pursuant to Rule 56 of the Rules of the United States Court of Federal

Claims (“RCFC”). Pl. Mot.; Def. Mot. For the reasons set forth below, the Court DENIES

plaintiff’s motion for partial summary judgment on liability and GRANTS the government’s

cross-motion for summary judgment on liability.

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II. FACTUAL AND PROCEDURAL BACKGROUND1

A. Factual Background

In this breach of contract matter, plaintiff, Trevor Langkamp, alleges that the government

has breached the Settlement Agreement that his parents entered into with the United States in

1984 to resolve a personal injury lawsuit brought on Mr. Langkamp’s behalf. Specifically,

plaintiff alleges that the Settlement Agreement obligates the government to make and guarantee

certain structured payments provided for in the agreement. See Compl. at ¶¶ 14-23. Plaintiff

further alleges that the government breached the Settlement Agreement by failing to pay or

guarantee the full amount of the monthly and periodic lump-sum payments required under the

Settlement Agreement after the original annuity company went into bankruptcy. Id.; see also

Def. Mot. at 1.

As relief, plaintiff seeks to recover $68,270.78 in unpaid monthly annuity payments for

the period August 2013 and June 2015. Compl. at ¶ 15. Plaintiff also seeks to recover a “lump

sum equal to the present value of the monthly annuity payments that he is entitled to receive,” for

the period July 2015 through the end of his life expectancy, plus a lump sum amount equal to the

present value of certain lump-sum payments due to plaintiff on December 15, 2018 and

December 15, 2028. Id. at ¶ 23.

i. The Settlement Agreement

The material facts of this case are not in dispute. On April 18, 1980, plaintiff suffered

certain injuries while on United States Department of the Army property. Compl. at ¶ 3; Def.

Mot. at 2. In 1982, plaintiff’s parents filed a Federal Tort Claims Act (“FTCA”) claim against

the United States on plaintiff’s behalf to recover damages in connection with these injuries. Def.

App. at A1-A6; Compl. at ¶ 4.

On November 15, 1984, plaintiff’s parents executed the Settlement Agreement to fully

resolve the claims brought in the FTCA litigation. Def. App. at A8-A10; Compl. at ¶ 5; see also

Def. Mot. at 3. The Settlement Agreement provides, among other things, that the “United States

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The facts recited in this Memorandum Opinion and Order are taken from plaintiff’s complaint

(“Compl.”); plaintiff’s motion for partial summary judgment (“Pl. Mot.”); the government’s cross-motion

for summary judgment on liability (“Def. Mot.”) and exhibits attached thereto (“Def. App. at A1-A182”).

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of America and United States Department of Army, will pay to the plaintiffs . . . the sum of

$239,425.45 as an upfront payment which includes attorney fees and costs and a structured

settlement for the benefit of Trevor Langkamp, which sum shall be in full settlement and

satisfaction of any and all claims . . . on account of the incident or circumstances giving rise” to

the Langkamps’ lawsuit. Def. App. at A8, ¶ 2; Compl. at ¶ 5. The Settlement Agreement also

provides:

That the aforesaid amount shall be paid as follows: $350.00 per month beginning

by the beginning of January, 1985 through October 15, 1996, then $3,100.00 per

month, 3 percent compounded annually for life, guaranteed for 15 years, beginning

November 15, 1996, and Lump Sum Payments as follows:

$ 15,000.00 on December 15, 1996

50,000.00 on December 15, 2000

100,000.00 on December 15, 2008

250,000.00 on December 15, 2018

1,000,000.00 on December 15, 2028

Def. App. at A9, ¶ 3; see Compl. at ¶¶ 6-7.

The Settlement Agreement further provides that “plaintiffs hereby agree to accept said

sum in full settlement and satisfaction of any and all claims and demands . . . which it or its

agents or assigns may have against . . . the United States of America and the United States

Department of Army . . . .” Def. App. at A9, ¶ 4.

A Memorandum For File dated October 30, 1984, signed by the then-Acting Assistant

Attorney General of the Civil Division of the Department of Justice provides that “[s]ettlement

of this case for $400,000 in a structured settlement to be paid by the United States is hereby

approved.” Def. App. at A7. In November 1984, the United States General Accounting Office

(“GAO”) issued an advice of payment of settlement to accompany check certifying that

$400,000 is due to plaintiff from the United States, payable from the appropriations indicated to

J.M.W. Settlements, Inc. (“JMW”), on behalf of plaintiff. Id. at A14. The advice of payment of

settlement to accompany check further provides that the GAO will issue two checks: a check in

the amount of $160,574.55 to JMW for Trevor Langkamp and a check in the amount of

$239,425.45 to Joseph P. Langkamp and Christina Langkamp, the natural guardians of Trevor

Langkamp. Id.

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Subsequently, in December 1984, the government paid $239,425.45 to the Langkamps to

fulfill the lump-sum payment requirement set forth in the Settlement Agreement. Id. at A35.

The government paid the remaining amount of $160,574.55 to JMW, a structured settlement

broker, for the purchase of structured settlement annuities on December 5, 1984. Id. at A35-

A37.

ii. The ELNY Annuities And Bankruptcy

On November 30, 1984, JMW purchased two single premium structured settlement

annuity policies from Executive Life Insurance Company of New York (“ELNY”) to fund the

monthly and the lump-sum payments delineated in paragraph three of the Settlement Agreement.

Compl. at ¶ 8; Def. Mot. at 4; Def. App. at A9, A17-A34. On December 7, 1984, the

Langkamps executed a release in full and final satisfaction of their claims. Def. App. at A38-

A39. Thereafter, the Langkamps and the government executed a stipulation of dismissal of the

Langkamps’ FTCA claim on December 10, 1984. Id. at A40-A43. The United States District

Court for the Western District of Michigan dismissed the action on December 17, 1984. Id. at

A44.

During the period January 1985 to July 2013, plaintiff received the monthly and periodic

lump-sum payments required under the Stipulation Agreement pursuant to the annuities

purchased on his behalf. Id. at A21, A30; Compl. at ¶ 9; Def. Mot. at 4. On April 16, 2012, the

Supreme Court of New York declared ELNY insolvent, and the court approved a restructuring

agreement for ELNY (the “Restructuring Agreement”). Def. App. at A45-A51; Compl. at ¶ 10;

Answer at ¶ 10. Under the Restructuring Agreement, ELNY’s assets were transferred to the

Guaranty Association Benefit Company (“GABC”), and the GABC assumed responsibility for

making the monthly and periodic lump-sum payments due to plaintiff. Compl. at ¶ 10.

In letters dated November 12, 2013, and December 9, 2013, the GABC notified plaintiff

that his monthly annuity payments would be reduced by 42.39%, from $4,974.59 to $2,108.73

per month. Id. at ¶¶ 11-12; Def. App. at A181-A182. In addition, the GABC notified plaintiff

that the periodic lump-sum payments to be paid in December of 2018 and December 2028 would

be reduced from $250,000.00 and $1,000,000.00 to $105,975.00 and $423,900.00, respectively.

Compl. at ¶ 11.

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The GABC began paying reduced annuity payments to plaintiff in August 2013. Pl. Mot.

at 5. As a result, during the period August 2013 to October 2013, plaintiff received $2,108.73 in

monthly annuity payments from the GABC, instead of the $4,974.59 per month payment that he

would have received from ELNY. Compl. at ¶ 12. During the period November 2013 to

October 2014, plaintiff received $2,177.99 in monthly annuity payments from the GABC,

instead of the $5,123.83 per month payment that he would have received from ELNY. Id. In

addition, during the period November 2014 to June 2015, plaintiff received $2,237.15 in monthly

annuity payments from GABC, instead of the $5,277.54 per month payment that he would have

received from ELNY. Id.

B. Relevant Procedural Background

Plaintiff filed the complaint in this matter on July 22, 2015. See generally Compl. On

November 20, 2015, the government answered the complaint. See generally Answer.

On March 11, 2016, plaintiff filed a motion for partial summary judgment on liability.

See generally Pl. Mot. On May 27, 2016, the government filed a cross-motion for summary

judgment on liability and a response and opposition to plaintiff’s motion for partial summary

judgment on liability. See generally Def. Mot. On July 8, 2016, plaintiff filed a response and

opposition to the government’s cross-motion for summary judgment on liability and a reply in

support of plaintiff’s motion for partial summary judgment on liability. See generally Pl. Reply.

On September 2, 2016, the government filed a reply in support of its cross-motion for summary

judgment on liability. See generally Def. Reply.

On November 15, 2016, the parties filed supplemental briefs regarding the impact of the

United States Court of Appeals for the Federal Circuit’s decision in Nutt v. United States, 837

F.3d 1292 (Fed. Cir. 2016), on this matter. See generally Pl. Supp. Brief; Def. Supp. Brief. On

December 6, 2016, the parties filed responsive supplemental briefs. See generally Pl. Supp.

Resp.; Def. Supp. Resp. On December 20, 2016, the parties filed supplemental reply briefs. See

generally Pl. Supp. Reply; Def. Supp. Reply.

These matters having been fully briefed, the Court addresses the pending motions.

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III. STANDARDS OF REVIEW

A. Jurisdiction And Contract Claims Against The United States

The Tucker Act grants this Court jurisdiction to consider claims based “upon any express

or implied contract with the United States.” 28 U.S.C. § 1491(a)(1). The Court does not,

however, possess jurisdiction to consider claims against the United States “based on contracts

implied in law.” United States v. Mitchell, 463 U.S. 206, 218 (1983) (citing Merritt v. United

States, 267 U.S. 338, 341 (1925)); Aboo v. United States, 86 Fed. Cl. 618, 626 aff’d, 347 F.

App’x 581 (Fed. Cir. 2009) (citation omitted). And so, to bring a valid contract claim against the

United States in this Court, the underlying contract must be either express or implied-in-fact.

Aboo, 86 Fed. Cl. at 626. Such a contract claim must also be for “actual, presently due money

damages . . . .” King v. United States, 395 U.S. 1, 3 (1969); see also Speed v. United States, 97

Fed. Cl. 58, 66 (2011) (citations omitted).

In addition, plaintiff bears the burden of proving the existence of a contract with the

United States, and plaintiffs must show that there is “something more than a cloud of evidence

that could be consistent with a contract to prove a contract and enforceable contract rights.” D &

N Bank v. United States, 331 F.3d 1374, 1377 (Fed. Cir. 2003). To establish the existence of

either an express or implied-in-fact contract with the United States, a plaintiff must show: (1)

mutuality of intent; (2) consideration; (3) lack of ambiguity in the offer and acceptance; and (4)

actual authority to bind the government in contract on the part of the government official whose

conduct is relied upon. Kam-Almaz v. United States, 682 F.3d 1364, 1368 (Fed. Cir. 2012). A

government official’s authority to bind the United States must be express or implied. Roy v.

United States, 38 Fed. Cl. 184, 187-89, dismissed, 124 F.3d 224 (Fed. Cir. 1997). And so, “the

[g]overnment, unlike private parties, cannot be bound by the apparent authority of its agents.”

Id. at 187.

In this regard, a government official possesses express actual authority to bind the United

States in contract “only when the Constitution, a statute, or a regulation grants it to that agent in

unambiguous terms.” Jumah v. United States, 90 Fed. Cl. 603, 612 (2009) aff'd, 385 F. App’x

987 (Fed. Cir. 2010) (internal citations omitted); see also City of El Centro v. United States, 922

F.2d 816, 820 (Fed. Cir. 1990). On the other hand, a government official possesses implied

actual authority to bind the United States in contract “when the employee cannot perform his

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assigned tasks without such authority and when the relevant agency’s regulations do not grant

the authority to other agency employees.” SGS-92-X003 v. United States, 74 Fed. Cl. 637, 652

(2006) (citations omitted); see also Aboo, 86 Fed. Cl. at 627 (implied actual authority “is

restricted to situations where ‘such authority is considered to be an integral part of the duties

assigned to a [g]overnment employee’” (quoting H. Landau & Co. v. United States, 886 F.2d

322, 324 (Fed. Cir. 1989))). In addition, when a government agent does not possess express or

implied actual authority to bind the United States in contract, the government can still be bound

by contract if the contract was ratified by an official with the necessary authority. Janowsky v.

United States, 133 F.3d 888, 891–92 (Fed. Cir. 1998).2

B. RCFC 56

Pursuant to RCFC 56, a party is entitled to summary judgment when there is “no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” RCFC

56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Biery v. United States,

753 F.3d 1279, 1286 (Fed. Cir. 2014). A dispute is “genuine” when “the evidence is such that a

reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. A

fact is “material” if it could “affect the outcome of the suit under the governing law . . . .” Id. In

addition, the moving party bears the burden of demonstrating the absence of any genuine issues

of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). And so, “‘the inferences to

be drawn from the underlying facts . . . must be viewed in the light most favorable to the party

opposing the motion.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88

(1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

In making a summary judgment determination, the Court does not weigh the evidence

presented, but instead must “determine whether there is a genuine issue for trial.” Anderson, 477

U.S. at 249; see also Am. Ins. Co. v. United States, 62 Fed. Cl. 151, 154 (2004); Agosto v. INS,

2

Ratification may take place at the individual or institutional level. SGS-92-X003 v. United States, 74

Fed. Cl. 637, 653-54 (2006). Individual ratification occurs when a supervisor: (1) possesses the actual

authority to contract; (2) fully knew the material facts surrounding the unauthorized action of his or her

subordinate; and (3) knowingly confirmed, adopted, or acquiesced to the unauthorized action of the

subordinate. Id. at 654 (quoting Leonardo v. United States, 63 Fed. Cl. 552, 560 (2005)). In contrast,

institutional ratification occurs when the government “seeks and receives the benefits from an otherwise

unauthorized contract.” Id.; see also Janowsky v. United States, 133 F.3d 888, 891-92 (Fed. Cir. 1998).

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436 U.S. 748, 756 (1978) (“[A trial] court generally cannot grant summary judgment based on its

assessment of the credibility of the evidence presented . . . .”). The Court may grant summary

judgment when “the record taken as a whole could not lead a rational trier of fact to find for the

nonmoving party . . . .” Matsushita Elec. Indus. Co., 475 U.S. at 587. The above standard

applies when the Court considers cross-motions for summary judgment. Principal Life Ins. Co.

& Subsidiaries v. United States, 116 Fed. Cl. 82, 89 (2014); see also Estate of Hevia v. Portrio

Corp., 602 F.3d 34, 40 (1st Cir. 2010). And so, when both parties move for summary judgment,

“‘the court must evaluate each party’s motion on its own merits, taking care in each instance to

draw all reasonable inferences against the party whose motion is under consideration.’” Abbey v.

United States, 99 Fed. Cl. 430, 436 (2011) (quoting Mingus Constructors, Inc. v. United States,

812 F.2d 1387, 1391 (Fed. Cir. 1987)).

C. Contract Interpretation

The United States Court of Appeals for the Federal Circuit has held that “[c]ontract

interpretation is a question of law.” Barron Bancshares, Inc., v. United States, 366 F.3d 1360,

1368 (Fed. Cir. 2004); Fortec Constructors v. United States, 760 F.2d 1288, 1291 (Fed. Cir.

1985); Greenhill v. United States, 92 Fed. Cl. 385, 393 (2010) (“The interpretation of a

settlement agreement is a question of law.”); see also Harris v. Dep’t of Veterans Affairs, 142

F.3d 1463, 1467 (Fed. Cir. 1998) (“A settlement agreement is a contract, and we apply basic

contract principles unless precluded by law.”). When interpreting a contract, the Court first

looks to whether the language of an agreement is ambiguous or unambiguous. See Grumman

Data Sys. Corp. v. Dalton, 88 F.3d 990, 997 (Fed. Cir. 1996); see also NVT Techs., Inc. v. United

States, 370 F.3d 1153, 1159 (Fed. Cir. 2004). It is also well established that the Court’s

interpretation of a contract begins with its “plain language.” McAbee Constr., Inc. v. United

States, 97 F.3d 1431, 1435 (Fed. Cir. 1996). And so, the plain and unambiguous provisions of a

contract “must be given their plain and ordinary meaning . . . and the court may not resort to

extrinsic evidence to interpret them.” Id. (citations omitted); see also Jowett, Inc. v. United

States, 234 F.3d 1365, 1368 (Fed. Cir. 2000) (holding that the Court gives “the words of the

agreement their ordinary meaning unless the parties mutually intended and agreed to an

alternative meaning.”); Hills Materials Co. v. Rice, 982 F.2d 514, 516 (Fed. Cir. 1992)

(“Wherever possible, words of a contract should be given their ordinary and common meaning.”)

(citations omitted).

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The Court also interprets the “provisions of a contract so as to make them consistent” and

so as not “to render them ineffective or superfluous.” Abraham v. Rockwell Int’l. Corp., 326

F.3d 1242, 1251, 1254 (Fed. Cir. 2003) (citations omitted); Fortec Constructors, 760 F.2d at

1292 (“This court must be guided by the well accepted and basic principle that an interpretation

that gives a reasonable meaning to all parts of the contract will be preferred to one that leaves

portions of the contract meaningless.”). But, in instances in which “there is a clear conflict

between” contract clauses, the Court must “determine which of the conflicting terms controls.”

Abraham, 326 F.3d at 1253-54 (citations omitted). To do so, the Court must apply the “general

rules of interpretation,” which require that, “‘[w]here specific and general terms in a contract are

in conflict, those which relate to a particular matter control over the more general language.’”

Id. at 1254 (citations omitted) (emphasis existing).

The Federal Circuit has also recognized that a contract that is reasonably susceptible to

more than one interpretation is ambiguous. Hills Materials Co., 982 F.2d at 516 (citations

omitted). Where a latent ambiguity exists in a contract, “the court will construe the ambiguous

term against the drafter of the contract when the nondrafter's interpretation is reasonable,” under

the general rule of contra proferentem. Id. (citations omitted); see also NVT Techs, Inc., 370

F.3d at 1159 (”To show an ambiguity it is not enough that the parties differ in their respective

interpretations . . . both interpretations must fall within the zone of reasonableness.”) (citations

omitted); HPI/GSA-3C, LLC v. Perry, 364 F.3d 1327, 1334 (Fed. Cir. 2004) (“Before a court

may enforce the general rule of contra proferentem against the drafter of an ambiguity, the

contractor’s interpretation of that ambiguity must be reasonable.”). But, “an exception to the

general rule that requires construing ambiguities against” the drafter exists where “the

ambiguities are so patent and glaring that it is unreasonable for a [party] not to discover and

inquire about them.” HPI/GSA-3C, LLC, 364 F.3d at 1334 (quotations omitted). “Where an

ambiguity is not sufficiently glaring to trigger the patent ambiguity exception, it is deemed latent

and the general rule of contra proferentem applies.” Id. (citations omitted).

Specifically relevant to the present case, the Federal Circuit has also previously examined

and interpreted settlement agreements with the United States that require future, periodic annuity

payments in Nutt v. United States and Massie v. United States. In Massie, the appellants brought

a breach of contract claim against the government alleging that the government had guaranteed

the annuity payments provided for under a settlement agreement that required the government to

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purchase an annuity that “will result in distributions on behalf of the United States,” after the

annuity company went into conservatorship and failed to make the full payments. 166 F.3d

1184, 1186-87 (Fed. Cir. 1999). The Federal Circuit observed that “[t]he language specifying

that the annuity ‘will result in distributions’ and that the disbursements ‘shall be paid’ is

unambiguously mandatory and says unequivocally that the Massies must receive the payments.”

Id. at 1190. And so, the Federal Circuit held that the government had guaranteed the annuity

payments required under the settlement agreement. Id.

More recently, in Nutt, the Federal Circuit interpreted a settlement agreement that

required the purchase of an annuity for the purpose of making certain periodic, future payments

required under that agreement. 837 F.3d 1292, 1294 (Fed. Cir. 2016). After the Nutt appellants

began receiving reduced payments under the annuity, the appellants alleged that the government

had guaranteed, and thus, was liable for, the annuity payments. Id. The Federal Circuit noted in

the decision, however, that the settlement agreement at issue specifically provided that “the

United States shall assist [Plaintiffs], their heirs or personal representatives, in the prosecution of

said suit to the extent permitted by applicable laws and regulations,” in the event that the annuity

company defaults on the annuity payments. Id. at 1297 (brackets existing). The Federal Circuit

also held that, among other things, “[t]he plain language of the Agreement makes clear that the

Government agreed to purchase annuities and pay certain lump-sum payments to Appellants, not

to make future payments or guarantee that the future payments be made if the insurance

company defaulted.” Id. at 1298. And so, the Federal Circuit concluded that “the Government's

obligations were satisfied upon making the lump-sum payments and purchasing the annuity.” Id.

IV. LEGAL ANALYSIS

The parties have filed cross-motions for summary judgment with respect to liability on

the issue of whether the government is liable to plaintiff and obligated to pay the outstanding

amounts of certain monthly and periodic lump-sum payments called for under the Settlement

Agreement. See Pl. Mot.; Def. Mot. Plaintiff argues that the government guaranteed these

payments and, as a result, the government breached the Settlement Agreement by failing to pay

the outstanding amounts due. See Pl. Mot. at 8-9. The government counters that it has not

breached the Settlement Agreement because the government has not expressly guaranteed the

monthly and periodic payments required under that agreement. Def. Mot. at 7-8. And so, the

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government maintains that it has fully satisfied its obligations with respect to these payments by

purchasing annuities for the purpose of making the payments. Id.

For the reasons discussed below, the plain language of the Settlement Agreement

demonstrates that the government has not unequivocally agreed to guarantee the monthly and

periodic lump-sum payments required under that agreement. And so, the Court DENIES

plaintiff’s motion for summary judgment on liability and GRANTS the government’s cross-

motion for summary judgment on liability.

A. The Settlement Agreement Provides For The Purchase Of Annuities

As an initial matter, the plain language of the Settlement Agreement requires that the

government purchase annuities for the purpose of making the monthly and periodic lump-sum

payments called for under that agreement. The parties agree that the Settlement Agreement is

unambiguous. Def. Supp. Brief at 1; Pl. Supp. Brief at 3; Grumman Data Sys. Corp., 88 F.3d at

997 (demonstrating that the Court first looks to whether the language of an agreement is

ambiguous or unambiguous); NVT Techs., Inc., 370 F.3d at 1159 (same). And so, the Court

begins its interpretation of the Settlement Agreement with the plain language of that agreement.

McAbee Constr., Inc., 97 F.3d at 1435; see also Jowett, Inc., 234 F.3d at 1368 (holding that the

Court gives “the words of the agreement their ordinary meaning unless the parties mutually

intended and agreed to an alternative meaning”).

In this regard, the Settlement Agreement provides, in relevant part, that:

[The] United States of America and United States Department of Army, will pay to

the [Langkamps] . . . the sum of $239,425.45 as an upfront payment which includes

attorney fees and costs and a structured settlement for the benefit of Trevor

Langkamp, which sum shall be in full settlement and satisfaction of any and all

claims . . . on account of the incident or circumstances giving rise” to the

Langkamps’ lawsuit.

Def. App. at A8, ¶ 2 (emphasis supplied). The Settlement Agreement further provides that:

[T]he aforesaid amount shall be paid as follows: $350.00 per month beginning by

the beginning of January, 1985 through October 15, 1996, then $3,100.00 per

month, 3 percent compounded annually for life, guaranteed for 15 years, beginning

November 15, 1996, and Lump Sum Payments as follows:

$ 15,000.00 on December 15, 1996

50,000.00 on December 15, 2000

100,000.00 on December 15, 2008

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250,000.00 on December 15, 2018

1,000,000.00 on December 15, 2028

Def. App. at A9, ¶ 3; see Compl. at ¶¶ 6-7. The Court interprets these provisions to require that

the government purchase structured settlement annuities to make the monthly and lump-sum

payments delineated in the Settlement Agreement. In this regard, the plain language of

paragraph two of the Settlement Agreement provides that the government “will pay . . . a

structured settlement for the benefit of Trevor Langkamp.” Def. App. at A8, ¶ 2. The Court

must give these words their ordinary meaning, absent evidence that the parties mutually intended

an alternative meaning. McAbee Constr., Inc., 97 F.3d at 1435; see also Jowett, Inc., 234 F.3d at

1368. A “structured settlement” is generally recognized to mean a legal settlement paid out as an

annuity rather than as a lump sum. See, e.g., 3 Stein on Personal Injury Damages Treatise § 16:1

(3d ed.) (2016) (“The payments [under a structured settlement] are normally funded using an

annuity or obligations of the United States.”); 1 Negotiating and Settling Tort Cases § 18:1

(providing that under a structured settlement, “[t]he defendant may retain the obligation to make

the future payments, or, more commonly, it may transfer the obligation to make the future

payments by purchasing an annuity contract from a life insurance company”). The Oxford

Pocket Dictionary of Current English also defines the term “structured settlement” as “a legal

settlement paid out as an annuity rather than in a lump sum . . . .” The Oxford Pocket Dictionary

of Current English, available at www.encyclopedia.com/humanities/dictionaries-thesauruses-

pictures-and-press-releases/structured-settlement (accessed March 17, 2017).

Because neither party argues that the parties mutually agreed to another meaning for the

term structured settlement, the Court adopts the ordinary meaning of the term structured

settlement−a legal settlement paid out as an annuity rather than as a lump sum–to interpret the

Settlement Agreement. See, e.g., Pl. Mot.; Def. Mot. And so, the Court construes paragraph two

of the Settlement Agreement to require that the government use a portion of the settlement

proceeds to purchase structured settlement annuities for the purpose of making the payments

delineated in paragraph three of that agreement.

Plaintiff’s reading of the Settlement Agreement to not require that the government

purchase annuities for the purpose of making the monthly and periodic lump-sum payments

required under that agreement is also belied by the plain language of that agreement. See Pl.

Mot. at 8-9. Plaintiff correctly observes in his motion for partial summary judgment that the

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word annuity does not appear in the Settlement Agreement. See Pl. Mot. at 1. But, the

Settlement Agreement, nonetheless, clearly provides that “the government will pay . . . a

structured settlement.” Def. App. at A8. As discussed above, the Court interprets the

requirement that the government will pay a structured settlement to require that the government

purchase structured settlement annuities to make the structured payments required under that

agreement. See, e.g., 3 Stein on Personal Injury Damages Treatise § 16:1 (3d ed.) (2016); 1

Negotiating and Settling Tort Cases § 18:1. Given this, the Court construes the Settlement

Agreement to reflect the parties’ intent for the government to purchase structured settlement

annuities for the purpose of making the monthly and periodic lump-sum payments to plaintiff.3

Def. App. at A9.

B. The Government Did Not Guarantee The Future

Periodic Payments Set Forth In The Settlement Agreement

Having determined that the plain language of the Settlement Agreement requires the

government to purchase structured settlement annuities for the purpose of making the structured

payments set forth in that agreement, the Court next examines whether the government has

guaranteed these structured payments in the event of a default by the annuity company. In his

motion for partial summary judgment on liability, plaintiff argues that the government has agreed

to pay or guarantee these monthly and periodic lump-sum payments.4 Pl. Mot. at 9. The

government counters in its cross-motion that the Settlement Agreement does not include such a

guarantee and that the government has fulfilled its obligations under the agreement by

purchasing the structured settlement annuities. See Def. Mot. at 7; Def. Supp. Resp. at 3. For

the reasons discussed below, the plain language of the Settlement Agreement demonstrates that

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While the Court need not consider extrinsic evidence to interpret the unambiguous terms of the

Settlement Agreement, it is noteworthy that the Court’s reading of the Settlement Agreement is also

supported by the undisputed material facts regarding the parties’ intent in this case. See e.g., Greco v.

Dep’t of Army, 852 F.2d 558, 560 (Fed. Cir. 1988). It undisputed that the government paid a portion of

plaintiff’s settlement proceeds directly to a structured settlement broker for the purpose of purchasing

structured settlement annuities to make the monthly and periodic lump-sum payments called for under

that agreement. Def. Mot. at 3-4; Pl. Reply at 5; Def. App. at A35-A37. It is similarly without dispute

that, after the structured settlement broker purchased these structured settlement annuity policies, the

Langkamps released their legal claims against the government. Def. App. at A38-A44.

4

Plaintiff contends that the government has been in breach of this agreement since August 2013, when he

first began to receive reduced annuity payments. Compl. at ¶¶ 12-15.

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the government has not guaranteed the monthly and periodic lump-sum payments required under

that agreement.

First, plaintiff points to no language in the Settlement Agreement that expressly and

unequivocally requires that the government guarantee the monthly and periodic lump-sum

payments delineated in that agreement. Id. As the United States Court of Appeals for the

Federal Circuit recently recognized in Nutt, the principle of sovereign immunity compels a

finding that the agreement at issue here does not obligate the government to guarantee future

payments if the government has not unequivocally promised to do so.5 837 F.3d at 1298. A

plain reading of the Settlement Agreement shows that the agreement does not contain such an

unequivocal promise. See Def. App. at A8-A10. Rather, the Settlement Agreement simply

provides that the future monthly and periodic lump-sum payments to be made to plaintiff “shall

be paid.” Id. at A9. This language does not provide that the government will guarantee−or even

make−these payments. Id. In fact, the use of the phrase “shall be paid” indicates that the parties

intended for a third party, rather than the government, to actually make the future payments.

And so, the Court does not read the plain language of the Settlement Agreement to require that

the government guarantee the future payments called for under that agreement.

The Court is also unpersuaded by the other arguments that plaintiff puts forward to show

that the Settlement Agreement obligates the government to guarantee his monthly and periodic

lump-sum payments. In this regard, plaintiff argues that there is no need for the Settlement

Agreement to contain an unequivocal guarantee of these payments because, the Settlement

Agreement does not contemplate the purchase of annuities. Pl. Supp. Resp. at 3-4; Pl. Supp.

Reply at 3. But, as discussed above, paragraph two of the agreement clearly requires that the

5

In Nutt, the Federal Circuit rejected the appellant’s argument that the language “payments by the United

States shall operate as full and complete discharge of all payments to be made” meant that the

government promised to guarantee the payments resulting from the annuities at issue in that case. 837

F.3d at 1297. The Nutt agreement also contained language that provided that if the insurance company

defaults in making the annuity payments, “[the appellants] . . . shall have standing to sue the said

insurance company for breach of contract.” Id. at 1297. In contrast, here, the Settlement Agreement

contains no provision regarding a default by the annuity company and simply provides that “plaintiffs

hereby agree to accept said sum in full settlement and satisfaction of any and all claims and demands . . .

against [the government].” Def. App. at A9, ¶ 4.

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government pay for structured settlement annuities to make these payments. And so, plaintiff’s

argument cannot be reconciled with the plaint text of the agreement.

Plaintiff would be, however, on somewhat firmer ground in arguing that the government

has unequivocally guaranteed the payment of certain monthly payments required under the

Settlement Agreement for a period of fifteen years. Paragraph three of the agreement provides

that the monthly payments called for in the Settlement Agreement are “guaranteed for 15 years.”

Def. App. at A9, ¶ 3; see also Nutt, 837 F.3d at 1299. But, there is no dispute that this guarantee

expired on November 15, 2011, and that these particular monthly payments have been paid in

full by ELNY. Compl. at ¶ 9; Def. Supp. Brief at 8-9; Def. Supp. Resp. at 3; see Def. App. at

A9, ¶ 3. And so, this language cannot form the basis for plaintiff’s claim to recover the

outstanding portion of the monthly and periodic lump-sum payments that he seeks in this

dispute.

Indeed, at bottom, plaintiff points to no language in the Settlement Agreement that would

expressly and unequivocally require the government to guarantee the monthly and periodic

lump-sum annuity payments that he seeks to recover in this litigation. Absent such an

unequivocal promise, the Court will not read an obligation on the part of the government to

guarantee these payments into the Settlement Agreement.

C. The Government Could Not Have

Entered Into The Contract That Plaintiff Alleges

As a final matter, it is also important to note that the undisputed material facts also show

that the government could not have entered into a contract that requires the government to pay

more than the $400,000 disbursed at the time of settlement to resolve plaintiff’s FTCA claim. To

establish the existence of either an express or implied-in-fact contract with the United States,

plaintiff must show, among other things, the actual authority to bind the government in contract

on the part of the government official whose conduct is relied upon. Kam-Almaz, 682 F.3d at

1368. The undisputed material facts here make clear that the Assistant United States Attorney

who entered into the Settlement Agreement on behalf of the government had actual authority to

settle the Langkamps’ claim for $400,000. Def. Mot. at 13; Pl. Reply at 5-6; Def. App. at A7. It

is also undisputed that the government disbursed this authorized amount in 1984, in the form of a

one-time, lump-sum payment of $239,425.45 and by paying a structured settlement broker

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$160,574.55 to purchase two structured settlement annuities for the benefit of plaintiff. Def.

App. at A17-A37; Compl. at ¶¶ 5-8; Def. Mot. at 4.

As the government argues in its cross-motion for summary judgment, any interpretation

of a contract with the government that would result in an obligation to which the government

cannot be legally bound would render the contract void and unenforceable. Def. Mot. at 10; see

Fed. Crop Ins. Corp v. Merrill, 332 U.S. 380, 384 (1947); cf. Schism v. United States, 316 F.3d

1259, 1278 (Fed. Cir. 2002) (“[A]ny private party entering into a contract with the government

assumes the risk of having accurately ascertained that he who purports to act for the government

does in fact act within the bounds of his authority.”) (citations omitted). And so, the government

could not have entered into a contract in this case that would have obligated it to pay, or to

guarantee, any amount in excess of the $400,000 authorized settlement amount to resolve the

FTCA litigation brought on plaintiff’s behalf.6

V. CONCLUSION

In sum, the plain language of the Settlement Agreement at issue in this dispute

demonstrates that the government contracted to purchase annuities to make the future, periodic

monthly and lump-sum payments required under that agreement. The plain language of this

agreement also demonstrates that the government did not unequivocally guarantee that it would

make these payments in the event of a default by the annuity company. And so, the undisputed

material facts in this matter show that the government is not liable to plaintiff for the remaining

annuity payments required under the agreement.

For the foregoing reasons, the Court

1. DENIES plaintiff’s motion for partial summary judgment on liability;

2. GRANTS the government’s cross-motion for summary judgment on liability; and

6

Plaintiff’s argument that the Court may not consider evidence regarding the Assistant United States

Attorney’s settlement authority because this information constitutes extrinsic evidence is also without

merit. Pl. Supp. Resp. at 4. The Court may properly consider evidence regarding whether this

government official had actual authority to enter into the Settlement Agreement, because the question of

whether the Assistant United States Attorney had such authority is a threshold matter of contract

formation. See Kam-Almaz v. United States, 682 F.3d 1364, 1368 (Fed. Cir. 2012) (holding that, to

establish the existence of an express contract, a plaintiff must demonstrate the actual authority to bind the

government in contract on the part of the government official whose conduct is relied upon).

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It is further ORDERED that the parties shall FILE a joint status report on or before

April 20, 2017, stating their respective views on whether this matter should be dismissed in light

of the Court’s ruling on the parties’ cross-motions for summary judgment on liability.

The Clerk’s Office shall enter judgment accordingly.

No costs.

IT IS SO ORDERED.

s/ Lydia Kay Griggsby

LYDIA KAY GRIGGSBY

Judge

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