# Correlated Development Corp. v. United States

> United States Court of Claims · May 18, 1977 · 556 F.2d 515

URL: https://www.frixlaw.com/law-library/cases/8595944

## Case

- **Full name:** CORRELATED DEVELOPMENT CORPORATION AND HOUSING CONSULTANTS, INC., A JOINT VENTURE v. United States
- **Court:** United States Court of Claims
- **Decided:** May 18, 1977
- **Citations:** 556 F.2d 515; 214 Ct. Cl. 106; 1977 U.S. Ct. Cl. LEXIS 274
- **Precedential status:** Published
- **Opinion:** Concurrence by Davis
- **Judges:** Davis, Kashiwa, Skelton
- **Cited by:** 28 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8595944

## Opinion text

Davis, Judge,
concurring:
I join generally in Judge Skelton’s opinion though I do not find the case as open-and-shut as he does, and do not agree with everything he says. My problem is Section 13 of the standard annual contributions contract, which was not openly placed before the court, and was not considered by it, in Housing Corp. of America v. United States, 199 Ct. Cl. 705 , 468 F.2d 922 (1972). Literally read, the complicated text of that provision seems to me to cover this very case. It says: "Failure of the Local Authority * * * to comply with the Letter of Intent or Contract * * * the occurrence of any such event, if the seller is not in default, shall constitute a Substantial Default for the purpose of Article V hereof, and, in such case, the Government will * * * perform such Letter of Intent or Contract of Sale, as the case may be. The provisions of this paragraph are made with, and for the benefit of the seller and his assignees who will have been specifically approved by the Government prior to such assignment. To enforce the performance of this provision the seller and such assignees, as well as the Local Authority shall have the right to proceed against the Government by action at law or suit in equity.”
My conclusion that Section 13 should not be read literally rests upon a number of intertwined considerations:
(a). Despite its overbroad language, the prime purpose of the section seems to be to protect the seller against a total default by the Local Authority — i.e. a refusal or inability to buy, pay for, and take over the project — not to provide a means of redressing various subordinate construction claims, as here, by a seller whose project has been taken over and paid for by the Local Authority.
(b). To accept plaintiffs literal reading of Section 13 would open up the Federal Government to liability for a mass of construction claims of all varieties (on projects taken over by Local Authorities) which it is difficult to *124 believe the United States (or the parties) contemplated — in the absence of an affirmative showing that that was indeed the intention.
(c). The simultaneous presence in the contributions contract of Section 510(b) (also quoted in the court’s opinion) — limiting third party rights to a very narrow class — warrants us in giving Section 13 a restricted, rather than expansive, interpretation — again, absent convincing proof that Section 13 means everything it says.
(d). Section 13 has been standard for quite some time but plaintiff has not shown, or even offered to show, that the provision has been generally interpreted, either by the Government or by the sellers, as covering the kind of subordinate construction claims involved here. 1 Nor has there even been any showing, or offer to show, that the section has been so much invoked by other sellers for claims of this type that a trial is warranted as to the customary understanding of the clause. (Plaintiff has itself moved for summary judgment without any affidavits or other material bearing on the general or customary understanding of Section 13.)
There is some significance to the fact that it was not even thought worthy of argument by the contractor in Housing Corp. of America, supra.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8595944. Public record. Not legal advice.