Appendix — Curtiss-Wright Corp. v. General Elec. Co.
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Gupreme Court, U,
FILED
APPENDIX
NOV 15 i979
L_MICHABL RODAK, JR. CLERK
In The Onur ..
Supreme Court of the United Dtates
OCTOBER TERM, 1979
No. 79-105
CURTISS-WRIGHT CORPORATION,
Petitioner,
vs .
GENERAL ELECTRIC COMPANY,
Respondent.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
PETITION FOR CERTIORARI FILED JULY 23, 1979
CERTIORARI GRANTED OCTOBER 1, 1979
- ‘Sap
Pa eee
Page
Chronological List of Relevant Docket Entries ............ la
Complaint and Demand for Jury Trial, Filed April 30, 1976
o: 6 sh fm v6: ote lim 0 5rd 6a
Answer and Counterclaim, Filed August 25, 1976.......... 42a
Reply to Counterclaim, Filed October 15, 1976 ............ 7la
Amendment to and Supplemental Complaint, Filed Nov-
emtuer 15, IFT) wun cccasccccacsnseteesenuuvns tae suan 78a
Answer to Amendment to and Supplemental Complaint
and Counterclaim, Filed December 8, 1976 ........... 8la
Additional Reply to Counterclaim, Filed December 27, 1976
POTTUTTTTETTT TTT Ee ee ee ee 86a
Affidavit of James H. Sullivan, Filed May 3, 1977, With
CEPT rT reer ry rie Te 88a
Affidavit of F. J. Balicki, Filed May 31, 1977 With At-
ce MPT ee 144a
Affidavit of J.A. Russell, Filed May 31, 1977 ...........4.. 157a
Statement of Material Facts as to Which There Is No
GRIND ONE 0 cn a piriad oka vk ccheuaeebinsaneenonen 160a
. Opinion on Parties’ Motions for Summary Judgment on the
Amendment to and Supplemental Complaint, Filed
<=,
TABLE OF CONTENTS
Oy rr er a ep rer om 164a
Ti
Contents
Page
Order Denying Plaintiffs Motions to Strike Defendant's
Seventeenth Defense and to Dismiss Defendant’s Count-
erclaim, Filed February 24, 1978 .........eeeeeeeeeee 173a
Order Granting Plaintiffs Motion for Summary Judgment
on the Amendment to and Supplemental Complaint,
Granting Plaintiffs Motion to Strike Defendant’s
Eighteenth and Nineteenth Defenses, Denying Defend-
ant’s Motion for Summary Judgment on the Amendment
to and Supplemental Complaint, and Deferring For
Later Consideration the Question of Prejudgment In-
terest, Filed February 24, 1978 ...........cceeeeevees 175a
Letter Opinion on Plaintiffs Request for Rule 54(b) Cer-
tification, Filed February 24, 1978 ...........00eeeeee 178a
Opinion on Plaintiffs Motion for an Award of Prejudgment
Interest, Filed June 20, 1978 .......ccccccccscsccvece 180a
Fourth Supplemental Affidavit of James H. Sullivan, Filed
July 21, 1978 With Attachments .............eeeeeeee 188a
Order Granting Plaintiffs Motion for an Award of Prejudg-
ment Interest on the Amendment to and Supplemental
Complaint, Filed July 27, 1978 ........e cece ee eeeees 194a
Letter Opinion Directing that Final Judgment Be Entered
Under Rule 54(b) on the Court’s Prior Orders Awarding
Plaintiff Summary Judgment With Prejudgment Interest
On the Amendment to and Supplemental Complaint,
Filed July 27, 1978 ...cccccdecscccccscvcvetoeveccchs 196a
Order of Final Judgment, Entered July 28, 1978 ........... 200a
Notice of Appeal From Order of Final Judgment Entered
Selly FB, ISTE occ cccvccceccesevscssevennwaesesesces 201a
iii
Contents
Page
Order Granting Defendant’s Application for Stay of Judg-
memt, Fred Augest 3, 197TG oan ccccsccccsccccccvece 203a
Supplemental Affidavit of E.A. Klein, Filed August 22,
FEE Vis cow pa ehacl eset re bee Kas pe CE eR inae Cees .....204a
Order Granting Plaintiffs Motion for Summary Judgment
With Prejudgment Interest on the Additional Supple-
mental Complaint, and Denying Defendant’s Motion for
Summary Judgment on the Additional Supplemental
Complaint, Filed August 29, 1978 ............eeeeeee 210a
Order of Final Judgment Entered August 31, 1978 ......... 214a
Notice of Appeal From Order of Final Judgment En-
I Fe Ey FOE here ee ASAE eee ewend eae succes 216a
Opinion of the Third Circuit Court of Appeals, Filed April
1. Sree erry > Pee rae er rane Pek re Pe 218a
Appellant’s Motion to Amend the Opinion of the Third Cir-
cuit Court of Appeals, Filed May I, 1979 ......... eee
Response of Appellee, Curtiss-Wright Corporation, to Ap-
pellant’s Motion to Amend the Opinion, Filed May 10,
i Oe Oe See Pe Eee Pee nO ree ree 238a
Order of the Third Circuit Court of Appeals Amending
Opinion, Dated May 11, 1979 ........... 0. cee eee eee 243a
Order of Third Circuit Court.of Appeals Amending Dissent-
ing Opinion, Dated May 21, 1979 ......... cc eee wees 244a
iv
Contents
Page
Order of the Third Circuit Court of Appeals Denying the
Petition for Rehearing, Dated June 4, 1979 ........... 246a
Dissenting Opinion Sur Denial of Petition for Rehearing,
Ne NN iy MO bi Sere nd kee ecadadpudumban scents 248a
Judgment of the Third Circuit Court of Appeals Issue in
Lieu of a Formal Mandate on June 12, 1979 .......... 262a
General Electric’s Answers to Curtiss-Wright’s Interroga-
NN I iiakc ck cea RCo cctv eeinenensans 264a
CHRONOLOGICAL ' LIST OF «RELEVANT DOCKET
ENTRIES
Date_ Proceedings
5-4-76 Complaint, filed April 30, 1976
8-27-76 Answer and Counterclaim, filed August 25, 1976.
10-19-76 Reply to Counterclaim, filed October 15, 1976.
11-29-76 Amendment To And Supplemental Complaint,
filed November 18, 1976.
12-9-76 Answer to Amendment To And Supplemental
Complaint; and Counterclaim, filed December 8,
1976.
12-28-76 Additional Reply to Counterclaim, filed
December 27, 1976.
5-5-77 Notice of Motions of Plaintiff for Summary
Judgment on the Amendment To And
Supplemental Complaint and to strike
Defendant’s Seventeenth, Eighteenth, and
Nineteenth Defenses to the Amendment To And
Supplemental Complaint and to dismiss
Defendant’s Counterclaim, filed May 3, 1977.
Affidavit of James H. Sullivan, filed May 3,
1977.
6-1-77 Notice of Motion of Defendant for Summary
Judgment on the Amendment To And
Supplemental Complaint, filed May 31, 1977.
Affidavit of F.J. Balicki, filed May 31, 1977.
9-28-77
12-6-77
1-16-78
2-28-78
2a
Revelant Docket Entries
Affidavit of J.A. Russell, filed May 31, 1977.
Statement of Material Facts As To Which There
Is No Genuine Issue, filed May 31, 1977.
Hearing on parties’ Motions for Summary
Judgment on the Amendment To And
Supplemental Complaint and on Plaintiff's
Motions to strike Defendant’s Seventeenth,
Eighteenth, and Nineteenth Defenses to the
Amendment To And Supplemental Complaint
and to dismiss Defendant’s Counterclaim
(September 26, 1977).
Opinion on parties’ Motions for Summary
Judgment on the Amendment To And
Supplemental Complaint, filed December 5,
1977.
Notice of Motion of Plaintiff to Settle the
Judgment and Order on the parties’ Motions for
Summary Judgment on the Amendment To And
Supplemental Complaint and Plaintiff's Motions
to strike Defendant’s Seventeenth, Eighteenth,
and Nineteenth Defenses and to _ dismiss
Defendant’s Counterclaim, filed January 12,
1978.
Order denying Plaintiff's Motions to strike the
Seventeenth Defense and to dismiss Defendant’s
Counterclaim, filed February 24, 1978.
Order granting Plaintiffs Motion for Summary
Judgment on the Amendment To And
Supplemental Complaint; granting Plaintiffs
Motion to strike the Eighteenth and Nineteenth
Defenses; denying Defendant’s Motion for
iz
1s
3-22-78
6-1-78
6-22-78
7-24-78
7-28-78
3a
Revelant Docket Entries
Summary Judgment on the Amendment To And
Supplemental Complaint; and deferring for later
consideration the question of prejudgment
interest, filed February 24, 1978.
Letter Opinion on Plaintiffs request for Rule
54(b) certification of Court’s ruling of December
5, 1977, filed February 24, 1978.
Notice of Motion of Plaintiff for an Award of
Prejudgment Interest on the Amendment To And
Supplemental Complaint, filed March 21, 1978.
Hearing on Plaintiffs Motion for an Award of
Prejudgment Interest (May 30, 1978).
Opinion on Plaintiffs Motion for an Award of
Prejudgment Interest, filed June 20, 1978.
Notice of Motion of Plaintiff for Summary
Judgment with Prejudgment Interest on
Plaintiffs Additional Supplemental Complaint,
filed July 21, 1978.
Fourth Supplemental Affidavit of James H.
Sullivan, filed July 21, 1978.
Order granting Plaintiffs Motion for an Award
of Prejudgment Interest on the Amendment To
And Supplemental Complaint, filed July 27,
1978.
Letter Opinion directing that final judgment be
entered under Rule 54(b) on the Court’s prior
Orders awarding Plaintiff summary judgment
8-4-78
8-23-78
8-30-78
8-31-78
9-18-78
3-22-79
4-17-79
4-30-79
4a
Revelant Docket Entries
with prejudgment interest on the Amendment To
And Supplemental Complaint, filed July 27,
1978.
Order of final judgment, filed July 27, 1978.
Notice of Appeal, filed August 3, 1978.
Order granting Defendant’s Application for Stay
of Judgment, filed August 3, 1978.
Supplemental Affidavit of E.A. Klein, filed
August 22, 1978.
Additional Supplemental Complaint, filed
August 28, 1978.
Order granting Plaintiffs Motion for Summary
Judgment with prejudgment interest on
Plaintiffs Additional Supplemental Complaint
and denying Defendant’s Motion for Summary
Judgment, filed August 29, 1978.
Order of final judgment, filed August 29, 1978.
Notice of Appeal, filed September 14, 1978.
Argument before the Third Circuit Court of
Appeals held.
Opinion and Judgment of the Third Circuit
Court of Appeals filed.
Petition by Appellee, Curtiss-Wright
Corporation, for rehearing en banc filed.
5-1-79
5-10-79
5-11-79
5-21-79
6-4-79
6-12-79
Sa
Relevant Docket Entries
Appellant’s Motion to Amend the Opinion of the
Third Circuit Court of Appeals filed.
Response of Appellee, Curtiss-Wright
Corporation, to Appellant’s Motion to Amend
the Opinion filed.
Order of the Third Circuit Court of Appeals
Amending Opinion filed.
Order of the Third Circuit Court of Appeals
Amending Dissenting Opinion filed.
Order of the Third Circuit Court of Appeals
Denying The Petition for Rehearing filed.
Dissenting Opinion Sur Denial of Petition for
Rehearing filed.
Judgment of the Third Circuit Court of Appeals
Issued in Lieu of a Formal Mandate filed.
6a
COMPLAINT AND DEMAND FOR JURY TRIAL, FILED
APRIL 30, 1976
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 76-794
CURTISS-WRIGHT CORPORATION,
Plaintiff,
VS.
GENERAL ELECTRIC COMPANY,
Defendant.
AS TO ALL COUNTS
JURISDICTION AND VENUE
1. This action is within the jurisdiction of this Court by
virtue of Title 28, United States Code, Sections 1332 and 1391.
2. Plaintiff is a corporation incorporated under the laws of
the State of Delaware, and has its principal place of business in
the Borough of Wood-Ridge, County of Bergen and State of
New Jersey, where it is engaged in the business, among others,
of manufacturing and selling large metal components for use in
the construction of nuclear propulsion plants for U.S. Navy
submarines and surface ships.
3. Defendant is a corporation incorporated in the State of
New York, and has its principal places of business in states other
than Delaware and New Jersey.
7a
Complaint and Demand for Jury Trial
4. Defendant is engaged in the business, among others, of
purchasing nuclear propulsion plant components on behalf of or
for resale to the United States Navy.
5. Defendant maintains one or more offices in New Jersey.
6. Defendant is subject to the jurisdiction of this Court.
7. The subject matter of this action exceeds Ten Thousand
($10,000.00) Doilars, exclusive of interest and costs, and is
between citizens of different states.
FIRST COUNT
8. In or about late 1967 and early 1968, preliminary
discussions and negotiations were held between plaintiff,
defendant (acting through its Machinery Apparatus Operation,
Schenectady, New York), and the U.S. Navy Department to
explore the possibility of plaintiff's becoming a supplier of large
components used in the construction of nuclear propulsion
plants for submarines and surface ships of the United States
Navy.
9. Defendant then occupied and continues to occupy to the
present time a program and/or:contract management role with
respect to the award of contracts to private industry for the
ultimate procurement by the Navy of these components.
10. During the course of the discussions and negotiations
aforesaid, and thereafter, defendant represented to plaintiff that
it urgently needed to develop a new source of supply for the
components aforesaid by reason of the fact that the existing
sources, which possessed the capability and experience for the
work, were either abandoning the business or were many months
and even years delinquent in performance.
8a
Complaint and Demand for Jury Trial
11. Although plaintiff had engaged in the business of
manufacturing aircraft engines and missile cases, and possessed
manufacturing experience of the kind derived from those
businesses, plaintiff had no experience in the manufacture of the
said nuclear components.
12. Defendant knew the extent of plaintiffs previous
manufacturing experience and capabilities and further knew that
plaintiff had no prior experience in the manufacture of said
nuclear components.
13. With the knowledge aforesaid, defendant proceeded to
induce plaintiff to enter into the business of becoming a supplier
of the said components and in furtherance of said inducement,
defendant stated to plaintiff that it had searched the length and
breadth of the United States and had screened and studied the
capabilities of many companies in an effort to find a supplier
that was capable of manufacturing the components. Defendant
assured plaintiff that defendant knew exactly the kind of
capability it was looking for and that plaintiff could do the job
with the help of defendant’s knowledge, expertise and
management competence, inviting and receiving plaintiffs trust
and confidence to that effect.
14. On various occasions beginning early in 1968 and
continuing thereafter from time to time through 1972, in
meetings and conversations held at Wood-Ridge, New Jersey,
and elsewhere, defendant, acting through its duly authorized
agents, including the General Manager of its Machinery
Apparatus Operation, induced plaintiff to enter into the business
of manufacturing nuclear components and into a series of
twenty-one contracts relating to same.
15. Said contracts were designated as Purchase Order Nos.
A-550, A-595, A-641, A-642, A-656, A-661, B-382, B-423, B-428,
Am
9a
Complaint and Demand for Jury Trial
B-412, B-433, B-442, B-384, B-425, B-429, B-410, A-675, A-113,
B-451, B-452 and B-478, and pursuant to same plaintiff agreed
to manufacture, assemble, inspect, test, sell and deliver to
defendant a total of 167 units in the aggregate of ten (10)
different types of nuclear components for the aggregate sum of
Two Hundred Fourteen Million Six Hundred Thousand
($214,600,000.00) Dollars, which defendant agreed to pay to
plaintiff.
16. Defendant induced plaintiff to enter into said business
and said contracts by making the following representations of
fact to plaintiff:
(a) Defendant represented to plaintiff that plaintiffs entry
into the business of manufacturing nuclear
components was necessary in the interests of the
national defense; that defendant intended to divide the
orders for the bulk of the annual requirements for said
components between plaintiff and the only then-
remaining major source of supply; and that plaintiff
would receive repetitive orders building up by 1974 to
8 reactor vessels, 8 reactor vessel closure heads, 8
pressurizers, and 22 steam generators per year.
(b) Defendant represented to plaintiff that, relative to any
company then or formerly in the business, defendant
and the Navy possessed superior knowledge, expertise,
and management competence, in the manner, methods,
processes and procedures of manufacturing the said
nuclear components, which knowledge, expertise, and
management competence equipped defendant to show
plaintiff how to manufacture the components in
accordance with the requirements of the contracts.
Defendant further represented that it would make such
knowledge, expertise, and competence available to
plaintiff.
10a
Complaint and Demand for Jury Trial
(c) Defendant represented to plaintiff that by virtue of
defendant’s superior knowledge, expertise and
competence (1) defendant knew that the delivery
schedules defendant was providing in_ the
aforementioned contracts were adequate to cover the
time that would reasonably be required by an
inexperienced company such as plaintiff to produce
the components; (2) defendant knew that the contract
prices were more than adequate to cover plaintiff's
costs of performance plus a reasonable profit, and; (3)
consequently, defendant knew that plaintiff would be
in a position of returning excessive profits to
defendant under the incentive price revision formula in
the contracts.
17. Each and every one of the foregoing representations so
made by the defendant was false and fraudulent and/or was
made by defendant as part of a scheme or artifice to defraud.
18. The said representations were known by the defendant
to be false when made and were made with intent to deceive
plaintiff and with the intent that plaintiff rely upon them and to
induce plaintiff to become a supplier of said nuclear
components, to enter into the aforesaid 21 contracts at the prices
and with the delivery schedules therein established, to make
large capital expenditures for the construction of a separate
factory and special purpose facilities, to divert to the business of
manufacturing said nuclear components its most skilled
technical and management personnel from other segments of its
business and agree not to make changes in such personnel
assignments without defendant’s approval and to devote
extraordinary amounts of management and technical time and
attention to the business of producing said nuclear components.
Complaint and Demand for Jury Trial
19. The aforesaid representations were material and at the
time they were made, plaintiff believed them and did not know
the truth and in reliance thereon plaintiff was induced to become
a supplier of said nuclear components, to enter into the
aforesaid 21 contracts at the prices and with the delivery
schedules therein established and thereby to incur huge losses in
the performance thereof, to make large capital expenditures for
the construction of a separate factory and special purpose
facilities and to incur losses on account of the lack of use
thereof, and to injure other segments of its business by diverting
its most skilled technical and management personnel from such
other segments and devoting extraordinary amounts of
management and technical time and attention to the business of
producing said nuclear components, which losses, expenses and
injuries were the proximate result of the aforesaid
representations.
20. In reliance upon the aforesaid representations, plaintiff
did take the aforementioned actions to its detriment.
21. By reason of the foregoing, defendant is liable to
plaintiff for damages, both compensatory and punitive.
WHEREFORE, plaintiff demands judgment on this Count
against the defendant as follows:
A. For compensatory damages, general and special;
B. For punitive damages;
C. For interest;
D. For costs of suit;
E. For attorneys fees.
12a
Complaint and Demand for Jury Trial
SECOND COUNT
22. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 21, inclusive, as if set forth at
length herein.
23. Defendant, through its agents and employees,
conspired with Vice Admiral Hyman G. Rickover of the U. S.
Navy in a malicious and willful scheme to create a relationship
of trust and confidence between defendant and plaintiff and te
deceive plaintiff and deprive plaintiff of its proper costs and
profits on the said 21 contracts.
24. The acts and omissions alleged in the First Count were
in pursuit of the said conspiracy and scheme.
25. As a result of the foregoing, plaintiff has suffered
damages for which defendant is liable to plaintiff.
WHEREFORE, “plaintiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For punitive damages;
C. For interest;
D. For costs of suit;
E. For attorneys fees.
a]
13a
Complaint and Demand for Jury Trial '
THIRD COUNT
26. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, as if set forth at
length herein.
27. The foregoing representations so made by defendant
were false or erroneous.
28. The said representations were made by the defendant
with intent that plaintiff rely upon them, and to induce plaintiff
to become a supplier of said nuclear components, to-enter into
the aforesaid 21 contracts at the prices and with the delivery
schedules therein established, to make large capital expenditures
for the construction of a separate factory and special purpose
facilities, to divert to the business of manufacturing said nuclear
components its most skilled technical and management
personnel from other segments of its business and agree not to
make changes in such personnel assignments without defendant’s
approval, and to devote extraordinary amounts of management
and technical time and attention to the business of producing
said nuclear components.
29. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs 19 and 20, as if set forth at length
herein.
30. As a result of the foregoing, plaintiff has suffered great
losses, defendant has been and will be unjustly enriched, and
plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
l4a
Complaint and Demand for Jury Trial
That the contracts be reformed;
(1) To cover the training, learning, development,
practice, quality assurance, rework and other
costs of performance incurred or to be incurred
by the plaintiff in the first-time manufacture of
these nuclear components;
(2) To provide delivery schedules adequate to cover
such first-time manufacture of the components by
plaintiff;
(3) To provide that plaintiff will earn reasonable
profit from such manufacture of the components;
That upon the contracts being so reformed, for an
accounting, and for the payments due under the
contracts as reformed; |
For such other sums as defendant may be found, on
accounting, to be liable to plaintiff as compensation
for plaintiff's diversion from its established lines of
business of the capital and other resources necessary to
enter the business of manufacturing the components;
For such damages as plaintiff has sustained or may
sustain as a result of any refusal or failure of defendant
to recognize and assume obligations coincident with its
obligations as reformed;
For the specific performance by the defendant of its
obligations under said reformed contracts in the
future;
#R
1Sa
Complaint and Demand for Jury Trial
F. Or, in the alternative, for compensation in the amount
of the reasonable and just value of plaintiff's
performance and investment in the business of
manufacturing nuclear components;
G. For such further and other reliet as plaintiff may be
entitled to.
FOURTH COUNT
31. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, as if set forth at
length herein.
32. Under the aforementioned circumstances and
relationship existing between the plaintiff and defendant,
plaintiff had a right to rely upon the representations and
information given to it by defendant.
33. Defendant owed a duty to plaintiff, if it gave
representations or information at all, to do so with due care.
34. Defendant knew said representations and information
were desired by plaintiff for the purpose of deciding whether to
enter the nuclear components business, that plaintiff intended to
rely thereon, and that if said representations and information
were false or erroneous, plaintiff would suffer great losses,
expenses and injuries.
35. Said representations and information were false or
erroneous and negligently made by defendant.
36. The aforesaid representations and information were
material and at the time they were made plaintiff believed them
16a
Complaint and Demand for Jury Trial
and in reliance thereon entered into the business of becoming a
supplier of said nuclear components, entered into the aforesaid
21 contracts at the prices and with the delivery schedules therein
established and incurred huge losses in the performance thereof,
made large capital expenditures for the construction of a
separate factory and special purpose facilities and incurred losses
on account of the lack of use thereof, and injured other segments
of its business by diverting its most skilled technical and
management personnel from such other segments and expending
extraordinary amounts of management and technical time and
attention to the business of producing said nuclear components,
which losses, expenses and injuries were the proximate result of
defendant making and providing the aforesaid representations
and information.
37. As a result of the foregoing, plaintiff has suffered
damages for which defendant is liable to plaintiff.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
FIFTH COUNT
38. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, as if set forth at
length herein.
39. Under all of the circumstances aforesaid, a special
relationship of trust and confidence was established between
plaintiff and defendant.
ae
17a
' Complaint and Demand for Jury Trial
40. The foregoing representations made by defendant were
false or erroneous.
41. The said misrepresentations made by defendant within
the context of the special relationship of trust and confidence
developed between plaintiff and defendant, whether purposeful,
negligent, or the result of a disregard for the truth of the
representations by defendant, induced plaintiff to enter into the
said business of becoming a supplier of nuclear components and
the said 21 contracts to plaintiffs great damage.
42. In light of all of the foregoing, entry into the business
and the said 21 contracts were the result of overreaching by
defendants.
43. Defendant’s actions in causing plaintiff to enter into
said business and the said 21 contracts and the results therein
obtaining as to plaintiff are unconscionable.
44. As a result of the foregoing, plaintiff has suffered
damages but has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. That the contracts be reformed;
(1) To cover the training, learning, development,
practice, quality assurance, rework and other
costs of performance incurred or to be incurred
by the plaintiff in the first-time manufacture of
these nuclear components;
184
Complaint and Demand for Jury Trial
(2) To provide delivery schedules adequate to cover
such first-time manufacture of the components by
plaintiff;
(3) To provide that plaintiff will earn reasonable
profit from such manufacture of the components;
That upon the contracts being so reformed, for an
accounting, and for the payments due under the
contracts as reformed;
For such other sums as defendant may be found, on
accounting, to be liable to plaintiff as compensation
for plaintiff's diversion from its established lines of
business of the capital and other resources necessary to
enter the business of manufacturing the components;
For such damages as plaintiff has sustained or may
sustain as a result of any refusal or failure of defendant
to recognize and assume obligations coincident with its
obligations as reformed;
For the specific performance by the defendant of its
obligations under said reformed contracts in the
future;
Or, in the alternative, for compensation in the amount
of the reasonable and just value of plaintiff's
performance and investment in the business of
manufacturing nuclear components;
For such further and other relief as plaintiff may be
entitled to.
19a
Complaint and Demand for Jury Trial
SIXTH COUNT
45. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 15, inclusive, as if set forth at
length herein.
46. In the early part of 1968 defendant represented to
plaintiff that defendant and the Navy possessed superior
knowledge, expertise and management competence in the
manner, methods, processes and procedures of manufacturing
said nuclear components relative to any company then or
formerly in the business.
47. Defendant agreed to provide this knowledge, expertise
and competence to plaintiff and show it how to become engaged
in the business of manufacture and sale of said components in
accordance with the price and delivery schedule terms under
which defendant was willing to contract to buy said components;
defendant also agreed to divide the orders for the bulk of the
annual requirements for said components between plaintiff and
the only then-remaining major source of supply; defendant
further agreed to place repetitive orders with plaintiff for said
components, building up by 1974 to 8 reactor vessels, 8 reactor
vessel closure heads, 8 pressurizers and 22 steam generators per
year, if plaintiff would become engaged in said business.
48. Defendant knew or should have known that plaintiff
entered into the business of manufacturing said components for
sale to defendant in reliance on defendant’s agreement aforesaid.
49. In reliance on said agreement, plaintiff entered into a
series of twenty-one contracts in writing with defendant,
designates as Purchase Order Nos. A-550, A-595, A-641,:A-661,
A-642, A-656, B-382, B-423, B-428, B-412, B-433, B-442, B-384,
B-425, B-429, B-410, A-675, A-113, B-451, B-452, and B-478, as
aforesaid.
20a
Complaint and Demand for Jury Trial
50. In further reliance on said agreement, plaintiff made
large capital expenditures for the construction of a separate
factory building and for special purpose facilities with which to
carry on said business, diverted to said business its most skilled
technical and management personnel from other segments of its
business and agreed not to make changes in such personnel
assignments without defendant’s approval, and devoted
extraordinary amounts of management and technical time and
attention to the business of producing said nuclear components.
51. Before commencing the manufacture of said
components plaintiff disclosed to defendant the manner,
methods, processes and procedures which plaintiff considered
appropriate for their manufacture and sought the knowledge,
expertise and competence of defendant in the necessary and
proper manner, methods, processes and procedures for said
manufacture in accordance with the requirements of the
aforementioned contracts.
52. Defendant failed to provide plaintiff with the necessary
and proper knowledge, expertise and competence to show it how
to manufacture said components as required by the contracts
aforesaid.
53. As a proximate result of the foregoing, plaintiff
encountered extreme and unusual difficulty and expense and
incurred huge losses in the performance of said contracts, made
large capital expenditures for the construction of a separate
factory and special purpose facilities and incurred losses on
account of the lack of use thereof, injured other segments of its
business by diverting its most skilled technical and management
personnel from such segments and devoting extraordinary
amounts of management and technical time and attention to the
business of producing said nuclear components, and was
otherwise damaged.
2la
Complaint and Demand for Jury Trial
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
SEVENTH COUNT
54. Plaintiff repeats and realleges the allegations contained
in paragraphs 45 through 47 as if set forth at length herein.
55. Defendant also represented and agreed that the prices
of said contracts were adequate to cover plaintiff's costs of
performance, with the knowledge, expertise and competence to
be provided by defendant, and to provide a reasonable profit to
plaintiff, and that the incentive pricing formula’ was
incorporated into said contracts merely to permit recovery by
the defendant for the benefit of the Navy of any underruns in
plaintiffs costs of performance of said contracts.
56. Defendant further represented and agreed that
defendant’s and hence the Navy’s need for plaintiff as a new
supplier of said nuclear components was not a temporary need
arising from the buildup at that time of requirements for said
nuclear components but was then foreseeably a need for a new
supplier on a continuing basis.
57. Said representations and agreements, in light of all of
the circumstances, incorporated and gave rise to an implied
covenant of good faith and fair dealing to the effect that plaintiff
would recover its costs of performance and realize a reasonable
profit while it was learning the business of manufacturing said
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Complaint and Demand for Jury Trial
nuclear components, and that plaintiff would continue to receive
contracts for said nuclear components once it learned the
business, provided defendant continued to have requirements for
said nuclear components.
58. Plaintiff relied on said covenants and agreements and in
consideration thereof agreed to become a supplier of said
nuclear components, to enter into the aforesaid 21 contracts at
the prices and with the delivery schedules therein established, to
make large capital expenditures for the construction of a
separate factory and special purpose facilities therefor and to
divert skilled technical and management personnel from other
segments of its business to the business of producing said
nuclear components.
59. In learning how to produce said nuclear components
with the benefit of such knowledge, expertise and competence as
was supplied by defendant to plaintiff in performing said 21
contracts, plaintiff incurred costs of performance far in excess of
the contract prices and was deprived of the reasonable profits
expected to be realized from performance of said contracts.
60. Plaintiff has requested defendant to reimburse it for
said excess costs of performance and to pay it the reasonable
profits expected to be realized through performance, and
defendant has breached said covenants and agreements by
refusing said request.
4
61. Since plaintiff has learned how to produce said nuélear
components, defendant and said Admiral Rickover have
conspired to deprive plaintiff of any additional contracts for the
production of said nuclear components, despite the existence of
requirements therefor, in order to coerce plaintiff into not
enforcing the aforesaid covenant of reimbursement of the costs
of performance of said 21 contracts and payment of the
om
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Complaint and Demand for Jury Trial
reasonable expected profit to be realized by plaintiff through
performance of said contracts. Said conspiracy and defendant's
refusal to continue to award contracts to plaintiff for the
production of said nuclear components constitutes a breach of
the aforesaid covenants and agreements.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
EIGHTH COUNT
62. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, as if set forth at
length herein.
63. During the period 1968 through 1972, defendant
awarded plaintiff a series of twenty-one contracts in writing
designated as Purchase Order Nos. A-550, A-595, A-641, A-661,
A-642, A-656, B-382, B-423, B-428, B-412, B-433, B-442, B-384,
B-425, B-429, B-410, A-675, A-113, B-451, B-452, and B-478, as
aforesaid.
63. Said contracts specified not only the physical
characteristics of the components to be manufactured by
plaintiff, but also the qualifications of the welders, weld
operators, welding procedures, welding equipment,
nondestructive test and inspection personnel, nondestructive test
procedures and nondestructive test equipment used to produce
them.
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Complaint and Demand for Jury Trial
64. Defendant warranted that plaintiff, despite plaintiff's
lack of prior experience in their manufacture, could produce
components of specified physical characteristics by employing
personnel, procedures and equipment so qualified.
65. Plaintiff believed the warranty to be true and in reliance
thereon proceeded to perform said contracts with personnel,
procedures and equipment so qualified.
66. Defendant breached said warranty in that plaintiff's
personnel, procedures and equipment, qualified to the
specifications aforesaid, were not able to produce components
meeting the specified physical characteristics, but produced
components which failed to meet the specified physical
characteristics and required vast amounts of rework to salvage.
67. Plaintiffs personnel, qualified as aforesaid, had to
undergo extensive additional training and learning before they
were able to produce components meeting the specified physical
characteristics.
68. Plaintiff gave defendant notice of its inability to
produce components meeting the _ specified physical
characteristics with personnel, procedures and equipment
qualified to said specifications.
69. Defendant failed and refused to make good on its
warranty aforesaid.
70. By reason of said breach of warranty, plaintiff had been
damaged.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
De)
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Complaint and Demand for Jury Trial
A. For compensatory damages, general and special;
B. For interest and costs of suit,
C. For attorneys fees.
NINTH COUNT
71. Plaintiff repeats and realleges all of the allegations
contained in paragraphs | through 16, inclusive, as if set forth at
length herein.
72. Through mutual mistake of the parties, said contracts
did not make adequate provision either in the price or the
delivery schedule for the training, learning and practice, the
stringency of the quality requirements as interpreted by
defendant, the consequent high incidence of rework, or the other
extreme difficulty and unusual expense, as well as the normal
costs of performance, required on the part of a company such as
plaintiff having no prior experience in the business to perform
the inherently complex welding and other fabricating and testing
operations in order to produce the ten (10) types of components
in accordance with the requirements of the contracts.
73. Without prior experience in the unique complexities of
nuclear component manufacture, and, at defendant’s urging,
relying on defendant for guidance, plaintiff did not know of the
inherent difficulty of the work and that literally years of first-
hand experience and practice are required to perform it
successfully.
74. Plaintiffs mistake consisted in the belief that its
aerospace manufacturing capability equipped it to perform the
contracts and earn a reasonable profit at the prices and delivery
schedules fixed therein by defendant, with little or no change in
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Complaint and Demand for Jury Trial
or addition to that capability, and without having to carry on
extensive amounts of training, learning and practice, or
encountering the stringent interpretations by defendant of the
quality requirements, the consequent high incidence of rework
or the other extreme difficulty and unusual expense that it
experienced in performing the contracts.
75. Defendant likewise mistakenly believed that plaintiff
possessed the kind of capability required to produce the nuclear
components in accordance with the terms of the aforesaid
contracts without having to carry on extensive amounts of
training learning, practice, rework and encountering the other
extreme difficulty and unusual expense experienced by the
plaintiff as well as the previous companies engaged in their
production.
76. It was the intent of the plaintiff and the defendant that
plaintiff should be able to perform the aforesaid contracts and,
as a result thereof, earn a reasonable profit.
77. In fact, plaintiff has suffered great losses and damages
as a result of its performance of the contracts, as aforesaid, and,
in light of the price and delivery schedule set by defendant,
plaintiff has been frustrated with respect to the mutual intent of
both parties that it earn a reasonable profit from the
performance of said contracts.
78. Plaintiff requested defendant to increase the price of
said contracts to cover the cost of the extensive amounts of
training, learning, practice, rework and other extreme difficulty
and unusual expense incurred by plaintiff to perform the
inherently complex welding and other fabrication and testing
operations to produce the components to the exacting, fail-safe
quality requirements imposed by defendant, and defendant has
refused to do so.
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Complaint and Demand for Jury Trial
79. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. That the contracts be reformed;
(1) To cover the training, learning, development,
practice, quality assurance, rework and other
costs of performance incurred or to be incurred
by the plaintiff in the first-time manufacture of
these nuclear components;
(2) To provide delivery schedules adequate to cover
such first-time manufacture of the components by
plaintiff;
(3) To provide that plaintiff will earn reasonable
profit from such manufacture of the components;
B. That upon the contracts being so reformed, for an
accounting, and for the payments due under the
contracts as reformed;
C. For such other sums as defendant may be found, on
accounting, to be liable to plaintiff as compensation
for plaintiffs diversion from its established lines of
business of the capital and other resources necessary to
enter the business of manufacturing the components;
D. For such damages as plaintiff has sustained or may
sustain as a result of any refusal or failure of defendant
to recognize and assume obligations coincident with its
obligations as reformed;
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Complaint and Demand for Jury Trial
E. For the specific performance by the defendant of its
obligations under said reformed contracts in the
future;
F. Or, in the alternative, for compensation in the amount
of the reasonable and just value of plaintiff's
performance and investment in the business of
manufacturing nuclear components;
G. For such further and other relief as plaintiff may be
entitled to.
TENTH COUNT
80. Plaintiff repeats and realleges the allegations contained
in Paragraphs | through 16, inclusive, as if set forth at length
herein.
81. Through mistake on the part of plaintiff and
misrepresentations or other inequitable conduct on the part of
the defendant, said contracts did not make adequate provision
either in the price or the delivery schedule for the training,
learning and practice, the stringency of the quality requirements
as interpreted by defendant, the consequent high incidence of
rework, or the other extreme difficulty and unusual expense, as
well as the normal costs of performance, required on the part of
a company such as plaintiff having no prior experience in the
business to perform the inherently complex welding and other
fabricating and testing operations in order to produce the ten
(10) types of components in accordance with the requirements of
the contracts.
82. Without prior experience in the unique complexities of
nuclear component manufacture, and, at defendant’s urging,
relying on defendant for guidance, plaintiff did not know of the
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Complaint and Demand for Jury Trial
inherent difficulty of the work and that literally years of
firsthand experience and practice are required to perform it
successfully.
83. Plaintiffs mistake consisted in the belief that its
aerospace manufacturing capability equipped it to perform the
contracts and earn a resonable profit at the prices and delivery
schedules fixed therein by defendant, with little or no change in
or addition to that capability, and without having to carry on
extensive amounts of training, learning and practice, or
encountering the stringent interpretations by defendant of the
quality requirements, and consequent high incidence of rework,
or the other extreme difficulty and unusual expense that it
experienced in performing the contracts.
84. Defendant’s misrepresentation or other inequitable
conduct consisted in its failure, despite its possession of superior
knowledge of the extreme difficulty and unusual expense of
producing the components, and of the stringency of the quality
requirements as interpreted by defendant, to warn plaintiff
thereof.
85. Plaintiff requested defendant to increase the prices of
said contracts to cover the cost of the extensive amounts of
training, learning, practice, rework and other extreme difficulty
and unusual expense incurred by plaintiff to perform the
inherently complex welding and other fabrication and testing
operations to produce the components to the exacting, fail-safe
quality requirements imposed by defendant, and defendant has
refused to do so.
86. Plaintiff, as a result of the foregoing, has suffered great
losses, but has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
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Complaint and Demand for Jury Trial
That the contracts be reformed;
(1) To cover the training, learning, development,
practice, quality assurance, rework and other
costs of performance incurred or to be incurred
by the plaintiff in the first-time manufacture of
these nuclear components;
(2) To provide delivery schedules adequate to cover
such first-time manufacture of the components by
plaintiff;
(3) To provide that plaintiff will earn reasonable
profit from such manufacture of the components;
That upon the contracts being so reformed, for an
accounting, and for the payments due under the
contracts as reformed;
For such other sums as defendant may be found, on
accounting, to be liable to plaintiff as compensation
for plaintiffs diversion from its established lines of
business of the capital and other resources necessary to
enter the business of manufacturing the components;
For such damages as plaintiff has sustained or may
sustain as a result of any refusal or failure of defendant
to recognize and assume obligations coincident with its
obligations as reformed;
For the specific performance by the defendant of its
obligations under said reformed contracts in the
future;
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Complaint and Demand for Jury Trial
F. Or, in the alternative, for compensation in the amount
of the reasonable and just value of plaintiff's
performance and investment in the business of
manufacturing nuclear components;
G. For such further and other relief as plaintiff may be
entitled to.
ELEVENTH COUNT
87. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, and Paragraphs
81, 82, 83, and 84, as if set forth at length herein.
88. Defendant further, and with the knowledge that
plaintiff was laboring under the said mistaken belief concerning
the effect and result of the contracts containing the price and
delivery schedules set by defendant, permitted plaintiff to enter
into the said contracts, to plaintiffs detriment.
89. Plaintiff repeats and realleges the allegations contained
in Paragraphs 85 and 86 as if set forth at length herein.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. That the contracts be reformed;
(1) To cover the training, learning, development,
practice, quality assurance, rework and other
costs of performance incurred or to be incurred
by the plaintiff in the first-time manufacture of
these nuclear components;
oe
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Complaint and Demand for Jury Trial
(2) To provide delivery schedules adequate to cover
such first-time manufacture of the components by
plaintiff;
(3) To provide that plaintiff will earn reasonable
profit from such manufacture of the components;
That upon the contracts being so reformed, for an
accounting, and for the payments due under the
contracts as reformed;
For such other sums as defendant may be found, on
accounting, to be liable to plaintiff as compensation
for plaintiff's diversion from its established lines of
- , business of the capital and other resources necessary to
D.
G.
enter the business of manufacturing the components;
For such damages as plaintiff has sustained or may
sustain as a result of any refusal or failure of defendant
to recognize and assume obligations coincident with its
obligations as reformed;
For the specific performance by the defendant of its
obligations under said reformed contracts in the
future;
Or, in the alternative, for compensation in the amount
of the reasonable and just value of plaintiffs
performance and investment in the business of
manufacturing nuclear components;
For such further and other relief as plaintiff may be
entitled to.
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Complaint and Demand for Jury Trial
TWELFTH COUNT
90. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, as if set forth at
length herein.
91. In or about May 1971 while plaintiff was performing
said contracts, defendant ordered and directed plaintiff to repeat
the x-ray testing of the welds by plaintiff on a certain number of
components, the welds on which plaintiff had already x-ray
tested and found to meet the specification requirements.
92. Defendant’s order and direction to plaintiff to re-x-ray
the weids was prompted by a complaint made to defendant by a
disgruntled employee of plaintiff that x-ray of the welds was not
being done in accordance with the specification requirements.
93. Defendant’s order and direction was made
notwithstanding the fact that defendant participated in the x-ray
testing of the welds and knew how it had been performed.
94. Plaintiff performed said work and defendant has
accepted the results thereof.
95. The welds re-x-rayed were found to meet specification
requirements.
96. Under the circumstances, said re-x-ray of the welds was
not reasonably required to substantiate th-.t fact and accordingly
constituted changed, extra or substituted work over and above
the base work included in the prices of the respective contracts.
97. As a result ofthe performance of said changed, extra or
substituted work, plaintiffs on-going production operations
experienced disruption and inefficiency through preoccupation
34a
Complaint and Demand for Jury Trial
of plaintiffs quality control personnel and nondestructive test
equipment and their resulting inability to timely detect and
correct defective and inadequate welds and weld practices as
they occurred.
98. As a proximate result of the foregoing facts, defendant
is liable to plaintiff for additional compensation by way of a
price increase or damages including not only the cost of the re-x-
raying, but also the expense of the disruption and inefficiency
caused the production operations as aforesaid.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
THIRTEENTH COUNT
99. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 16, inclusive, as if set forth at
length herein.
100. In or about October 1973 while plaintiff was
performing said contracts, defendant disapproved the
procedures used by plaintiff to perform magnetic particle testing.
101. Said disapproval action was taken by defendant
notwithstanding the fact that the Government’s and defendant’s
quality control and inspection personnel had theretofore
approved plaintiffs training and testing program for its
magnetic particle testing personnel and had conducted periodic
surveillance audits of their testing.
om
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Complaint and Demand for Jury Trial
102. At defendant’s order and direction the magnetic
particle testing of all affected production hardware in process
was done over and defendant has accepted the results thereof.
103. The retested production hardware was found to meet
specification requirements.
104. The repeat of the magnetic particle testing was not
reasonably required by the terms of plaintiffs contracts to
substantiate the fact that said production hardware met
specification requirements and accordingly constituted changed,
extra or substituted work over and above the base work
included in the prices of the respective contracts.
105. As a result of the repeat of the magnetic particle
testing, plaintiffs on-going production operations experienced
delay, disruption and inefficiency.
106. As a proximate result of the foregoing facts, defendant
is liable to plaintiff for additional compensation by \/ay of a
price increase or damages including not only the cost of
repeating the magnetic particle testing, but also the expense of
the aforesaid delay, disruption and inefficiency of its production
operations.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
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Complaint and Demand for Jury Trial
FOURTEENTH COUNT
107. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 13, inclusive, as if set forth at
length herein.
108. At the times and places abovementioned, defendant
awarded contracts to plaintiff designated as Purchase Order
Nos. A-550, A-595, A-641, A-656, A-661, A-675, and A-113
whereby plaintiff agreed, among other things, to manufacture,
assemble, inspect, test, deliver and warrant reactor vessel and
closure head assemblies, including responsibility for the “design
adequacy” of said reactor vessel and closure head assemblies
under the conditions therein stated, in consideration for which
defendant agreed to pay plaintiff therefor an aggregate price of
Ninety-One Million Eight Hundred Twenty-Seven Thousand
Three Hundred and Eighty-Eight ($91,827,388) Dollars, as more
specifically provided in said contracts.
109. In the course of manufacture of the closure heads,
plaintiff encountered dimensional and “fit-up” problems in
installing parts thereof known as the “insulation and canning”,
the solution of which required that changes be made in said
insulation and canning as called for by the contract drawings in
order to install the same satisfactorily and as contemplated by
the contract specifications.
110. Plaintiff made the changes and performed the work
incident thereto at the order, direction or request of the
defendant and defendant has accepted the results thereof.
111. The aforesaid changes made by plaintiff in the
insulation and canning constituted changed, extra or substituted
work over and above the base work included in the prices of the
respective contracts on account of which defendant is liable to
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Complaint and Demand for Jury Trial
plaintiff for additional compensation by way of an increase in .
price or damages.
112. Plaintiff has demanded said price increase or damages
and defendant has failed and refused to pay the same.
WHEREFORE, plainiiff demands judgment against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
FIFTEENTH COUNT
113. Plaintiff repeats and realleges all of the allegations
contained in Paragraphs | through 13, inclusive, and Paragraph
108, as if set forth at length herein.
114. Through mutual mistake of the parties, or through
mistake on the part of the plaintiff coupled with
misrepresentations or other inequitable conduct on the part of
the defendant, the said contracts did not fully and truly express
the intention and meaning of the parties as to the conditions,
scope or degree of plaintiff's responsibility for the design
adequacy of the closure heads insofar as the “insulation and
canning” were concerned.
115. The mutual mistake consisted of a failure of the
parties to express their understanding that defendant was neither
allowing the time that. would be required for, nor was it paying
for a full design review of all aspects of the design of the
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Complaint and Demand for Jury Trial
components, that the components had already been built
successfully by other contractors, and that plaintiff would only
be required to perform a “design audii” to verily that the
components as designed would comply with the operating and
environmental conditions stated in the specications
116. Consequently, piaiautfs esign adequar
responsibility did not include the dimensional and iit-uy
croblems that were encounterec the in bic
canning.
117. The misrepresentations or other inequitable conduc
on the pari of the defendant consisted of its representation to
plaintiff that the closure heads here in question had been
successfully built by previous contractors in accordance with the
drawings supplied by defendant, and defendant’s failure to
disclose to plaintiff that dimensional and fit-up problems
respecting the insulation and canning of closure heads made by
previous contractors had been encountered.
118. But for the mutual mistake, or the mistake of plaintiff
and misrepresentations or other inequitable conduct of
defendant, plaintiff would have had no responsibility to make
the abovementioned changes required to manufacture the
closure heads aforesaid except upon payment therefor as for
changed, extra or substituted work.
119. As a result of the foregoing, defendant is liable to
plaintiff for additional compensation by way of a price increase
or damages.
120. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment against
defendant as follows:
al
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Complaint and Demand for Jury Trial
A. That the affected contracts be reformed to provide that
resolution of the dimensional and fit-up problem
encountered in installing the insulation and canning
‘constitutes changed, extra or substituted work for
which plaintiff is entitled to additional compensation
in the amount of $251,973.00;
B. That upon the contracts being so reformed, for an
accounting, and for the payments due under the
contracts as reformed;
C. For such other sums as defendant may be found, on
accounting, to be indebted to the plaintiff under said
reformed contracts;
D. For such damages as plaintiff has sustained or may
sustain as a result of any refusal or failure of defendant
to perform its obligations under the aforesaid
contracts as reformed;
E. For such further and other relief as plaintiff may be
entitled to.
SIXTEENTH COUNT
121. Plaintiff repeats and realleges all of the allegations
contained in Paragraph | through 13, inclusive, and Paragraph
63 as if set forth at length herein.
122. In the case of Purchase Order Nos. A-595, A-641, and
A-656, plaintiff was not responsible for the design adequacy of
the closure heads being manufactured thereunder inasmuch as
the conditions under which it was to become respensible were
not satisfied.
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Complaint and Demand for Jury Trial
123. Until said conditions were satisfied, defendant is liable
under said contracts in the case of any inadequacies in the design
of the closure heads, as depicted in the contract drawings, to pay
plaintiff additional compensation by way of a price increase or
damages for any changes in said closure heads and the drawings
thereof in order to make the design conform to the requirements
of the specifications.
124. Plaintiff has fully preformed all the conditions of the
contracts on its part and has claimed additional compensation
under Purchase Order Nos. A-595, A-641,:and A-656 on account
of said changes, and defendant has failed and refused to pay the
same.
WHEREFORE, plaintiff demands judgment | against
defendant as follows:
A. For compensatory damages, general and special;
B. For interest and costs of suit;
C. For attorneys fees.
CRUMMY, DEL DEO, DOLAN
& PURCELL
Attorneys for Plaintiff
s/ Peter E. Henry
Peter E. Henry
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Complaint and Demand for Jury Trial
DEMAND FOR TRIAL BY JURY
Please take notice that plaintiff demands trial by jury of all
issues so triable.
CRUMMY, DEL DEO, DOLAN
& PURCELL
Attorneys for Plaintiff
s/ Peter E. Henry
Peter E. Henry
42a
ANSWER AND COUNTERCLAIM, FILED AUGUST 25,
1976
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 76-794
[TITLE OMITTED]
ANSWER AND COUNTERCLAIM
ANSWER
Defendant General Electric Company Answers the
Complaint of Plaintiff Curtiss-Wright Corporation, as follows:
1. Defendant admits that there is diversity among the
parties but denies that this is an action within the jurisdiction of
this Court for the reasons set forth in Fourth, Thirteenth and
Fourteenth Defenses set forth below.
2. Admitted.
3. Admitted.
4. Defendant admits that it is engaged, through its
Machinery Apparatus Operation, in the business, among others,
of purchasing nuclear propulsion plant components on behalf of
the United States Navy. Defendant denies that it purchases such
components for resale to the Navy.
5. Admitted.
6. Denied for the reasons set forth in the Fourth,
Thirteenth and Fourteenth Defenses.
7. Admitted.
43a
Answer and Counterclaim
FIRST COUNT
8. Defendant admits that, during the period specified,
discussions and later negotiations were held regarding the
possibility of Plaintiff becoming a supplier of large components
used in the construction of nuclear propulsion plants for Naval
vessels. Defendant avers that said discussions and negotiations
resulted from the mutual interests of Plaintiff in entering this
field of endeavor and the needs of the Navy. Defendant avers on
information and belief that such discussions and/or negotiations
did not occur in meetings at which all three parties were present.
Defendant denies the remaining allegations of Paragraph 8.
9. Admitted.
10. Defendant admits that it was seeking to develop a new
source of supply for the aforesaid components, and that it
projected a future need for said new source of supply. Defendant
denies the remaining allegations of Paragraph 10.
11. Defendant admits that Plaintiff had engaged in the
business of manufacturing aircraft engines and missile cases and
that it had not actually manufactured nuclear components of the
kind called for in the contracts giving rise to this litigation,
although Plaintiff had manufactured other items for the Naval
Nuclear Program. Defendant avers that Plaintiff represented,
among other things, that its experience in other manufacturing
endeavors was transferrable to the Naval Nuclear Program.
Defendant denies the remaining allegations of Paragraph 11.
12. Defendant admits that it was aware that Plaintiff had
no prior experience in the actual manufacture of the particular
nuclear components for the Naval Nuclear Program which were
the subject of the contracts giving rise to this‘ litigation.
Defendant denies that it knew the extent of Plaintiff's experience
44a
Answer and Counterclaim
and capabilities to the same degree that Plaintiff knew its own
experience and capabilities. Defendant denies the remaining
allegations of Paragraph 12.
13. Denied.
14. Defendant admits that, acting on the Navy’s behalf, it
entered into 21 contracts with Plaintiff relating to the
manufacture and sale of nuclear components in the period
specified. Defendant denies the remaining allegations of
Paragraph 14.
15. Defendant admits that the contracts were designated as
purchase orders with the numbers set forth in the Complaint and
that Plaintiff agreed, among other obligations under said
purchase orders, to manufacture, assemble, inspect, test, sell and
deliver certain nuclear components. Defendant denies that said
components were sold and delivered to it; and avers that they
were sold and delivered to the Navy. Defendant further avers
that by its calculation the total number of units was 162.
Defendant further states that, although the aggregate price of
said purchase orders is approximately as alleged in the
Complaint, in view of change orders and other adjustments the
exact total is subject to qualification and interpretation.
Defendant denies the remaining allegations of Paragraph 15.
16. Denied.
17. Denied.
18. Denied.
19. Denied.
20. Denied.
21. Denied.
45a
Answer and Counterclaim
SECOND COUNT
22. Defendant admits and denies the allegations of
Paragraph 22 of the Complaint in the manner set forth in
Paragraphs | through 21, inclusive, of this Answer.
23. Denied.
24. Denied.
25. Denied.
THIRD COUNT
26. Defendant admits and denies the allegations of
Paragraph 26 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
27. Denied.
28. Denied.
29. Denied.
30. Denied.
FOURTH COUNT
31. Defendant admits and denies the allegations of
Paragraph 31 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
32.-33. Paragraphs 32 and 33 of the Complaint set forth
legal conclusions as to which no answer is required; however, if
46a
Answer and Counterclaim
an answer is required, Defendant denies the allegations of
Paragraphs 32 and 33.
34. Denied.
35. Denied.
36. Defendant admits that Plaintiff incurred capital
expenditures relating to the performance of the purchase orders.
Defendant denies for lack of information the allegations of
alleged losses incurred by Plaintiff. Defendant avers that
Plaintiffs entry into this business, its signing of the purchase
orders, and its making of any investments with respect to the
Naval Nuclear Program were the result of business judgments
made by Plaintiff, an experienced and substantial firm.
Defendant denies the remaining allegations of Paragraph 36.
37. Denied.
FIFTH COUNT
38. Defendant admits and denies the allegations of
Paragraph 38 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
39. Paragraph 39 sets forth a legal conclusion as to which
no answer is required; however, if an answer were required,
Defendant denies the allegations of Paragraph 39.
40. Denied.
41. Denied.
42. Denied.
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Answer and Counterclaim
43. Denied.
44. Denied.
SIXTH COUNT
45. Defendant admits and denies the allegations of
Paragraph 45 of the Complaint in the manner set forth in
Paragraphs | through 15, inclusive, of this Answer.
46. Denied.
47. Defendant avers that as part of the business
relationship between it and Plaintiff, it was understood that
Defendant would provide reasonable cooperation, consistent
with the contract terms, in furnishing Plaintiff such information
pertinent to the performance of the agreements as Defendant
possessed but Plaintiff did not. Defendant further avers that said
understanding is not contained in any formal agreements, other
than as it is implict in the review process provided for in the
contracts. Defendant further avers at all times during the course
of its business relationship with Plaintiff it not only acted in full
conformity with that understanding, but provided Plaintiff with
valuable assistance far beyond any requirements of the contract.
Defendant denies the remaining allegations of Paragraph 47.
48. Denied.
49. Defendant admits that the listed purchase orders were
entered into with Plaintiff, but denies that said actions were “{iJn
reliance on said agreement.” Defendant denies the remaining
allegations of Paragraph 49.
50. Defendant admits that Plaintiff made certain capital
expenditures for construction of a separate factory building and
48a
Answer and Counterclaim
for special purpose facilities. Defendant denies that any such
actions of Plaintiff were “{iJn further reliance on said
agreement.” Defendant denies the remaining allegations of
Paragraph 50.
51. Defendant avers that, in accordance with the
understanding described in Paragraph 47 of this Answer, from
time to time it received from Plaintiff certain information
concerning the manner, methods, processes and procedures for
manufacturing the components to be delivered, and that it from
time to time commented on said information. Defendant further
avers that, under the contractual relationships, Plaintiff had the
legal duty to devise appropriate manners, methods, processes
and procedures that conformed to the Navy’s specifications or
other requirements. Defendant further avers that it provided
Plaintiff with such knowledge or information as was requested
or appropriate as set forth in Paragraph 47 of this Answer.
Defendant denies the remaining allegations of Paragraph 51.
52. Denied.
53. Defendant admits that Plaintiff made capital
expenditures relating to the performance of the purchase orders.
Defendant denies for lack of information the allegations that
Plaintiff incurred losses in the performance of the purchase
orders. Defendant denies the remaining allegations of Paragraph
53.
SEVENTH COUNT
54. Defendant admits and denies the allegations of
Paragraph 54 of the Complaint in the manner set forth in
Paragraphs 45 through 47, inclusive, of this Answer.
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Answer and Counterclaim
55. Denied.
56. Defendant admits that in the early discussions between
Plaintiff and Defendant it was not anticipated that Plaintiff's
participation in the Naval Nuclear Program would be
“temporary” or that it was related to “temporary” build-ups.
Defendant denies, however, that there was any representation,
agreement, or assurance as to the scope of the future business to
be available to Plaintiff. Defendant further avers that the
availability of such business was a matter within the control of
persons other than Defendant, including the United States
Congress and the Navy. Defendant denies the remaining
allegations of Paragraph 56.
57. Denied.
58. Denied.
59. Defendant denies for lack of information the allegations
that Plaintiffs cost of performing the 21 contracts exceeded the
contract prices. Defendant denies the remaining allegations of
Paragraph 59.
60. Denied.
61. Denied.
EIGHTH COUNT
62. Defendant admits and denies the allegations of
Paragraph 62 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
63. Admitted, except that Defendant denies the allegation
that such awards or purchase orders were “as aforesaid.”
50a
Answer and Counterclaim
63. Defendant avers that specifications of the components
to be manufactured, and qualifications of welders, weld
operators, welding procedures, welding equipment, testing
procedures, and other items were contained in Navy documents
which were incorporated by reference in the purchase orders.
Defendant further avers that said documents speak for
themselves as to their requirements and that Plaintiff's
characterization of them is incomplete. Defendant denies the
remaining allegations of Paragraph 63.
64. Denied.
65. Denied.
66. Defendant admits that Plaintiff produced components
which failed to meet the specified physical characteristics and
which necessitated substantial amounts of rewerk. Defendant
denies that said failure occurred through any action or inaction
of Defendant, and further denies the remaining allegations of
Paragraph 66.
67. Defendant admits that Plaintiffs welding personnel,
although “qualified” in the sense that they had obtained certain
required certificates, had to undergo extensive additional
training and learning before they were able to produce
components meeting specifications. Defendant avers that this
failure of Plaintiff to provide personnel able to do the job
correctly did not result from any action or inaction of
Defendant, and resulted in substantial delays and expenses to
Defendant. Defendant denies the remaining allegations of
Paragraph 6/7.
68. Defendant admits that both it and Plaintiff, as well as
the Navy, ultimately became aware of Plaintiffs inability or
difficulty in producing components meeting specifications.
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Answer and Counterclaim
Defendant denies that this awareness resulted from Plaintiff's
giving of “notice.” Defendant denies the remaining allegations of
Paragraph 68.
69. Denied.
70. Denied.
NINTH COUNT
71. Defendant admits and denies the allegations of
Paragraph 71 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
72. Denied.
73. Denied.
74. Defendant admits that Plaintiff may have made a
mistake of business judgment in assessing its own capability to
perform the contracts and earn a profit upon them. Defendant
denies the remaining allegations of Paragraph 74.
75. Defendant avers that it believed at the outset of its
relationship with Plaintiff that Plaintiff did possess the
capability required to produce the components, without extreme
difficulty and unusual expense. Defendant avers, however, that
at all times it was contemplated that additional training,
learning, and practice would be required in order for personnel
of Plaintiff to be able to accomplish the required work.
Defendant denies the remaining allegations of Paragraph 75.
76. Defendant avers that, based largely upon the
representations made ‘by the Plaintiff to Defendant and
Defendant’s assumption that Plaintiff would perform in a
52a
Answer and Counterclaim
workmanlike manner, Defendant anticipated that Plaintiff
would be able to perform the contracts ‘and earn a reasonable
profit thereon. Defendant further avers that the profitability of
these contracts was subject to risks as is the case with all fixed-
price contracts. Defendant denies the remaining allegations of
Paragraph 76.
77. Defendant denies for lack of knowledge the allegation
that Plaintiff incurred losses in the performance of the purchase
orders. Defendant denies the remaining allegations of Paragraph
77.
78. Denied.
79. Denied.
TENTH COUNT
80. Defendant admits and denies the allegations of
Paragraph 80 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
81. Defendant denies for lack of information the allegation
that Plaintiff made a unilateral mistake in negotiating provisions
of the contract regarding the subjects set forth in Paragraph 81
of the Complaint. Defendant denies that the inclusion or
exclusion of any provisions in the contracts was attributable to
or resulted from or in any misrepresentation or other inequitable
conduct by the Defendant. Defendant denies the remaining
allegations of Paragraph 81.
82. Defendant admits that Plaintiff underestimated the
difficulty of the work. Defendant denies the remaining
allegations of Paragraph 82.
53a
Answer and Counterclaim
83. Defendant denies for lack of information the allegations
of Paragraph 83 concerning the reasons for and substance of
Plaintiffs alleged unilateral mistake. Defendant denies the
remaining allegations of Paragraph 83. ‘.
84. Denied.
85. Denied.
86. Denied.
ELEVENTH COUNT “
87. Defendant admits and denies the allegations of
Paragraph 87 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, and Paragraphs 81 through
84, inclusive, of this Answer.
88. Denied.
89. Denied.
TWELFTH COUNT
90. Defendant admits and denies the allegations of
Paragraph 90 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
91. Defendant admits that beginning in or about May 1971,
Plaintiff, at the request of the Navy as well as Defendant,
repeated x-ray testing of certain welds which Plaintiff had made.
Defendant denies that Plaintiff was “ordered and directed” by
Defendant to perform such tests. Defendant denies for lack of
information the allegation that Plaintiff had already found said
welds to meet specifications. Defendant denies the remaining
allegations of Paragraph 91.
cr
54a
Answer and Counterclaim
92. Defendant admits that a request that x-ray testing be
repeated was made in or about May 1971, and that such request
was prompted by a complaint made by an employee of Plaintiff.
Defendant avers that said complaint was not only that x-rays of
welds were not done in accordance with specifications, but that
there had been falsification of radiographic inspection records.
Defendant denies that it gave Plaintiff any “order and
direction.” Defendant denies the remaining allegations of
Paragraph 92.
93. Defendant denies that it gave Plaintiff any “order and
direction.” Defendant admits that some of its employees had
some information as to how x-ray testing was performed but
denies that it “participated” in that testing. Defendant further
avers that said testing and the manner of its performance was
the responsibility of Plaintiff. Defendant denies the remaining
allegations of Paragraph 93.
94. Defendant admits that Plaintiff performed certain x-ray
tests but denies that Defendant “accepted the results thereof.”
Because it is not clear as to what Plaintiff means by “said
work”, Defendant is unable fully to answer Paragraph 94 of the
Complaint and therefore denies it. Defendant denies the
remaining allegations of Paragraph 94.
95. Denied.
96. Denied.
97. Defendant admits that Plaintiff experienced difficulty in
timely detecting and correcting defective and inadequate welds
and weld practices as they occurred. Defendant denies the
remaining allegations of Paragraph 97.
98. Denied.
55a
Answer and Counterclaim
THIRTEENTH COUNT
99. Defendant admits and denies the allegations of
Paragraph 99 of the Complaint in the manner set forth in
Paragraphs | through 16, inclusive, of this Answer.
100. Defendant admits that it was recommended to
Plaintiff that it change the procedures used to perform magnetic
particle testing. Defendant denies that said recommendations
occurred in or about October 1973, and avers that such
recommendations were made at least as early as June 1972.
Defendant denies the remaining allegations of Paragraph 100.
101. Defendant admits that it as well as the Government
conducted periodic surveillance audits of Plaintiffs testing.
Defendant avers that, under the contracts, final responsibility
for all these aspects of performance, training, and testing was
placed on Plaintiff. Defendant denies the remaining allegations
of Paragraph 101.
102. Denied.
103. Denied.
104. Denied.
105. Denied.
106. Denied.
FOURTEENTH COUNT
107. Defendant admits and denies the allegations of
Paragraph 107 of the Complaint in the manner set forth in
Paragraphs | through 13, inclusive, of this Answer.
56a
Answer and Counterclaim
108. Defendant admits that, acting on behalf of the Navy, it
awarded contracts to Plaintiff designated as purchase orders
with the numbers set forth in Paragraph 108, and that Plaintiff
agreed, among other things, to undertake the duties set forth in
Paragraph 108. Defendant avers that the purchase orders speak
for themselves as to their contents. Because “the times and
places abovementioned” are not specified Defendant denies that
allegation of Paragraph 108. Defendant admits that the
aggregate purchase price of the eight specified purchase orders is
approximately as alleged in Paragraph 108, but avers that the
exact aggregate purchase price may be subject to qualification
and interpretation. Defendant denies the remaining allegations
of Paragraph 108.
109. Defendant admits that in the course of manufacturing
closure heads Plaintiff encountered dimensiona: @ffd “fit-up”
problems in installing parts known as “insulation and canning.”
Defendant further admits that the resolution of these problems
required that changes be made in insulation and canning as
shown in buyer-furnished drawings, but avers that the allegation
of the Complaint is incomplete and misleading in that, under the
contracts, design responsibility for such changes was on
Plaintiff. Defendant denies the remaining allegations of
Paragraph 109.
110. Denied.
111. Denied.
112. Defendant admits that Plaintiff demanded a price
increase for the matters alieged in the Fourteenth Count of the
Complaint, but denies that Defendant has “failed and refused to
pay the same.” Defendant instead avers that a request for a
change by Plaintiff has not yet been acted upon. Defendant
denies the remaining allegations of Paragraph 112.
57a
Answer and Counterclaim
FIFTEENTH COUNT
113. Defendant admits and denies the allegations of
Paragraph 113 of the Complaint in the manner set forth in
Paragraphs | through 13, inclusive. and Paragraph 108 of this
Answer.
114. Denied.
115. Denied.
116. Denied.
117. Denied.
118. Denied.
119. Denied.
120. Denied.
SIXTEENTH COUNT
121. Defendant admits and denies the allegations of
Paragraph 121 of the Complaint in the manner set forth in
Paragraphs | through 13, inclusive, and Paragraph 63 of this
Answer.
122. Paragraph 122 primarily sets forth a legal conclusion
as to which no answer is required; however, insofar as an answer
is required, the allegations of Paragraph 122 are denied.
123. Paragraph 123 of the Complaint sets forth a legal
conclusion as to which no answer is required; however, if an
answer is required, Defendant denies the allegations of
Paragraph 123.
58a
Answer and Counterclaim
124. Defendant admits that Plaintiff has claimed additional
compensation under the specified purchase orders. Defendant
denies that Plaintiff has fully performed all the conditions of
said contracts. Defendant further denies that it has failed and
refused to pay the additional compensation requested by
Plaintiff under said purchase orders and avers that the claim has
not yet been acted upon. Defendant denies the remaining
allegations of Paragraph 124.
FIRST DEFENSE
The Complaint fails to state a claim on which relief can be
granted.
SECOND DEFENSE
The claims asserted in the Complaint are barred by the
statute of limitations.
THIRD DEFENSE
Any equitable claims asserted in the Complaint which are
not barred by the statute of limitations, are barred by laches.
FOURTH DEFENSE
*. all times pertinent to the Complaint, and in the
performance of its duties relating to the formation and
implementation of the contracts which are the subject of the
Complaint, Defendant acted on behalf of the Navy.
Accordingly;
(a) The claims asserted in the Complaint which sound
in tort are barred by the exceptions to the Federal Tort Claims
Act, 28 U.S.C. §2680(a) and (h), for discretionary functions,
misrepresentation, deceit or interference with contract rights.
59a
Answer and Counterclaim
(b) Defendant is immune from tort liability in this case
under the official immunity doctrine.
(c) The claims asserted in the Complaint which sound
in contract cannot be brought to this Court because the claims
asserted exceed $10,000, the jurisdictional limit of the Tucker
Act, 28 U.S.C. §1346(a).
FIFTH DEFENSE
Any claims asserted in the Complaint based upon fraud or
mistake are not stated with particularity and accordingly are
fatally defective under Rule 9(b), Federal Rules of Civil
Procedure.
SIXTH DEFENSE
Any claims asserted in the Complaint based upon alleged
“negligence” of Defendant are barred by the contributory
negligence of Plaintiff.
SEVENTH DEFENSE
Plaintiffs claims are barred by its failure to seek relief or
exhaust its remedies under the “Changes, Extras and
Substitutions” clause of each of the purchase orders.
EIGHTH DEFENSE
Plaintiffs claims are barred by its agreement in the
aforesaid “Changes, Extras and Substitutions” clause, that:
“Buyer will, not pay for additional work or
extras unless such work or extras have been ordered
in writing and the price therefor agreed upon.
EE ee a ee es Sa a ae ee ee ee i ee ne eT a ee Ce et ee ee ee ee oe eee
60a
Answer and Counterclaim
Changes made by Seller without an authorized
Change Order or Amendment shall be made at the
sole risk of Seller, there being no financial recourse
against Buyer.”
. NINTH DEFENSE
Any claims asserted in the Complaint based upon (a)
inspections or testing of any work, or approvals of design,
drawings, samples, test results, procedures or schedules by the
Government or by Defendant; or (b) requirements by the
Government or Defendant that Plaintiff correct defects in its
work, are barred by the “Inspection” clause of each of the
purchase orders, and by the administrative specifications.
TENTH DEFENSE
The Counts of the Complaint asserting “agreements” of
Defendant which are not set forth in the purchase orders are
barred by the “Contract Rights” clause of these orders.
ELEVENTH DEFENSE
Plaintiff is estopped from maintaining this action or from
recovering upon the claims asserted in its Complaint by virtue of
various actions taken by it, and/or by failures by it to act, upon
which Defendant relied, including but not limited to the
following:
(a) Its representations made prior to the formation of
its contractual relationship with Defendant, in order to induce
Defendant and the Navy to approve it as a contractor for the
large components used in the Naval Nuclear Program, that
Plaintiff had the expertise and capabilities to perform the
contracts satisfactorily in accordance with the Navy’s
6la
Answer and Counterclaim
requirements, and to perform highly skilled work of the type and
magnitude required by the Naval Nuclear Program.
(b) Its entry into fixed-price contracts, which are by
their very nature inconsistent with Plaintiffs present position
that it was assured a profit.
(c) Its agreement to or acquiescence in the activities,
such as inspections, additional x-rays, re-welding, etc., which are
the subject of the Complaint.
(d) Its inducing of Defendant and the Navy to approve
it as contractor for additional purchase orders, and its entry into
additional purchase orders, without its having raised any
complaints regarding older purchase orders.
(e) Its failure to raise the claims now asserted, while
the contracts were being implemented, and despite the
extraordinary assistance rendered to Plaintiff by Defendant
which benefitted Plaintiff greatly and which prevented Plaintiff
from suffering great losses on the purchase orders and/or totally
defaulting on them.
(f) Its filing of a request for relief under Public Law
85-804, and various representations and admissions made in
conjunction therewith, including that Plaintiff had no adequate
judicial remedy and that its losses resulted from Plaintiff's own
misjudgments as to the requirements and difficulty of the work.
TWELFTH DEFENSE
The claims asserted in the Complaint have been waived and
abandoned by Plaintiff, in light of the considerations set forth in
the Eleventh Defense.
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Answer and Counterclaim
THIRTEENTH DEFENSE
The United States is a party that must ve joined as to all
counts of the Complaint seeking reforma:tol rescission, since
must approve all modifications « lange ancellations of
-ontracts in excess of $10,000 between L> ind Plaintiff
Since the equitable relief sough ‘on acapable +
¥ o} an ba 7 Tat , Niccsea
verjormance tnose councs Scen b
nder Rule i9, Federai ruies
OURT
Counts 3,.5,. 9, 10; HM, 15 of the chunt seeking
reformation or rescission are barred by the Cocirine of sovereign
immunity.
FIFTEENTH DEFENSE
Plaintiffs requests for equitable relief are barred because it
comes into Court with unclean hands.
SIXTEENTH DEFENSE
The Complaint must be dismissed as violative of Rule 8,
Federal Rules of Civil Procedure, in that its statements of claims
are not “short and plain” and its averments are not “simple,
concise, and direct.”
SEVENTEENTH DEFENSE
During the course of the performance of the contracts,
Plaintiff failed (a) to perform its obligations in a workmanlike
manner; (b) to establish on a timely basis adequate quality
control programs and procedures: (c) to use personnel with
63a
Answer and Counterclaim
adequate competence and training in its quality control
program, and in production tasks; (d) to supply adequate
tooling, machinery and testing equipment; and (e) to establish
and implement adequate testing and inspection programs. As a
result, Plaintiff produced faulty materials which had to be
reworked and retested, caused delays in production and delivery
of the components, and caused great additional expense, the
costs and damage of which which (sic) must be set-off against
any recovery by Plaintiff.
WHEREFORE, Defendant General Electric Company
demands that the Complaint be dismissed with prejudice; that
costs and its attorney’s fees be awarded to Defendant; and that
the Court grant to Defendant such other, further and additional
relief as may be just and proper.
COUNTERCLAIM
1. During the period 1968 through 1972, Defendant on
behalf of the Navy and Plaintiff entered into contracts
designated as Purchase Order Nos. A-550, A-595, A-641, A-642,
A-656, A-661, B-382, B-423, B-428, B-412, B-433, B-443, B-384,
B-425, B-429, B-410, A-675, A-113, B-451, B-452 and B-478.
2. Plaintiff agreed under each of the aforesaid purchase
orders to manufacture, for delivery to the Navy, certain large
components for use in the construction of nuclear propulsion
plants for Naval vessels.
3. Under the aforesaid purchase orders, Plaintiff agreed ©
and undertook the obligations, among others, of training
welders and other personnel to Navy requirements; of furnishing
and using employees competent to perform welding, weld-testing
and other skilled tasks contemplated by the agreements; and of
constructing the components to Navy specifications and to
deliver the components in accordance with specified delivery
schedules.
64a
Answer and Counterclaim
4. Plaintiff agreed and was obligated to furnish and use
adequate tooling, machinery and testing equipment to perform
the work under the purchase orders in a timely and workmanlike
manner, consistent with the high standards of the Naval Nuclear
sad
5. Plaintiff did not perfor its obligations under the
agrermnan in a eatin workmanlike manner in that:
(a) Its anion did not‘ establish quality’ control
programs and procedures adequate or in time to assure the
production of components ‘of. the high quality” and on the
schedule required for the Navy’s program, and did not use
personnel with sufficient competence and training to carry out a
quality controt program of the’sophistication required for work
of the nature required by thepurchase orders.
(b) It failed to establish adequate training programs
for welders.
(c) It failed to supply welders with the ability to
perform the required work correctly and timely.
(d) Its empicyees produced numerous defective welds,
and failed to find defects in its welds.
(e) It failed to supply tooling, machinery, and testing
equipment adequate to perform the work as required and in a
timely fashion, but instead supplied inadequate and old tooling,
machinery and testing equipment.
(f) It failed to establish and implement testing and
inspection programs and practices adequate to find and correct
construction defects in a timely and efficient manner.
65a
Answer and Counterclaim
6. Each of the defects in its performance as set forth in
Paragraph 5 above was pointed out to Plaintiff by
representatives of the Navy and/or Defendant, who made
specific recommendations to assist Plaintiff in curing the defects,
and/or avoiding future or repeated defects. Plaintiff either failed
to accept the recommendations, failed to carry out fully
recommendations which it did accept, or did so in an untimely
manner after further delays and expenditures had resulted from
its actions.
7. As a direct result of the matters set forth in Paragraphs 5
and 6 above, substantial delays occurred in the progress of the
work which Plaintiff was obligated to perform, numerous errors
were made by Plaintiff in the production and testing of the
components which Plaintiff was obligated to deliver, much of
the work which Plaintiff performed had to be redone, and much
work had to be deferred while Plaintiff corrected its errors and
belatedly revised its quality control, testing and training
programs.
8. Also as a direct result of the matters set forth in
Paragraphs 5 and 6 above, it became necessary for Defendant
to make extraordinary efforts, far beyond those contemplated by
the contract or anticipated as a part of the normal cooperation
of contracting parties acting in good faith, in order to prevent a
major default in the performance of its and Plaintiff's
obligations to the Navy. Defendant's efforts included special
assistance v0 Plaintiff to help it to correct its deficiencies in each
of the areas set forth in Paragraph 5 above and to establish
quality control and testing programs adequate to meet the high
standards of the Naval Nuclear Program.
9. Defendant's provision of intensive and special assistance
to Plaintiff conferred great benefits upon Plaintiff, in that (a)
Defendant performed work which was the contractual
66a
Answer and Counterclaim
responsibility of Plaintiff; (b) prevented substantial losses which
otherwise would ‘tave~-befallen Plaintiff; and (c) averted a
probable total default in contract performance by Plaintiff and
the termination of Plaintiff's position as a supplier of large
components to the Naval Nuclear Program.
10. Defendant has not been compensated in whole or in
any part, for the benefits it conferred upon Plaintiff nor for the
losses to Plaintiff which Defendant's efforts averted.
11. Plaintiff caused great increases in the costs of the
production and delivery of the nuclear components required by
the purchase orders, which costs in part were passed on to, and
borne by, the Navy.
12. At all times pertinent hereto, in its relationship with
Plaintiff, Defendant was a contractor of the Navy and was
acting on the Navy’s behalf.
COUNT I
13. Defendant repeats and realleges the allegations of
Paragraphs 1-12, inclusive, of this Counterclaim.
14. Plaintiff breached its obligations under the purchase
orders to manufacture and deliver said components for the
Naval Nuclear Program.
15. Said breaches by Plaintiff of its obligations resulted in
substantial damages, which Defendant is entitled to recover
from Plaintiff for the ultimate benefit of the United States.
COUNT Il
16. Defendant repeats and realleges the allegations of
Paragraphs 1-12, inclusive, of this Counterclaim.
67a
Answer and Counterclaim
17. Plaintiff impliedly warranted that it would perform the
obligations under the purchase orders in a workmanlike manner,
and would provide competent management, adequate tools and
machinery, adequate training and testing procedures, and
adequate quality control procedures.
18. Plaintiff breached the warranty described in Paragraph
17 above.
19. Said breach by Plaintiff of its warranty resulted in
substantial damages, which Defendant is entitled to recover
from Plaintiff for the ultimate benefit of the United States.
COUNT IiIl
20. Defendant repeats and realleges the allegations of
Paragraphs 1-12, inclusive, of this Counterclaim.
21. Durn.g the negotiations leading up io Plaintiff's entry
into the Naval Nuciear Program, Plaintiff represented that it
was competent to m. iufacture and deliver ‘arge components
for the Naval Nuck rt Program; and that ‘ts experience in
aerospace projects quaiified it to perform the necessary tasks,
including welding of large components for the Naval Nuclear
Program.
22. During the performance of the purchase orders set forth
in Paragraph | of this Counterclaim, Plaintiff represented that it
was capable of instituting and would institute additional quality
control procedures, and that it would apply or install tooling,
machinery, training and testing procedures, and use personnel,
adequate to manufacture the items in a timely and workmanlike
i ianner consistent with the high standards of the Naval Nuclear
Program.
| OOOO
68a
Answer and Counterclaim
23. The representations described in Paragraph 21 and 22
were made to induce Defendant and the Navy to accept Pia:atiff
as a contractor for large components in the Naval Nuclear
Program, to agree to enter into or approve additional purchase
orders with Plaintiff, and/or to refrain from declaring Plaintiff
in default, as they had a right to do in view of the acts and
omissions alleged in Paragraphs 1-12.
24. Defendant and the Navy relied upon the aforesaid
representations of Plaintiff in accepting Plaintiff as a supplier, in
issuing it additional purchase orders, and in not terminating it
for default.
25. The aforesaid representations were false and unfounded
and were not carried out by Plaintiff.
26. Said representations by Plaintiff, and Plaintiffs failure
to carry out these representations, resulted in substantial
damages, which Defendant is entitled to recover from Plaintiff
for the ultimate benefit of the United States.
COUNT IV
27. Defendant repeats and realleges the allegations of
Paragraphs 1-12 and 21-26, inclusive, of this Counterclaim.
28. By virtue of the representations set forth in Paragraphs
21-26, Plaintiff expressly warranted its ability and capacity to
perform in a timely and workmanlike manner the work required
by the purchase orders, consistent with the high standards of the
Naval Nuclear Program.
29. Plaintiff breached the warranty described in Paragraph
28 above.
69a
Answer and Counterclaim
30. Said breach by Plaintiff of its warranty resulted in
substantial damages, which Defendant is entitled to recover
from Plaintiff for the ultimate benefit of the United States.
COUNT V
31. Defendant repeats and realleges the allegations of
Paragraphs 1-30, inclusive, of this Counterclaim.
32. As the result of Defendant’s assistance to Plaintiff in
the performance of Plaintiff's contractual duties, as alleged in
Paragraph 9 of this Counterclaim, Plaintiff has been unjustly
enriched.
33. Plaintiff is liable to Defendant for the benefits
conferred, or losses to Plaintiff prevented, through Defendant’s
actions.
WHEREFORE, Defendant demands as relief from Plaintiff
the following damages: ;
1. The damages and additional costs incurred as a
result of the actions and inactions of Plaintiff complained of in
this Counterclaim.
2. The value of the benefits and avoidance of losses
conferred upon Plaintiff through Defendant’s efforts alleged in
Paragraph 32 and 33 of this Counterclaim.
3. Defendant's costs, disbursements and attorney’s fees
of this litigation.
4. Such other, further and additional relief as to this
Court may seem just and proper.
70a
Answer and Counterclaim
COLE AND GRONER, P.C.
By
ALAN Y. COLE
WALTER H. FLEISCHER
ALFRED F. BELCUORE
1730 K Street, N.W.
Washington, D.C. 20006
HANNOCH, WEISMAN, STERN &
BESSER
By
ALBERT G. BESSER
744 Broad Street
Newark, New Jersey 07102
Attorneys for Defendant-Counter-
claimant General Electric Company
Of Counsel:
ROLAND C. RADICE, ESQ.
MICHAEL A. LAMANNA, ESQ.
General Electric Company
One River Road
Schenectady, New York 12345
Tla
REPLY TO COUNTERCLAIM, FILED OCTOBER 15, 1976
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 76-794
(Judge Coolahan)
[TITLE OMITTED}
Curtiss-Wright Corporation replies to the Counterclaim
herein of General Electric Company as follows:
1. Plaintiff admits that it entered into various contracts
with defendant as designated by the purchase order numbers set
forth in paragraph | of the Counterclaim, except that No.B-443
should be B-442, but denies that it entered into said contracts
with the Navy directly or with defendant on behalf of the Navy.
2. Plaintiff avers that the aforesaid purchase orders speak
for themselves, but admits that the components manufactured
by it are and were intended for use in the construction of nuclear
propulsion plants for Naval vessels.
3. Plaintiff denies the allegations of paragraph 3 of the
Counterclaim and avers that the aforesaid purchase orders speak
for themselves concerning plaintiffs obligations set forth therein.
Plaintiff further avers that it is entitled to have its agreements
and obligations as set forth in the purchase orders modified and
reformed by reason of the matters set forth in the Complaint.
4. Plaintiff denies the allegations of paragraph 4 of the
Counterclaim and avers that the aforesaid purchase orders speak
for themselves concerning plaintiff's obligations set forth therein.
Plaintiff further avers that is is entitled to have its agreements
and obligations as set’forth in the purchase orders modified and
reformed by reason of the matters set forth in the Complaint.
72a
Reply to Counterclaim
5. Plaintiff denies each and every allegation set forth in
paragraph 5 of the Counterclaim.
6. Plaintiff denies each and every allegation of paragraph 6
of the Counterclaim.
7. Plaintiff denies each and every allegation of paragraph 7
of the Counterclaim.
8. Plaintiff denies each and every allegation of paragrapi: 8
of the Counterclaim.
9. Plaintiff denies each and every allegation of paragraph 9
of the Counterclaim.
10. Plaintiff denies that defendant’s efforts averted any
losses to plaintiff or that defendant conferred upon plaintiff any
benefits or that defendant is entitled to compensation from
plaintiff.
11. Plaintiff denies each and every allegation of paragraph
11 of the Counterclaim.
12. Plaintiff admits that defendant was a contractor of the
Navy but denies the remaining allegations of paragraph 12 of the
Counterclaim.
COUNT I
13. Plaintiff repeats and realleges its responses to
paragraphs | through 12 of the Counterclaim as if set forth at
length herein.
14. Plaintiff denies each and every allegation of paragraph
14 of the Counterclaim.
73a
Reply to Counterclaim
15. Plaintiff denies each and every allegation of paragraph
15 of the Counterclaim.
COUNT Il
16. Plaintiff repeats and realleges its responses to
paragraphs | through 12 of the Counterclaim as if set forth at
length herein.
17. Plaintiff denies each and every allegation of paragraph
17 of the Counterclaim.
18. Plaintiff denies each and every allegation of paragraph
18 of the Counterclaim.
19. Plaintiff denies each and every allegation of paragraph
19 of the Counterclaim.
COUNT III
20. Plaintiff repeats and realleges its responses to
paragraphs | through 12 of the Counterclaim as if set forth at
length herein.
21. Plaintiff denies each and every allegation of paragraph
21 of the Counterclaim. Any statement, written or otherwise, by
plaintiff with respect to its competence to manufacture and
deliver large components for the Naval nuclear program resulted
directly from and were dependent upon defendant’s assurances,
agreements, representations, and warranties to plaintiff as set
forth in paragraphs 13, 16(b), 16(c), 46-48, 64, 65 and 82 of the
Complaint in this action, or were based upon the mutual
mistake of the parties as set forth in the Ninth Count of the
Complaint, or were based upon the mistake of plaintiff and the
misrepresentations and other inequitable conduct of defendant
as set forth in the Tenth Count of the Complaint.
74a
Reply to Counterclaim
22. Plaintiff denies each and every allegation of paragraph
22 of the Counterclaim. Any statements, written or otherwise, by
plaintiff with respect to its capability to institute and intention to
institute additional quality control procedures, and its intention
to apply or install tooling, machinery, training and testing
procedures, and use personnel adequate to manufacture the
items in a timely and workmanlike manner consistent with the
high standards of the Naval nuclear program, resulted directly
from and were dependent upon defendant’s assurances,
agreements, representations and warranties to plaintiff as set
forth in paragraphs 13, 16(b), 16(c), 46-48, 64, 65 and 82 of the
Complaint in this action, or were based upon the mutual
mistake of the parties as set forth in the Ninth Count of the
Complaint, or were based upon the mistake of plaintiff and the
misrepresentations and other inequitable conduct of defendant
as set forth in the Tenth Count of the Complaint.
23. Plaintiff denies each and every allegation of paragraph
23 of the Counterclaim.
24. Plaintiff denies each and every allegation of paragraph
24 of the Counterclaim.
25. Plaintiff denies each and every allegation of paragraph
25 of the Counterclaim.
26. Plaintiff denies each and every allegation of paragraph
26 of the Counterclaim.
COUNT IV
27. Plaintiff repeats and realleges its responses to
paragraphs | through 12 and 21 through 26 of the Counterclaim
as if set forth at length herein.
75a
Reply to Counterclaim
28. Plaintiff denies each and every allegation of paragraph
28 of the Counterclaim.
29. Plaintiff denies each and every allegation of paragraph
29 of the Counterclaim.
30. Plaintiff denies each and every allegation of paragraph
30 of the Counterclaim.
COUNT V
31. Plaintiff repeats and realleges its responses to
paragraphs | through 30 of the Counterclaim as if set forth at
length herein.
32. Plaintiff denies each and every allegation of paragraph
32 of the Counterclaim.
33. Plaintiff denies each and every allegation of paragraph
33 of the Counterclaim.
FIRST AFFIRMATIVE DEFENSE
Each Count of the Counterclaim fails to state a claim upon
which relief can be granted.
SECOND AFFIRMATIVE DEFENSE
Defendant has no standing to assert those claims of the
Counterclaim seeking recovery on behalf or for the benefit of the
United States.
THIRD AFFIRMATIVE DEFENSE
As to the claims of the Counterclaim brought by defendant
on behalf of or for the ultimate benefit of the United States
defendant is not the real party in interest.
76a
Reply to Counterclaim
FOURTH AFFIRMATIVE DEFENSE
Defendant is estopped from asserting its Counterclaim by
the doctrine of unclean hands, including defendant’s fraud,
misrepresentations, overreaching, and other inequitable conduct,
as well as defendant’s breaches of contract, warranty and
covenant of good faith and fair dealing. Defendant is further
estopped from asserting and/or has waived its rights with
respect to the claims in the Counterclaim by permitting plaintiff
to expend large amounts of time and money in continued
performance of the work and acceptance of said performance.
FIFTH AFFIRMATIVE DEFENSE
Any delays in plaintiffs performance of the work called for
by the purchase orders which are the subject of the
Counterclaim were caused by defendant’s fraud,
misrepresentations, overreaching and other inequitable conduct,
as well as defendant’s breaches of contract, warranty and
covenant of good faith and fair dealing. Defendant is also
estopped and/or has waived any claims for delay by permitting
plaintiff to expend large amounts of time and money in
continued performance of the work and acceptance of said
performance.
SIXTH AFFIRMATIVE DEFENSE
Any claims asserted in the Counterclaim based upon fraud
are not stated with particularity and, accordingly, are fatally
defective under Rule 9(b) of the Federal Rules of Civil
Procedure.
SEVENTH AFFIRMATIVE DEFENSE
77a
Reply to Counterclaim
In the event that and to the extent that the claims asserted
in the Complaint are barred by the statute of limitations, the
claims asserted in the Counterclaim are likewise barred.
EIGHTH AFFIRMATIVE DEFENSE
The claims asserted in the Counterclaim are barred by the
doctrine of laches.
WHEREFORE, plaintiff, Curtiss-Wright Corporation, in
addition to the demands set forth in its Complaint in this action,
demands:
A. That the Counterclaim be dismissed with prejudice.
B. That costs and attorneys fees be awarded to plaintiff.
C. That the Court grant to plaintiff such other further
and additional relief as may be just and proper.
CRUMMY, DEL DEO, DOLAN
& PURCELL
Attorneys for Plaintiff
s/ Ralph N. Del Deo
Ralph N. Del Deo
78a
AMENDMENT TO AND SUPPLEMENTAL COMPLAINT,
FILED NOVEMBER 18, 1976
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
(Judge Coolahan)
Civil Action No. 76-794
[TITLE OMITTED]
Plaintiff, for its Amendment To And Supplemental
Complaint alleges as follows:
SEVENTEENTH COUNT
125. Plaintiff repeats and realleges all of the allegations
contained in paragraphs | through 7 of the Complaint in this
action as if set forth at length herein.
126. From on or about early in 1968 through 1972, on
various occasions, plaintiff and defendant entered into a series of
21 contracts pursuant to which plaintiff entered into the business
of manufacturing nuclear components and performing related
work for the defendant, for the aggregate sum of Two Hundred
Fourteen Million Six Hundred Thousand Dollars
($214°6007000.00), which defendant agreed to pay plaintiff.
127. To date, plaintiff has performed all of the terms and
conditions of those contracts designated as Purchase Order Nos.
B-382, B-384, B-410, B412 and B-425 on its part to be
performed.
128. The balance due on account of the price stipulated in
said Purchase Orders, after crediting all progress payments
made, is Three Million Six Hundred Seventy-Three Thousand
Five Hundred Eighty-Four Dollars ($3,673,584.00) over and
ez-
79a
Amendment to and Supplemental Complaint
above such unliquidated additional amounts as may be found to
be due plaintiff thereon under the foregoing Counts of the
Complaint in this action.
129. Defendant has not paid said sum of Three Million Six
Hundred Seventy-Three Thousand Five Hundred Eighty-Four
Dollars ($3,673,584.00) to plaintiff or any part thereof, although
demand therefor has been made.
WHEREFORE, plaintiff demands judgment against
defendant on this Count for the sum of $3,673,584.00, interest,
and costs.
EIGHTEENTH COUNT
130. Plaintiff repeats and realleges all of the allegations
contained in paragraphs | through 7 of the Complaint in this
action as if set forth at lengt! herein.
131. From on or about early in 1968 through 1972, on
various occasions, plaintiff and defendant entered into a series of
21 contracts pursuant to which plaintiff entered into the business
of manufacturing nuclear components and performing related
work for the defendant, for the aggregate sum of Two Hundred
Fourteen Million Six Hundred Thousand Dollars ($214,600.00)
which defendant agreed to pay plaintiff.
132. To date, plaintiff has performed all the terms and
conditions of those contracts designated as Purchase Order Nos.
A-550, A-595, A-642, B-423, B-429, B-433 and B-442 on its part
to be performed.
133. The balance due on account of the price stipulated in
said Purchase Orders, after crediting all progress payments
made, if Four Million Seven Hundred Four Thousand Nine
80a
Amendment to and Supplemental Complaint
Hundred Fifty Two Dollars ($4,704,952.00) over and above such
unliquidated additional amounts as may be found to be due
plaintiff thereon under the foregoing Counts of the Complaint in
this action.
134. Defendant has not paid said sum of Four Million
Seven Hundred Four Thousand Nine Hundred Fifty Two
Dollars ($4,704,952.00) to plaintiff or any part thereof although
demand therefor has been made.
WHEREFORE, plaintiff demands judgment against
defendant on this Count for the sum of $4,704,952.00, interest,
and costs.
CRUMMY, DEL DEO, DOLAN &
PURCELL
Attorneys for Plaintiff
s/ Ralph N. Del Deo
Ralph N. Del Deo
8la
ANSWER TO AMENDMENT TO AND SUPPLEMENTAL
COMPLAINT AND COUNTERCLAIM, FILED
DECEMBER 8, 1976
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 76-794
[TITLE OMITTED}
ANSWER TO AMENDMENT TO AND SUPPLEMENTAL
COMPLAINT; AND COUNTERCLAIM OF DEFENDANT
GENERAL ELECTRIC COMPANY
Defendant General Electric Company Answers the
Amendment to and Supplemental Complaint of Plaintiff
Curtiss-Wright Corporation, as follows:
1-124. Defendant admits and denies the allegations of
Paragraphs | through 124, inclusive, of Plaintiffs Complaint in
the manner set forth in Paragraphs | through 124, inclusive, of
Defendant’s Answer.
SEVENTEENTH COUNT
125. Defendant admits and denies the allegations of
Paragraph 125 of the Complaint in the manner sef forth in
Paragraphs | through 7, inclusive, of this Answer.”
126. Defendant admits that, during the period specified,
Plaintiff and Defendant entered into 21 contracts relating to the
manufacture and sale of certain nuclear components for the
Navy Nuclear Program. Defendant avers that, although the
aggregate price of said contracts, which were designated as
purchase orders, is approximately as alleged in the Complaint,
in view of change orders and other adjustments the exact total is
subject to qualification and interpretation. Defendant denies the
remaining allegations of Paragraph 126.
Lessee
82a
Answer to Amendment to and Supplemental Complaint
127. Defendant admits that Plaintiff has delivered the
hardware required by the contracts. Defendant denies the
remaining allegations of Paragraph 127.
128. Defendant admits that $3,673,584.00 is the amount
representing the redeterminable price, less progress and
liquidation payments, under the listed purchase orders.
Defendant denies that that amount is a “balance due” to which
Plaintiff is entitled. Defendant denies the remaining allegations
of Paragraph 128.
129. Admitted.
EIGHTEENTH COUNT
130. Defendant admits and denies the allegations of
Paragraph 130 of the Complaint in the manner set forth in
Paragraphs | through 7, inclusive, of this Answer.
131. Defendant admits that, during the period specified,
Plaintiff and Defendant entered into 21 contracts relating to the
manufacture and sale of certain nuclear components for the
Navy Nuclear Program. Defendant avers that, although the
aggregate price of said contracts, which were designated as
purchase orders, is approximately as alleged in the Complaint,
in view of change orders and other adjustments the exact total is
subject to qualification and interpretation. Defendant denies the
remaining allegations of Paragraph 131.
132. Defendant admits that Plaintiff has delivered the
hardware required by the contracts. Defendant denies the
remaining allegations of Paragraph 132.
i33. Demied.
134. Admitted.
| al
83a
Answer to Amendment to and Supplemental Complaint
DEFENSES
Defendant reasserts and incorporates by reference herein its
First through Seventeenth Defenses, inclusive, set forth in
Defendant’s Answer.
EIGHTEENTH DEFENSE
Plamtiffs claim for final payments under Counts 17 and i8
of the Amendment to and Supplemental Complaint are barred
by its anticipatory breach of, failure to meet the condition
precedent in, and refusal to abide by, Paragraph Sc. of the
Terms and Conditions of Purchase applicable to each of the
purchase orders.
NINETEENTH DEFENSE
Plaintiffs claims for final payments under Counts 17 and 18
of the Amendment to and Supplemental Complaint are barred
by its refusal to enter into an unconditional amendment for
redetermination to the purchase orders as required by each of
the purchase orders.
WHEREFORE, Defendant General Electric Company
demands that the Complaint and the Amendment to and
Supplemental Complaint be dismissed with prejudice; that costs
and its attorneys’ fees be awarded to Defendant; and that the
Court grant to Defendant such other, further and additional
relief as may be just and proper.
COUNTERCLAIM
1-33. Defendant repeats and realleges the allegations of
Paragraphs 1-33, inclusive, of its Counterclaim as if ‘fully set
forth herein.
84a
Answer to Amendment to and Supplemental Complaint
WHEREFORE, Defendant demands as relief from Plaintiff
the following damages:
1. The damages and additional costs incurred as a result of
the action and inactions of Plaintiff complained of in this
Counterclaim.
2. The value of the benefits and avoidance of losses
conferred upon Plaintiff through Defendant's efforts alleged in
Paragraph 32 and 33 of this Counterclaim.
3. Defendant’s costs, disbursements and attorneys’ fees of
this litigation.
4. Such other, further and additional relief as to this Court
may seem just and proper.
COLE AND GRONER, P.C.
s/ Alan Y. Cole
ALAN Y. COLE
WALTER H. FLEISCHER
ALFRED F. BELCUORE
1730 K Street, N.W.
Washington, D.C. 20006
HANNOCH, WEISMAN, STERN &
BESSER
s/ Albert G. Besser
ALBERT G. BESSER
744 Broad Street
Newark, New Jersey 07102
Attorneys for Defendant-Counter-Claimant
General Electric Company
85a
Answer to Amendment to and Supplemental Complaint
Of Counsel:
ROLAND C. RADICE, ESQ.
MICHAEL A. LAMANNA, ESQ.
General Electric Company
One River Road
Schenectady, New York 12345
86a
ADDITIONAL REPLY TO COUNTERCLAIM, FILED
DECEMBER 27, 1976
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
(Judge Coolahan)
Civil Action
No. 76-794
[TITLE OMITTED]
Whereas defendant, General Electric Company, has
repeated and realleged the allegations of Paragraphs 1-33,
inclusive, of its Counterclaim in response to the Amendment To
And Supplemental Complaint in this action, plaintiff, Curtiss-
Wright Corporation, herein replies to said paragraphs as
follows:
1-33. Plaintiff repeats and realleges its responses to
paragraphs 1-33 of the Counterclaim as if set forth at length
herein.
AFFIRMATIVE DEFENSES
Plaintiff reasserts its First through Eighth Affirmative
Defenses to the Counterclaim as if set forth at length herein.
WHEREFORE, plaintiff, Curtiss-Wright Corporation, in
addition to the demands set forth in the Amendment To And
Supplemental Complaint in this action, demands:
A. That the Counterclaim be dismissed with
prejudice.
B. That costs and attorneys fees be awarded to
plaintiff.
87a
Additional Reply to Counterclaim
That the Court grant to plaintiff such other
further and additional relief as may be just and
proper.
CRUMMY, DEL DEO, DOLAN
& PURCELL
s/ Ralph N. Del Deo
Ralph N. Del Deo
AFFIDAVIT OF JAMES H. SULLIVAN, FILED MAY 3,
1977, WITH ATTACHMENTS
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Civil Action No. 76-794
[TITLE OMITTED]
STATE OF NEW JERSEY
Ss
COUNTY OF BERGEN
JAMES H. SULLIVAN, being duly sworn according to
law, upon his oath, does depose and say:
1. Since April of 1973, I have been employed as Director of
Administration — Nuclear Facility by Curtiss-Wright
Corporation, plaintiff in the above captioned matter (hereinafter
“Curtiss-Wright”), and I am personally familiar with the matters
set forth herein.
2. The records of Curtiss-Wright reflect that between May
1, 1968 and September 30, 1970, Curtiss-Wright entered into 21
subcontracts with General Electric Company, defendant, in the
above captioned matter (hereinafter “General Electric”),
pursuant to which Curtiss-Wright agreed to supply a total of 167
large components for use in nuclear propulsion systems of naval
vessels. These 21 contracts are designated as Purchase Orders
Nos. A-550, A-595, A-641, A-642, A-656, A-661, B-382, B-423,
B-428, B-412, B-433, B-442, B-384, B-425, B-429, B-410, A-675,
A-113, B-451, B-452, and B-478 (hereinafter “the 21 Purchase
Orders”). Each Purchase Order is subject to the “Terms and
Conditions of Purchase”, attached hereto as EXHIBIT “D”.
89a
Affidavit of James H. Sullivan
3. Curtiss-Wright has made delivery of each of the large
components called for by the 12 subcontracts designated as
Purchase Orders Nos. A-642, B-412, B-384, B-382, B-423, B-433,
A-550, B-425, B-410, B-442, B-595 and B-429 (hereinafter “the
12 Purchase Orders”).
4. On October 17, 1975, Curtiss-Wright submitted to
General Electric the final invoices for Purchase Order Nos. B-
382, B-384, B-412 and B-425, and on November 3, 1975, Curtiss-
Wright submitted its final invoice for Purchase Order No. B-410.
Each of these invoices was accompanied by a cover letter, a
sample of which is attached to this Affidavit as EXHIBIT “B”.
5. On December 29, 1975, General Electric returned said
invoices to Curtiss-Wright without payment.
6. Subsequently Curtiss-Wright submitted to General
Electric the final invoices for Purchase Order Nos. A-642, B-423,
B-433, A-550, B-442, A-595 and B-429, and resubmitted the
invoices for those Purchase Orders designated in Paragraph 4,
supra. Each of these invoices was accompanied by a qualified
release, a sample of which has been attached to this Affidavit as
EXHIBIT “C”.
7. As of this date, General Electric has failed to pay each of
said invoices.
8. Pursuant to the Terms and Conditions, Paragraph 19,
Curtiss-Wright prior to submitting its final invoices on the 12
the Defense Contract Auditing Agency of the United States
Department of Defense (hereinafter “DCAA”), which has issued
audit reports verifying Curiiss-Wright’s cost data in each
instance. Based on its audits the DCAA recommended no
downward revision of -the prices set forth in the 12 Purchase
Orders as amended.
90a
Affidavit of James H. Sullivan
9. As to the 5 Purchase Orders designated in Paragraph 4
supra, General Electric’s acceptance of the DCAA’s
recommendation of no downward adjustment in the prices set
forth in the Purchase Orders as amended was evidenced by
General Electric’s forwarding of “Final Price Redetermination
Amendments” to Curtiss-Wright.
10. As to the 7 Purchase Orders designated in Paragraph 6
supra, General Electric as of this date has not forwarded “Final
Price Redetermination Amendments”. In a _ written
communication to Curtiss-Wright dated February 23, 1976,
General Electric took the position that it would not forward
these amendments due to the dispute between the parties as to
Curtiss-Wright’s position that it could submit qualified releases
at the time of final invoicing. General Electric did not, however,
indicate any disagreement with the DCAA recommendations ~
described in Paragraph 8 supra.
11. Attached to this Affidavit as EXHIBIT “A” —
Schedule of Liquidated Claims, is a chart which reflects, as to
each of the 12 Purchase Orders, (a) a description of the
components involved, (b) the date of the original Purchase
Order, (c) the date delivery of the large components was
completed, (d) the date Curtiss-Wright’s final cost data was
submitted, (e) the date the DCAA audit was issued, (f) the date
the final invoices were submitted and, where applicable, returned
and re-submitted, and (g) the total value of the final invoices
(hereinafter “the holdbacks”).
12. The total amount of holdbacks on the 12 Purchase
Orders is $8,378,536.00 exclusive of interest, constituting
approximately 10 percent of the total contract prices of the 12
Purchase Orders as amended. On eight of the remaining nine of
the 21 Purchase Orders, Plaintiff has completed delivery of the
large components called for thereunder. The amount of the
holdbacks on these eight Purchase Orders is $9,173,464.00.
9la
Affidavit of James H. Sullivan
13. General Electric’s failure to make payment on the
invoices listed in Exhibit “A” attached hereto has been the
subject of correspondence and discussion between the parties
wherein General Electric stated the reasons for its refusal to pay
the invoices. The correspondence and discussions dealt solely
with Curtiss-Wright’s desire to preserve certain claims at the
time of final invoicing and General Electric’s objection to this
position. At no time did General Electric indicate that the
amounts of the final invoices were incorrect.
14. To the best of my knowledge, the records of Curtiss-
Wright do not reflect nor am I personally aware that, prior to
the inception of Civil Action No. 76-794, General Electric or the
United States informed Curtiss-Wright that Curtiss-Wright had
defaulted on or was in breach of ‘any one of the 21 Purchase
Orders which had resulted in outstanding damages to General
Electric or the United States. Nor did General Electric or the
United States, prior to the inception of Civil Action No. 76-794,
ever indicate to Curtiss-Wright any intention to withhold final
payment under the 21 Purchase Orders as set-off for damages
allegedly suffered by either or both of them.
15. The records of Curtiss-Wright further reflect that on
July 2, 1976, for purpose of avoiding further dispute at that time
between the parties regarding General Electric’s insistence upon
Curtiss-Wright’s executing unqualified releases, and to permit
payment to be made to Curtiss-Wright without prejudice to the
position of either party, Curtiss-Wright offered in exchange for
payment of the holdbacks, to post a surety payment bond in the
amount of the holdbacks, conditioned on the repayment of the
holdbacks upon General Electric's demand. As of this date
General Electric has failed to substantively respond to this
proposal.
93a
Affidavit of James H. Sullivan
Sworn to May 2nd, 1977
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94a
Affidavit of James H. Suliivan
EXHIBIT B
cc: Sullivan, Lovell, Ahl, Jaugstetter, Janiec
October 14, 1975
General Electric Company
Machinery Apparatus Operation
P.O. Box 1021
Schenectady, New York 12301
Attention: Mr. F.J. Balicki
C-WC Ref. No. A-105-35
Subject: Proposed Amendment No. 49 to MAO P.O. B-382
Gentlemen:
The enclosed amendment is executed and delivered by Seller on
the express condition that:
Notwithstanding any provision of this orde: .o the contragy,
Seller reserves all rights arising out of the loss of $29,300,000 on
this and other orders which is the subject of a Request for
Extracontractual Relief under P.L. 85-804 filed with the
Department of the Navy.
Please confirm in writing, at the time you execute the original of
this amendment and return it to us, that you understand that it
is executed and delivered on the above stated condition.
Very truly yours,
CURTISS-WRIGHT CORPORATION
Y.A. Wokovits
Manager, Contracts & Proposals
FAW:am
Enclosure
95a
Affidavit of James H. Sullivan
EXHIBIT C
CURTISS-WRIGHT CORPORATION
Wood-Ridge, New Jersey 07075
General Electric Company
Machinery Apparatus Operation
Post Office Box 1021
Schenectady, New York 12301
Attention: Mr. E. Phelps
Subject: GE/MAO — C-WC Contracts — Final Payment
Dear Mr. Phelps:
Pursuant to the terms of Purchase Order No. A-595 and in
consideration of the sum of two hundred sixty-three thousand
seven hundi:d forty seven dollars ($263,747) which has been or
is to be paid under the said Purchase Order to Curtiss-Wright
Corporation, One Passaic Street, Wood-Ridge, New Jersey,
Curtiss-Wright Corporation, upon payment of the said sum by
General Electric Company, does remise, release and discharge
General Electric Company and the Government, their officers,
agents and employees, of and from all liabilities, obligations,
claims and demands whatsoever under or arising from the said
Purchase Order, except such claims as are set forth in a certain
civil action entitled Curtiss-Wright Corporation, Plaintiff, versus
General Electric Company, Defendant, File No. 76-794 pending
in the United States District Court for the District of New
Jersey.
96a
Affidavit of James H. Suilivan
IN WITNESS WHEREOF, this Release has been executed this
twenty-third day of September, 1976.
CURTISS-WRIGHT CORPORATION
By: Richard P. Sprigle
Senior Vice President
CERTIFICATE
1, Francis E. Fallon certify that I am the Secretary of Curtiss-
Wright Corporation named in the foregoing Release; that
Richard P. Sprigle who signed said Release on behalf of Curtiss-
Wright Corporation, is the Senior Vice President of said
Corporation, that said Release was duly signed for and in behalf
of said Corporation by authority of its governing body and is
within the scope of its corporate powers.
s/ Francis E. Fallon
Francis E. Fallon
(Corporate Seal)
Article
DN=SwCMmIDRWEwWHN—
14.
15.
98a
Affidavit of James H. Sullivan
TABLE OF CONTENTS
Description
Definitions
Contract Rights
Delivery
Taxes
Payments
Changes, Extras and Substitutions
Liens
Inspection
Warranty
Rights in Technical Data
Patents — Provisions and Rights
Patent Indemnity
Notice and Assistance Regarding Patent
Infringement
Furnished Information
Transmission Abroad of Equipment or
Technical Data Relating to Nuclear
Propulsion of Naval Ships
Control of Visitors
Public Release of Information
Lower-tier Seller Cost and Pricing Data
Audit and Records
Price Reduction for Defective Cost or
Pricing Data
Title f
Applicable Laws
Proprietary Information
Notice of Labor Disputes
Priorities, Allocations and Allotments
Assignment
Subcontracting
Article
28.
29.
30.
31.
Je.
33.
34.
35.
36.
a.
38.
99a
Affidavit of James H. Sullivan
Description
Set-off
Permits
Special Materials
Default
Suspension of Work for the Convenience
of the Buyer
Work on Buyer, Government or Other
Premises
Fair Labor Standards Act
Anti-Kickback Act
Use of Government Property, Special
Tooling or Special Test Equipment
Preproduction Costs
Compliance with Armed Services
Procurement Regulations
a. Buy American Act
b. Convict Labor
c. Covenant Against Contingent Fees
d. Examination of Records
e. Excess Profit
f. Filing of Patent Applications
g. Government Property
h. Interest
i. Equal Opportunity
j. Renegotiation
k. Responsibility for Supplies
|. Military Security Requirement
m. Special Tooling and Special Test
Equipment
n. Termination
o. Utilization of Concerns in Labor
Surplus Areas
100a
Affidavit of James H. Sullivan
Article Description
p. Labor Surplus Area Subcontract-
ing Program
q. Utilization of Small Business
r. Small Business Subcontracting
Program
s. Walsh-Healey Public Contract
Act
t. Contract Work Hours Standards
Act — Overtime Compensation
u. Duty-Free Entry — Canadian
Supplies
39. Cost Support and Certification
Relative to Amendments
40. Order of Precedence
Attachment
1. Certificate of Current Cost or Pricing
Data
This Purchase Order is placed by the General Electric
Company (“General Electric”) pursuant to the prime contract
(“Prime Contract”), indicated on the attached Purchase Order,
between General Electric, acting through the Machinery
Apparatus Operation (MAO), and the U.S. Government
(“Government” including, but not limited to, the “Navy”), acting
through the Department of the Navy, Naval Ship Systems
Command (“Navy”). This order does not bind nor purport to
bind the United States Government, its officers, employees or
agents.
10la
Affidavit of James H. Sullivan
1. DEFINITIONS — As used throughout these terms and
conditions, the following definitions shall apply:
Government — the United States of America
Commission — the United States Atomic Energy
Commission or its duly authorized representatives
Navy — the Department of the Navy or its duly authorized
representatives
Cognizant Government Agency — shall mean the United
States Navy
Buyer — shall mean Machinery Apparatus Operation of
the General Electric Company
Seller — the legal entity which has agreed to provide the
goods or services required by this order
Purchase Order — the contract document in which, and by
acknowledgement thereof, Seller agrees to provide, for
consideration stated therein, the goods and services in
accordance with the requirements contained or referenced
therein. The terms “order,” “contract,” or “subcontract”
shall be synonymous with the term “purchase order.”
Change Order — a unilateral direction by the Buyer to the
Seller to proceed with the work as changed and to report
the effect on the order pursuant to the provisions of Article
6 entitled, “Changes, Extras and Substitutions.”
Amendment — the contract document in which, and by
acknowledgement thereof, the Seller agrees to modify the
order in accord with the provisions of the amendment.
102a
Affidavit of James H. Sullivan
Lower-tier Subcontractor — a supplier or subcontractor,
including any supporting lower-tier supplier or
subcontractor, who has a subcontract or order from the
Seller or any lower-tier subcontractor.
2, CONTRACT RIGHTS — This order (which term shall be
deemed to include related plans, drawings, specifications, and
other documents) contains the entire agreement of the parties,
and no modification, alteration, waiver, or other provision
which is inconsistent with or in addition to the provisions of this
order shall have any force or effect unless the same shall be
incorporated in the order in writing by the Buyer. Failure of
Buyer to enforce any of its rights hereunder shall not constitute
a waiver of such rights or of any other rights under this order.
3. DELIVERY — All Delivery requirements set forth in this
order are firm. Seller agrees that delays during performance of
the order which would cause delivery to extend beyond
contractual delivery date(s), and which are the responsibility of
Seller, must be made up by Seller at his expense through the use
of whatever means are necessary including, but not limited to,
overtime and additional workshifts.
Unless otherwise provided in this order, delivery shall not be
made more than 45 days prior to the delivery dates specified
herein. Buyer may return early deliveries at Seller’s risk and
expense. Seller shall comply with the delivery schedule provided
in this order but shall rot make material or production
commitments without specific written authorization by Buyer
nor in advance of such time as Seller reasonably believes
necessary to meet delivery schedules except as otherwise
specified in the order.
4. TAXES — Unless otherwise expressly stated on the face of
this order, the price stated herein includes all applicable Federal,
103a
Affidavit of James H. Sullivan
State and Local taxes in effect on the date of this order but does
not include any State or local sales, use or any other tax directly
applicable to the completed supplies or services covered by this
order from which Seller or this transaction is exempt.
5. PAYMENTS —
a. Except as otherwise provided in this order, e.g., progress
payments, no payment by Buyer shall be due until thirty (30)
days after (1) receipt of an acceptable invoice and appropriate
evidence that Seller has met all the requirements of the order, or
(2) receipt of the supplies at destination, whichever last occurs.
Buyer may at his discretion make payments for partial delivery
of supplies if so requested by Seller. No payment made by Buyer
shall be deemed to indicate final acceptance and any payment
made prior to final acceptance shall be returned by Seller at the
request of Buyer if the supplies to which the payment relates are
rejected.
b. Unless otherwise provided, if this order provides a
discount for prompt payment, the discount period shall be
calculated from the date an acceptable invoice and supporting
evidence that all order requirements have been met is received or
the date of receipt at destination of the supplies, whichever last
occurs.
c. Seller and each assignee under an assignment in effect at
the time of final payment agree as a condition precedent to final
payment, that the Buyer and the Government, their respective
officers, agents and employees are released from all liabilities,
obligations and claims arising under or by virtue of this order.
Seller further agrees that the final invoice shall constitute not
less than ten percent (10%) of the total order price.
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Affidavit of James H. Sullivan
6. CHANGES, EXTRAS AND SUBSTITUTIONS —
a. Buyer may at any time, by a written Change Order
issued by Buyer and without notice to the sureties, make
changes, within the general scope of this order, in any one or
more of the following:
1) Drawings, designs or specifications, where the supplies
to be furnished are to be specifically manufactured for
Buyer in accordance therewith;
2) Method of shipment or packing;
3) Place of delivery, inspection or acceptance,
4) The amount of Government furnished property,
5) The quantities or items of any repair parts lists.
If any such Change Order causes an increase or decrease in the
cost of, or the time required for, performance of any part of the
work under this order, or otherwise affects any other provision
of this order, whether changed or not changed by any such
written notice of change, an equitable adjustment shall be
negotiated in the order price or delivery requirements, or both,
and in such other provisions of the order as may be affected.
Such adjustment shall be accomplished by a written amendment
to this order signed by Buyer. No changes to this order are
authorized unless made by Buyer representative designated by
name herein and substantiated by a formal written
amendment/change order. Changes made by Seller, unless
authorized by a written amendment/change order, shall be made
at the sole risk of Seller, there being no financial recourse
against Buyer.
105a
Affidavit of James H. Sullivan
b. Any claim by Seller for adjustment under this article
must be asserted within 30 days or such earlier date as may be
specified by Buyer from the date of receipt by Seller of the
notification of Change Orders; provided, however, that Buyer, if
he decides that the facts justify such action, may receive and act
upon any such claim asserted at any time prior to final payment
under this order.
c. Where the cost of property made obsolete or excess as a
result of a change is included in Seller’s claim for adjustment.
Buyer reserves the right to prescribe the manner of disposition of
such property.
d. Nothing in this article shall excuse Seller from
proceeding with the order as changed.
e. Buyer will not pay for additional work or extras unless
such work or extras have been ordered in writing and the price
therefor agreed upon. Changes made by Seller without an
authorized Change Order or Amendment shall be made at the
sole risk of Seller, there being no financial recourse against
Buyer.
f. Seller shall not substitute other materials or accessories
for those specified in the order without the written consent of
Buyer.
7. LIENS — Seller agrees to delivery to Buyer the articles
covered by this order free and clear of all liens, claims, and
encumbrances.
8. INSPECTION —
a. All work (which term throughout this article includes
without limitation raw materials, procedures and processes,
106a
Affidavit of James H. Sullivan
components, intermediate assemblies and end products) shall be
subject to inspection and test by Buyer and the Government, to
the extent practicable at all times and places including the period
of manufacture, and in any event prior to acceptance. Seller is
responsible for, and shall upon Buyer's request furnish evidence
of, compliance with all requirements of the order; and inspection
and test by Buyer or the Government of any work or approval
of designs, drawings, samples, test results, procedures, processes
or schedules by Buyer or the Government does not relieve Seller
from any responsibility to meet the order requirements.
b. In case any work is defective in material or workmanship
or otherwise not in conformity with the requirements of this
order, Buyer shall have the right either to reject it (with or
without instructions as to its disposition) or to require
correction. Work which has been rejected or required to be
corrected shall be removed, or, if permitted or required by
Buyer, corrected in place by and at the expense of Seller
promptly after notice, and shall not thereafter be tendered for
acceptance unless the former rejection or requirement of
correction is disclosed. If Seller fails promptly to remove such
work which is required to be removed or promptly to replace or
correct such work as specified by Buyer, Buyer either (1) may by
contract or otherwise replace or correct such work and charge to
Seller the cost occasioned Buyer thereby, or (2) may terminate
this order for default as provided in the article of this order
entitled “Default.” Unless Seller corrects or replaces such work
within the delivery schedule, Buyer may require the delivery of
such work at a reduction in price which is equitable under the
circumstances.
107a
Affidavit of James H. Sullivan
c. If any inspection or test is made by Buyer and/or the
Government on the premises of Seller or a _ lower-tier
subcontractor, Seller without additicnal charge shall provide all
reasonable facilities and assistance for the safety and
convenience of Buyer and/or the Government’s representatives
in the performance of their duties. If Buyer and/or Government
inspection or test is made at a point other than the premises of
Seller or a lower-tier subcontractor, it shall be at the expense of
Buyer except as otherwise provided in this order; provided that,
in case of rejection, Buyer shall not be liable for any reduction in
value of samples used in connection with such inspection or test.
d. All inspections and tests by Buyer and/or the
Government shall be performed in such a manner as not to
unduly delay the work. Buyer reserves the right to charge to
Seller any additional costs of Buyer’s and/or the Government's
inspection and test when work is not ready at the time such
inspection and test is requested by Seller or when reinspection or
retest is necessitated by prior rejection.
e. Acceptance or rejection of the work shall be made as
promptly as practicable after delivery, except as otherwise
provided in this order; but failure to inspect and accept or reject
work shall neither relieve Seller from responsibility for such
work as is not in accordance with the order requirements nor
impose liability upon Buyer theiefor. Except as otherwise
provided in this order, acceptance shall be conclusive except as
regards latent defects, fraud, or such gross mistakes as amount
to fraud.
f. Inspection and test requirements specifically required by
this order are for the convenience of Buyer ard/or the
Government and do not relieve Seller of his responsibility to
provide a high-quality product which meets order requirements.
108a
Affidavit of James H. Suilivan
if during the period specified in the article of this order entitled
“Warranty” any failure to meet order requirements is uncovered
(including any uncovered by Buyer’s and/or the Government’s
own tests), Seller shall be responsible in accordance with the
provisions of said warranty article for correcting the condition;
this requirement applies regardless of the extent of testing or
inspection specifically required by this order.
g. Seller shall provide and maintain and require its lower-
tier subcontractors to provide and maintain an inspection and
quality control system acceptable to Buyer covering the work
hereunder. Records of all inspection and quality control work by
Seller and its lower-tier subcontractors shall be kept complete
and available to Buyer and/or the Government during
performance of this order and for such longer period as may be
specified elsewhere in this order.
9. WARRANTY —
a. In addition to its obligations under other provisions of
this order (including those concerning inspection and
acceptance), Seller warrants material and workmanship, and that
the items furnished under this order will be manufactured in
accordance with the order requirements, and, if Seller is
responsible for design, will meet all design requirements set forth
in this order. The term of this warranty is for a period of three
years after delivery or for a period of one year after the date first
placed in use, whichever first expires (or in the case of standard
commercial articles, one year after delivery).
b. Buyer shall give Seller notice of any defect or lack of
conformity with order requirements within a reasonable time
after discovery. Seller shall promptly thereafter (without cost to
Buyer) either correct or replace such defective or non-
conforming item or component thereof, and correct or replace
109a
Affidavit of James H. Sullivan
all appropriate drawings, procedures and manuals, or, if Buyer
does not require correction or replacement of the defective or
non-conforming item or component thereof, Seller, within a
reasonable time after the notice shall repay such portion of the
order price of the item as is equitable under the circumstances. If
Seller fails to proceed with reasonable promptness to make any
correction or replacement in accordance with the provisions of
this article, Buyer reserves the right to cause such correction or
replacement to be made and Seller agrees to reimburse Buyer for
the costs incurred thereby. Unless otherwise agreed, correction
or replacement of defective or non-conforming items or
components thereof shall be performed subject to and in
accordance with the provisions of this order. Buyer has the right
to require Seller to correct in place any defective or non-
conforming item or component thereof delivered under this
order or to return such item or component to Seller for
correction in which case Seller shall be responsible for packing
and packaging charges and shipping cost (to and from Seller's
plant) for item or component returned for correction. In
exercising this right, Buyer will notify Seller which alternative it
proposes to take. In this connection, Buyer will be reasonabdic in
making its election in terms of its and the Government’s time
requirements, the relative economics of each course and the
particular circumstances at the time of election, giving due
regard to any reasonable requests of Seller. In the event that
Seller is required to correct in place, Seller shall not be
responsible for removal or reinstallation of the items or
structural parts not furnished by Seller under this order. Seller
shall not be required to incur costs for such correction in place
in excess of an amount equal to the total price of this order. In
the event that any defective item is returned by Buyer to Seller's
plant for correction, Buyer shall be responsible for removing the
defective item from the system and Seller shall upon completion
of correction, make delivery as directed by Buyer, but shall not
be obligated to incur costs in excess of the total price of this
110a
Affidavit of James H. Sullivan
order, plus shipping (to and from Seller’s plant) and packing and
packaging charges, nor shall Seller be responsible for any costs
of reinstallation. However, Seller shall not be responsible for
shipping costs outside the continental limits of the United States.
c. The warranty with respect to a corrected or replaced
item, items or components thereof, shall be subject to the same
terms as the warranty provided for in paragraph a. The original
warranty for other than the corrected or replaced item, items, or
components thereof shall continue until the expiration of the
period prescribed in paragraph a. plus a period equal to the time
elapsed between ihe discovery of the defect and correction or
replacement of the defective item, items or components thereof.
d. Defective or non-conforming items or components
thereof which Seller is required to correct or replace in
accordance with the provisions of this article may be
contaminated with radioactivity. Should the level of
radioactivity of items or components thereof be sufficient to
create by itself a “radiation area” as defined in 10 C.F.R. Sec.
20.202 in effect on the date of this order, Seller shall nevertheless
promptly correct or replace such items or components as
directed by Buyer. In the event Seller’s costs of correction or
replacement are increased solely by reason of the level of
radioactivity of any such items or components thereof which
exceeds the level specified in the definition of “radiation area,”
an equitable adjustment shall be made, and such adjustment
shall be agreed to in writing. If Buyer, with respect to any such
items or components thereof having a level of radioactivity
sufficient to create by itself a “radiation area,” elects, as
provided in paragraph b. above to require payment of an
equitable portion of the order price, the parties shall not
consider the estimated additional costs of correcting such items
or component incurred solely by reason of the level of
radioactivity specified in the definition of “radiation area.”
Illa
Affidavit of James H. Sullivan
e. Approval of design, drawings, samples, test results,
procedures, processes or schedules by Buyer or the Government
shall not in any way limit or diminish Seller’s warranties
hereunder.
10. RIGHTS IN TECHNICAL DATA —
a. Definitions.
1) Technical Data, as used in this clause, means technical
writing, sound recordings, pictorial reproductions,
drawings, or other graphic representations and works
of a technical nature, whether or not copyrighted,
which are specified to be delivered pursuant to this
order. The term does not include financial reporis, cost
analyses, and other information incidental to order
administration.
2) Limited Rights means rights to use, duplicate, and
disclose technical data in whole or in part, by or for
the Government, with the express limitation that such
data may not be released outside the Government,
used, duplicated, or disclosed in whole or in part, for
manufacture or procurement, except for:
(i) emergency repair or overhaul work by or for the
Government where the item or process concerned
is not otherwise reasonably available to enable
timely performance of the work; and
(ii) release to a foreign government as the interests of
the United States may require;
provided, in‘either case, that the release of such data
shall be subject to the limitations of this paragraph 2).
l12a
Affidavit of James H. Sullivan
3) Unlimited Rights means rights to use, duplicate or
disclose technical data, in whole or in part, in any
manner and for any purpose whatsoever, and to have
or permit others to do so.
b. Government Rights.
1) The Government shall have unlimited rights in:
(i)
(ii)
(ili)
(iv)
technical data resulting directly from performance
of experimental, developmental or research work
which was specified as an element of performance
in this or any other Government contract or
subcontract;
technical data necessary to enable manufacture of
end-items, components and modifications, or to
enable the performance of processes, when the
end-items, components, modifications or
processes have been, or are being, developed
under this or any other Government contract or
subcontract in which’ experimental,
developmental or research work is, or was
specified as an element of contract performance,
except technical data pertaining to_ items,
components or processes developed at private
expense (but see 2) (ii) below):
technical data constituting corrections or changes
to Government-furnished data;
technical data pertaining to end-items,
components or processes which was prepared for
the purpose of identifying sources, size,
configuration, mating and attachment
2)
(v)
(vi)
ll3a
Affidavit of James H. Sullivan
characteristics, functional characteristics and
performance requirements (“form, fit and
function” data, e.g., specification control
drawings, catalog sheets, envelope drawings, etc.)
manuals or instructional materials prepared for
installation, operation, maintenance or training
purposes;
\
other technical data which has been, or is
normally furnished without restriction by the
Seller or subcontractor; and
(vii) technical data listed or described in an agreement
The
(ii)
incorporated into the Schedule of this contract,
which the parties have predetermined on the basis
of subparagraphs (i) through (vi) above, and
agreed will be furnished with unlimited rights.
Government shall have limited rights in:
technical data, listed or described in an agreement
incorporated into the Schedule of this order,
which the parties have agreed will be furnished
with limited rights; and
technical data pertaining to items, components or
processes developed at private expense, other
than such data as may be included in the data
referred to in b) 1)(i), (iii), (iv), (v). and (vi);
provided that each piece of data to which limited
rights are to be asserted pursuant to 2)(i) and (ii) above
is marked with the following legend in which is
inserted the number of the prime contract under which
lida
Affidavit of James H. Sullivan
the technical data is to be delivered and the name of
the Seller or subcontractor by whom the technical data
was generated:
“Furnished under United States Government Contract
No. Shall not be either released outside the
Government, or used, duplicated, or disclosed in whole
or in part for manufacture or procurement, without
the written permission of except for: (i)
emergency repair or overhaul work by or for the
Government, where the item or process concerned is
not otherwise reasonably available to enable timely
performance of the work; or (ii) release to a foreign
government, as the interests of the United States may
require; provided that in either case the release, use
duplication or disclosure hereof shall be subject to the
foregoing limitations. This legend shall be marked on
any reproduction hereof in whole or in part.”
No legend shall be marked on, nor shall any limitation
on rights of use be asserted as to, any data which the
Seller has previously delivered to the Government
without restriction. The limited rights provided for by
this paragraph (b)(2) shall not impair the right of the
Government to use similar or identical data acquired
from other sources.
c. Material Covered by Copyright.
1)
Notwithstanding the provisions of b. above, Seller
agrees to and does hereby grant to the Government,
and to its officers, agents, and employees acting within
the scope of their official duties, a royalty-free,
nonexclusive and irrevocable license throughout the
world for Government purposes to publish, translate,
——_4—__
2)
115a
Affidavit of James H. Sullivan
reproduce, deliver, perform, dispose of, and to
authorize others so to do, all technical data now or
hereafter covered by copyright.
No such copyrighted matter shall be included in
technical data furnished hereunder without the written
permission of the copyright owner for the Government
to use such copyrighted matter in the manner
described above.
Seller shall report to Buyer and the Government
promptly and in reasonable written detail each notice
or claim of copyright infringement received by Seller
with respect to any technical data delivered hereunder.
d. Removal of Unauthorized Markings.
Notwithstanding any provisions of this order concerning
inspection and acceptance, the Government may modify,
| remove, obliterate, or ignore any marking not authorized by the
terms of this order on any technical data furnished hereunder, if
(i) Seller fails to respond within sixty (60) days to a
written inquiry by the Government concerning the
propriety of the use of the marking, or
(ii) Seller's response fails to substantiate his
contention that the use of the marking is
authorized, in which case the Government shall
give written notice to Seller.
e. Relation to Patents.
Nothing contained in this clause shall imply a license to the
Government under any patent or be construed as affecting the
1 16a
Affidavit of James H. Sullivan
scope of any license or other right otherwise granted to the
Government under any patent.
f. Limitation on Charges for Data.
Seller recognizes that the Government, or a foreign
government with funds derived through the Military Assistance
Program or otherwise through the United States Government,
may contract for property or services with respect to which the
vendor may be liable to Seller for charges for the use of
technical data on account of such an order. Seller further
recognizes that it is the policy of the Government not to pay in
connection with its contracts, or to allow to be paid in
connection with contracts made with funds derived through the
Military Assistance Program or otherwise through the United
States Government, charges for data which the Government has
a right to use and disclose to others, which is in the public
domain. or which the Government has been given without
restrictions upon its use and disclosure to others. This policy
does not apply to reasonable reproduction, handling, mailings
and similar administrative costs incident to the furnishing of
such data. In recognition of this policy, Seller agrees to
participate in and make appropriate arrangemet..s for the
exclusion of such charges from such orders, or for the refund of
amounts received by Seller with respect to any such charges not
so excluded.
g. Acquisition of Data from Subcontractors.
1) Whenever any technical data is to be obtained froma
subcontractor under this order, Seller shall use this
same clause in the order without alteration, and no
other clause shall be used to enlarge or diminish the
Government's or the Seller’s rights in that
subcontractor data which is required for the
Government.
“
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Affidavit of James H. Sullivan
2) Tec
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