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Keywords

contractdefendantmotionsummary judgmenttrustmotion for summary judgment

contractplaintiffdefendantindemnitymotionsummary judgmenttrustmotion for summary judgment

Related Cases

Uniroyal, Inc. v. U. S., 197 Ct.Cl. 258, 454 F.2d 1394

Facts

In October 1969, the General Services Administration awarded a contract to Muldrow Enterprises for the delivery of 40 tires. Uniroyal, the manufacturer of the tires, extended credit to Muldrow in exchange for an assignment of the contract proceeds. However, Uniroyal claimed that the government disregarded this assignment and paid Muldrow instead. Uniroyal filed a petition seeking to recover the amount owed for the tires, alleging that it was the rightful assignee of the contract proceeds.

In October 1969, defendant, through the General Services Administration, awarded to Losion Muldrow, an individual doing business as Muldrow Enterprises, a contract calling for the delivery of 40 tires for a total price of $28,358.52. Defendant received the tires and remitted the contract price to contractor Muldrow Enterprises. Plaintiff, the manufacturer of the tires sold to defendant, filed this petition on January 12, 1971, alleging that the contractor had ordered the tires from plaintiff and in consideration for plaintiff's agreement to finance the transaction by extending credit to Muldrow, Muldrow assigned to plaintiff the right to receive the proceeds of the contract.

Issue

Whether Uniroyal, Inc. is a proper assignee under the Assignment of Claims Act of 1940 and whether it provided the necessary notice of assignment to the government.

The question of whether plaintiff is precluded from asserting this claim under the Assignment of Claims Act of 1940, inasmuch as plaintiff is not a financial institution and is, therefore, not a proper assignee, has been answered by this court in Royal Indemnity Co. v. United States, 93 F.Supp. 891, 117 Ct.Cl. 736, 746 (1950), wherein this court stated: This assignment was not within the terms of the Assignment of Claims Act of 1940, supra, inasmuch as that Act provides that a valid assignment may be made only to a bank, trust company, or other financing institution; which the surety admittedly is not.

Rule

The Assignment of Claims Act of 1940 allows valid assignments only to banks, trust companies, or other financing institutions, and requires that the assignee file written notice of the assignment with the contracting officer.

The Assignment of Claims Act has the requirement that “the assignee * * shall file written notice of the assignment together with a true copy of the instrument of assignment with (a) the contracting officer or the head of his department or agency; * * *.” 31 U.S.C. § 203(4) (1970).

Analysis

The court determined that Uniroyal did not qualify as a financial institution under the terms of the Assignment of Claims Act, as it was merely a manufacturer of tires and did not meet the statutory definition. Furthermore, the court noted that Uniroyal failed to provide the required written notice of the assignment to the government, which is a prerequisite for enforcing any assignment against the government. As a result, the court concluded that Uniroyal's claim was invalid.

Since plaintiff is not a qualifying institution, any alleged assignment to it is void against the United States under the Assignment of Claims Act, supra. Plaintiff is, therefore, precluded from asserting its claim under an alleged assignment against defendant.

Conclusion

The court granted the defendant's motion for summary judgment, concluding that Uniroyal was not entitled to recover due to its status as a non-qualifying assignee and its failure to comply with the notice requirements of the Assignment of Claims Act.

In conclusion, for the reasons that (1) plaintiff is not a proper assignee under the Assignment of Claims Act, inasmuch as it is not a financial institution and (2) plaintiff has failed to comply with the notice provision of the Act, plaintiff cannot recover in this action.

Who won?

The United States prevailed in the case because Uniroyal was not a proper assignee under the Assignment of Claims Act and failed to provide the necessary notice of assignment.

Defendant's motion for summary judgment is granted and plaintiff's petition is dismissed.

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