     In the United States Court of Federal Claims
                                        No. 14-282 C
                                     Filed: June 4, 2015

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                                       *
                                       *
CYNTHIA G. NUTT et al.,                *
                                       *           Breach of Contract;
      Plaintiffs,                      *           Federal Tort Claims Act,
                                       *              28 U.S.C. § 2671 et seq.;
v.                                     *           Military Claims Act,
                                       *              10 U.S.C. § 2731 et seq.;
THE UNITED STATES,                     *           Summary Judgment,
                                       *              RCFC 56.
      Defendant.                       *
                                       *
                                       *
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Andrew J. Maloney, III, Kriendler & Kriendler, LLP, New York, N.Y., Counsel for Plaintiffs.
Ryan M. Majerus, United States Department of Justice, Civil Division, Washington, D.C.,
Counsel for the Government.

                       MEMORANDUM OPINION AND FINAL ORDER

BRADEN, Judge.

I.     RELEVANT FACTUAL BACKGROUND.1

       On September 27, 1983, James Nutt, Sr. was killed when his vehicle was struck by a
United States Army truck driven by a drunk Army employee. Am. Compl. ¶ 1. James Nutt, Sr.
was survived by his wife and son, Cynthia Nutt and James Nutt, Jr. Am. Compl. ¶ 3.

       On February 23, 1984, Plaintiffs filed a Form 95 Notice Of Claim, “pursuant to the
Federal Tort Claims Act, 28 U.S.C. § 2671.” Am. Compl. ¶ 2; see also Pl. Ex. A.



       1
           The relevant facts discussed herein were derived from: the Exhibits attached to
Plaintiffs’ April 11, 2014 Complaint (“Pl. Exs. A–E”); Plaintiffs’ April 30, 2014 Amended
Complaint (“Am. Compl.”); Plaintiffs’ November 13, 2014 Motion For Partial Summary
Judgment On Liability (“Pl. Mot.”); and the Government’s December 9, 2014 Cross-Motion For
Partial Summary Judgment (“Gov’t Mot.”) and the Appendix attached thereto (“Gov’t App’x 1–
58”).

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       On June 28, 1985, Plaintiffs and the Government entered into a settlement agreement
(“Agreement”) that stated, in relevant part:

      As soon as practicable after approval of this settlement, the United States agrees
      to purchase annuities which will pay the following amounts:

      [$60,000 per year] to Cynthia G. Nutt, her estate or designated beneficiary for as
      long as [she] shall live or for thirty (30) years, whichever is later.

      On each of the following anniversaries of the purchase of the annuity, the
      following specified lump sum payments shall be paid to Cynthia G. Nutt, her
      estate or designated beneficiary:

                     Anniversary                   Amount
                     Fifth                         $100,000.00
                     Tenth                         $125,000.00
                     Fifteenth                     $150,000.00
                     Twentieth                     $175,000.00
                     Twenty-fifth                  $200,000.00
                     Thirtieth                     $225,000.00

      On each of the following anniversaries of the purchase of the annuity, the
      following specified lump sum payments shall be paid to James N. Nutt, Jr., his
      guardian, his estate or designated beneficiary.

                     Anniversary                   Amount
                     Thirteenth                    $25,000.00
                     Fourteenth                    $25,000.00
                     Fifteenth                     $25,000.00
                     Sixteenth                     $25,000.00
                     Seventeenth                   $40,000.00
                     Eighteenth                    $40,000.00
                     Nineteenth                    $40,000.00
                     Twentieth                     $100,000.00
                     Twenty-fifth                  $150,000.00
                     Thirtieth                     $150,000.00
                     Thirty-fifth                  $200,000.00
                     Fortieth                      $200,000.00
                     Forty-fifth                   $200,000.00
                     Fiftieth                      $1,000,000.00
                     Fifty-fifth                   $1,000,000.00

                                          ***

      The payments by the United States set forth above shall operate as full and
      complete discharge of all payments to be made to and of all claims which might
      be asserted on behalf of [Plaintiffs], their heirs and personal representatives, and

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       any other persons whomsoever may assert a claim, provided, however, that if the
       insurance company hereinaf[t]er referred to defaults in the performance of its
       obligations under the annuity agreement with the United States, [Plaintiffs], their
       heirs or personal representatives as third party beneficiary shall have standing to
       sue the said insurance company for breach of contract. In such event, the United
       States shall assist [Plaintiffs], their heirs or personal representatives, in the
       prosecution of said suit to the extent permitted by applicable laws and regulations.

       The United States represents to [Plaintiffs] that the insurance company it selects
       for the purchase of the annuities will be one which is generally regarded as very
       sound in the insurance industry and to be among the class or group of insurance
       companies which are rated Excellent or better by Best’s Guide to Life Insurance
       Companies, 1982 Edition, published by A. M. Best Company, Oldwick, New
       Jersey 07830.

       [Plaintiffs] agree by this Settlement Agreement to reimburse and/or indemnify
       and hold harmless the United States, its agents, servants and employees from any
       and all causes of action, claims, liens, rights or subrogated interests of whatever
       nature arising from the incident noted above.

Pl. Ex. B at 1–3.

        On July 2, 1985, the Probate Court of Miller County, Arkansas approved the Agreement.
Pl. Ex. C.

       On July 12 1985, the Government purchased a structured annuity from Executive Life
Insurance Company of New York (“ELNY”) through a broker, JMW Settlements, Inc. Am.
Compl. ¶ 5; see also Gov’t App’x at 45.

       On April 23, 1991, ELNY went into receivership. Am. Compl. ¶ 6.

        On December 7, 2011, the New York State Liquidation Bureau sent Plaintiffs a letter
explaining the liquidation of ELNY receivership assets and stating, “[d]ue to the liquidation, at
this time it is anticipated that the amount of your benefit payments will ultimately be reduced.”
Pl. Ex. D at 1. Under ELNY’s liquidation and restructuring, Plaintiffs would receive an
estimated 45% of their expected benefits. Pl. Ex. E. But see Am. Compl. ¶ 6 (“Consequently[,]
Mrs. Nutt would receive only an estimated 45% of her remaining annuity[,] and her son James
Jr. would receive only 41% of his remaining annuity.”). Plaintiffs received full payments until
August 8, 2013. Am. Compl. ¶ 6.

        In 2011, 2012, and 2013, “Plaintiffs contacted the U.S. Army tort claims personnel and
structured annuity division . . . to demand they cover any shortfalls. Neither the Army nor
Justice Department provided a meaningful response.” Am. Compl. ¶ 6.

      On August 8, 2013, “[P]laintiff’s scheduled payments were cut to approximately 45%[.]”
Am. Compl. ¶ 6. “Mrs. Nutt has not received 59% of the monthly payments owed to her since
August 8, 2013[.]” Am. Compl. ¶ 7. “Plaintiffs have been advised that Ms. Nutt will not receive

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the Thirtieth lump sum payment of $225,000 due to her on July 12, 2015.” Am. Compl. ¶ 8.
“Plaintiffs have further been advised that James N. Nutt, Jr. will not receive his [future lump sum
payments].” Am. Compl. ¶ 9.

II.    PROCEDURAL HISTORY.

       On April 11, 2014, Cynthia Nutt and James Nutt, Jr. (“Plaintiffs”) filed a Complaint in
the United States Court of Federal Claims (“Compl.”). On April 30, 2014, Plaintiffs filed an
Amended Complaint (“Am. Compl.”).

       On August 8, 2014, the Government filed an Answer.

        On November 13, 2014, Plaintiffs filed a Motion For Partial Summary Judgment On
Liability (“Pl. Mot.”). On December 9, 2014, the Government filed a Response & Cross-Motion
(“Gov’t Mot.”). On January 15, 2015, Plaintiffs filed a Reply & Response (“Pl. Reply”). On
February 12, 2015, the Government filed a Reply (“Gov’t Reply”).

        On April 7, 2015, Plaintiff filed a Notice advising the court of an April 1, 2015 opinion
by another judge on the United States Court of Federal Claims in a similar case, Stathis v. United
States, No. 14-61, 2015 WL 1537542 (Fed. Cl. Apr. 1, 2015).

III.   DISCUSSION.

       A.      Jurisdiction.

        The United States Court of Federal Claims has jurisdiction under the Tucker Act, 28
U.S.C. § 1491, “to render judgment upon any claim against the United States founded either
upon the Constitution, or any Act of Congress or any regulation of an executive department, or
upon any express or implied contract with the United States, or for liquidated or unliquidated
damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The Tucker Act, however, is “a
jurisdictional statute; it does not create any substantive right enforceable against the United
States for money damages . . . . [T]he Act merely confers jurisdiction upon [the United States
Court of Federal Claims] whenever the substantive right exists.” United States v. Testan, 424
U.S. 392, 398 (1976).

         To pursue a substantive right under the Tucker Act, a plaintiff must identify and plead an
independent contractual relationship, Constitutional provision, federal statute, and/or executive
agency regulation that provides a substantive right to money damages. See Todd v. United
States, 386 F.3d 1091, 1094 (Fed. Cir. 2004) (“[J]urisdiction under the Tucker Act requires the
litigant to identify a substantive right for money damages against the United States separate from
the Tucker Act[.]”); see also Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en
banc) (“The Tucker Act . . . does not create a substantive cause of action; . . . a plaintiff must
identify a separate source of substantive law that creates the right to money damages. . . . [T]hat
source must be ‘money-mandating.’”). Specifically, a plaintiff must demonstrate that the source
of substantive law upon which he relies “can fairly be interpreted as mandating compensation by
the Federal Government[.]” Testan, 424 U.S. at 400. And, the plaintiff bears the burden of
establishing jurisdiction by a preponderance of the evidence. See Reynolds v. Army & Air Force
Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988) (“[O]nce the [trial] court’s subject matter

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jurisdiction [is] put in question . . . . [the plaintiff] bears the burden of establishing subject matter
jurisdiction by a preponderance of the evidence.”).

       “[W]hen viewed simply as a contract, a breach of a settlement agreement involving
damages of more than $10,000 is within the Tucker Act jurisdiction of the Court of Federal
Claims.” VanDesande v. United States, 673 F.3d 1342, 1346 (Fed. Cir. 2012). Here, Plaintiffs
allege violation of the Agreement involving damages over $10,000. See Am. Compl. ¶ 17.
Thus, the court has jurisdiction to adjudicate Plaintiffs’ claims.

        B.      Standing.

         The United States Supreme Court has held that “the question of standing is whether the
litigant is entitled to have the court decide the merits of the dispute or of particular issues.”
Warth v. Seldin, 422 U.S. 490, 498 (1975). Standing must be determined “as of the
commencement of suit.” Rothe Dev. Corp. v. Dep’t of Def., 413 F.3d 1327, 1334 (Fed. Cir.
2005). “The party invoking federal jurisdiction bears the burden of establishing [the three]
elements [of standing].” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Specifically,
“a plaintiff must show [that] it has suffered an ‘injury in fact’ that is . . . concrete and
particularized and . . . actual or imminent, not conjectural or hypothetical; . . . the injury is fairly
traceable to the challenged action of the defendant; and . . . it is likely, as opposed to merely
speculative, that the injury will be redressed by a favorable decision.” Friends of the Earth,
Inc. v. Laidlaw Envtl. Serv., Inc., 528 U.S. 167, 180–81 (2000) (citations omitted).
        The April 30, 2014 Amended Complaint alleges that Plaintiffs have suffered an “injury in
fact” that is concrete and particularized, actual, and fairly traceable to the Government’s failure
“to pay [P]laintiffs’ scheduled annuity payments” and refusal “to pay future periodic and lump
sum payments pursuant to the terms of the . . . Agreement.” Am. Compl. ¶ 16. Accordingly,
Plaintiffs have established standing to seek an adjudication of the claims alleged in the April 30,
2014 Amended Complaint.
        C.      Standard Of Review For Summary Judgment.

        On a motion for summary judgment, the moving party must establish that there is no
genuine issue of material fact and that the moving party is entitled to judgment as a matter of
law. See Amergen Energy Co. ex rel. Exelon Generation Co. v. United States, 779 F.3d 1368,
1372 (Fed. Cir. 2015) (quoting Rule 56(c) of the Rules of the United States Court of Federal
Claims (“RCFC”)) (“Summary judgment is appropriate when, drawing all justifiable inferences
in the nonmovant’s favor, ‘there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.’”). Only genuine disputes of material fact that might
affect the outcome of the suit preclude entry of summary judgment. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986) (“As to materiality, the substantive law will identify which
facts are material. Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment. Factual disputes that are
irrelevant or unnecessary will not be counted.”). The “existence of some alleged factual dispute
between the parties will not defeat an otherwise properly supported motion for summary
judgment.” Id. at 247–48 (emphasis in original). “[C]ourts are required to view the facts and
draw reasonable inferences ‘in the light most favorable to the party opposing the [summary

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judgment] motion.’” Scott v. Harris, 550 U.S. 372, 378 (2007) (quoting United States v.
Diebold, Inc., 369 U.S. 654, 655 (1962)).

       D.     Plaintiffs’ Argument.

        Plaintiffs argue that “[t]he sole issue on summary judgment is whether the Government
breached its contract with Plaintiffs by failing to make the future payments it promised to
Plaintiffs in exchange for settlement of their claims[.]” Pl. Mot. at 4. “[T]he Government was
not absolved from the terms of the . . . Agreement when it purchased the ENLY annuity.” Pl.
Mot. at 5. The “Agreement states that the future payments ‘shall be paid’ thereby rendering the
future payments mandatory[.]” Pl. Mot. at 5.

       This case is analogous to Massie v. United States, 166 F.3d 1184 (Fed. Cir. 1999) and
Hendrickson v. United States, No. 83-CV-621, 2014 WL 2112575 (W.D.N.Y. May 20, 2014). In
Massie, the United States Court of Appeals for the Federal Circuit held:

       The language specifying that the annuity “will result in distributions” and that the
       disbursements “shall be paid” is unambiguously mandatory and says
       unequivocally that the [plaintiffs] must receive the payments. . . . Because the
       payments are mandatory, the [G]overnment must be responsible for their
       payment; no one else is a party to the Agreement. Although the [G]overnment
       may delegate its duties under the Agreement to another entity, such as [ELNY],
       this delegation does not absolve it of its obligations.

Massie, 166 F.3d at 1190. This case mirrors Massie, because both cases involve the Military
Claims Act (“MCA”). Pl. Resp. at 3.

     Similarly in Hendrickson, the United States District Court for the Western District of
New York determined that:

       The Government agreed to settle this case by paying an initial lump sum, and
       making future payments. It chose to fund those payments with the purchase of an
       annuity. That ELNY, the provider of the annuity, can no longer make the total
       payments owed by the defendant to the plaintiffs is not a burden to be borne by
       the plaintiffs. It is the Government’s promise, and it is the Government’s
       responsibility to meet that promise.

Hendrickson, 2014 WL 2112575, at *6.

       Plaintiffs contend that “both [Massie and Hendrickson] dealt with tort settlements . . .
wherein the Government voluntarily agreed to make monthly payments along with larger
periodic payments as part of the individual settlements.” Pl. Mot. at 6. “To save money, the
Government purchased annuities from ELNY. However, once ELNY was no longer able to




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make the promised payments[,] the courts held it was the Government’s responsibility to meet its
original obligation.” Pl. Mot. at 6.2

       E.       The Government’s Argument.

      The Government responds that there are five reasons the Agreement only required the
Government to purchase the annuity, not to guarantee ELNY’s future payments.

        First, “Plaintiffs’ interpretation of the [Agreement] cannot be correct because the . . .
Department of Justice official with authority at the time to settle this case . . . authorized a
structured settlement ‘not to exceed $1,601,978.00[.]’” Gov’t Mot. at 9; see also Gov’t App’x at
5 (June 25, 1985 Memorandum). If the Army’s representative had attempted to settle the case
for more than $1,601,978.00, the Agreement would have been unenforceable. See White v. Dep’t
of Interior, 639 F. Supp. 82, 88 (M.D. Pa. 1986) (holding that a settlement agreement was
unenforceable when it had not been authorized by a United States official with requisite
authority). Thus, adopting Plaintiffs’ interpretation renders the Agreement unenforceable. Gov’t
Mot. at 10.

      Second, “[t]he [Federal Tort Claims Act (“FTCA”)] is a limited waiver of the
Government’s sovereign immunity” and only allows federal courts to award “money damages.”
Gov’t Mot. at 11 (citing 28 U.S.C. § 1346(b)(1)3). “Money damages” must be in “lump sum”



       2
           Plaintiffs also distinguish Linebarger v. United States, 927 F. Supp. 1280 (N.D. Cal.
1996). Pl. Mot. at 7. In Linebarger, “the Government did not retain ownership of the
[plaintiff’s] annuity after its purchase”; thus, the Government was not obligated to guarantee
future payments. Pl. Mot. at 7. But, in this case, the Government did retain ownership of the
annuity; thus, it is obligated to guarantee future payments. Pl. Mot. at 7; see also Hendrickson,
2014 WL 2112575, at *7 (“Linebarger, however, is significantly different from [Hendrickson] in
that . . . the Settlement Agreement specifically provided that the United States retained
ownership of the annuity[.]”). The plaintiffs in Linebarger “were free to negotiate the terms of
the agreement including the choice of an annuity company,” but Plaintiffs in this case “were
forced to use ELNY.”             Pl. Mot. at 8. Finally, Plaintiffs contend that Linebarger
“misapprehended the law completely on the Government’s ability to enter into an agreement
with bargained for future payments,” even though “the Government routinely enters into
structured settlements.” Pl. Mot. at 8.
       3
           Section 1346(b)(1) provides:

       Subject to the provisions of chapter 171 of this title, the district courts . . . shall
       have exclusive jurisdiction of civil actions on claims against the United States, for
       money damages, accruing on and after January 1, 1945, for injury or loss of
       property, or personal injury or death caused by the negligent or wrongful act or
       omission of any employee of the Government while acting within the scope of his



                                              7
form. Gov’t Mot. at 11 (citing Frankel v. Heym, 466 F.2d 1226, 1228–29 (3d Cir. 1972) (“[A]
district court should not make other than lump-sum money judgments unless and until Congress
shall authorize a different type of award.”)). “As a result, no court has jurisdiction to order the
United States to pay future damages by way of periodic payments or to order the United States to
purchase annuities to pay future periodic payments absent specific statutory authority.” Gov’t
Mot. at 11. The FTCA requires settlements to “be final and conclusive and be paid only in a
matter similar to judgments in like causes.” Gov’t Mot. at 12 (citing 28 U.S.C. § 26724).
Executive agencies are bound by congressional oversight of appropriated funds, including FTCA
settlements; therefore, agencies cannot agree to unfixed or unascertained settlements. See 28
U.S.C. § 2672; see also B-162924, 1967 WL 2339, at *1 (Comp. Gen. Dec. 22, 1967) (“We find
no reason to object to any manner of compromise settlement . . . in a fixed reasonable amount.”).
“Thus, because of the restrictions placed on the [Government] in FTCA actions, it does not and
cannot act as the guarantor for future, periodic annuity payments under the terms of the
[Agreement].” Gov’t Mot. at 16 (citing Hercules Inc. v. United States, 516 U.S. 417, 426–27
(1996) (holding that the contracting officer did not and would not have agreed to open-ended
indemnification)).

        Third, “the terms of the . . . [A]greement . . . are consistent with the limitations on the
United States’ authority regarding FTCA settlements.” Gov’t Mot. at 17. The Agreement
“states that the ‘United States of America agrees to purchase annuities which will pay’ future
sums[.]” Gov’t Mot. at 17 (quoting Gov’t App’x at 1 (Agreement)). Plaintiffs focus on the


       office or employment, under circumstances where the United States, if a private
       person, would be liable to the claimant in accordance with the law of the place
       where the act or omission occurred.

28 U.S.C. § 1346(b)(1).
       4
           Section 2672, in relevant part, provides:

       Subject to the provisions of this title relating to civil actions on tort claims against
       the United States, any such award, compromise, settlement, or determination shall
       be final and conclusive on all officers of the Government, except when procured
       by means of fraud.

       Any award, compromise, or settlement in an amount of $2,500 or less made
       pursuant to this section shall be paid by the head of the Federal agency concerned
       out of appropriations available to that agency. Payment of any award,
       compromise, or settlement in an amount in excess of $2,500 made pursuant to this
       section or made by the Attorney General in any amount pursuant to section 2677
       of this title shall be paid in a manner similar to judgments and compromises in
       like causes and appropriations or funds available for the payment of such
       judgments and compromises are hereby made available for the payment of
       awards, compromises, or settlements under this chapter.

28 U.S.C. § 2672.

                                               8
language of the Agreement stating that “[t]he payments by the United States set forth above shall
operate as a full and complete discharge[.]” Gov’t App’x at 3. But, “[t]he only reasonable
interpretation of this provision is that the ‘payments’ that will ‘operate as full and complete
discharge’ are those payments made to purchase the annuity, which upon purchase, satisfied the
Government’s obligation to all payments that the [A]greement expressly provided would ‘be
satisfied[.]’” Gov’t Mot. at 18 (emphasis in original). The Agreement provided that “[t]he
United States will furnish to [Plaintiffs] . . . evidence of the purchase by the United States of
annuities in an amount sufficient to satisfy those obligations of the United States under th[e] . . .
Agreement which are to be satisfied by the purchase of the annuities.” Gov’t App’x at 3. The
Agreement does not provide that the Government would guarantee future payments. Gov’t Mot.
at 18. Plaintiffs understood this to be the case, because correspondence between the parties’
counsel in 1985 and 1986 “indicates that the [P]laintiffs’ counsel intended to ‘reinsure’ the
annuity contracts”—an unnecessary step if the Government guaranteed the payments. Gov’t
Mot. at 18; see also Gov’t App’x at 55–56 (September 6, 1985 and February 3, 1986
correspondence from Plaintiffs’ counsel to JMW Settlements, Inc.).

        The Agreement also provides that, if the insurance company fails to make annuity
payments, Plaintiffs have standing to sue the insurance company “for breach of contract,” and
that “the [Government] shall assist [Plaintiffs], their heirs or personal representatives, in the
prosecution of said suit[.]” Gov’t App’x at 3. “This provision would be nonsensical if, in fact,
the Government itself served as guarantor of all payments.” Gov’t Mot. at 19. Moreover, the
Agreement requires the Government to select an insurance company that is “generally regarded
as very sound in the insurance industry” and “rated Excellent or better[.]” Gov’t App’x at 3. “If
the [Government were] responsible for ensuring the amount of the periodic distributions, there
would have been no need for the agreement to specify that the company providing the annuity be
of a particular quality.” Gov’t Mot. at 20.

        Fourth, “Plaintiffs take the words ‘shall’ and ‘will’ out of context in the [Agreement].”
Gov’t Mot. at 21. In their proper context, these words “simply describe the annuity to be
purchased[.]” Gov’t Mot. at 21. The same is true of the phrase “shall be paid”: “the United
States is not even mentioned in the paragraphs in which these words appear.” Gov’t Mot. at 22
(citing Gov’t App’x at 1–3). Adopting Plaintiffs’ interpretation “would fundamentally alter the
benefit of the bargain . . . and add a term requiring the Government to insure or guarantee the
solvency of the annuity issuer, a term to which the [Government] plainly did not (and could not)
agree.” Gov’t Mot. at 22–23; see also Linebarger, 927 F. Supp. 1280, 1282 (N.D. Cal. 1996)
(“Under the FTCA the United States could not have entered an agreement in which it was
required to make periodic payments over twenty years. . . . Plaintiff essentially argues that,
under the terms of the settlement agreement, the [G]overnment was required to see that each
payment was made and if not pay that amount itself. . . . Such an agreement is plainly prohibited
under the FTCA.”).5

       5
         The Government also argues that, “[c]ontrary to [P]laintiffs’ assertions, the district court
in Linebarger did not rely on [the] lack of [the Government’s] ownership [of the annuity] as the
reason why the Government was not obligated to guarantee future payments. Rather, the court
correctly held that the Government cannot guarantee to make future, periodic payments under the
FTCA.” Gov’t Mot. at 24 n.6.

                                              9
        Fifth, “Massie is distinguishable because that case involved a claim filed pursuant to the
[MCA]. Thus, Massie did not address the limitations on the [Government] in FTCA
settlements[.]” Gov’t Mot. at 26. “The distinction between the MCA and the FTCA is crucial,
because the MCA, 10 U.S.C. §§ 2731–2739, is not a waiver of the Government’s sovereign
immunity.” Gov’t Mot. at 27 (citing Tobar v. United States, 639 F.3d 1191, 1196 (9th Cir. 2011)
(“The [MCA] does not mention, and therefore does not waive, sovereign immunity.”)). “There
is also no ‘claim’ for a plaintiff to release in MCA cases because a claimant has no right to
litigate a MCA claim—the Secretary’s decision to pay is discretionary and not subject to
review.” Gov’t Mot. at 27. Massie does not control, because it adjudicated an MCA claim, not
an FTCA claim. Gov’t Mot. at 27–28.

       F.      The Court’s Resolution.

        As an initial matter, the court must determine whether Massie controls this case. Massie
construed an MCA claim. See Massie, 166 F.3d at 1186 (“The [plaintiffs] filed a claim with the
Department of the Navy pursuant to section 2733 of the Military Claims Act[.]”). Here,
Plaintiffs assert that they filed an MCA claim. Pl. Reply at 3 (“[T]his is an MCA claim rather
than an FTCA case[.]”). But, this contradicts both Plaintiffs’ March 30, 2014 Complaint and
February 23, 1984 Form 95 Notice Of Claim. See Am. Compl. ¶ 2 (“A Form 95 Notice [O]f
Claim was filed pursuant to the Federal Torts Claims Act, 28 U.S.C. § 2671 et seq. against the
Department of the . . . Army of the United States on behalf of [P]laintiffs on February 23,
1984.”); see also Pl. Ex. A (Form 95 Notice Of Claim). Plaintiffs provide no evidence that their
claim falls under the MCA. Am. Compl. ¶ 2; Pl. Ex. A (Form 95 Notice Of Claim); Pl. Ex. C, at
1 (July 2, 1985 Probate Order approving “Wrongful Death Compromise Settlement with the
United States of America under the Federal Tort Claims Act”). Moreover, only the Secretary of
a department can settle an MCA claim; the Deputy Attorney General settles FTCA claims.
Compare 10 U.S.C. § 2733(a) (granting the Secretary and Judge Advocate General authority to
settle MCA claims), with 28 U.S.C. § 2672 (“The head of each Federal agency or his designee, in
accordance with regulations prescribed by the Attorney General, may . . . settle any claim [under
the FTCA.]”). In this case, the Deputy Attorney General settled Plaintiffs’ claim. See Gov’t
App’x at 5 (Memorandum to File). The record clearly indicates that Plaintiffs filed an FTCA—
not an MCA—claim. As such, Massie does not control.

        As a matter of law, “[c]ontract terms are given their plain and ordinary meaning, unless
the provisions are ambiguous.” Precision Pine & Timber, Inc. v. United States, 596 F.3d 817,
824 (Fed. Cir. 2010). “A contract provision is only ambiguous if susceptible to more than one
reasonable meaning.” Barron Bancshares, Inc. v. United States, 366 F.3d 1360, 1375–76 (Fed.
Cir. 2004). “When the contractual language is unambiguous on its face, [the court’s] inquiry
ends and the plain language of the Agreement controls.” Coast Fed. Bank, FSB v. United States,
323 F.3d 1035, 1040–41 (Fed. Cir. 2003). “When interpreting the contract, the document must
be considered as a whole and interpreted so as to harmonize and give reasonable meaning to all
of its parts.” NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004). “An
interpretation that gives meaning to all parts of the contract is to be preferred over one that leaves
a portion of the contract useless, inexplicable, void, or superfluous.” Id.

      Thus, the court must determine whether the terms of the June 28, 1985 Agreement are
unambiguous, such that the court’s “inquiry ends at the plain language of the Agreement,” or

                                               10
whether extrinsic evidence should be considered. See Coast Fed. Bank, 323 F.3d at 1040–41.
And, to make that determination, the court reads the contract “as a whole” with the intent to
“give . . . meaning to all parts of the contract.” NVT Techs., 370 F.3d at 1159. Here, the
Agreement provides that “the United States of America agrees to purchase annuities which will
pay [certain periodic amounts.]” Pl. Ex. B at 1. The fairest reading of this Agreement provision
is that the Government did not agree to pay future sums; it agreed to purchase annuities. The
annuities, in turn, “will pay” the future sums. Pl. Ex. B at 1. And, after listing the future sums to
be paid, the Agreement provides that “[t]he payments by the United States set forth above shall
operate as a full and complete discharge[.]” Pl. Ex. B at 3.

        Plaintiffs argue that “payments by the United States” refers to the future sums. Pl. Mot.
at 5–6. The court must construe “payments by the United States” in context of the whole
Agreement—and certainly in context of the whole paragraph. See NVT Techs., 370 F.3d at 1159.
The provisions in the Agreement immediately following the “payments by the United States”
favor the Government. They read:

        The payments by the United States set forth above shall operate as full and
        complete discharge of all payments to be made to and of all claims which might
        be asserted on behalf of [Plaintiffs], their heirs and personal representatives, and
        any other persons whomsoever may assert a claim, provided, however, that if the
        insurance company hereinaf[t]er referred to defaults in the performance of its
        obligations under the annuity agreement with the United States, [Plaintiffs], their
        heirs or personal representatives as third party beneficiary shall have standing to
        sue the said insurance company for breach of contract. In such event, the United
        States shall assist [Plaintiffs], their heirs or personal representatives, in the
        prosecution of said suit to the extent permitted by applicable laws and regulations.

Pl. Ex. B at 3.

        The foregoing paragraph provides that if the insurance company defaults, Plaintiffs have
standing to sue the insurance company, and the Government agreed to assist Plaintiffs in their
lawsuit against the defaulting insurance company. If “payments by the United States” referred to
the future sums, rendering the Government a guarantor of the insurance company, it would not
make sense for the Government to agree to assist Plaintiffs in a lawsuit against the insurance
company.

        Plaintiffs’ interpretation also is undercut by the next paragraph of the Agreement:

        The United States represents to [Plaintiffs] that the insurance company it selects
        for the purchase of the annuities will be one which is generally regarded as very
        sound in the insurance industry and to be among the class or group of insurance
        companies which are rated Excellent or better by Best’s Guide to Life Insurance
        Companies, 1982 Edition, published by A. M. Best Company, Oldwick, New
        Jersey 07830.

Pl. Ex. B at 3.


                                              11
        If the Government acted as a guarantor of the future sums to Plaintiff, it would be
unnecessary for the Government to select a “very sound” insurance company “rated Excellent or
better.” The fact that the Government had to select a “very sound” insurance company implies
that Plaintiffs sought to reduce risk by selecting a low-risk annuity instead of requiring the
Government act as a guarantor. Plaintiffs do not dispute that ELNY was rated “Excellent or
better” in 1985. Therefore, this portion of the Agreement also favors the Government’s
interpretation.6



       6
         Analogous case law from the United States Court of Federal Claims also weighs in the
Government’s favor. In Helmandollar v. United States, the plaintiffs settled an FTCA claim
against the Government. 39 Fed. Cl. 302, 303 (1997). In language similar to the Agreement’s
language:

       The settlement agreement stated that the . . . [G]overnment would pay to [the]
       plaintiffs $210,000 in cash initially and would purchase “an annuity from an A+-
       rated company that will pay directly to [the plaintiffs] . . . or a designated
       trustee . . . monthly payments of $250.00 for the life of Pamela Helmandollar”
       and a lump-sum payment every five years over a span of thirty years aggregating
       $172,900. In return for these payments, [the] plaintiffs released the [G]overnment
       from their claims.

Id. (internal citations omitted). Like this case, the insurance company in Helmandollar
defaulted, and the plaintiffs sued the Government for breach of contract. See id. at 303–04. But,
the court dismissed the case, writing:

       Upon examining the settlement agreement as a whole, we conclude that the
       phrase “will pay” is clearly a description of the type of annuity to be purchased
       and not a guarantee of the amount of money that is actually paid out by the
       annuity.

       The only payments guaranteed by the [G]overnment in the settlement were the
       initial cash payments directly to [the] plaintiffs and their counsel and the initial
       cash outlay to purchase the annuities. . . . In no way did [the Government]
       undertake a guarantee of the solvency of the annuity company. . . .

       In interpreting the contract itself, the plain language of the contract controls, and
       here, the language upon which [the] plaintiffs premise their argument describes
       the value and nature of the annuity [the Government] was to purchase to fulfill its
       obligation to [the] plaintiffs, rather than a guarantee that the annuity purchased
       will faithfully perform over a period of years.

Id. at 304 (internal quotation marks and citation omitted).

       This case is analogous to Helmandollar. As in that case, the Government here agreed
only to pay an initial lump sum and purchase an annuity. Pl. Ex. B at 1–3. The Agreement
language also stated that the annuity “will pay” future sums to Plaintiffs. The court agrees with
                                              12
         Finally, the court is cognizant that waivers of sovereign immunity must be construed
strictly in favor of the sovereign. See Sossamon v. Texas, 131 S. Ct. 1651, 1662 (2011) (quoting
Lane v. Pena, 518 U.S. 187, 192 (1996) (“A waiver of sovereign immunity must be ‘strictly
construed, in terms of its scope, in favor of the sovereign.’”)); see also United States Dep’t of
Energy v. Ohio, 503 U.S. 607, 627 (1992) (recognizing “the requirement that any statement of
waiver be unequivocal”). The FTCA is a waiver of sovereign immunity. See Fed. Dep. Ins.
Corp. v. Meyer, 510 U.S. 471, 475–76 (1994) (“In 1946, Congress passed the FTCA, which
waived the sovereign immunity of the United States for certain torts committed by federal
employees.”). As such, the court must construe the FTCA narrowly. See Sossamon, 131 S. Ct.
at 1662. This principle further compels a finding that the Agreement did not obligate the


Helmandollar that “will pay” is “not a guarantee of the amount of money that is actually paid out
by the annuity.” Helmandollar, 39 Fed. Cl. at 304.

        The court has considered Stathis v. United States, 2015 WL 1537542 (Fed. Cl. Apr. 1,
2015). As a matter of law, decisions of the United States Court of Federal Claims are not
binding. See W. Coast Gen. Corp. v. Dalton, 39 F.3d 312, 315 (Fed. Cir. 1994) (“Court of
Federal Claims decisions, while persuasive, do not set binding precedent for separate and distinct
cases in that court.”). Although the court in Stathis determined that it was bound by Mathis, the
undersigned judge disagrees. Mathis, as an MCA case, did not need to narrowly construe a
waiver of sovereign immunity, unlike this case. Moreover, the court in Stathis did not explain
how the key phrase—“payments by the United States”—fits into the larger context of the
contract as a whole. For example, Stathis did not explain how the provisions providing for an
A+-rated insurer and the Government’s assistance in suing the defaulting annuity provider would
not be read out of the contract if the Government were the annuity’s guarantor. And, Stathis did
not “strictly construe” sovereign immunity in the Government’s favor, because it determined that
the Government “arguably ha[s] deferred the waiver of sovereign immunity until the payments
are made.” 2015 WL 1537542, at *11. Even though the facts of Stathis are analogous to those
presented here, because of the surrounding language in the Agreement and sovereign immunity
concerns, the undersigned judge respectfully declines to follow Stathis.

        Hendrickson also does not persuade otherwise. In Hendrickson, the court determined
“that the [G]overnment agreed not only to purchase the annuity that would fund [the] plaintiffs’
future payments, but also guaranteed that those payments would be made.” 2014 WL 2112575,
at *6. The court “relied on that portion of the parties’ Agreement which provided that [t]he
purchase of [the] annuity contracts . . . and payments thereunder shall operate as full and
complete discharge and satisfaction of the periodic and other payments with respect to the United
States of America[.]” Id. (emphasis in original) (internal quotation marks omitted). The
language emphasized by the Hendrickson court in its denial of reconsideration—“and payments
thereunder”—is absent from the Agreement here. The Hendrickson agreement also provided
that “[t]he United States of America shall be obligated to make payment of certain future
periodic payments as set forth [in the agreement].” 2014 WL 1224715, at *7. That language
also is absent from the Agreement here. The Government never “obligated [itself] to make
payment of certain future periodic payments.” Id. Instead, it “agree[d] to purchase annuities
which will pay [certain future sums.]” Pl. Ex. B at 1.

                                             13
Government to guarantee future payments, because it did not unequivocally promise to do so.
Dep’t of Energy, 503 U.S. at 627.

        For these reasons, after reading the June 28, 1985 Agreement, as a whole, the court has
determined that the language of the Agreement is unambiguous, and there is no reason to
consider extrinsic evidence. See Coast Fed. Bank, 323 F.3d at 1040–41.7 Based on the four
corners of the Agreement, the court has determined that the Government was obligated to pay
certain fixed sums to Plaintiffs and pay for an annuity. The Government was not obligated to
guarantee or insure that annuity; its obligation ended at the initial purchase of the ELNY annuity.

IV.    CONCLUSION.

        For the reasons discussed herein, the Government’s December 9, 2014 Cross-Motion For
Partial Summary Judgment is granted. Plaintiffs’ November 13, 2014 Motion For Partial
Summary Judgment is denied. Plaintiffs’ April 30, 2014 Amended Complaint is dismissed.

       IT IS SO ORDERED.

                                                     s/ Susan G. Braden
                                                     SUSAN G. BRADEN
                                                     Judge




       7
          Even if the court did consider extrinsic evidence, it would support the conclusion that
the Government’s obligation ended at its purchase of a compliant annuity. Gov’t App’x at 5
(Memorandum to File authorizing a Government representative to settle the case for an amount
“not to exceed $1,601,978.00”); see also Gov’t App’x at 55–57 (correspondence between
Plaintiffs’ and the Government’s counsel discussing reinsuring the annuities, thus demonstrating
that the Government was not the guarantor of the annuities).

                                             14
