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Fraud and False Claims

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Basic elements of a false claims case -  Young - Montenay, Inc. v. U.S., 15 F.3d 1040 (Fed.Cir. 1994)

Guide to Young-Montenay, Inc. v. U.S., 15 F.3d 1040 (Fed.Cir. 1994)

Young-Montenay, sought to recover costs incurred because of alleged government-caused delays on a boiler renovation project for the Department of Veterans Affairs ("VA"). On October 27, 1982, Young-Montenay entered into a contract with the VA to perform certain renovations to boiler equipment, instrumentation and controls at the VA Medical Center in Kerrville, Texas. This dispute arises over a purchase order for a new "burner package" for the VA Medical Center provided by Keeler Door-Oliver Burner Company ("Keeler") to Young-Montenay. Young-Montenay submitted to Keeler a purchase order for the burner package at a price of $104,000.00. Keeler issued its original invoice in the amount of $104,000.00. Subsequently, a dispute arose between Young-Montenay and Keeler as to whether the burner package supplied by Keeler was a complete package in accordance with the plans and specifications and whether Young-Montenay would eventually owe Keeler $153,000.00. As a result of the dispute, Young-Montenay altered the original invoice by deleting $104,000.00 from the bill and substituting $153,000.00. Upon denial of its claims by the contracting officer, Young-Montenay sought relief from the United States Court of Federal Claims. In an amended answer, the government raised a special plea in fraud pursuant to 28 U.S.C. 2514, and asserted counterclaims based upon the False Claims Act, 31 U.S.C. 3729, and the Contract Disputes Act, 41 U.S.C. 601 et seq. (1993). On January 6, 1993, the court granted the government's motion for summary judgment on its special plea in fraud and on both counterclaims. Young-Montenay, Inc. v. United States, Order No. 90-3862C. The court awarded treble damages in the amount of $147,000.00 and a statutory penalty of $5,000.00, pursuant to 31 U.S.C. 3729. Young-Montenay now appeals the summary judgment, merits on all three claims. We affirm the judgment in its entirety.

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