Fox Logistics and Construction Co. v. United States

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
FOX LOGISTICS AND CONSTRUCTION CO.,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2024-2150
______________________
Appeal from the United States Court of Federal Claims
in No. 1:18-cv-01395-EHM, Judge Edward H. Meyers.
______________________
Decided: June 3, 2026
______________________
HAL EMALFARB , Emalfarb Law LLC, Northbrook, IL,
argued for plaintiff-appellant.
STEVEN J OHN G ILLINGHAM , Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for defendant-appellee. Also
represented by MARTIN F. HOCKEY , J R., P ATRICIA M.
MCCARTHY , BRETT SHUMATE.
______________________
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FOX LOGISTICS AND CONSTRUCTION CO. v. US 2
Before M OORE, Chief Judge, P ROST , Circuit Judge, and
SEEBORG, Chief District Judge.1
P ROST , Circuit Judge.
Fox Logistics and Construction Co. (“Fox”) appeals a
decision of the U.S. Court of Federal Claims (“Claims
Court”) granting summary judgment for the United States.
For the reasons below, we affirm.
BACKGROUND
This appeal arises from a subcontractor’s attempts to
secure payment from the United States. In August 2012,
the U.S. Air Force awarded Lakeshore Engineering Ser-
vices, Inc. (“Lakeshore”) Task Order No. 42 under Federal
Prime Contract #FA8903-06-D-8505 for the expansion of
the Shindand Air Base in Afghanistan. J.A. 2–3, 2682. In
October 2012, Lakeshore awarded Fox a subcontract in
support of that task order. J.A. 3. The arrangement
quickly soured—within months of awarding Fox the sub-
contract, Lakeshore began failing to make timely pay-
ments. J.A. 3.
A series of show-cause notices and warnings to
Lakeshore from the Air Force ensued. J.A. 3–9. These
communications came to a head on January 7, 2014, when
the Air Force issued another show-cause notice to
Lakeshore. J.A. 2074–76. The notice informed Lakeshore
that the Air Force considered Lakeshore’s “nonpayment to
subcontractors to be endangering performance under” the
task order and explained that “the non-payment and re-
sulting impacts are cause for reconsideration” of termina-
tion under the task order’s provisions for default.
J.A. 2074. It further directed Lakeshore to “provide the
1 Honorable Richard Seeborg, Chief District Judge,
United States District Court for the Northern District of
California, sitting by designation.
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FOX LOGISTICS AND CONSTRUCTION CO. v. US 3
[g]overnment with a corrective action plan to prevent con-
tinual financial issues from affecting future performance
and completion of the project.” J.A. 2076. In response,
Lakeshore proposed that it would deposit future payments
on task orders into a designated holding account. J.A. 6,
2082–90. In a February 7, 2014 letter to Lakeshore (“the
February 2014 agreement”), the Air Force contracting of-
ficer agreed to use of the holding account and instructed
Lakeshore to include subcontractor payment certifications
with future invoices for payments and pay a subcontractor
immediately upon receipt of payment. J.A. 2096. The con-
tracting officer advised that the Air Force would monitor
transactions from the holding account—if transactions did
not occur in accordance with the approved subcontractor
payment certification, the task order would be immediately
terminated for default. J.A. 2097.
On February 14, 2014, Lakeshore and Fox signed the
final version of the Lakeshore-Fox payment plan.
J.A. 2173. The plan specified that Lakeshore was to pay
Fox for the amounts on Lakeshore’s submitted invoices.
J.A. 2172. It also specified that the Air Force would have
“full access viewing rights to monitor all proceeds.”
J.A. 2172. Under the plan, Lakeshore submitted four in-
voices to the Air Force. J.A. 19. For each invoice, payment
was made by the Air Force to Lakeshore, and by Lakeshore
to Fox. J.A. 19–20.
On or about May 1, 2014, Lakeshore abandoned Task
Order No. 42 and its other projects in Afghanistan. J.A. 9.
On May 2, 2014, the Air Force contracting officer emailed
Lakeshore, directing the company to ensure that its sub-
contractors discontinue performing work, including under
Task Order No. 42. J.A. 2102. Lakeshore filed a Chapter
7 bankruptcy petition. J.A. 9. Fox contends that
Lakeshore owed it “more than $3,000,000” at the time
Lakeshore declared bankruptcy and that it incurred over
$8,000,000 in uncompensated expenses. Appellant’s
Br. 21; J.A. 9. Fox alleges it “unsuccessfully” attempted to
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FOX LOGISTICS AND CONSTRUCTION CO. v. US 4
recover those funds during Lakeshore’s bankruptcy pro-
ceedings. Appellant’s Br. 21. Fox further alleges it subse-
quently filed a certified claim with the Air Force, which was
denied. Appellant’s Br. 21; J.A. 9.
Fox filed its complaint with the Claims Court in Sep-
tember 2018. J.A. 9. The complaint alleged that Fox had
an implied-in-fact contract with the Air Force, was a third-
party beneficiary to the Air Force’s contract with
Lakeshore, and that the Air Force had breached its implied
duties of good faith and fair dealing. J.A. 41–49. The
Claims Court ordered jurisdictional discovery and fact dis-
covery following the government’s (ultimately withdrawn)
motion to dismiss. See Fox Logistics & Constr. Co. v.
United States, 145 Fed. Cl. 236, 239–43 (2019); J.A. 9–10.
Both parties filed motions for summary judgment. J.A. 10.
In May 2024, the Claims Court granted the government’s
motion for summary judgment, concluding that: (1) no im-
plied-in-fact contract existed between Fox and the Air
Force; (2) Fox was not a third-party beneficiary of
Lakeshore’s February 2014 agreement with the Air Force;
and (3) even if Fox were a third-party beneficiary of
Lakeshore’s February 2014 agreement with the Air Force,
that the Air Force had not breached that agreement.
J.A. 11–19.
Fox timely appealed. We have jurisdiction under 28
U.S.C. § 1295(a)(3).
D ISCUSSION
We affirm a grant of summary judgment “when the rec-
ord, examined in the light most favorable to the non-mo-
vant, demonstrates that there is no genuine issue as to any
material fact and that the moving party is entitled to judg-
ment as a matter of law.” G4S Tech. LLC v. United States,
779 F.3d 1337, 1340 (Fed. Cir. 2015) (cleaned up). We re-
view the Claims Court’s grant of summary judgment de
novo and draw all justifiable factual inferences in favor of
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FOX LOGISTICS AND CONSTRUCTION CO. v. US 5
Fox. See Ammex, Inc. v. United States, 384 F.3d 1368, 1371
(Fed. Cir. 2004).
On appeal, Fox argues that the Claims Court erred in
granting summary judgment to the government because
(1) it was a third-party beneficiary to the Air Force’s Feb-
ruary 2014 agreement with Lakeshore and (2) a genuine
dispute of material fact exists as to whether the Air Force
breached that agreement. Appellant’s Br. 22, 46. We need
not reach whether Fox established third-party-beneficiary
status, because even if it did, it would still have to show a
breach. See Sullivan v. United States, 625 F.3d 1378, 1380
(Fed. Cir. 2010). And, because we conclude that the Claims
Court properly determined that no genuine dispute of ma-
terial fact exists as to the alleged breach of the February
2014 agreement, we affirm the Claims Court’s grant of
summary judgment.
To determine whether there was a breach, we must
know what the February 2014 agreement required. “Con-
tract interpretation begins with the language of the written
agreement.” NVT Techs., Inc. v. United States, 370 F.3d
1153, 1159 (Fed. Cir. 2004). The February 2014 agreement
between the Air Force and Lakeshore is clear. It sets forth
in relevant part that Lakeshore “may resume submitting
invoices for payment provided that [Lakeshore] continue[s]
to submit sub-contractor payment certifications, and that
all payments are made in accordance with that certification
immediately upon receipt of funds from the government.”
J.A. 2096. The agreement further required Lakeshore to
submit “an agreed upon payment plan with sub-contractors
currently in arrears.” J.A. 2096. Finally, it specified that,
“[o]nce invoices are approved and disbursed to” Lakeshore,
the government “will monitor transactions from the desig-
nated holding account. If at any time, transactions do not
occur in accordance with the approved sub-contractor pay-
ment certification[,] this task order will be immediately
terminated for default.” J.A. 2097. Importantly, the agree-
ment focuses on Lakeshore’s obligations.
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FOX LOGISTICS AND CONSTRUCTION CO. v. US 6
Fox does not anchor its arguments regarding breach in
the language of the agreement. Instead, to support its po-
sition that a genuine dispute of material fact exists regard-
ing whether the Air Force breached the contract, Fox offers
what it believes to be the Claims Court’s
“acknowledge[ment]” of a dispute of fact: that “[i]f
Lakeshore still owes Fox money for work performed under
their subcontract, that is an issue for the bankruptcy court,
not this one.” Appellant’s Br. 47 (citing J.A. 20). We disa-
gree with Fox’s interpretation of the Claims Court’s state-
ment. A comment on what Lakeshore may owe Fox is
separate from the question ultimately relevant to this case:
whether the Air Force breached. Fox thus failed to raise a
material factual dispute.
Fox goes on to assert that the Air Force breached by
“neglect[ing] to fund the special account as promised.” Ap-
pellant’s Br. 49. But Fox fails to substantiate this asser-
tion. The implication of Fox’s position appears to be that
the Air Force should have funded the special account even
in the absence of submitted invoices from Lakeshore. See
Appellee’s Br. 31. But Fox does not provide evidentiary
support indicating that the Air Force agreed to such an ob-
ligation.
The evidence on the record before us instead demon-
strates that Lakeshore submitted four invoices to the Air
Force following the February 2014 agreement.2 J.A. 9;
2 At oral argument, Fox was given an opportunity to
supplement the record before this court, with the govern-
ment’s consent, if there exists evidence within the record
below of invoices that the government refused to pay. Oral
Arg. at 30:23–56, No. 24-2150, https://www.cafc.uscourts.
gov/oral-arguments/24-2150_04072026.mp3. Following
several non-compliant filings (ECF Nos. 52, 53, 56) and or-
ders from this court for correction (ECF Nos. 55, 57, 58),
Fox filed its most recent motion for leave to file a
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FOX LOGISTICS AND CONSTRUCTION CO. v. US 7
Appellant’s Br. 20. The Air Force processed those four in-
voices and paid Lakeshore the invoiced total. J.A. 9. Fox
received all four corresponding payments. J.A. 9, 20; Ap-
pellant’s Br. 20. The fact that Lakeshore then fell behind
on payments to Fox and subsequently declared bankruptcy
does not turn Lakeshore’s failure to pay its subcontractor
into the Air Force’s nonperformance. See Sullivan, 625
F.3d at 1380–81. Fox does not—and indeed, it cannot—
point to any obligation in the February 2014 agreement
that the Air Force failed to perform. Instead, the record is
clear that the Air Force did what it agreed to do: pay the
invoices submitted to it by Lakeshore. J.A. 19–20. And
when Lakeshore failed to make payments to its subcontrac-
tors, the Air Force again did what it said it would do in the
February 2014 agreement: terminate for default.
J.A. 2097, 2102. Thus, the Claims Court properly granted
the government’s summary judgment motion, as Fox failed
to raise a genuine dispute of material fact that the Air
Force breached.
CONCLUSION
We have considered Fox’s remaining arguments and
find them unpersuasive. For the foregoing reasons, we af-
firm the Claims Court’s grant of the government’s motion
for summary judgment.
AFFIRMED
supplemental appendix (ECF Nos. 59, 60) and what ap-
pears to be a motion for leave to file the supplemental ap-
pendix out of time (ECF No. 61). The court grants Fox’s
motions (ECF Nos. 59, 60, 61). We have reviewed Fox’s
supplemental appendix and conclude that the contents
therein do not furnish evidence that alters the decision set
forth in this opinion.
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