Lea v. United States , 662 F. App'x 925 ( 2016 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
COREY LEA,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2016-2108
______________________
Appeal from the United States Court of Federal
Claims in No. 1:15-cv-00292-MBH, Judge Marian Blank
Horn.
______________________
Decided: October 6, 2016
______________________
COREY LEA, Arrington, TN, pro se.
JESSICA COLE, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, for defendant-appellee. Also represented by
BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., REGINALD
T. BLADES, JR.
______________________
Before NEWMAN, LOURIE, and CLEVENGER, Circuit Judges.
2 LEA v. US
PER CURIAM.
Corey Lea (“Lea”) appeals from the decision of the
United States Court of Federal Claims (the “Claims
Court”) dismissing his complaint for lack of jurisdiction
and denying his motion for reconsideration. See Lea v.
United States, 126 Fed. Cl. 203 (2016) (“Order”); Lea v.
United States, No. 15-292C, 2016 WL 2854257 (Fed. Cl.
May 10, 2016). Because the Claims Court did not err in
dismissing the complaint, we affirm.
BACKGROUND
Lea was a farmer in Kentucky. Appellant’s Informal
Br. 1. Acting through his company, Corey Lea, Inc., he
applied for a loan from Farmers National Bank, guaran-
teed by the Farm Service Agency of the United States
Department of Agriculture. Id. at 1. The loan guarantee
agreement lists the borrower’s name as Corey Lea, Inc.
and is signed by a Farm Service Agency official. Appel-
lee’s App. 58. Farmers National Bank held the first
mortgage, and the Farm Service Agency held the second
mortgage. After Lea defaulted by failing to make pay-
ments, the bank foreclosed on the farm property. Appel-
lant’s Informal Br. 2.
Lea first filed multiple complaints against the gov-
ernment and Farmers National Bank in the United States
District Court for the Western District of Kentucky,
alleging discrimination and seeking an injunction against
the foreclosure. The district court dismissed the claims in
favor of the defendants, and on appeal from one of the
dismissals, this court issued an order holding that we
lacked jurisdiction and transferring that appeal to the
United States Court of Appeals for the Sixth Circuit. Lea
v. Dep’t of Agric., 562 F. App’x 969 (Fed. Cir. 2014).
Lea next filed a complaint against the government in
the Claims Court in January 2014, alleging fraud, breach
of contract, conspiracy to commit fraud and breach of
LEA v. US 3
contract, and tortious interference. The Claims Court
dismissed his appeal for lack of subject matter jurisdic-
tion, finding that it lacked jurisdiction (1) over any claims
against defendants other than the United States, (2) to
grant any requested injunctive or declaratory relief, and
(3) to hear his tort claims. Lea v. United States, No. 14-
44C, 2014 WL 2101367, at *2 (Fed. Cl. May 19, 2014) (Lea
I). The Claims Court also dismissed his claims for breach
of contract for failure to state a claim because Lea failed
to show that he was either a party or a third-party benefi-
ciary to the contracts involving the government. Id. at *3.
Lea appealed from that decision to this court, and we
vacated and remanded the dismissal of his contract
claims, but affirmed the dismissal of all other claims. See
Lea v. United States, 592 F. App’x 930 (Fed. Cir. 2014)
(Lea II). We held that Lea lacked standing unless he were
a third-party beneficiary, and we vacated and remanded
for the Claims Court to determine whether to grant
discovery on that issue. Id. at 933–34.
However, before our opinion issued, Lea filed another
complaint against the government in the Claims Court,
again asserting the breach of contract claims, along with
various claims of constitutional violations such as takings.
See Lea v. United States, 120 Fed. Cl. 440, 443 (2015) (Lea
III); Order, 126 Fed. Cl. at 209–10 (summarizing the
procedural posture of Lea III). Because Lea was pursuing
the same breach of contract claims in Lea I on remand,
the contract claims in Lea III were dismissed as duplica-
tive and the noncontractual claims were dismissed for
lack of jurisdiction.
Shortly afterwards, Lea filed another complaint
against the government in the Claims Court in March
2015, which became the instant case (Lea IV), and he
voluntarily dismissed Lea I without prejudice. Order, 126
Fed. Cl. at 209. In this complaint, he alleged, inter alia, a
taking, unjust enrichment, breach of an implied-in-fact
4 LEA v. US
contract by violating federal foreclosure regulations,
breach of the loan guarantee agreement, and breach of
the second mortgage agreement. Id. at 209–10. The
Claims Court observed that Lea had filed at least eleven
separate actions in federal courts based on the same set of
facts. Id. at 207.
The Claims Court first found that Lea failed to cure
the jurisdictional defects that led to the dismissal of the
same claims of a taking, unjust enrichment, and breach of
an implied-in-fact contract in Lea III, and thus was pre-
cluded from reasserting those claims. Order, 126 Fed. Cl.
at 214–15. The court then analyzed the remaining breach
of contract claims. Id. at 215–18. The court noted that
the borrower identified in the loan guarantee agreement
and the mortgagor identified in the second mortgage
agreement were both the corporate entity, not the indi-
vidual. The court concluded that Corey Lea, Inc. was the
only entity eligible to pursue contractual claims against
the United States based on third-party beneficiary status.
Id. at 217. Because a corporation must be represented by
an attorney, the court dismissed the remaining contract
claims. Id. at 217–18.
Lea moved for reconsideration, which was denied by
the Claims Court. Lea timely appealed to this court from
the Claims Court’s decisions. We have jurisdiction pursu-
ant to 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review the Claims Court’s dismissal for lack of ju-
risdiction de novo. FloorPro, Inc. v. United States, 680
F.3d 1377, 1380 (Fed. Cir. 2012). The Tucker Act pro-
vides the Claims Court with jurisdiction to “render judg-
ment upon any claim against the United States founded
. . . upon any express or implied contract with the United
States.” 28 U.S.C. § 1491(a)(1). However, in contract
cases “[t]he government consents to be sued only by those
with whom it has privity of contract.” Erickson Air Crane
LEA v. US 5
Co. of Wash. v. United States, 731 F.2d 810, 813 (Fed. Cir.
1984); see also id. (holding that subcontractors lack privi-
ty with the government and thus lack standing to bring a
direct suit for breach of contract against the government).
Lea argues that the Claims Court did not consider
that Corey Lea, Inc. is a dissolved corporation with Lea as
a sole shareholder winding up its affairs. Lea asserts that
the court also incorrectly cited case law applying Texas
law rather than Kentucky law with regard to a corpora-
tion’s ability to continue litigation after it has been dis-
solved. Lea also insists that the government waived the
argument of standing to sue on behalf of the corporation.
Lea further asserts that as a debtor listed on the first
mortgage, he has standing as an individual to sue for
breach of contract. Moreover, Lea contends, the courts in
Lea I and Lea II found that he had standing, and there-
fore under the law of the case doctrine and the mandate
rule, the Claims Court erred in finding that it lacked
jurisdiction over his contract claims. Lea also disputes
that collateral estoppel applies, particularly as to the
takings claim, which he denies was previously addressed
in Lea III.
The government responds that the Claims Court con-
sidered all of the facts alleged in the complaint and
acknowledged that Lea was winding up Corey Lea, Inc.’s
affairs. However, the government maintains, Lea was not
a party to the contracts with the government, and any
injury to him was not separate and distinct from the
corporation’s injury. The government asserts that Lea’s
claims were therefore derivative of the corporation’s, and
emphasizes that shareholder-derivative actions require
counsel. Additionally, the government responds, the court
may sua sponte challenge its own subject matter jurisdic-
tion at any time, whether the defendant raises the issue
or not. As for the other claims, the government contends
that the court correctly applied collateral estoppel because
the claims were “almost verbatim” identical to the claims
6 LEA v. US
in Lea III that were dismissed for lack of jurisdiction and
Lea failed to cure the jurisdictional defects.
We agree with the government that the Claims Court
did not err in dismissing Lea’s complaint for lack of
jurisdiction. We understand Lea’s desire to pursue claims
relating to the company that he was the sole shareholder
of and that bears his name. Lea’s role in managing the
affairs of the dissolved corporation, however, is insuffi-
cient to vest the Claims Court with jurisdiction to adjudi-
cate his claims.
Lea focuses on the fact that Corey Lea, Inc. has been
dissolved and that he is the sole shareholder winding up
the affairs of the corporation. Appellant’s Informal Br.
5–9. Although Kentucky law provides that dissolution of
a corporation does not bar or exempt the corporation from
litigation in its own name, the law does not create privity
between Lea and the government merely because of such
dissolution, such that he as an individual may sue for
breach of contract. As Lea is not an attorney, and a
corporation may not be represented by a non-attorney, the
Claims Court correctly concluded that he may not pursue
the claims on behalf of Corey Lea, Inc.
The only way Lea could have had standing to sue the
government for breach of contract with regard to the loan
guarantee agreement and the second mortgage agreement
would have been, as we noted previously, if he were a
third-party beneficiary to the contracts. See Lea II, 592 F.
App’x at 933. But Lea did not expressly argue that he
was a third-party beneficiary until he made an oblique
reference to such in his reply. Appellant’s Reply Br. 6.
Nonetheless, the government addressed that point in its
response brief by asserting that the Claims Court proper-
ly determined that Lea was not a party to the contracts
and that Corey Lea, Inc. was the intended beneficiary
instead. Appellee’s Br. 10. We will accordingly address it
briefly.
LEA v. US 7
To prove third-party beneficiary status, a plaintiff
must show “that the contract not only reflects the express
or implied intention to benefit the party, but that it
reflects an intention to benefit the party directly.” Glass
v. United States, 258 F.3d 1349, 1354 (Fed. Cir. 2001).
And we have previously held that shareholders are not
necessarily third-party beneficiaries eligible to enforce a
contract between a corporation and the government. Id.
at 1354–55; First Hartford Corp. Pension Plan & Tr. v.
United States, 194 F.3d 1279, 1289 (Fed. Cir. 1999) (not-
ing that “one of the principal motivations behind utilizing
the corporate form is often the desire to limit the risk of
ownership to the amount of capital invested and thus
avoid the obligations, contractual or otherwise, of the
corporation” and finding the shareholders in that case
were not third-party beneficiaries and thus could not
bring breach of contract claims on their own behalf).
Although a third-party beneficiary need not be explic-
itly identified in a contract, here the contracts were
clearly not intended to benefit Lea as an individual. The
loan guarantee and second mortgage agreements were
clearly intended to assist Corey Lea, Inc. in obtaining a
loan to purchase and operate farm property. Even though
Lea was the president and sole shareholder of Corey Lea,
Inc., the company was and is still a separate legal entity.
More is required to confer intended third-party bene-
ficiary status than knowledge that he as an individual
would indirectly benefit from the agreements. Lea made
the conscious choice to apply for the loan in his company’s
name rather than his own. Whatever his reasons might
have been, he cannot now claim that the contract was
intended to directly benefit him as an individual. Moreo-
ver, whether he was listed as an individual on the first
mortgage, a contract with a private bank, is irrelevant to
privity with the government. Because Lea has not alleged
facts sufficient to establish his status as a third-party
beneficiary, the Claims Court correctly found that it
8 LEA v. US
lacked jurisdiction over the breach of contract claims filed
in his name.
Accordingly, Lea did not provide the Claims Court
with evidence supporting his alleged status as a third-
party beneficiary of the loan guarantee and second mort-
gage agreements. The court therefore did not err in
concluding that it lacked jurisdiction to adjudicate Lea’s
breach of contract claims.
Lea furthermore did not present any new, previously
unavailable facts that would support the Claims Court’s
jurisdiction over claims previously found to be not within
the purview of the Tucker Act. The court therefore did
not err in finding that Lea did not cure the original juris-
dictional defects and thus did not justify a new analysis of
jurisdiction over those claims.
CONCLUSION
We have considered Lea’s remaining arguments and
conclude that they are without merit. For the foregoing
reasons, the decision of the Claims Court is affirmed.
AFFIRMED