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Xxxxxx Xxxxxx of America, ex. rel. Xxxxxxx Xxxxxxx v. TransTechnology
Corporation and Breeze-Eastern, a Division of TransTechnology Corporation.
Civ. No. 03cv5359 (D.N.J.).
I. PARTIES
This Agreement is entered into this 6th day of September 2005, by and
among the United States of America ("United States"), through the Department of
Justice, Xxxxxxx Xxxxxxx ("Relator"), and TransTechnology Corporation and
Breeze-Eastern, a Division of TransTechnology Corporation (collectively
"TransTechnology ") for themselves and any of their predecessors, successors,
assigns, businesses, affiliates, subsidiaries, divisions, employees, agents, and
representatives (hereinafter all jointly referred to as the "Parties").
II. RECITALS
A. Between 1993 and 2005, Defendants submitted, or caused to be submitted,
claims for payment based on various contracts entered into with entities of the
United States, including the Department of Defense and the United States Coast
Guard.
B. On November 12, 2003 Relator filed a Qui Tam suit against
TransTechnology in the United States District Court for the District of New
Jersey, captioned as United States of America ex rel. Xxxxxxx Xxxxxxx v.
TransTechnology Corporation and Breeze-Eastern, a Division of TransTechnology
Corporation, Civ. No. 03cv5359 (D.N.J.). In his complaint, the Relator alleged,
among other allegations, that Defendants falsely certified that they complied
with contractual specifications when providing overhaul and repair services to
hoists and hooks used primarily in helicopter applications ("Qui Tam Action").
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al, Civ. No. 03cv5359
(D.N.J.).
Settlement Agreement - Page 1 of 00
X. XxxxxXxxxxxxxxx, Xxxxxxx, xxx xxx Xxxxxx Xxxxxx (through the Civil
Division, Department of Justice and the Office of the United States Attorney for
the District of New Jersey), have engaged in settlement discussions concerning a
disposition of the allegations raised in the Qui Tam Action.
D. Defendants deny all allegations in the Qui Tam Action and specifically
deny that they violated the Federal Civil False Claims Act, 31 U.S.C. Sections
3729-33 (the "FCA") or in any way acted wrongfully.
E. The Parties wish, to avoid the time, expense, and risk of litigation by
reaching a settlement of the allegations raised in the Qui Tam Action.
F. This Settlement Agreement is made in compromise of disputed claims.
Neither the Settlement Agreement, its execution, or the performance of any
obligations under it, including any payments, nor the fact of the settlement, is
intended to be, or shall be understood as, an acknowledgment of responsibility,
admission of liability or wrongdoing, or other expression reflecting upon the
merits of the dispute by TransTechnology, which liability is expressly denied.
III. AGREEMENTS
In reliance on the foregoing Recitals, and in consideration of the mutual
promises, covenants and obligations of this Settlement Agreement, and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
OBLIGATIONS
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al, Civ. No. 03cv5359
(D.N.J.).
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1. After the execution of this Settlement Agreement, TransTechnology shall
- -
a. Make cash payments to the United States for the total sum of One
Million Dollars ($1,000,000.00) as provided on the following payment
schedule:
i. Within five (5) business days of the execution of this
settlement agreement, TransTechnology, shall pay to the United
States the sum of One Hundred Thousand Dollars ($100,000.00);
ii. On or before March 30, 2006, TransTechnology shall pay to the
United States the sum of Three Hundred Thousand Dollars
($300,000.00);
iii. On or before September 30, 2006, TransTechnology shall pay to
the United States the sum of Six Hundred Thousand Dollars
($600,000.00);
b. TransTechnology agrees not to submit its claims for payment for
Breeze-Eastern services performed under work order numbers R08627,
R08808, and R08817, representing a value of Fifty-Four Thousand and
Four Hundred and Twenty-Six Dollars ($54,426), and hereby waives the
right to submit any claim for payment for these work orders.
c. TransTechnology shall repair, as is necessary to return to
serviceable condition, three (3) rescue hoists identified as:
Part Number Serial Number
BL-27100-85 260CK
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
Settlement Agreement - Page 3 of 14
BL-27100-185 642CKT
BL-27100-86 127CK
The three hoists are to be brought to serviceable condition and made
available for return to the United States within two (2) months of their
receipt following the execution of this settlement agreement providing the
necessary parts are available. TransTechnology will attempt to secure the
necessary parts within a commercially reasonable period of time. If one or
more of the hoists cannot be returned to a serviceable condition,
TransTechnology will provide the United States with a comparable hoist in
serviceable condition. The agreed upon value for the services provided in
this sub-paragraph is Fifty-Four Thousand and Four Hundred and Twenty-Six
Dollars ($54,426).
d. TransTechnology acknowledges that, except when specifically agreed by the
United States, the United States has by statute and regulation a right of
setoff, and TransTechnology confirms that it will not contest, now or
hereafter,any setoff made pursuant to said statutes and regulations of any
future payments due to TransTechnology from any United States government
contract payments in order to satisfy any default by TransTechnology of
its obligations under paragraph 1 of this Settlement Agreement.
The total value of paragraphs 1 (a), (b), and (c) is $1,108,852.00 and
represents
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
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the Settlement Amount.
2. Contingent upon the United States receiving the Settlement Amount
payments and services from TransTechnology and as soon as feasible after receipt
of each payment and service identified in sub-parts (a), (b), and (c) of
paragraph 1, the United States agrees to pay the relator as follows - -
a. The United States will pay relator Thirty Thousand, Eight
Hundred Eighty-Five Dollars and Twenty Cents ($30,885.20) of
the $100,000 cash payment to be made by TransTechnology within
a reasonable after the later of the executing this Settlement
Agreement or the Court's acceptance thereof, representing a
Twenty Percent (20%) relator's share of the cash payment made
pursuant to paragraph l(a)(i), and Twenty Percent (20%) of the
value of the claims for payment waived by TransTechnology
pursuant to paragraph l(b).
b. Upon completion of the all services to be performed under
paragraph l(c), the United States shall pay relator Ten
Thousand, Eight Hundred and Eighty-Five Dollars and Twenty
Cents ($10,885.20), representing a Twenty Percent (20%)
Relator's share of the agreed value of the services to be
performed by TransTechnology pursuant to paragraph 1 (c);
c. The United States shall pay Sixty Thousand Dollars ($60,000)
to relator after receipt of the $300,000 due on or before
March 30, 2006 under paragraph l(a)(ii), representing a Twenty
Percent (20 %) Relator's share
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
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of TransTechnology's payment made pursuant to paragraph
l(a)(ii);
d. The United States shall pay One-Hundred Twenty Thousand
Dollars ($120,000) to relator after receipt of the $600,000
due on or before September 30, 2006 under paragraph l(a)(iii),
representing a Twenty Percent (20 %) Relator's share of
TransTechnology's payment made pursuant to paragraph
l(a)(iii).
These amounts in total shall be the Relator's share pursuant to 31 U.S.C.
Section 3730(d).
3. TransTechnology shall pay to the Relator, through his attorneys, or
their designated representative(s), the total sum of Twenty-Five Thousand
Dollars ($25,000) in satisfaction of the Relator's claims under 31 U.S.C.
Section 3730(d) (expenses, attorney's fees, and costs) within five (5) business
days after the execution of this Settlement Agreement.
4. TransTechnology Corporation and Breeze-Eastern, a Division of
TransTechnology Corporation shall be jointly and severally liable for payments
of the Settlement Amount identified in paragraph one (1) and the payment to the
Relator, though his attorney, identified in paragraph three (3). Cash payments
to the United States of the Settlement Amount identified in paragraph one(l)
shall be made by electronic funds transfer pursuant to written instructions to
be provided to TransTechnology's legal counsel by Xxxxxxx X. Xxxxx or his
designated representative. The payment to the Relator through his attorney,
identified in paragraph three (3), shall be made by cashier's or certified check
to the Relator's counsel, Xxxxx Xxxxxx, P.C., in care of Xxxx Xxxxxx, Esq.
5. Contemporaneously with the execution of this Settlement Agreement, the
parties shall
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al, Civ. No. 03cv5359
(D.N.J.).
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execute the attached Stipulation of Dismissal and Proposed Order of Dismissal
(Exhibit A), in which the United States and the Relator agree to dismiss the Qui
Tam Action with prejudice subject to the terms of this Settlement Agreement. The
United States shall file the Stipulation of Dismissal and Proposed Order of
Dismissal with the United States District Court for the District of New Jersey
within five (5) business days after the execution of the Settlement Agreement.
RELEASES
6. Subject to the exceptions set forth below, in consideration of the
obligations of TransTechnology set forth in this Agreement, and conditioned upon
the full payment of the Settlement Amount by TransTechnology, the United States
agrees to release and discharge TransTechnology, and its predecessors,
successors, assigns, businesses, affiliates, subsidiaries, divisions, directors,
employees, agents, and representatives from any liability or claim the United
States has for civil or administrative monetary damages under the False Claims
Act, 31 U.S.C. Sections 3729-3733; the Contract Disputes Act, 41 U.S.C, 601 et
seq.; the Program Fraud Civil Remedies Act, 31 U.S.C. 3801-3812; or under common
law theories of payment by mistake, unjust enrichment, breach of contract, and
fraud for the allegations in the Qui Tarn Action.
7. Conditioned upon receipt of the full payment of Twenty-Five
Thousand-Dollars ($25,000) as provided in paragraph three (3), the Relator, for
himself individually, and for his heirs, successors, attorneys, agents, and
assigns, agrees to release TransTechnology, their officers, agents, and
employees, from any liability to Relator arising before the execution of this
agreement from the filing of the Qui Tam, Action, including, but not limited to,
any liability to Relator arising under 31 U.S.C. Section 3730(d) (expenses or
attorney's fees and costs).
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
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8. The Relator, for himself individually, and for his heirs, successors,
agents and assigns, fully and finally releases, waives, and forever discharges
the United States, its officers, agents, and employees, from any claims arising
from or relating to 31 U.S.C. Section 3730, including 31 U.S.C. Sections
3730(b), (c), (c)(5), and (d), from any claims arising from the filing of the
Qui Tam Civil Action, and from any other claims for a share of the Settlement
Amount, and in full settlement of any claims Relator may have under this
Agreement. This Agreement does not resolve or in any manner affect any claims
the United States has or may have against the Relator arising under Title 26,
U.S. Code (Internal Revenue Code), or any claims arising under this Agreement.
9. TransTechnology fully and finally releases the United States, its
agencies, employees, servants, and agents from any claims (including attorneys
fees, costs, and expenses of every kind and however denominated) which they have
asserted, could have asserted, or may assert in the future against the United
States, its agencies, employees, servants, and agents, related to the Qui Tam
Action and the United States' investigation and prosecution thereof.
10. TransTechnology fully and finally releases the Relator, his heirs,
successors, agents and assigns from any claims (including attorneys fees, costs,
and expenses of every kind and however denominated) which they have asserted,
could have asserted, or may assert in the future against the Relator, his heirs,
successors, agents and assigns related to the Qui Tam Action and the United
States' investigation and prosecution thereof.
11. Relator agrees that this Settlement Agreement is fair, adequate and
reasonable under all the circumstances and that he will not challenge the
agreement pursuant to 31 U.S.C. Section
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al, Civ. No.
03cv5359 (D.N.J.).
Settlement Agreement - Page 8 of 14
3730(c)(2)(B).
LIMITATIONS OF RELEASES
12. The United States specifically does not release TransTechnology, or
any other entity or individual under this Agreement from (a) any criminal, civil
or administrative claims arising under Title 26, U.S. Code (Internal Revenue
Code) or Internal Revenue Service Regulations or under Securities or
Environmental laws; (b) any liability under the contracts at issue for any
claims for delivery of any deficient or defective products and/or services
except as alleged in the Qui Tam Action; (c) liability under any express or
implied product/services warranties pertinent to these contracts, or liability
for the failure to deliver items or services due except as alleged in the Qui
Tam Action; (d) any obligations created by this Settlement Agreement or related
to disputes and claims for the enforcement of this Settlement Agreement; (e) the
criminal liability, if any, of any person or entity; (f) administrative action,
if any, by the Department of Defense, the United States Coast Guard, or any
other federal agency to suspend, debar or determine the responsibility of
Defendants, its affiliates, present or former officers or employees; (g) any
criminal, civil, regulatory, or administrative claims, if any, arising under
Title 14, Code of Federal Regulations (Federal Aviation Administration,
Department of Transportation); and (h) any claims for personal injury or
property damage, if any, or for other consequential damages arising from the
products/services delivered under the contracts referred to in the Qui Tam
Action.
13. TransTechnology agrees that all costs (as defined by Federal
Acquisition Regulation ("FAR") 31.205-47) incurred by or on behalf of
TransTechnology and its officers, directors,
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No.
03cv5359 (D.N.J.).
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agents and employees in connection with (a) the matters covered by this
Settlement Agreement, (b) the Government's audit and investigation of the
matters covered by this Settlement Agreement, (c) TransTechnology's
investigation, defense of the matter, and corrective actions relating to the Qui
Tam Action, (d) the negotiation of this Settlement Agreement, and (e) the
payments made to the United States pursuant to this Settlement Agreement shall
be unallowable costs for government accounting purposes. These unallowable costs
will be separately estimated and accounted for by TransTechnology.
TransTechnology will not charge such unallowable costs directly or indirectly to
any contracts with the United States. Any such cost previously submitted or
treated by TransTechnology as an allowable cost for government accounting
purposes shall be withdrawn and any charge or charges previously submitted that
were based on such cost shall be adjusted accordingly.
14. Notwithstanding the releases set forth in paragraph six (6) above, the
United States expressly reserves all civil claims against individuals, including
any current or former officers, employees, agents or employees of
TransTechnology, not otherwise specifically identified as a defendant in
Paragraph B of Section II (Recitals) of this Settlement Agreement, who have
received written notification that they are the target of a criminal
investigation, are indicted or charged, are convicted or who enter into a plea
agreement arising from the conduct that is the subject of this agreement.
15. TransTechnology waives and will not assert any defenses
TransTechnology may have to any criminal prosecution or administrative action
relating to the Qui Tam Action that may be based in whole or in part on a
contention that, under the Double Jeopardy Clause in the
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
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Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the
Eighth Amendment of the Constitution, this Settlement Agreement bars a remedy
sought in such criminal prosecution or administrative action. Nothing in this
paragraph or any other provision of this Agreement constitutes an agreement by
the United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws, Title 26 of the United States Code.
CONTINGENCIES
16. In the event of a voluntary or involuntary liquidation or
reorganization case by or against TransTechnology under bankruptcy, receivership
or other insolvency law, TransTechnology agrees not to contest or oppose any
motion filed by the United States seeking relief from or modification of the
automatic stay imposed by 11 U.S.C. Section 362(a) nor to seek relief under 11
U.S.C. Section 105 to enjoin or restrain the United States from recovering
monies owed by TransTechnology arising out of this agreement through offset.
TransTechnology recognizes that this express waiver is in consideration for the
ability to make deferred payments of the Settlement Amount as provided in
paragraph one (1) above.
17. The Parties agree that, if the United States District Court for the
District of New Jersey fails to enter the Order of Dismissal dismissing Civil
Action No. 03cv5359 (D.N.J.) with prejudice, this agreement shall be null and
void. Should the Court decline to enter the Order of Dismissal dismissing Civil
Action No. 03cv5359 (D.N.J.) with prejudice, the United States will return any
payments TransTechnology may have made pursuant to paragraph (l)(a), the Relator
will return any payments the United States may have made pursuant to paragraph
(2) and will
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
Settlement Agreement - Page 11 of 14
return any payments TransTechnology may have made pursuant to paragraph (3), and
TransTechnology may submit the foregone claims for payment identified in
paragraph (l)(b) and may submit a claim for payment for any services provided
under paragraph (l)[c] within a reasonable time after the Court's action.
ADDITIONAL CONSIDERATIONS
18. This document contains the full and complete Agreement with respect to
the matters covered herein. No modification of this Agreement shall be effective
unless in writing and signed by the Parties, and agreed to by the United States.
19. All parties consent to the public disclosure of this Settlement
Agreement, and information about this Settlement Agreement may be made available
to the public upon request.
20. Each person who signs this Agreement in a representative capacity
warrants that he or she is duly authorized to do so. Further, each Party for
himself or itself, as the case may be, (i) acknowledges that such Party has been
advised by competent legal counsel in connection with the execution of this
Agreement and the accompanying releases, has read each and every paragraph of
this Agreement, understands the respective rights and obligations set forth
herein, and (ii) represents that the commitments, acknowledgment,
representations, and promises set forth herein are freely and willingly
undertaken and given.
21. This Settlement Agreement shall be interpreted in accordance with the
federal laws of the United States. The Parties agree that the exclusive
jurisdiction and venue for any dispute arising between and among the Parties
under this Agreement will be the United States District Court for the District
of New Jersey.
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
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22. For purposes of construction, this Agreement shall be deemed to have
been drafted by all Parties to this Agreement and shall not, therefore, be
construed against any Party for that reason in any subsequent dispute.
23. This Agreement is intended to be for the benefit of TransTechnology,
Relator, and the United States only, and by this instrument TransTechnology,
Relator, and the United States do not release any claims against any other
person or entity, except those who may be identified within this Agreement.
24. Dismissal of the Qui Tam Action is subject to the terms of the
Settlement Agreement.
25. This document shall be executed in counterparts, with one original
being provided to each party. Each of the counter part documents shall be
considered an original of this document.
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U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ. No. 03cv5359
(D.N.J.).
Settlement Agreement - Page 13 of 14
IN WITNESS WHEREOF, the Parties have executed the foregoing Agreement or
counterparts thereof, intending to be bound.
For UNITED STATES OF AMERICA For UNITED STATES OF AMERICA
By: /s/ Xxxx X. Xxxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------- --------------------------------
Xxxx X. Xxxxxxx, Xx. Xxxxxx X. Xxxxxxxxx
Trial Attorney Assistant United States Attorney
Civil Division 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxxx Department of Justice Xxxxxx, Xxx Xxxxxx 00000
(000)000-0000 (000)000-0000
Dated the 6th day of September, 2005 Dated the 12th day of August, 2005
For TRANSTECHNOLOGY COUNSEL FOR RELATOR
CORPORATION AND ITS DIVISION
BREEZE-EASTERN
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxx
----------------------------------- --------------------------------
Xxxxxxx X. Xxxxx, Esq. Xxxx Xxxxxx, Esq.
Xxxxx Xxx Xxxxx Xxxxxx, P.C.
000 Xxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000 Xxxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000 (000) 000-0000
Dated the 12th day of August, 2005 Dated the 19th day of August, 2005
QUI TAM RELATOR
/s/ XXXXXXX XXXXXXX
---------------------------------------
XXXXXXX XXXXXXX
Dated the 19 day of August, 2005
U.S. ex rel. Xxxxxxx Xxxxxxx v. TransTechnology, et al., Civ.
No. 03cv5359 (D.N.J.).
Settlement Agreement - Page 14 of 14
