Bianchi

This is a res judicata case regarding settlement of a government contract dispute.

Facts

The government hired Bianchi to sew garments for the military. In 1979 and 1980, it *1295 contracted for Bianchi to make about 43,000 raincoats for the Navy, 27,000 women’s jackets for the Air Force, and 125,000 men’s coats. Bianchi borrowed money from Bank of America secured in part by an assignment of contract proceeds. The bank loan was guaranteed by the Small Business Administration. The bank went through the proper steps to obtain government approval of the assignments and to make them binding upon the government.

Claims arose in all directions. Bianchi and the bank had a dispute in state court over whether the bank properly performed its duties under the loan agreement. Bianchi and the United States had a dispute in the Armed Services Board of Contract Appeals over whether the government owed him more money. Eventually the bank and the government had a dispute as well.

Bianehi’s claim against the military was settled by stipulation. The stipulation, made in September 1988, provided that Bianchi would recover $617,500 plus interest, the government would recover nothing on its claims,…