In the United States Court of Federal Claims

No. 09-364C

(Filed: October 30, 2014)

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TERRYTOWN SSA, LLC,

Plaintiff,

v.

THE UNITED STATES OF AMERICA,

Defendant.

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ORDER

This is a Contract Disputes Act (“CDA”) action. Plaintiff appeals the

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contracting officer’s denial of its claim for damages for the alleged wrongful

termination of a contract to design, build, and then lease to the General

Services Administration (“GSA”) an office building in Terrytown, Louisiana

for use by the Social Security Administration (“SSA”). Defendant has

counterclaimed, seeking reprocurement costs and liquidated damages for

delay. Pending now are the parties’ cross-motions for partial summary

judgment. Defendant has moved for summary judgment to the effect that the

termination was proper because plaintiff’s delays were not excused and that

there is no evidence of bad faith on the part of GSA. Plaintiff cross-moved,

seeking a judgment that the termination was wrongful because it had no duty

to begin or finish construction of the project, and it asks the court to find that

the circumstances surrounding the termination establish bad faith on the part

of the government. We heard oral argument on May 7, 2014, on the motions

in this case, and simultaneously heard argument on similar motions pending

in a related action, Lake Charles XXV, LLC v. United States, No. 09-363C.

During oral argument, we asked for supplemental briefing on a question raised

The CDA is codified at 41 U.S.C. §§ 7101-7109 (2012).

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for the first time at oral argument. After considering the written and oral

argument, we conclude that there is no evidence of bad faith and thus grant

defendant’s motion for partial summary judgment and deny plaintiff’s crossmotion on that issue. As to the separate question of whether the termination

was proper, however, we conclude that material questions of fact preclude

entry of judgment at this time and therefore we deny both motions on that

issue.

This case was filed contemporaneously with three related suits

involving design, build, and lease contracts for similar facilities in other

locations in Louisiana for use by the SSA. The plaintiffs in all four cases

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share common ownership, and discovery in all four cases was, in large part,

conducted jointly. Two of those cases have been dismissed because plaintiff

ran afoul of the Contract Act’s prohibition against assignment of contracts.

See Am. Govt. Props. v. United States, No. 09-153C, 2014 WL 4248193 (Fed.

Cl. Aug. 28, 2014); Am. Govt. Props. v. United States, No. 09-131C (Fed. Cl.

Aug. 28, 2014) (unpublished order granting defendant’s motion to dismiss).

Nearly identical cross-motions for summary judgment, in all but one

respect, were filed in Lake Charles, No. 09-363C. In that case, we granted the

government’s motion for summary judgment in full and denied plaintiff’s

cross-motion. Lake Charles XXV, LLC v. United States, No. 09-363C, 2014

WL 5180797 (Fed. Cl. Oct. 15, 2014) (opinion and order granting defendant’s

motion for partial summary judgment). The facts of this case are substantially

similar to those in Lake Charles, and the contract involved there contains the

identical clauses at issue in this case. A fuller recitation of the background

facts can be found in our October 15, 2014 opinion in that case. We

incorporate and adopt the reasoning in that opinion as it pertains to the issue

of plaintiff’s arguments regarding its duty to proceed with construction and the

effect of the no-waiver clause. Plaintiff did have a duty to begin construction

and complete it regardless of GSA’s late issuance of design drawings and

approval of construction drawings because it agreed to a new schedule by

amendment to the contract. That amendment superceded the requirements of

the original contract and obligated plaintiff to begin construction and then

complete it by March 28, 2008. Def.’s App. 272 (Supplemental Lease

 Those cases are American Government Properties. & New Iberia SSA, LLC

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v. United States, No. 09-131C; American Government Properties & Houma

SSA, LLC v. United States, No. 09-153C; and Lake Charles XXV, LLC v.

United States, No. 09-363C.

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Agreement No. 3). Further, as explained in our Lake Charles opinion, the

contract’s no-waiver clause did not operate to preserve the original

construction schedule. We must therefore consider whether the delays were

excused.

Unlike its motion in Lake Charles, defendant has not argued that the

plaintiff here failed to meet the contract’s requirement that the contractor

provide notice of delay within 10 days of the start of the alleged delay. Instead

defendant argues that plaintiff cannot show any excusable delay for two

reasons. The first reason is that, even granting 71 days of rain delay as

claimed in the Second Amended Complaint, plaintiff would not have met that

extended deadline. Defendant points only to plaintiff’slast proposed schedule,

however, sent after the second cure notice, which proposed a date 144 days

after the original March 28 delivery deadline of SLA No. 3.

The second reason argued by the government is that there is no

evidence that the weather delays claimed actually affected the critical path of

construction. Defendant contends that permitting delays, not the weather,

prevented vertical construction. Defendant also argues, although it does not

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provide proof, that, even assuming that weather was to blame, it was not

“unusually severe” as required by the contract’s excusable delay clause. See

48 C.F.R. § 552.270-18 (2014) (defining “excusable delay” as, among other

things, “unusually severe weather”).

Plaintiff chose not to directly meet defendant’s argumentsregarding the

specifics of delay in its response and cross-motion, relying instead on the

argument that it had no duty to complete construction. Nevertheless, we

Defendant also argues that the evidence demonstrates that plaintiff or its

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subcontractors were late in applying for permits, November 2007, and thus

failed to act with due diligence to obtain the permits and finish construction on

time. Plaintiff contended during the contract period that permitting delays

were the fault of others, although it did not present a permitting delay claim to

the CO. While plaintiff is therefore prohibited from citing that as a basis for

its claim in this case, see Def.’s App. 329-33 (Certified Claim to the

Contracting Officer); Lake Charles, 2014 WL 5180797, at *8 n.10, defendant

has not put on its own evidence with respect to permitting delays attributable

to plaintiff, and we cannot say with certainty that permitting problems would

have prevented timely completion had plaintiff received a weather-related

extension.

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believe there are outstanding fact issues best resolved at trial. We cannot say

that there is no evidence that the weather was unusually severe. Mr. Blackmon

testified in his deposition that the rains were unusual, and plaintiff is entitled

to present that testimony and whatever other evidence it has in that regard at

trial. Further, while defendant may ultimately prove to be correct that, even

given 71 days for weather, plaintiff would not have met its new deadline, it has

not presented evidence to establish the point. The fact that plaintiff proposed

a revised schedule with a deadline extension longer than 71 days is, viewing

it in the light most favorable to plaintiff, only an offer to the government, not

a statement that the project could not have been completed faster.

With regard to plaintiff’s bad faith claim, as we explained in the

October 15, 2014 Lake Charles opinion, that claim is unfounded. Plaintiff’s

argument in that regard is pure conjecture as there is no evidence to suggest

bad faith on the part of the government. We therefore grant defendant’s

motion for summary judgment with respect to the claim of bad faith on the part

of the government.

In sum, we grant defendant’ motion for partial summary judgment in

part and deny it in part. We grant it with regard to the bad faith claim. Further,

we agree with the United States that plaintiff is barred from arguing that

defendant’s conduct prior to the issuance of SLA No. 3 excuses plaintiff’s

performance. We deny, however, defendant’s motion with respect to

plaintiff’s claim of weather delay. We deny plaintiff’s cross-motion for

summary judgment in full.

The parties are directed to confer and propose further pretrial

proceedings in a joint status report to be filed by November 25, 2014.

s/ Eric G. Bruggink

ERIC G. BRUGGINK

Judge

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