NOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2008-1033 NOVA EXPRESS Appellant,

v. John E. Potter, POSTMASTER GENERAL, Appellee.

Philip Emiabata , as Nova Express, of Austin, Texas, pro se. Joseph A. Pixley , Trial Attorney, Commercial Liti gation Branch, Civil Division, United States Department of Ju stice, of Washington, DC, for respondent. With him on the brief were Jeffrey S. Bucholtz , Acting Assistant Attorney General, Jeanne E. Davidson , Director, and Steven J. Gillingham , Assistant Director. Appealed from: United States Postal Service Board of Contract Appeals Administrative Judge Norman O. MenegatNOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2008-1033

NOVA EXPRESS Appellant,

v. John E. Potter, POSTMASTER GENERAL, Appellee.

Appeal from the United St ates Postal Service Board of Contract Appeals in nos. 5101, 5205 and 5268, Administrative Judge Norman O. Menegat

___________________________ DECIDED: May 8, 2008

___________________________

Before LOURIE, BRYSON, and GAJARSA, Circuit Judges

. PER CURIAM. Appellant Nova Express (“N ova”) appeals a decision by t he United States Postal Service Board of Contract Appeals (“the Board”), upholding th e default termination of Nova’s contract with the United States Postal Serv ice (“Postal Service”). Nova Express , P.S.B.C.A. Nos. 510 1, 5205 and 5268 (P.S.B.C.A. Jun. 11, 2007). For the reasons stated, we affirm the Board's decision.BACKGROUND On October 30, 2001, the Postal Servic e awarded Nova contract No. HCR 78640 for transportation of mail between two Postal Service facilities (“the contract”). The contract expressly provided that Nova must “establish and maintain continuously in effect” a policy or policies for liability in surance with a minimum Combined Single Limit (CSL) of $750,000 for any tru ck used in performance of t he contract. The contract further required that Nova furnish the cont racting officer with proof that it had the requisite insurance, in cluding copies of the applicable pol icy or policies. The contract’s termination clause provided that the Postal Service could terminate the contract for default upon Nova’s failure to perform any pr ovision of the contract, including “if the supplier fails to establish and maintain conti nuously in effect insurance as required by this contract, or fails to provide proof of insurance . . . as required by the contracting officer.” Under the contract, t he Postal Service’s right to terminate the contract for such default could be exercised only if the Postal Se rvice notified Nova of the specific failure and provided three days to cure the defect. Nova obtained insurance for the truck used in performing the contract from Fireman’s Fund County Mutual (“Fireman’s Fund”) in the requir ed amount of $750,000 CSL for the term from September 3, 2002 th rough September 3, 2003. It financed the insurance through Pronote, In c. (“Pronote”), an insurance financing company, under an arrangement in which Nova made a $3,404 downpayment to Fireman’s Fund, and Pronote paid the balance of the over $11,000 annual premium. Under the financing agreement, Nova paid monthly installments to Pronote over the term of the policy, and Pronote was authorized to direct Fireman’s Fund to cancel the policy if Nova failed to

2008-1033 2make the required payment s. The Board found that Pronote asked Fireman’s Fund to cancel the insurance and Firem an’s Fund did so, effective Ap ril 7, 2003. Nova did not notify the Postal Servic e that the insurance c ontract had been canceled. The contracting officer’s staff noticed in September 2003 that Nova’s insurance policy had expired according to its original term. The Postal Service attempted to contact Nova on multiple occasions regar ding updating its insurance information, but Nova failed to respond. The Postal Service then contacted Fireman’s Fund directly. The Fireman’s Fund insurance agent advised the Postal Servic e that Nova’s policy had been canceled in April 2003. By letter dated September 19, 2003, the contracting officer notified Nova that its review indicated that Nova’s in surance had expired, and that as a result of this as well as unsatisfactory service, Nova was te mporarily suspended from performing the contract, pending investigation of the allegations. As part of the investigation, the letter asked Nova to provide the Postal Service copies of insurance policies, documenting proof of insurance without any lapse of coverage after September 2002 to the present. By letter dated September 23, 2003, the contracting officer again notified Nova that under the contract Nova was required to establish and continuously maintain insurance coverage on all vehicles used in performing the contract. The letter advised Nova that it must furnish proof of cont inuous coverage by S eptember 26, 2003 or its rights to perform under the contract would be terminated for default. In response to the letters, Nova submitted to the contracting officer copies of its Fireman’s Fund policy purporting to cover the period September 3, 2002 to September

2008-1033 33, 2003, and copies of various truck rental agreements in which some insurance or damage waivers had been purchased fo r the rented vehicle. On September 30, 2003, the contract ing officer issued a final decision terminating Nova’s contract for default and withholding payment for the pay period leading up to the termination. On September 3, 2004, the contracting officer denied Nova’s claims for damages relating to t he allegedly improper termination. And on January 31, 2005, the contracting officer iss ued a final decision claiming $2,706.20 in excess reprocurement costs resu lting from the termination. Nova appealed all three dete rminations to the Board. The Board affirmed, concluding that Nova had kno wingly breached its contract obligations. The Board found that Nova’s liability insurance policy with Fireman’s Fund was cancelled effective April 7, 2003 and that Nova had not show n that it had liability insur ance in the amount required by the contract at any time after that date. The Board also reject ed Nova’s contention that the Postal Service acted in bad faith and found that the evidence provided by the Postal Service was sufficient to establish Nova’s liability for $2,706.20 in reprocurement
costs. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(10). DISCUSSION The express terms of the contract allo w for termination for default upon three days notice for failure to continuously maintain the required insuranc e. Whether or not Nova continuously maintained the required insurance and wh ether the Postal Service provided Nova with the requisite thr ee days notice are questions of fact. See McDonnell Douglas Corp . v. United States , 323 F.3d 1006, 1014 (Fed. Cir. 2003) (“In

2008-1033 4determining whether a default termination wa s justified, a court must review the evidence and circumstances surrounding the te rmination, and that assessment involves a consideration of factual and evidentiary i ssues.”). This Court cannot set aside the Board’s factual determinations unless they are “fraudulent, or arbitrary, or capricious, or so grossly erroneous as to necessarily impl y bad faith, or if such decision is not supported by substantial evid ence.” 41 U.S.C. § 609(b); see also West Coast Gen. Corp. v. Dalton , 39 F.3d 312, 314 (Fed. Cir. 1994). We find no basis for overturning the Board’s findings. In a thorough opinion, the Board carefully reviewed the test imony and exhibits before it. 1 Substantial evidence supports the Board’s determinat ion that Nova’s Fireman’s Fund insurance policy had been canceled effective April 7, 2003, and t hat none of the truck rental agreements provided the required level of insurance. As the Board found, th e cancellation of the Fireman’s Fund policy was doc umented in a letter from Pr onote, and the truck rental agreements Nova provided either showed that no liability insurance was purchased or that the liability insurance provided wa s much less than the required $750,000. Substantial evidence also supports the Board’s determi nation that the Postal Service provided Nova with ad equate notice of its failure to meet the terms of the

1 Nova argues that the Board failed to discuss vari ous pieces of evidence in its opinion. Nova has not established the rele vance of any of the evidence it believes was wrongfully neglected, how ever, and we conclude that there was nothing arbitrary and capricious in the B oard’s consideration of the evidence. We also find no abuse of discretion in the Board’s acceptance into ev idence of Postal Service Exhibits which Nova argues were first pr ovided to it at trial. See Johnson Mgmt. Group CFC, Inc. v. Martinez , 308 F.3d 1245, 1252 (Fed. Cir. 2002) (“[A] discovery or evidentiary ruling of the Board will not be ov erturned unless ‘an abuse of discretion is clear and is harmful.’”) (quoting Curtin v. Office of Pers. Mgmt. , 846 F.2d 1373, 1378 (Fed. Cir. 1988))). The Board was entitled to find credible the governm ent’s representation t hat the Exhibits in question had been repeatedly sent to Nova prior to trial.

2008-1033 5contract and gave Nova three days to cure this breach prior to term inating the contract. Nova’s reliance on the September 19, 2003 le tter to show that no notice had been given is misplaced. The September 19, 2003 letter did not terminate the contract but merely suspended Nova’s performance of the cont ract pending investigation. As the Board found, it was the September 23, 2003 letter which provided No va with notification that the contract would terminate if Nova did not furnish proof of continuous insurance, and this letter gave Nova three days to furnish such proof. The contract was only terminated on September 30, after this th ree day period had expired. There is also no reversible error in t he Board’s determinatio n that the Postal Service did not act with bad faith in terminating the contract. See Am-Pro Protective Agency, Inc. v. United States , 281 F.3d 1234, 1241 (Fed. Cir. 2002) (holding that clear and convincing evidence is required to overco me the presumption t hat the government acted in good faith). The B oard found that Nova’s allega tions of bad faith were not supported in the record, and it concluded that witnesses fo r the Postal Service denying the allegations were credible. Nova has provided no convin cing basis for overturning these findings. See Charles G. Williams Constr., Inc. v. White , 326 F.3d 1376, 1381 (Fed. Cir. 2003) (“Board credibili ty determinations . . . are ‘v irtually unassailable.’”). Accordingly, we affirm the Board’s findin g that the Postal Service’s termination of the contract was justified. We also affirm the Board’s determination th at the Postal Service was entitled to recover its reprocurement costs. Nova argues here, as it di d before the Board, that the government should have produced the “bid s heets” reflecting the various emergency service offers. The Board found that de spite the absence of the bid sheets the

2008-1033 62008-1033 7 testimony of the Postal Service’s contract specialist was “credible and sufficient to establish that the Postal Service act ed properly and made r easonable efforts to minimize the reprocurement costs.” We fi nd no basis to disturb the Board’s finding. The judgment of the B oard is affirmed. Costs to Appellee.