NOTE: This disposition is nonprecedential.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 Litigation Branch, Civil Division, 

United States Department of Justice, 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. Menegat 
NOTE: This disposition is nonprecedential.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. 

Appeal from the United States 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 (“Nova”) appeals a decision by the United States Postal 

Service Board of Contract Appeals (“the Board”), upholding the default termination of 

Nova’s contract with the United States Postal Service (“Postal Service”). Nova Express, 

P.S.B.C.A. Nos. 5101, 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 Service 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 insurance with a minimum Combined Single Limit 

(CSL) of $750,000 for any truck used in performance of the contract. The contract 

further required that Nova furnish the contracting officer with proof that it had the 

requisite insurance, including copies of the applicable policy 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 provision of the contract, including “if the 

supplier fails to establish and maintain continuously in effect insurance as required by 

this contract, or fails to provide proof of insurance . . . as required by the contracting 

officer.” Under the contract, the Postal Service’s right to terminate the contract for such 

default could be exercised only if the Postal Service 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 required amount of $750,000 

CSL for the term from September 3, 2002 through September 3, 2003. It financed the 

insurance through Pronote, Inc. (“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 2
make the required payments. The Board found that Pronote asked Fireman’s Fund to 

cancel the insurance and Fireman’s Fund did so, effective April 7, 2003. Nova did not 

notify the Postal Service that the insurance contract 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 regarding 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 Service 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 insurance had expired, and that as a result of this as well 

as unsatisfactory service, Nova was temporarily 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 continuous coverage by September 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 3
3, 2003, and copies of various truck rental agreements in which some insurance or 

damage waivers had been purchased for the rented vehicle. 

On September 30, 2003, the contracting 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 the allegedly improper termination. And on 

January 31, 2005, the contracting officer issued a final decision claiming $2,706.20 in 

excess reprocurement costs resulting from the termination. 

Nova appealed all three determinations to the Board. The Board affirmed, 

concluding that Nova had knowingly 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 shown that it had liability insurance in the amount required 

by the contract at any time after that date. The Board also rejected 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 allow for termination for default upon three 

days notice for failure to continuously maintain the required insurance. Whether or not 

Nova continuously maintained the required insurance and whether the Postal Service 

provided Nova with the requisite three days notice are questions of fact. See

McDonnell Douglas Corp. v. United States, 323 F.3d 1006, 1014 (Fed. Cir. 2003) (“In 

2008-1033 4
determining whether a default termination was justified, a court must review the 

evidence and circumstances surrounding the termination, and that assessment involves 

a consideration of factual and evidentiary issues.”). 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 imply bad faith, or if such decision is not 

supported by substantial evidence.” 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 testimony and exhibits before it.1

 Substantial evidence 

supports the Board’s determination that Nova’s Fireman’s Fund insurance policy had 

been canceled effective April 7, 2003, and that none of the truck rental agreements 

provided the required level of insurance. As the Board found, the cancellation of the 

Fireman’s Fund policy was documented in a letter from Pronote, and the truck rental 

agreements Nova provided either showed that no liability insurance was purchased or 

that the liability insurance provided was much less than the required $750,000. 

Substantial evidence also supports the Board’s determination that the Postal 

Service provided Nova with adequate notice of its failure to meet the terms of the 

 1

 Nova argues that the Board failed to discuss various pieces of evidence in 

its opinion. Nova has not established the relevance of any of the evidence it believes 

was wrongfully neglected, however, and we conclude that there was nothing arbitrary 

and capricious in the Board’s consideration of the evidence. We also find no abuse of 

discretion in the Board’s acceptance into evidence of Postal Service Exhibits which 

Nova argues were first provided 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 overturned 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 government’s representation that the Exhibits in 

question had been repeatedly sent to Nova prior to trial. 

2008-1033 5
contract and gave Nova three days to cure this breach prior to terminating the contract. 

Nova’s reliance on the September 19, 2003 letter 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 contract pending investigation. As the Board 

found, it was the September 23, 2003 letter which provided Nova 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 three day period had expired. 

There is also no reversible error in the Board’s determination 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 overcome the presumption that the government 

acted in good faith). The Board found that Nova’s allegations of bad faith were not 

supported in the record, and it concluded that witnesses for the Postal Service denying 

the allegations were credible. Nova has provided no convincing basis for overturning 

these findings. See Charles G. Williams Constr., Inc. v. White, 326 F.3d 1376, 1381 

(Fed. Cir. 2003) (“Board credibility determinations . . . are ‘virtually unassailable.’”). 

 Accordingly, we affirm the Board’s finding that the Postal Service’s termination of 

the contract was justified. 

We also affirm the Board’s determination that the Postal Service was entitled to 

recover its reprocurement costs. Nova argues here, as it did before the Board, that the 

government should have produced the “bid sheets” reflecting the various emergency 

service offers. The Board found that despite the absence of the bid sheets the 

2008-1033 6
2008-1033 7

testimony of the Postal Service’s contract specialist was “credible and sufficient to 

establish that the Postal Service acted properly and made reasonable efforts to 

minimize the reprocurement costs.” We find no basis to disturb the Board’s finding. 

The judgment of the Board is affirmed. 

Costs to Appellee.