Opinion ID: 2629057
Heading Depth: 3
Heading Rank: 2

Heading: The IBCA's Complaint Requirements

Text: (5) It is a settled rule that the insurer must look to the facts of the complaint and extrinsic evidence, if available, to determine whether there is a potential for coverage under the policy and a corresponding duty to defend. ( Waller, supra, 11 Cal.4th at p. 25.) In Foster-Gardner, the court pointed out that [i]t is because the insurer's duty to defend depends on the allegations in the complaint that the insurer may or may not owe a duty to defend those allegations. ( Foster-Gardner, supra, 18 Cal.4th at p. 880, original italics, citing Waller, supra, 11 Cal.4th at p. 26.) This link between the complaint and an insurer's duty to provide coverage was crucial to Foster-Gardner 's holding that the pollution remediation order, which did not amount to a complaint, provided insurance companies insufficient notice of the parameters of the action against the insured. ( Foster-Gardner, supra, at p. 880.) The IBCA complaint requirements distinguish the case from Foster-Gardner. As noted, the Contract Disputes Act established the IBCA and authorized it to conduct trials, determine liability, and award money damages. (41 U.S.C. § 607.) The legislative history shows that Congress intended the IBCA to serve as an alternative means to resolve contract disputes in an informal, expeditious, and inexpensive way. (Sen.Rep. No. 95-1118, 2d Sess., pp. 1, 12 (1978), reprinted in 1978 U.S. Code Cong. & Admin. News, p. 5235.) As previously noted, Congress created concurrent jurisdiction in the United States Court of Claims (now called the United States Court of Federal Claims) and the IBCA to review appeals from contracting officers' decisions. ( Coco Brothers, Inc. v. Pierce (3d Cir. 1984) 741 F.2d 675, 678; see 41 U.S.C. §§ 606, 609(a)(1).) In other words, Ameron had a choice of forums for appealing the liability decision of the Bureau's contracting officer, and it chose the IBCA. (6) The IBCA procedure at issue here requires the contractor appealing from an adverse decision by the Bureau's contracting officer to file a complaint, setting forth simple, concise, and direct statements of each claim, alleging the basis with appropriate reference to contract provisions for each claim, and the dollar amount claimed. (43 C.F.R. § 4.107(a) (2009).) The complaint requires no particular form or formality, and it shall fulfill the generally recognized requirements of a complaint. ( Ibid. ) Although the contractor thus initiates the IBCA proceeding, the purpose of the proceeding is to resolve the claim against the contractor, who is therefore in the position of a defendant. The factual issues are then framed for adjudication by the pleadings, which consist both of the contractor's complaint and the government's answer. Together, these pleadings serve the purpose ascribed to the court complaint as described in Foster-Gardner, namely, informing the insurer of the nature of the dispute so that it can determine its defense duties under the insurance policy. In addition, not only does the Code of Federal Regulations call the required pleading before the IBCA a complaint, but the requirements for that complaint serve the same notice purpose as California's civil litigation complaint requirement. (43 C.F.R. § 4.107(a) (2009).) Under the Code of Civil Procedure, a complaint must contain a statement of the facts constituting the cause of action, in ordinary and concise language. (Code. Civ. Proc., § 425.10, subd. (a).) This requirement forces parties to give fair notice of their claims to opposing parties so they can defend. ( Doheny Park Terrace Homeowners Assn., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099 [34 Cal.Rptr.3d 157].) It is clear that the IBCA pleading requirements meet the standards for a complaint under our Code of Civil Procedure. The IBCA pleading must set[] forth simple, concise, and direct statements of each claim, alleging the basis with appropriate reference to contract provisions for each claim.... This level of specificity gives as much, if not more, notice to insurers making coverage decisions regarding claims as does the specificity required by our Code of Civil Procedure. If there were any doubt whether the complaint before the IBCA was meant to serve the same purpose as a complaint in a court of law, the Code of Federal Regulations spells it out for us: This pleading shall fulfill the generally recognized requirements of a complaint.... (43 C.F.R. § 4.107(a) (2009).) It would exalt form over substance to find such a complaint before the IBCA insufficient simply because the IBCA is not a court of law, particularly when the basis of the insurers' position is that they rely on the substantive contents of a complaint in order to make their coverage decisions. Respondents rely on the fact that a contractor can choose to access article III courts (U.S. Const., art. III) directly, by filing an action with the Federal Claims Court rather than with the IBCA. (Sen.Rep. No. 95-1118, supra, p. 3.) Respondents claim that this alternative procedure means that Congress intended to distinguish an action filed with the IBCA from one filed with the Federal Claims Court. They assert that the degree of due process desired is weighed against the time and expense considered appropriate for the case. In other words, respondents claim that the contractor that chooses the IBCA as a forum must give up some of the due process rights that it would have received in a court, such that the IBCA proceedings stop short of being a suit. Not so. Congress allowed for these two avenues of review in order to cut down the present traffic between the boards and the courts ... [to] reduc[e] the points of friction and eliminat[e] delays. (Sen.Rep. No. 95-1118, supra, p. 12.) In addition, Congress expected that agency boards would handle better than 90 percent of contract claims, since they should be the least expensive, most expeditious forum available to the contractor. ( Ibid. ) Due process rights are adequately protected in the IBCA quasi-judicial proceedings. ( Id. at p. 13.) With regard to appeals to the IBCA, Congress states: The contractor should feel that he is able to obtain his `day in court' ... and at the same time [save] time and money through the agency board process. If this is not so, then contractors would elect to go directly to court and bypass the boards since there would be no advantage in choosing the agency board route for appeals. ( Id. at p. 25.) Respondents next assert that language referring to the transfer of suits between boards like the IBCA and the Federal Claims Court is an anomaly. Insurers cite language from previous drafts of the Contract Disputes Act where the word suits in title 41 United States Code section 609(d) referred to transfers between the federal district court and the Federal Claims Court instead of between the Federal Claims Court and agency boards, and argue that the word suits is, essentially, a drafting error. [9] The insurers are correct that section 609(d) is anomalous in referring to the administrative remedy as a suit when the rest of the statutory scheme consistently characterizes it as an appeal. We note, however, that in enacting the Contract Disputes Act, Congress completely redrafted this section, and we are not inclined to, nor are we in a position to, find that a typographical error appears in the legislation.