Opinion ID: 2780805
Heading Depth: 2
Heading Rank: 3

Heading: Violation of the Haul Route and

Text: Notification Clauses The haul route and notification clauses require that EM Logging transport logs over a designated haul route and notify the Forest Service when deliveries will take more than 12 hours to reach a weighing location. J.A. 668. The Board found that EM Logging deviated from the written haul plan and violated the 12 hour requirement when EM Logging overnighted trucks off the haul route. J.A. 26–27. EM Logging argues that it did not violate the haul route and notification clauses because it travelled over roads highlighted on the map it provided to the Forest Service before starting work and always informed the Forest Service as soon as practicable when a load would be delayed. It argues that even the alleged violations of the haul route and notification clauses do not demonstrate flagrant disregard. It argues that even if it breached the haul route clause when one of its drivers took a detour on December 20, 2010, it was a minor violation because the detour was necessitated by illness. There, the driver fell ill while driving the truck to a weighing station and turned around so that he could see a doctor. He was later diagnosed with bronchial pneumonia. It argues such a violation does not demonstrate flagrant disregard. EM Logging further argues that, even if its notifications were untimely, they do not demonstrate flagrant disregard because they were sent as soon as practicable given the paucity of cell phone service in rural Montana. The government argues that the Board’s decision is supported by substantial evidence. It argues that the written haul plan submitted by EM Logging, rather than EM LOGGING v. DEPARTMENT OF AGRICULTURE 11 the map it initially submitted, defined the approved haul route. Thus, it argues that EM Logging breached the haul route clause on December 20, 2010, when one of its drivers deviated from the written haul plan even though the driver’s route was on the haul map. It argues that EM Logging violated the notification clause because delay notifications were untimely and points to a single notification sent 13 days after a late delivery as unreasonable. The government argues that these breaches demon- strate flagrant disregard because after EM Logging sought and was denied deviations EM Logging breached the contract. It notes that EM Logging requested the ability to haul on any road highlighted on the map it first submitted to the Forest Service, but was required to submit a written haul plan to designate routes. It argues that EM Logging’s actions thus demonstrate flagrant disregard of the haul route clause because EM Logging did not adhere to the written haul plan on December 20, 2010. It notes that EM Logging requested the ability to increase the hauling period from 12 to 24 hours, which was denied. It argues that EM Logging’s actions demonstrate flagrant disregard of the notification clause because when EM Logging was unable to comply with the 12 hour requirement, it did not timely notify the government of delay. We agree with EM Logging that its actions do not provide substantial evidence for a conclusion that EM Logging was in flagrant disregard of the contract. The government’s only alleged route deviation was a single, isolated event necessitated by illness. This single instance does not rise to the level of flagrant disregard. The alleged notification violations similarly do not demonstrate flagrant disregard. The parties agree that EM Logging did not need to notify the Forest Service before the 12-hour period expired, but should have done so within a reasonable period after EM Logging became aware of a delay. The record contains evidence of a single 12 EM LOGGING v. DEPARTMENT OF AGRICULTURE instance in which EM Logging notified the government 13 days after a delayed load was delivered. The record contains evidence of a second instance where EM Logging notified the government four days after a delayed load was delivered. Both deliveries arrived within 48 hours. EM Logging sent both of the delay notifications in November before the Forest Service issued a Notification of Breach for the notification clause. Thus, the record contains two delayed notifications, both sent before the government raised its concerns with EM Logging, and no delayed notifications after the government raised a concern. Two instances of delayed notifications, before the government even noted that such a delay in notification was unreasonable, is not substantial evidence to support a conclusion that EM Logging was in flagrant disregard. The government is not arguing that EM Logging breached the contract by not delivering within 12 hours—the issue is not when did the trucks arrive—the issue is only when did EM Logging notify the government that the delivery of the load took more than 12 hours. These two minor, technical violations of the notification clause do not substantiate termination for flagrant disregard.