Opinion ID: 2263053
Heading Depth: 2
Heading Rank: 1

Heading: The Bilateral Modification

Text: Eagle argues that the CAB and the trial court erred when they concluded, as a matter of law, that the bilateral modification of the contract precluded Eagle from recovering start-up costs because, under that modification, Eagle was solely responsible for the facility. On this point we agree with Eagle. The bilateral modification states: The contractor is responsible for obtaining all permits necessary to establish the recycling processing and buy back facilities in the District. By executing this contract the District does not waive any requirements of law or the right to review permit application in accordance with applicable criteria. The processing and buy-back facilities are private facilities which are the sole responsibility of the contractor. [Emphasis added.] The CAB ruled that the italicized sentence meant that Eagle had no legitimate expectation of recovering costs of the District-based facility. The trial court agreed, stating: The plain meaning of the modification clearly establishes the District Facility as the sole responsibility of Eagle. This includes, inter alia, start-up and construction costs associated with the . . . Facility. We do not read this language so broadly. Although we would normally defer to the expertise of the CAB, see Dano Resource Recovery, 620 A.2d at 1352, in this instance we think the CAB's conclusion that Eagle essentially waived its statutory right to recover costs it reasonably incurred is an incorrect reading of the bilateral modification. Surely, a waiver of such magnitude must be clear and unambiguous. Had the parties actually intended to place sole financial responsibility on Eagle for construction of the District facility, the bilateral modification could have  and should have  declared that intention in plain, unambiguous language. See, e.g., Keller v. Keller, 171 A.2d 511, 514 (D.C. 1961) (If the parties intended a waiver. . . in all circumstances, it was an easy matter for them to state such intention). It did not do so, however, and for this reason we hold that the CAB's interpretation of the bilateral modification stretches its meaning too far. The sole responsibility language of the bilateral modification is too vague and imprecise to be construed as a deliberate waiver of Eagle's statutory right to recover its costs actually incurred. Thus, standing alone, the bilateral modification does not preclude Eagle from recovering its start-up costs. Eagle's argument that the start-up costs were incurred pursuant to the contract is, however, without merit. All construction costs associated with the District-based facility were incurred after the contract was declared void. This case is therefore distinguishable from New York Mail & Newspaper Transportation Co. v. United States, 139 Ct.Cl. 751, 154 F.Supp. 271, cert. denied, 355 U.S. 904, 78 S.Ct. 332, 2 L.Ed.2d 260 (1957), upon which Eagle primarily relies. In that case a contract was declared invalid three years after performance began. The court held that [w]hen an individual or the Government rescinds a contract, the parties are to be placed, as far as possible, in the position they would have occupied without the transaction. Id. at 759, 154 F.Supp. 271, 154 F.Supp. at 276 (footnote omitted). The contractor was therefore awarded costs that it had incurred during its performance of the contract. The difference between New York Mail and this case is that, in New York Mail, the contractor began performance before the contract was terminated. Consequently, since the [cost incurred by the plaintiff] was due solely to the requirements of the contract, the Government should reimburse that expense in accordance with the terms of the contract. . . . Id. at 759-760, 154 F.Supp. at 276. In the instant case, however, Eagle did not even acquire the site for the facility until January of 1995, nine months after the CAB declared the contract void (see note 5, supra ). Thus it was not due solely to the requirements of the contract that Eagle incurred its start-up costs. On the contrary, the contract was no longer valid when Eagle began its construction of the facility, and New York Mail does not support its argument. This is not to say that Eagle is necessarily foreclosed from recovering any of its start-up costs. As we have said, the bilateral modification cannot be read as a waiver of Eagle's statutory right to recover costs reasonably incurred. Indeed, it may well be that some of the costs Eagle incurred in building the facility were reasonable, since it might not have purchased the site and begun construction had DPW initially followed the CAB's instructions and informed Eagle that the contract had been declared void ab initio. We leave it to the CAB on remand to determine what specific start-up costs, if any, were reasonably incurred.