Court Opinion

ID: 6337524
Source: CourtListenerOpinion
Date Created: 2022-05-03 21:01:31.361988+00
Date Added: 2024-06-11T09:24:46.213955
License: Public Domain

In the United States Court of Federal Claims
                                          No. 21-1114C
                                      (Filed: May 3, 2022)
                                     FOR PUBLICATION
***************************************
CORNELIO SALAZAR                      *
D/B/A USA RANCH,                      *
                                      *
                  Plaintiff,          *
                                      *
v.                                    *
                                      *
THE UNITED STATES,                    *
                                      *
                  Defendant.          *
                                      *
***************************************
     A. Blair Dunn, Western Agriculture, Resource and Business Advocates, LLP,
Albuquerque, New Mexico, for Plaintiff.
       Rafique O. Anderson, Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington, D.C. for Defendant,
United States. With him on briefs were Brian M. Boynton, Acting Assistant Attorney
General, Patricia M. McCarthy, Director, Eric P. Bruskin, Assistant Director, as well
as Mary E. Zoldak, Attorney, Mountain Region, Office of the General Counsel, United
States Department of Agriculture.
                                   OPINION AND ORDER
      Plaintiff Cornelio Salazar brings claims arising from water-handling contracts
he entered with the United States Forest Service (“USFS”). 1 See generally Compl.
(ECF 1). The government moved to dismiss under Rule 12(b)(6) of the Rules of the
United States Court of Federal Claims (“RCFC”). 2 Because Defendant raised
arguments based on contractual waivers, I converted the motion to dismiss to a

1 In his filings, Plaintiff identifies “USDA Forest Service” as the defendant. That is inconsistent with
this Court’s Rules, which require that the United States be “designated as the party defendant.” See
RCFC 10(a). Nonetheless, the substance of Plaintiff’s suit is directed at the United States, “not its
officers, [or] any other individual.” Gulley v. United States, 150 Fed. Cl. 405, 412 (2020) (citing Kemp
v. United States, 124 Fed. Cl. 387, 392–93 (2015)). The error appears to be merely technical, and has
been corrected in the caption.
2 Def.’s Mot. to Dismiss (ECF 5); Pl.’s MTD Resp. (ECF 6); Def.’s MTD Reply (ECF 7). I heard oral

argument on Nov. 16, 2021. See Tr. of Oral Arg. (“Tr.”) (ECF 21).
motion for summary judgment and ordered new briefing. 3 Defendant’s motion for
summary judgment is now fully briefed and ripe for decision. 4 For the reasons
discussed below, Defendant’s motion is GRANTED. The case is DISMISSED.

                                         BACKGROUND
I. The Clean-Water Contract
       The USFS, acting under authority delegated by the Secretary of Agriculture,
is responsible for the preservation of national forests, including the prevention and
extinguishment of forest fires. See 36 C.F.R. § 200.3(b). To fulfill that purpose, the
USFS contracts with private parties to supply and replenish its water resources.
      Mr. Salazar entered a water-hauling contract with the USFS in 2019 (Contract
No. 12837119T7058). Pl. Exh. 1 at 1 (ECF 1-1). 5 The contract provided that Mr.
Salazar would be eligible, on the government’s request, to transport water for the
USFS in the southwestern United States at a rate of $2,099 per day. See id. at 2, 8,
19.
       Three portions of the contract deserve special attention. First, the contract
authorized compensation for travel to and from a worksite, including rest periods. See
id. at 8, 38–39. One condition for travel compensation was that Plaintiff’s truck pass
an examination upon arrival:
        If the resource does not pass inspection at the incident or designated
        inspection station, it is considered noncompliant. The Contractor may
        be given 24 hours or time frame designated by Government
        representatives to bring the resource into compliance. If the resource
        does not pass inspection, no payment will be made for travel to the
        incident or point of inspection or return to the point of hire, or for the
        time that the resource was not available.
Id. at 45.

3 See Order (ECF 9). Release and waiver are affirmative defenses to claims of breach of contract. See
RCFC 8(c)(1). “Plaintiffs are not required to negate affirmative defenses in their complaints,” City of
Fresno v. United States, 148 Fed. Cl. 19, 33 (2020), so an affirmative defense ordinarily does not justify
dismissal under RCFC 12(b)(6) unless the allegations in the complaint show that the defense applies,
see Silver Buckle Mines, Inc. v. United States, 117 Fed. Cl. 786, 797–98 (2014); Wright & Miller, 5B
Fed. Prac. & Proc. Civ. § 1357 (3d ed.), which was not the case here.
4 Def.’s Mot. for Summ. J. (ECF 13) (“Def.’s Mot.”); Pl.’s Resp. (ECF 18); Def.’s Reply (ECF 19).
5 It is not clear that all of the materials cited by the parties have been authenticated. One of the

declarations submitted by Defendant does not even appear to have been executed. APPX030. The
documents also contain minor ambiguities and possible discrepancies. But neither party has objected
that the other’s materials “cannot be presented in a form that would be admissible in evidence,” see
RCFC 56(c)(2), and most evidentiary issues are immaterial to resolving Defendant’s motion.

                                                  -2-
      Second, the contract was for transportation of clean water, as distinguished
from “gray water.” 6 Plaintiff’s water transportation vehicles were listed as available
for “Water Tender,” see id. at 2, which the contract distinguished from gray water
tender, id. at 28. The contract specified that a given truck could not operate as both
a water tender and a gray water tender:
       Due to health issues associated with gray water and possible exposure
       to humans as well as potential contamination to pump apparatus, trucks
       offered as Gray Water Trucks will not be awarded an agreement as a
       Water Tender. Vendors with both a Water Tender and a Gray Water
       agreement for the same truck will need to change out all plumbing,
       including tank(s), pump, plumbing and hoses/fittings as appropriate for
       the resource order or choose which resource they want to keep under
       agreement. The other resource agreement will be cancelled. Coordinate
       with the Contracting Officer(s) on which agreement you want to keep.
Id.
       Third, the contract contained specific provisions for modifying its terms. It
provided, in essence, that the contract could only be modified by the original
procurement officer or his successor, or by an incident-specific emergency contract:
       Changes to Agreements may only be made by the original signing
       procurement official or a designated successor contracting officer …. If
       the original signing procurement official or designated successor
       contracting officer is not available and adjustments are deemed
       appropriate, an Emergency Equipment Rental Agreement (EERA) shall
       be executed at the incident and shall be applicable ONLY for the
       duration of that incident.
Id. at 20.
II. Plaintiff’s Performance and the Emergency Equipment Rental
    Agreement
       In the summer of 2020, the USFS undertook extinguishment of the “Dolan”
forest fire at the Los Padres National Forest, in Big Sur, California. Def.’s Appendix
(“APPX”) APPX031, APPX034 (ECF 13-1); Salazar Aff. ¶ 2 (ECF 18-1). Plaintiff left
New Mexico to support fire extinguishment efforts on August 24 and remained

6 The parties do not explain what gray water is. The Clean Water Act defines “graywater” as “galley,
bath, and shower water.” 33 U.S.C. § 1322(a)(11). Other sources define gray water as “all waste water
streams [that] come out from buildings except toilet water.” Sonali Manna, Treatment of Gray Water
for Reusing in Non-potable Purpose to Conserve Water in India, 13 Int’l J. of Applied Env’t Scis. 703,
705 (2018).

                                                -3-
through September 22, a period of 30 days. See Pl. Exh. 2 at 1–28 (ECF 1-2); Salazar
Aff. ¶ 2; APPX001–002, APPX011.
      Plaintiff arrived at ground support on August 27, 2020. Pl. Exh. 2 at 3;
APPX034. His truck initially failed inspection, but Mr. Salazar purchased certain
items to bring it into compliance, receiving approval at some time later that day. See
Pl. Exh. 2 at 3; APPX034; Salazar Aff. ¶¶ 3–4. The government concedes that Mr.
Salazar received a grace period for repairs, as the clean-water contract permitted. Tr.
at 21. From August 27 to 29, Plaintiff was in service, but his truck remained
unassigned. Pl. Exh. 2 at 4–5; APPX011.
       Around this time — the documents do not establish exactly when — a “facilities
unit leader” allegedly told Plaintiff that USFS had a pressing need for gray-water
transportation. Salazar Aff. ¶ 6. Mr. Salazar’s truck was demobilized from clean-
water transportation and reassigned to gray water on August 30; he began
transporting gray water the next day. Id. ¶ 7; Pl. Exh. 2 at 6–7, APPX001–002,
APPX034–035. He continued to perform gray-water transportation until September
22. APPX001–002, APPX034–035.
      On September 22, Plaintiff and an authorized government representative
executed an Emergency Equipment Rental Agreement (“EERA”). See APPX004–
APPX008, APPX037. The EERA — a separate contract effective from August 30 to
September 22, with its own contract number (129AB520K5243) — was for a “Gray
Water Truck” at a rate of $1,350 per day. APPX004; Salazar Aff. ¶¶ 10–11.
III.     Plaintiff’s Payment and Complaint
       At the same time Mr. Salazar executed the EERA, he executed two separate
invoices — one under his original clean-water contract, one under the EERA.
       Under the clean-water contract, Plaintiff agreed to be paid $2,099 per day from
August 27 to 29 — i.e., the period when he was unassigned after arrival in California
— minus $1,749 for the 10 hours his truck was not available for service on August
27. APPX011. He was not compensated for his time traveling to California. The
invoice includes a release stating that “contractor hereby releases the government
from any and all claims arising from this agreement except as reserved in
‘remarks[.]’” Id. The “Remarks” section contains the word “FINAL,” and makes no
reference to outstanding disputes over payment. Id.
      Under the EERA, Plaintiff accepted payment of $1,350 per day for August 30
to September 22, i.e., the period when he was occupied with transporting gray water. 7

7   His payment was deducted $1,125 for a truck breakdown on September 10. APPX003.

                                               -4-
APPX001–002. The EERA invoice contains the same release language as the invoice
for the clean-water contract, and likewise identifies no payment disputes. Id.
      In an affidavit supporting his opposition to the motion for summary judgment,
Plaintiff claims he was forced to sign the waivers and that government agents
misrepresented their effect:
       16. I was told in no uncertain terms that if I did not agree to waive my
       objection about my previous contract, I would not be paid anything
       except for the two days before I started hauling gray water.
       17. … I was informed that my waiver was qualified to only apply to
       accepting the EERA contract and did not waive my dispute regarding
       the original agreement or the modification of it to haul gray water.
Salazar Aff. ¶¶ 16–17.
       Plaintiff alleges the government breached the clean-water contract and the
duty of good faith and fair dealing by (1) failing to compensate him for his travel time
to California, and (2) failing to compensate him at the rate of $2,099 per day for gray
-water transportation. 8

                                        DISCUSSION
I. Summary Judgment Standard
       As the party seeking summary judgment, the government must show “that
there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” RCFC 56(a). “[A]ll evidence must be viewed in the light
most favorable to the nonmoving party, and all reasonable factual inferences should
be drawn in favor of the nonmoving party.” Dairyland Power Coop. v. United States,
16 F.3d 1197, 1202 (Fed. Cir. 1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986), and Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59 (1970)).
However, to survive the government’s motion, Mr. Salazar “must do more than simply
show that there is some metaphysical doubt as to the material facts.” Matsushita
Electric Indust. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Summary
judgment will be granted “against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986).

8As noted above, the period at issue runs 30 days from August 24 to September 22, 2020. The records
show that Plaintiff was paid $2,099 from August 27–29, 2020, APPX011–APPX012. That leaves a total
of 27 contested days. Tr. at 40.

                                               -5-
II. Plaintiff’s Claims
       Resolving the case depends on the terms of the relevant contracts, including
the language contained in the two waivers. “Contracts to which the government is a
party are subject to the general rules of contract interpretation,” Wetlands Water
District v. United States, 109 Fed. Cl. 177, 191 (2013), which necessarily “begin[] with
the language of the written agreement.” Id. (quoting Coast Fed. Bank, FSB v. United
States, 323 F.3d 1035, 1038 (Fed. Cir. 2003)). Clear and unambiguous terms will be
given their ordinary meaning. See Barseback Kraft AB v. United States, 121 F.3d
1475, 1479 (Fed. Cir. 1997). To “permit otherwise would cast ‘a long shadow of
uncertainty over all transactions’ and contracts.” McAbee Constr. v. United States, 97
F.3d 1431, 1435 (Fed. Cir. 1996) (quoting Trident Ctr. v. Connecticut Gen. Life Ins.
Co., 847 F.2d 564, 569 (9th Cir. 1988)). Here, the plain terms of Plaintiff’s contracts
foreclose his claims.
   A. Travel to California (August 24–August 26, 2020)
       In its motion for summary judgment, Defendant raises two arguments against
Plaintiff’s claim for his time traveling from New Mexico to California: (1) A provision
in the clean-water contract specified that a vehicle which failed inspection would not
be compensated for travel to the point of inspection, see Def.’s Mot. at 13–14; and (2)
the release contained in the invoice signed by Mr. Salazar covered payment from
August 27 to August 29, 2020, thereby precluding his claims for that period, see Def.’s
Mot. at 17–21. Because the second argument requires dismissal of Plaintiff’s claims
for travel time, I do not reach Defendant’s argument based on the initial inspection.
       The only contract in effect when Mr. Salazar traveled from New Mexico to
California between August 24 and 26 was the clean-water contract. And on
September 22, 2020, Plaintiff signed a general release from “any and all claims
arising under” that contract, with no written reservation of rights. APPX011. This
Court and the Federal Circuit have repeatedly held that “absent special vitiating
circumstances, a general release bars claims based upon events occurring prior to the
date of the release.” Augustine Med., Inc. v. Progressive Dynamics, Inc., 194 F.3d
1367, 1373 (quoting Johnson, Drake & Piper, Inc. v. United States, 209 Ct. Cl. 313,
531 F.2d 1037, 1047 (Ct. Cl. 1976)); see also Imprimis Investors LLC v. United States,
83 Fed. Cl. 46, 63 (Ct. Cl. 2008); Dairyland Power Coop. v. United States, 27 Fed. Cl.
805, 811–12 (1993).
      Circumstances that might vitiate a general release include economic duress,
fraud, mutual mistake, or continued conduct between parties suggestive of their
never having contemplated the claim in question as covered by the release. See IMS
Engineers-Architects, P.C. v. United States, 92 Fed. Cl. 52, 64 (citing Mingus

                                         -6-
Constructors, Inc. v. United States, 812 F.2d 1387, 1395 (Fed. Cir. 1987), and J.G.
Watts Constr. Co. v. United States, 161 Ct. Cl. 801, 807 (1963)). Mr. Salazar appears
to allege that he signed the releases under duress. Specifically, Mr. Salazar claims
that “[he] was told in no uncertain terms that if [he] did not agree to waive [his]
objection about [his] previous contract, [he] would not be paid anything except for the
two days before [he] started hauling gray water.” Salazar Aff. ¶ 16.
       The Federal Circuit applies a three-part conjunctive test for duress, requiring
that a party establish: “(1) that it involuntarily accepted the other party’s terms,
(2) that circumstances permitted no other alternative, and (3) that such
circumstances were the result of the other party’s coercive acts.” N. Star Steel Co. v.
United States, 477 F.3d 1324, 1334 (Fed. Cir. 2007) (citing Rumsfeld v. Freedom NY,
Inc., 329 F.3d 1320, 1329 (Fed. Cir. 2003)); see also Dureiko v. United States, 209 F.3d
1345, 1358 (Fed. Cir. 2000). “Economic pressure and even the possibility of severe
financial loss ... are not duress,” and “a claim of economic duress is not substantiated
by the making of hard bargain.” Sneeden v. United States, 33 Fed. Cl. 303, 310 (1995).
        Regardless of whether Plaintiff signed the waivers “involuntarily” or as a
result of “coercive acts,” Plaintiff’s theory of duress — that he would only be paid for
two days if he did not sign, see Salazar Aff. ¶ 16 — is insufficient to establish that he
had “no other alternative.” N. Star Steel Co., 477 F.3d at 1334. The government, in
effect, gave Mr. Salazar a choice between immediate payment upon signing a waiver
and a potentially larger future payment after litigation. Ordinarily, the possibility of
litigation is precisely the kind of “alternative” that precludes a duress defense to a
contract. See Mobility Sys. & Equip. Co. v. United States, 51 Fed. Cl. 233, 237–38
(2001); Rissman v. Rissman, 213 F.3d 381, 386 (7th Cir. 2000) (“No legal system can
accept an assertion that ‘this contract was signed under duress because my only
alternative was a lawsuit.’ That would eliminate settlement — and to a substantial
degree the institution of contract itself.”); Wright v. Eastman Kodak Co., 445 F. Supp.
2d 314, 319 (W.D.N.Y. 2006). A duress defense might still be available in exceptional
circumstances, such as where the government’s own wrongful acts have placed the
signing party under extraordinary financial pressure at the time of the waiver, see
Mobility Sys., 51 Fed. Cl. at 237 (“It has … become ‘settled law that the mere stress
of business conditions will not constitute duress where the defendant was not
responsible for those circumstances.’”); Oasis Int’l Waters, Inc. v. United States, 134
Fed. Cl. 155, 203 (2017), 9 but Mr. Salazar presents no evidence that he was in such

9Judge Easterbrook in Rissman noted that a duress claim might still proceed where the plaintiff faced
a “remote” but impractical possibility of filing suit. 213 F.3d at 386–87.

                                                -7-
straits. Because there is no genuine dispute as to whether Mr. Salazar could have
refused to sign, his duress defense does not overcome his signed waiver.
       Mr. Salazar also appears to argue that his waiver is void because government
agents misrepresented its effect: “I was informed that my waiver was qualified to only
apply to accepting the EERA contract and did not waive my dispute regarding the
original agreement or the modification of it to haul gray water.” See Salazar Aff. ¶ 17.
This Court and the Federal Circuit have evaluated contractual misrepresentation
claims using a test derived from the Restatement (Second) of Contracts, which permits
courts to void a contract when:
      (1) defendant made a misrepresentation; (2) the misrepresentation was
      either fraudulent or material; (3) the misrepresentation induced
      plaintiff to enter into the contract; and (4) plaintiff was justified in
      relying on the misrepresentation.
Morris v. United States, 33 Fed. Cl. 733, 745 (1995) (citing Restatement (Second) of
Contracts § 164); see also Barron Bancshares, Inc. v. United States, 366 F.3d 1360,
1381 (Fed. Cir. 2004).
       Whatever Mr. Salazar might have been told, he could not have been justified
in relying on it because the terms of the waiver were plain: “[C]ontractor hereby
releases the government from any and all claims arising from this agreement,” with
an exception for written reservations that Mr. Salazar never made. APPX011.
Because the waiver expressly “release[ed] the government from any and all claims
arising from” the clean-water contract, see id., it left no room for any representation
or belief that it “did not waive [his] dispute” regarding travel time, see Salazar Aff.
¶ 17. This Court has repeatedly rejected misrepresentation theories where the
alleged misrepresentation was inconsistent with contractual language, see
Nematollahi v. United States, 38 Fed. Cl. 224, 232 (1997); Detroit Hous. Corp. v.
United States, 55 Fed. Cl. 410, 415–16 (2003), and I must do the same here.
   B. Gray-Water Transportation (August 30–September 22, 2020)
       Mr. Salazar also alleges breach of contract and breach of the duty of good faith
and fair dealing based on the government’s refusal to pay the clean-water contract’s
per diem rate of $2,099 between the dates of August 30 and September 22, 2020, when
Plaintiff was transporting gray water. Plaintiff mainly claims that his clean-water
contract was modified to allow him to transport gray water at the original rate. That
theory fails for several reasons.
      Most importantly, he waived it as described above. Plaintiff was paid for gray
-water transportation pursuant to the EERA, and he signed a release waiving “any

                                         -8-
and all claims arising from” that contract without any written reservations.
APPX001–APPX002. Even if Plaintiff were correct that he transported gray water
under a modification of the clean-water contract, he waived his claims arising from
that contract too. APPX011. Either way, his waivers — which, again, survive
Plaintiff’s theories of duress and misrepresentation — unambiguously cover the field.
        Aside from the two waivers, Plaintiff brings no evidence that his clean-water
contract was in fact modified to cover gray-water transportation at the original rate.
The contract was for clean water only, not gray water, Pl. Exh. 1 at 28, and specified
that modifications could only be made through “the original signing procurement
official or a designated successor contracting officer (as designated officially in [the
government’s procurement system]),” or by an EERA. Id. at 20.
       There is no evidence that any authorized person agreed to modify the clean-
water contract. At most, Mr. Salazar claims that he learned about a need for gray-
water transportation from a “facilities unit leader,” that an unspecified individual
asked him to “haul gray water under the original contract,” and that a “finance officer
did not inform [him] that [he] was no longer under” the clean-water contract. Salazar
Aff. ¶¶ 6–8. Those assertions leave no basis to infer that any of the individuals Mr.
Salazar interacted with was in fact the original contracting officer or a designated
successor. See Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325 (Fed. Cir.
1997) (“Anyone entering into an agreement with the Government takes the risk of
accurately ascertaining the authority of the agents who purport to act for the
Government, and this risk remains with the contractor even when the Government
agents themselves may have been unaware of the limitations on their authority.”).
Even if the contracting officer was aware that Mr. Salazar was transporting gray
water before the EERA was signed, “[s]ilence in and of itself is not sufficient to
establish a [consent] by the [contracting officer].” Harbert/Lummus Agrifuels Projects
v. United States, 142 F.3d 1429, 1434 (Fed. Cir. 1998). If the clean-water contract was
modified at all, it could only have been by the EERA. Pl. Exh. 1 at 20. But the EERA
is what established the lower gray-water rate, so it contradicts Mr. Salazar’s theory
that the clean-water contract was modified to allow gray-water transportation at the
original rate. In the absence of a genuine factual dispute, there is no basis for Mr.
Salazar’s claim that the clean-water contract was ever modified.
       Plaintiff lastly alleges that the government breached its duty of good faith and
fair dealing when it allowed him to transport gray water between August 30 and
September 22, 2020 but failed to pay him at the clean-water contract’s rate. See
Compl. ¶¶ 21–24; Pl.’s Resp. at 5. Plaintiff’s waiver covers those claims as well as his
claims for breach of contract. See, e.g., Doe v. United States, 153 Fed. Cl. 629, 640–41

                                         -9-
(2021); IMS Engineers-Architects, P.C. v. United States, 92 Fed. Cl. 52, 63–66 (2010),
aff’d, 418 F. App’x 920 (Fed. Cir. 2011).
       Even if those claims fell outside the waiver, the government is entitled to
judgment as a matter of law. The government would have breached the duty of good
faith and fair dealing if its acts interfered with Plaintiff’s performance of contractual
duties or “destroy[ed] the reasonable expectations of the other party regarding the
fruits of the contract.” Dobyns v. United States, 915 F.3d 733, 739 (Fed. Cir. 2019)
(quoting Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005)). The
duty of good faith and fair dealing, however, “cannot expand a party’s contractual
duties beyond those in the express contract or create duties inconsistent with the
contract’s provisions.” Precision Pine & Timber, Inc. v. United States, 596 F.3d 817,
831 (Fed. Cir. 2010). Here, the clean-water contract did not authorize payment for
transportation of gray water, and Plaintiff has not raised a factual dispute about
whether the contract was modified. The government was therefore under no
obligation to pay Plaintiff for hauling gray water at all, and so could not have
breached any duty in refusing to pay him at a particular rate.
                                   CONCLUSION
    For the foregoing reasons, Defendant’s Motion for Summary Judgment is
GRANTED. The case is DISMISSED.
      The Clerk is directed to enter judgment accordingly.

      IT IS SO ORDERED.
                                                  s/ Stephen S. Schwartz
                                                  STEPHEN S. SCHWARTZ
                                                  Judge

                                         - 10 -