Court Opinion

ID: 9450399
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:46:07.729153+00
Date Added: 2024-06-11T17:32:18.019922
License: Public Domain

DAVIS, Judge
(concurring in part and dissenting in part).
1. I concur with the court in rejecting the Government’s broad contention that the Disputes clause demands that all factual matters connected with the contract — whatever the nature of the claim — be tried and determined only by the agency board (or representative), with finality attaching to all those administrative factual findings which are adequately supported. That has never *616been the law during the long history of Disputes clauses. On the contrary, the finality of such findings has been recognized only when the board was considering a contractor’s request under some contract provision (like the Changes, Changed Conditions, Termination for Default or for Convenience, or Suspension of Work articles) expressly authorizing the agency to grant an adjustment in price or other specific relief in defined circumstances. These alone are disputed questions “arising under” the contract. Exhaustion of the administrative remedy has not been required and finality has not been accorded where the facts relate to a type of claim, such as for a breach, which the contract does not commit to agency determination. Those disputes are connected with, but do not arise under, the contract. The administrative board can give no relief under the contract, and therefore cannot finally decide the facts.
This was the accepted distinction before the Wunderlich Act of 1954, 68 Stat. 81, 41 U.S.C. §§ 321-322.1 There is certainly no ground for saying that that enactment changed this segment of Government contract law. The same rules have continued to be followed since the passage of that statute, both by the administrative agencies and by this court, explicitly and tacitly.2 As the court’s opinion in the present case points out, the Supreme Court’s opinion in United States v. Carlo Bianchi & Co., 373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963), did not remotely suggest that these long-established rules were wrong or should be changed. That decision dealt solely with a matter conceded to *617be within the scope of the Disputes clause.3
With this history of almost thirty years, it is far too late to try to interpret the Disputes clause anew, as if the question had emerged for the first time. The practice is too firmly rooted to be puffed aside by grammatical refinements and hortatory appeals to the “plain language” canon. The judicial, administrative, and practical construction of the clause is too entrenched for any but the strongest of assaults. We have been presented with no such overwhelming reason for making this drastic change in Government contract law at this time.
2. I disagree, however, with the majority’s holding that well-supported factual findings, appropriately made by the board in deciding a dispute “arising under the contract,” are not binding in a court trial of a cause of action which is outside the Disputes clause (e. g., for breach, reformation, etc.). If the board has relevantly and appropriately decided a certain factual issue in connection with a claim under the Changes or Changed Conditions article, etc., and if that finding is adequately sustained by the administrative record, my view is that then the court should accept the finding in deciding the breach claim (or other claim not “arising under the contract”). There should be no de novo evidence and no de novo finding on that particular factual issue. Of course, court evidence and court findings would be entirely proper as to all factual questions, remaining in the court case, which have not been finally determined by the agency tribunal; only those particular facts which have been actually found, and which survive scrutiny under the Wunderlich Act, would be conclusive. And, of course, a board could not gratuitously exceed its mandate by wandering off and finding facts which are not a true part of, and integral to, its determination under the substantive contract clause being applied.
This position, rather than the court’s, seems to me required by the terms of the Disputes clause, the phrasing of the Wunderlich Act, the principle underlying the Bianchi decision, and the policy of collateral estoppel.4 Once an issue of fact arises in a controversy under the contract and is decided by the agency, the text of the Disputes clause makes that decision, if supported, final and conclusive on the parties — not simply final and conclusive for a special purpose, but final and conclusive without qualification and without limitation. The statute, too, is framed in terms of the conclusiveness, without restriction, of any supportable factual decision by the board “in a dispute involving a question arising under such contract.” 5 The wording of both the Act and the contract clause seem to grant finality to all factual findings properly made by the board in the course of resolving a disputed question under the contract — not merely to the board’s findings on disputed issues of fact which *618themselves necessarily arise under the contract.
The Bianchi opinion articulates the basic rationale for accepting fully the Act and the clause as they are written— avoidance of “a needless duplication of evidentiary hearings and a heavy additional burden in the time and expense required to bring litigation to an end” (373 U.S. at 717, 83 S.Ct. at 1415). This major underpinning of the Bianchi decision likewise supports the finality, in court, of all facts validly found by the board in the course of a determination under the contract. There is no need for a second hearing on an issue already tried and resolved.
This is the same general policy which nourishes the doctrine of collateral es-toppel. The court is reluctant, however, to apply that principle to these administrative findings because of the nature and genesis of the boards. The Wunder-lich Act, as applied in Bianchi, should dispel these doubts. The Supreme Court made it plain that Congress intended the boards (and like administrative representatives) to be the fact-finders within their contract area of competence, just as the Interstate Commerce Commission, the Federal Trade Commission, and the National Labor Relations Board are the fact-finders for other purposes. In the light of Bianchi’s evaluation of the statutory policy, we should not squint to give a crabbed reading to the board’s authority where it has stayed within its sphere, but should accept it as the primary fact-finding tribunal whose factual determinations (in disputes under the contract) must be received, if valid, in the same way as those of other courts or of the independent administrative agencies. Under the more modern view, the findings of the latter, at least when acting in an adjudicatory capacity, are considered final, even in a suit not directly related to the administrative proceeding, unless there is some good reason for a new Judicial inquiryTnto^ffie^Sfé facts. See Davis, Administrative Law 566 (1951); Fairmont Aluminum Co. v. Commissioner, 222 F.2d 622, 627 (C.A. 4, 1955). The only reasons the majority now offers for a judicial re-trial of factual questions already determined by valid board findings are the same policy considerations which Congress and the Supreme Court have already discarded in the Wunderlich Act and the Bianchi opinion.
3. With respect to a de novo trial, my’ disposition of the six separate claims with which we have to deal would be as follows:
a. Pier Drilling Claim: The only aspect of this claim now before us, on the Government’s request for review of the Commissioner’s order, is the ruling that plaintiff can introduce de novo evidence on the issue of whether it was delayed into the winter (and thereby suffered damage) in the pouring of concrete. This alleged delay in pouring concrete was part of an administrative claim that plaintiff was entitled to relief, under Article 4 (Changed Conditions), for the difficulties met after it encountered “float rock.” The Advisory Board could not grant monetary compensation for this delay (United States v. Rice, 317 U.S. 61, 63 S.Ct. 120, 87 L.Ed. 53 (1942)), but under the express words of Article 4 the Board could allow an extension of time for performance. In refusing to give that relief, the Board specifically found that the delay due to the “float rock” did not operate to delay the building construction (i. e., the pouring of concrete). Since this issue was then properly before the Board in the proceeding under Article 4, its finding of fact must be accepted (in my view) if adequately supported. There should be no de novo trial of this issue.
b. Concrete Aggregate Claim: I agree with the court on this part of the case. The Hearing Examiner never reached the merits of any claim and therefore decided nothing (on the merits) which would be binding here. If the present demand can correctly be deemed one for breach of contract, there should be a full trial. But if the demand properly comes under the contract, the Commissioner should decide whether or not the *619'Hearing Examiner’s ruling on the timeliness of the appeal is to be upheld. If so, the claim is at an end. If not, proceedings here should be suspended to allow the Atomic Energy Commission a reasonable opportunity to determine the merits of the claim. Like the court, I intimate no view as to the character of the claim (breach of contract vs. arising under the contract).
c. Shield Window Claim: Plaintiff sought both compensation and an extension of time under Article 4 (Changed Conditions) for this item — just as with the Pier Drilling Claim. Basing its decision on Articles 4 and 9 (Delays— Damages), the Advisory Board, after a full hearing, made findings on the very delay for which plaintiff now seeks compensation. Those findings were rightly part of the Board’s determination whether or not to grant an extension of time — • relief expressly authorized by Articles 4 and 9. As indicated above, these findings, to the extent sanctioned by the administrative record, should be held binding on this court, and de novo evidence (directed at the same factual issues) disallowed. If there are other factual issues not covered by the Board’s supportable findings, de novo evidence should be permitted.
d. Shield Door Claim: I agree with the court that plaintiff is barred by its release from now seeking delay damages on this demand.6 *The claim made administratively was plainly one under the Changes article (Article 3) and therefore within the Board’s competence. I do not concur, however, with the court’s disposition of this claim on the ground that there is no allegation of arbitrary or capricious action. This is a formal defect which can easily be cured by amendment. If plaintiff does so amend, I would let the Commissioner decide whether he can adequately review the Board’s findings in the absence of the oral testimony, e. g., on the basis of the papers and documentary evidence. If such a review would be insufficient, I would suspend proceedings to give the Atomic Energy Commission a chance to correct the record by reconstructing the previous hearing or by holding a new one (see United States v. Carlo Bianchi & Co., supra, 373 U.S. at 717-718, 83 S.Ct. 1409).7 Bianchi, as I read it, precludes any de novo judicial trial where the claim is solely under the contract and there have been administrative findings on the merits.
e. Amercoat Paint Claim: I agree with the court. To the extent not released,8 this claim has been paid.
f. Delay-Damages Claim: The Commissioner held that, aside from the matter of the release,9 the plaintiff’s general claim for delay damages tracked the separate individual claims and should follow their disposition. I agree with this conclusion (as presumably the court does, although the opinion does not mention this phase of the case). The general delay damages claim appears to have no independent status of its own but is a recapitulation of the separate demands.
4. There are two types of Bianchi-related issues which this case does not present in its current posture: (a) The extent to which an administrative deter*620mination of factual questions directly related to the interpretation (rather than the application) of the contract provisions is binding in court;10 and (b) the proper procedure where the contractor, without having pursued administrative remedies under the contract, sues for a breach, while the defendant contends that the claim could and should have been framed as a demand for administrative relief under some specific clause of the contract. Since Bianchi, the court has not decided these questions (and does not do so now), and I continue to reserve my position until the issues must be faced. Cf. WPC Enterprises, Inc. v. United States, Ct.Cl., 323 F.2d 874, 878, decided Oct. 11, 1963.

. See Phoenix Bridge Co. v. United States, 85 Ct.01. 603, 629-630 (1937); Plato v. United States, 86 Ct.Cl. 665, 677-678 (1938); Langevin v. United States, 100 Ct.Cl. 15, 29-31 (1943); Silberblatt & Lasker, Inc. v. United States, 101 Ct.Cl. 54, 80-81 (1944); Beuttas v. United States, 101 Ct.Cl. 748, 767 ff, 771 (1944), rev’d on other grounds, 324 U.S. 768, 65 S.Ct. 1000, 89 L.Ed. 1354 (1945); Holton, Seelye & Co. v. United States, 65 F. Supp. 903, 907, 106 Ct.Cl. 477, 500 (1946); Anthony P. Miller, Inc. v. United States, 77 F.Supp. 209, 212, 111 Ct. Cl. 252, 330 (1948); Hyde Park Clothes, Inc. v. United States, 84 F.Supp. 589, 592, 114 Ct.Cl. 424, 438 (1949); John A. Johnson Contracting Corp. v. United States, 98 F.Supp. 154, 156, 119 Ct.Cl. 707, 745 (1951); Continental Illinois Nat’l Bank & Trust Co. v. United States, 101 F.Supp. 75, 759, 121 Ct.Cl. 203, 246, cert, denied, 343 U.S. 963, 72 S.Ct. 1057, 96 L.Ed. 1361 (1952); Potashnick v. United States, 105 F.Supp. 837, 839, 123 Ct.Cl. 197, 218-220 (1952); Continental Illinois Nat’l Bank & Trust Co. v. United States, 115 F.Supp. 892, 897, 126 Ct.Cl. 631, 640-641 (1953).

. I give only a relatively few samples. See, e.g., F. H. McGraw & Co. v. United States, 130 F.Supp. 394, 397, 131 Ct.Cl. 501, 506 (1955); John A. Johnson Contracting Corp. v. United States, 132 F. Supp. 698, 701, 132 Ct.Cl. 645, 652 (1955) ; Railroad Waterproofing Corp. v. United States, 137 F.Supp. 713, 715-716, 133 Ct.Cl. 911, 915-916 (1956) ; Peter Kiewit Sons’ Co. v. United States, 151 F. Supp. 726, 138 Ct.Cl. 668 (1957); Volentine & Littleton v. United States, 169 F.Supp. 263, 265, 144 Ct.Cl. 723, 726 (1959); Abbett Electric Corp. v. United States, 162 F.Supp. 772, 774, 142 Ct.Cl. 609, 613 (1958); A. S. Schulman Electric Co. v. United States, 145 Ct.Cl. 399 (1959); Snyder-Lynch Motors, Inc. v. United States, 292 F.2d 907, 154 Ct.Cl. 476, 519 (1961); Helene Curtis Industries, Inc. v. United States, Ct.Cl., 312 F.2d 774, decided Feb. 6, 1963; W. H. Edwards Eng’r Corp. v. United States, Ct. Cl., No. 218-59, decided April 5, 1963, slip op., p. 5; Flippin Materials Co. v. United States, Ct.Cl., 312 F.2d 408, decided Jan. 11, 1963; Ekco Products Co. v. United States, Ct.Cl., 312 F.2d 768, decided Jan. 11, 1963; Ideker Constr. Co., IBCA No. 124 (1957), 57-2 B.C.A. par. 1441, pp. 4845-46; Norair Eng’r Corp., ASBCA No. 3527 (1957), 57-1 B.C.A. par. 1283; Craig Instrument Corp., ASBCA No. 6385 (1960), 61-1 B.C.A. par. 2875; Kenneth. Holt, IBCA No. 279 (1961), 61-1 B.C.A. par. 3060; Model Eng’r & Mfg. Corp., ASBCA No. 7490 (1962), 1962 B.C.A. par. 3363, p. 17,308; Allied Contractors, Inc., IBCA No. 265 (1962), 1962 B.C.A. par. 3501, pp. 17,864^65. The Advisory Board on Contract Appeals of the Atomic Energy Commission took the same position (see the court’s opinion, ante). See, also, Spector, Is it “Bianchi’s Ghost”' — or “Much Ado About Nothing”, 16 Admin. Law Rev. 265, 290-91 (1964).

. In the ease at bar, the defendant does not rely on Bianchi to support its broad position. The Government’s Supplementary Memorandum (p. 10) says, after quoting a sentence from the Bianchi opinion, 373 U.S. at 714, 83 S.Ct. 1409, “Thus, Bianchi does not decide the scope of the standard disputes agreement in Government contracts, beyond the recognition that no argument was addressed to this question.”

. I know of no decision of this court which has addressed itself to this exact problem.

. 41 U.S.O. § 321 provides: “No provision of any contract entered into by the United States, relating to the finality or conclusiveness of any decision of the head of any department or agency or bis duly authorized representative or board in a dispute involving a question arising under such contract, shall be pleaded in any suit now filed or to be filed as limiting judicial review of any such decision to cases where fraud by such official or his said representative or board is alleged: Provided, however, That any such decision shall be final and conclusive unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence.”
41 U.S.O. § 322 provides: “No Government contract shall contain a provision making final on a question of law the decision of any administrative official, representative, or board.”

. Technically, the question of the release is not now before us on defendant’s request for review since the Commissioner decided that point in favor of defendant. Plaintiff did not seek review. In the interests of speedy and orderly disposition of the litigation, however, it seems better to dispose of the issue now, rather than when the case comes before us on the merits or on a motion for partial summary judgment. By failing to appeal from the Commissioner’s ruling, plaintiff can be deemed to have accepted at least that part of his decision. There is no suggestion in the briefs that plaintiff is preserving its position on that phase of the case.

. This is one aspect of the so-called “fact vs. law” question under the Wunderlich Act.

. If plaintiff refuses to participate in such renewed administrative proceedings, it should be held to have abandoned the claim. If the Atomic Energy Commission refuses, “the sanction of judgment for the contractor” is available (373 U.S. at 718, 83 S.Ct. at 1415).

. See footnote 6, supra.

. The defense of release is raised by the defendant’s motion for partial summary judgment which appears to cover more than the six claims now before us.