Court Opinion

ID: 4255946
Source: CourtListenerOpinion
Date Created: 2018-03-19 16:00:07.802909+00
Date Added: 2024-06-11T14:17:24.345609
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                 )
                                             )
Assessment and Training Solutions            )      ASBCA No. 61047
 Consulting Corporation                      )
                                             )
Under Contract No. H92240-14-P-0155          )

APPEARANCE FOR THE APPELLANT:                       James S. Delsordo, Esq.
                                                     Argus Legal, PLLC
                                                     Manassas, VA

APPEARANCES FOR THE GOVERNMENT:                     Jeffrey P. Hildebrant, Esq.
                                                     Air Force Deputy Chief Trial Attorney
                                                    Phillip E. Reiman, Esq.
                                                    Lt Col Nathaniel H. Sears, USAF
                                                    Lori R. Shapiro, Esq.
                                                     Trial Attorneys

           OPINION BY ADMINISTRATIVE JUDGE CLARKE ON THE
             GOVERNMENT'S MOTION FOR RECONSIDERATION

       The Air Force (AF)/Navy 1 timely moves the Board to reconsider2 its 3 October
2017 decision sustaining in part Assessment and Training Solutions Consulting
Corporation's (ATSCC's) appeal and awarding ATSCC $50,637.08. Assessment and
Training Solutions Consulting Corp., ASBCA No. 61047, 17-1 BCA, 36,867. The
decision was issued pursuant to Board Rule 12.3. We deny the motion.

                                    DISCUSSION

Standard for Reconsideration

       The Navy must demonstrate a compelling reason for the Board to modify its
decision. J.F. Taylor, Inc., ASBCA Nos. 56105, 56322, 12-2 BCA, 35,125. The
standard we apply for reconsideration is "[t]o prevail on reconsideration, the moving
party must generally establish that the underlying decision contained mistakes in our
findings of facts or errors of law or that newly discovered evidence warrants vacating
our decision." DODS, Inc., ASBCA No. 57667, 13 BCA, 35,203 at 172,711.

1
  This was a Special Operations Command (SOCOM) contract for the Navy to conduct
       training on commercial vessels, however, AF trial attorneys represent SOCOM.
2
  The motion is styled a "Motion for Partial Reconsideration."
Motions for reconsideration are not intended to provide a party with an opportunity
to reargue issues previously raised and denied. CP, Inc., ASBCA No. 56257,
15-1 BCA ,r 35,829 at 175,194.

Contention of the Parties

       The Navy's central argument is that the Board erroneously applied the common
law of baihnent presumption of negligence under the facts of this case. 3 The Navy
contends that the written contract should be enforced over the common law and that
the Navy did not have exclusive possession of the charter boats based on periodic
maintenance requirements of the bailor, ATSCC.

        ATSCC argues that the Navy presents no new arguments and that the common
law presumption was fully covered in the original decision. Therefore, the Navy is not
entitled to reconsideration.

Common Law ofBailment Presumption

        The decision relies upon a common law of baihnent presumption we discussed
as follows:

                The law of bailment imposes upon the bailee the duty to
                protect the property by exercising ordinary care and to
                return the property in substantially the same condition,
                ordinary wear and tear excepted.... When the government
                receives the property in good condition and returns it in a
                damaged condition, a presumption arises "that the cause of
                the damage to the property was the Government's failure
                to exercise ordinary care or its negligence." Mohammad
                Darwish, 00-2 BCA ,r 31,114 at 153,672; International
                Automotriz, ASBCA No. 59665, 15-1 BCA ,r 36,174 at
                176,513.

ATSCC, 17-1 BCA ,r 36,867 at 179,632.

The Alleged Errors of Law

       The Navy contends the presumption does not apply and thus the Board's
reliance upon it is an error of law:

3
    The Navy does not discuss Judge Prouty's concurring decision stating that the record
         supports a finding of negligence without reliance on the presumption.

                                            2
                      Application of this common law presumption
              constitutes a two-fold error of law. First, the express terms
              of the subject Contract require that negligence be proven,
              while the common law bailment rule affords that
              negligence may be presumed. Second, the Government
              did not exercise exclusive control over the bailed vessels
              and exclusive control is a prerequisite for the presumption
              to arise.

(Gov't mot. at 8)

       The Navy misconstrues the relationship between the contract language and the
presumption. The presumption serves to satisfy the bailor's obligation to prove
negligence and shifts the burden to the bailee (Navy) to overcome the presumption.

       The Navy emphasizes that the presumption does not arise in all cases. We
agree. In Mohammad Darwish Ghabban Est., ASBCA No. 51994, 00-2 BCA ,r 31,114
the Board stated, "The Government's retwn to the contractor of bailed property in a
state unfit for service may give rise to a claim for damages." Id. at 153,672 (emphasis
added). The word "may" means just what the Navy argues. For example, if the bailor
has sufficient access to the bailed item(s), access that could cause or contribute to the
damage, the presumption would not arise. See the discussion below, particularly the
facts of United States v. Mowbray's Floating Equipment Exchange, Inc., 601 F.2d 645,
647 (2d Cir. 1979).

Terms of the Contract

       ATSCC's contract included a clause that requires ATSCC to bear the cost of
repairs "unless it can be proven that such repairs were due to negligence or willful
damages caused by the government." ATSCC, 17-1 BCA ,r 36,867 at 179,628.

        The Navy argues, "Where there is a written bailment contract, the assignment
of liability for loss or damage is determined by the provisions of the contract, rather
than by common law" (gov't mot. at 6). This is only the case when the written
contract and common law differ. In that case the written contract is enforced over the
common law. We discussed the situation where the written contract and common law
are essentially the same in the decision:

             In this case, contrary to the Navy's argument, the criteria
             for government liability are the same under the common
             law of bailment and the express contract-negligence. The
             Board has applied the common law presumption when an
             express written contract exists if the common law is

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              consistent with the written contract. [Mohammad Darwish,
              00-2 BCA ,r 31,114 at 153,672] (we construe the language
              used here as no more than an expression of the common
              law liability of the bailee).

ATSCC, 17-1 BCA ,r 36,867 at 179,632.

       We relied upon the Board's decision in Mohammad Darwish where we applied
the presumption even though there was a written contract where the contract and
presumption imposed the same negligence standard. The cases cited by the Navy do
not contradict Mohammad Darwish. The Navy fails to explain why we should not
follow our decision in Mohammad Dan-vish.

       The Navy relies on three cases in support of its argument that only the express
contract applies: Cramer Alaska, Inc., ASBCA No. 39071, 92-2 BCA ,r 24,969;
H.N Bailey and Associates, ASBCA No. 29298, 87-2 BCA ,r 19,763; and
Universal Maritime Service Corp., ASBCA Nos. 22661, 22804, 81-1 BCA ,r 15,118
(gov't mot. at 6-7). Cramer Alaska addressed the AF's failure to return a "655-B
loader" in accordance with the written contract and does not involve damage and the
presumption as the Navy suggests. H.N Bailey deals with the loss of roller bearings,
government-furnished property, and the Board found, "In this case we have been
unable to conclude that appellant had the control and custody of the bearings alleged to
be missing or, indeed, that these bearings were in fact delivered to appellant."
H.N Bailey, 87-2 BCA ,r 19,763 at 100,004. The case does not involve damage and
the presumption as the Navy suggests. Universal Maritime Service also deals with a
case where the government had exclusive control of a warehouse where lost items
were stored at night and on weekends. The Board held, "Inasmuch as the Government
has not shown that the cargo was lost during the hours when it was in the custody and
control of appellant, the inference of negligence rule is not for application." Universal
Maritime Service, 81-1 BCA ,r 15,118 at 74,792-93. These cases do not contradict
Mohammad Darwish.

Proof of Negligence

       The Navy argues, "where a bailment contract requires proof of the bailee's
negligence, the presumption may not be implied and the bailor must provide proof of
actual negligence of the bailee" (gov't mot. at 7). This is too simplistic a
characterization of the law, ignores Mohammad Darwish, and is a repackaging of the
Navy's argument discussed above. The Navy relies on two cases as support of its
proposition: Analog Precision, Inc., ASBCA Nos. 31277, 32877, 87-2 BCA ,r 19,804;
and Elro Swindle dlbla Aircraftsman, Inc., ASBCA No. 26964, 84-1 BCA ,r 17,172.
The Analog Precision decision dealt with computer equipment damaged during
shipment. The Board found, "Even if the Government, as bailee, is initially presumed

                                           4
to have been negligent in retuming the equipment in a damaged condition, the
evidence produced by the Govemment, as shown by the findings, rebuts that
presumption insofar as preparation for shipment is concemed." Analog Precision,
87-2 BCA ,r 19,804 at 100,170. Analog Precision implicitly supports our decision in
ATSCC. In Aircraftsman, the issue was liability for an aircraft accident. The Board
found that the pilot was not negligent and that the bailor did not sustain its burden of
proof. However, the Board does not discuss the presumption and we do not agree that
this decision conflicts with Mohammad Darwish. In Mohammad Darwish, just like in
ATSCC, the contract included a clause requiring proof of government negligence, yet
this Board imposed the presumption because the contract's negligence standard was
the same as the common law presumption. ATSCC, 17-1 BCA ,r 36,867 at 179,632.

Exclusive Possession

       The Navy argues, "The presumption of negligence may not be applied where
the bailee's possession of the property was not exclusive to that of the bail or"
(gov't mot. at 7). We agree with this as a general proposition, but the Navy's
interpretation of exclusive possession is too narrow.

       The Navy relies on several cases in support of its argument. The Navy cites
Mowbray, 601 F.2d at 647 ("[I]t is established law that no inference of negligence
against the bailee arises if his possession of the damaged bailed property was not
exclusive of that of the bailor."). While the quote is accurate, the Navy ignores the
facts of Mowbray where a 115-foot, flat-bottomed barge (the Victor) sank while
moored in a berth owned by Ellis, the bailee. The bailor's argument was that Ellis was
presumed negligent in the sinking of the barge. The problem was that the bailor's
employees had significant access to the barge. The Court's decision bears repeating:

             Throughout the time that the Victor was berthed at the
             wharf, Atmanchuck [bailor] and his agents-not Ellis-
             [bailee] repaired and overhauled the vessel. The wharf
             was not enclosed or fenced off; Atmanchuck had
             unimpeded access to the Victor. No request for permission
             to board her was made of or required by Ellis. In fact an
             employee of Atmanchuck was on board the vessel earlier
             in the evening on the very night the vessel sank.

                     The reason for the rule that a bailee who fails to
             retum goods or retums damaged goods to the bailor has the
             obligation of rebutting an inference of negligence is that
             normally the bailor has no way of knowing what happened
             to the goods entrusted to his bailee. R. Brown, The Law of
             Personal Property§ 87 at 359 (2d ed. 1955). The appellant

                                           5
              here was obviously under no such disadvantage. He and
              his employees enjoyed daily access to the vessel which
              they were repowering.

Id. at 647.

        Similarly, ATSCC had no way of knowing how the Navy was operating the
vessels because ATSCC was not involved in the training. Therefore, application of the
presumption was appropriate. There is no similarity between bail or's access in
ATSCC and that in Mowbray. The Navy also cites Analog Precision, 87-2 BCA
,r 19,804 that we distinguished above.
       Our ATSCC decision discusses "exclusivity" as follows:

                      The Navy argues that the common law presumption
              does not apply because the Navy did not have exclusive
              control of the FS and LBV. It bases this argument on
              ATSCC 's obligation to preform quarterly preventive
              maintenance, yet states that ATSCC had "regular and
              frequent access to the vessels in order to perform and
              coordinate maintenance and repairs as required by the
              PWS." (Gov't reply br. at 4) We do not agree that
              ATSCC's obligation to maintain the vessels amounts to
              "frequent access" sufficient to avoid the presumption. The
              damage to the FS port engine occmTed during Navy
              operations and training and ATSCC did not participate in
              the Navy's training. Accordingly there is a presumption
              that the damage was caused by the Navy's negligence.

ATSCC, 17-1 BCA ,r 36,867 at 179,633.

        Simply put the Navy presents no evidence that ATSCC's quarterly maintenance
had any connection to the engine failure. Indeed, the record supports the conclusion
that the damage occurred during Navy training operations when the Navy had
exclusive control of the vessel. ATSCC, 17-1 BCA ,r 36,867 at 179,628-31, findings 3,
8-10, 16-19. The Navy's interpretation of"exclusive control" is too narrow. The
Navy would have us conclude that any access to a bailed item by a bailor, even access
that has nothing to do with the loss or damage, is sufficient to invalidate the
presumption. That is not what we found in Mowbray and Universal Maritime Service
cited by the Navy and discussed above. Apparently the Navy would contend that the
presumption would not apply to a bailment of an automobile damaged in an accident
because the car had routine maintenance at the dealership. None of the cases cited by
the Navy support such a narrow interpretation.

                                          6
Engine Logs

         The Navy argues that the discussion of engine logs in the decision is, "the
equivalent of imposing a legal obligation that does not exist in the Contract" (gov't br.
at 10). The decision does no such thing. The question here is if the Navy operated the
engines in an overheated condition that could cause the manifolds to crack. The Navy
entered several logs into the record indicating that in July 2014 it did operate Free
Spirit with overheated engines. ATSCC, 17-1 BCA ,r 36,867 at 179,629, finding 8.
The Navy set itself up for our decision by presenting testimony that hourly inspections
of the engine were conducted during training and the results entered in logs kept on the
vessel. Id. at 179,630-31, finding 18. These logs would affirmatively answer that
question one way or the other. Whether these logs were required by the contract or not
is irrelevant - according to sworn testimony of SBC Alb hourly checks were done and
log books were filled out and kept on the vessel. Id. As explained in the decision, the
Navy entered numerous logs into the record but not the ones leading up to and
including the 6 August 2015 engine failure that might rebut the presumption.
Testimony, unsupported by contemporaneous records that the Navy said existed, was
not enough.

                                     CONCLUSION

      The Navy failed to prove that the decision's reliance on the common law
presumption was legal error. The motion is denied.

       Dated: 6 March 2018

                                                  Administr~ve Judge
                                                  Armed Services Board
                                                  of Contract Appeals

 I concur in result (see separate opinion)

  J.~
  Administrative Judge
  Vice Chairman
  Armed Services Board
. of Contract Appeals

                                             7
               OPINION BY ADMINISTRATIVE JUDGE PROUTY

       I concur in the result. As stated in my concurrence with Judge Clarke's original
decision, I respectfully disagree with the reasoning in that opinion regarding the
application of the presumption of negligence from bailment law. My conclusion that a
finding of government negligence is supported by the facts, even without this
presumption, however, is not altered by the government's motion, which presents no
new or compelling arguments upon the matter and expressly limits itself to challenging
Judge Clarke's decision upon the presumption of negligence issue.

       Dated: 6 March 2018

                                                 J. REIDPR0UTY
                                                 Administrative Judge
                                                 Vice Chairman
                                                 Armed Services Board
                                                 of Contract Appeals

       I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 61047, Appeal of
Assessment and Training Solutions Consulting Corporation, rendered in conformance
with the Board's Charter.

      Dated:

                                                 JEFFREY D. GARDIN
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

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