Court Opinion

ID: 3005092
Source: CourtListenerOpinion
Date Created: 2015-09-28 17:00:04.851386+00
Date Added: 2024-06-11T11:46:00.159763
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of--                                           )
                                                      )
Jeffrey C. Stone Inc., d.b.a. Summit Builders         )          ASBCA No. 58372
                                                      )
Under Contract No. W912PL-10-C-0034                   )

APPEARANCES FOR THE APPELLANT:                                   John R. Jefferies, Esq.
                                                                 Justin R. DePaul, Esq.
                                                                  Fennemore Craig, P.C.
                                                                  Phoenix, AZ

APPEARANCES FOR THE GOVERNMENT:                                  Thomas H. Gourlay, Jr., Esq.
                                                                  Engineer Chief Trial Attorney
                                                                 Gilbert H. Chong, Esq.
                                                                  Engineer Trial Attorney
                                                                  U.S. Army Engineer District,
                                                                   Los Angeles

             OPINION BY ADMINISTRATIVE JUDGE SCOTT
    ON APPELLANT'S MOTION TO STRIKE ANSWER AND COUNTERCLAIM

       The much delayed hearing in this appeal is set to commence on 19 October 2015.
Appellant has moved pursuant to Board Rule 16 for the Board's imposition of sanctions
against the government for its failure to respond to appellant's discovery requests and
Board orders. In particular, appellant requests that the Board strike the government's
answer to the complaint; preclude the government from introducing any evidence of an
alleged setoff due it or of any other alleged liability of appellant to the government
related to this appeal; and enter a default judgment against the government.

        In its belated opposition to appellant's motion, the government avers that it has
now, belatedly, served its responses to appellant's discovery requests. The government
also refers to its 8 December 2014 response to the Board's 24 November 2014 order to
show cause why sanctions should not be imposed against it for various delinquencies in
connection with the potential government setoff claim and other matters. That response
indicated that the government had earlier advised that it was unlikely that the contracting
officer would issue a decision asserting the setoff allegation and that the government
would not be pursuing this element of its defense. The government also asserts that
appellant has not demonstrated prejudice because it has not shown that its discovery
requests were related to the issues in controversy in this appeal and that entry of a default
judgment in appellant's favor would be overly broad, unreasonable, relief. For the most
part, the government has not directly addressed appellant's allegation that it has failed to
respond to Board orders.

                                        DISCUSSION

         Board Rule 16, Sanctions, 1 provides that:

                      If any party fails to obey an order issued by the Board,
                the Board may impose such sanctions as it considers
                necessary to the just and expeditious conduct of the appeal.

         Board Rule 17, Dismissal or Default for Failure to Prosecute or Defend,
         provides that:

                        Whenever the record discloses the failure of either
               party to file documents required by these Rules, respond to
               notices or correspondence from the Board, comply with
               orders of the Board, or otherwise indicates an intention not to
               continue the prosecution or defense of an appeal, the Board
               may ... [i]n the case of a default by the Government...issue an
               order to show cause why the Board should not act thereon
               pursuant to Rule 16. If good cause is not shown, the Board
               may take appropriate action.

       The government has repeatedly failed to comply with Board orders in this appeal
and to advance it toward resolution (see, e.g., Board's 24 November 2014 order to show
cause; Board's 15 July 2015 memorandum of conference call). Moreover, the
government's position on the setoff issue has been ambiguous. For example, in a
30 October 2014 joint teleconference, government counsel stated that the government
was not pursuing offset on a gear claim but would be pursuing others. The Board
interprets the government's opposition to appellant's motion to strike to represent that it
will not be pursuing any setoff claim against appellant in connection with this appeal.
Therefore, that portion of appellant's motion appears to be moot.

      A default judgment '"is a drastic step which should be resorted to only in the most
extreme cases."' Information Systems & Networks Corp. v. United States, 994 F.2d 792,
796 (Fed. Cir. 1993) (quoting United Coin Meter Co. v. Seaboard Coastline Railroad,

1
    The Board's Rules were revised effective 21July2014. Board Rule 16 was formerly
         Board Rule 35 and Board Rule 17 was formerly Board Rule 31.

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705 F.2d 839, 845 (6th Cir. 1983)). We have stressed that:

                     The sanction of the entry of a default judgment in
             favor of appellant is the severest sanction the Board can issue
             against the government. Such a sanction should be reserved
             for situations in which contumacious or contemptuous
             conduct is shown .... The Board has considerable discretion in
             evaluating a motion for sanctions.

Thorpe Seeop Corp., ASBCA No. 58961,      14-1BCA~35,541      at 174,167 (citations
omitted).

       So far in this appeal, while the government's delinquencies have frustrated
appellant and the Board and impeded the expeditious resolution of the appeal, the
government ultimately has responded to the Board's orders. We do not deem its conduct
to be contumacious or contemptuous to the extent that a default judgment is warranted.

                                      DECISION

       We deny appellant's motion to strike the government's answer. We deem it
conceded by the government that no set-off is due the government in connection with this
appeal. Appellant's motion for a default judgment is denied.

      Dated: 17 September 2015

                                                    inistrative Judge
                                                Armed Services Board
                                                of Contract Appeals

I concur                                        I concur

 //P~~--~
MARK    N. STEMPLE~                             RICHARD SHACKLEFORD
Administrative Judge                            Administrative Judge
Acting Chairman                                 Vice Chairman
Armed Services Board                            Armed Services Board
of Contract Appeals                             of Contract Appeals

                                           3
       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. 58372, Appeal of Jeffrey C.
Stone Inc., d.b.a. Summit Builders, rendered in conformance with the Board's Charter.

      Dated:

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

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