Court Opinion

ID: 2747248
Source: CourtListenerOpinion
Date Created: 2014-10-31 12:01:16.22526+00
Date Added: 2024-06-11T11:25:40.394250
License: Public Domain

In the United States Court of Federal Claims
                                 No. 09-364C
                           (Filed: October 30, 2014)

**********************

TERRYTOWN SSA, LLC,

                      Plaintiff,

v.

THE UNITED STATES OF AMERICA,

                      Defendant.

**********************

                                    ORDER

        This is a Contract Disputes Act (“CDA”)1 action. Plaintiff appeals the
contracting officer’s denial of its claim for damages for the alleged wrongful
termination of a contract to design, build, and then lease to the General
Services Administration (“GSA”) an office building in Terrytown, Louisiana
for use by the Social Security Administration (“SSA”). Defendant has
counterclaimed, seeking reprocurement costs and liquidated damages for
delay. Pending now are the parties’ cross-motions for partial summary
judgment. Defendant has moved for summary judgment to the effect that the
termination was proper because plaintiff’s delays were not excused and that
there is no evidence of bad faith on the part of GSA. Plaintiff cross-moved,
seeking a judgment that the termination was wrongful because it had no duty
to begin or finish construction of the project, and it asks the court to find that
the circumstances surrounding the termination establish bad faith on the part
of the government. We heard oral argument on May 7, 2014, on the motions
in this case, and simultaneously heard argument on similar motions pending
in a related action, Lake Charles XXV, LLC v. United States, No. 09-363C.
During oral argument, we asked for supplemental briefing on a question raised

1
    The CDA is codified at 41 U.S.C. §§ 7101-7109 (2012).

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for the first time at oral argument. After considering the written and oral
argument, we conclude that there is no evidence of bad faith and thus grant
defendant’s motion for partial summary judgment and deny plaintiff’s cross-
motion on that issue. As to the separate question of whether the termination
was proper, however, we conclude that material questions of fact preclude
entry of judgment at this time and therefore we deny both motions on that
issue.

       This case was filed contemporaneously with three related suits
involving design, build, and lease contracts for similar facilities in other
locations in Louisiana for use by the SSA.2 The plaintiffs in all four cases
share common ownership, and discovery in all four cases was, in large part,
conducted jointly. Two of those cases have been dismissed because plaintiff
ran afoul of the Contract Act’s prohibition against assignment of contracts.
See Am. Govt. Props. v. United States, No. 09-153C, 2014 WL 4248193 (Fed.
Cl. Aug. 28, 2014); Am. Govt. Props. v. United States, No. 09-131C (Fed. Cl.
Aug. 28, 2014) (unpublished order granting defendant’s motion to dismiss).

        Nearly identical cross-motions for summary judgment, in all but one
respect, were filed in Lake Charles, No. 09-363C. In that case, we granted the
government’s motion for summary judgment in full and denied plaintiff’s
cross-motion. Lake Charles XXV, LLC v. United States, No. 09-363C, 2014
WL 5180797 (Fed. Cl. Oct. 15, 2014) (opinion and order granting defendant’s
motion for partial summary judgment). The facts of this case are substantially
similar to those in Lake Charles, and the contract involved there contains the
identical clauses at issue in this case. A fuller recitation of the background
facts can be found in our October 15, 2014 opinion in that case. We
incorporate and adopt the reasoning in that opinion as it pertains to the issue
of plaintiff’s arguments regarding its duty to proceed with construction and the
effect of the no-waiver clause. Plaintiff did have a duty to begin construction
and complete it regardless of GSA’s late issuance of design drawings and
approval of construction drawings because it agreed to a new schedule by
amendment to the contract. That amendment superceded the requirements of
the original contract and obligated plaintiff to begin construction and then
complete it by March 28, 2008. Def.’s App. 272 (Supplemental Lease

2
 Those cases are American Government Properties. & New Iberia SSA, LLC
v. United States, No. 09-131C; American Government Properties & Houma
SSA, LLC v. United States, No. 09-153C; and Lake Charles XXV, LLC v.
United States, No. 09-363C.

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Agreement No. 3). Further, as explained in our Lake Charles opinion, the
contract’s no-waiver clause did not operate to preserve the original
construction schedule. We must therefore consider whether the delays were
excused.

        Unlike its motion in Lake Charles, defendant has not argued that the
plaintiff here failed to meet the contract’s requirement that the contractor
provide notice of delay within 10 days of the start of the alleged delay. Instead
defendant argues that plaintiff cannot show any excusable delay for two
reasons. The first reason is that, even granting 71 days of rain delay as
claimed in the Second Amended Complaint, plaintiff would not have met that
extended deadline. Defendant points only to plaintiff’s last proposed schedule,
however, sent after the second cure notice, which proposed a date 144 days
after the original March 28 delivery deadline of SLA No. 3.

       The second reason argued by the government is that there is no
evidence that the weather delays claimed actually affected the critical path of
construction. Defendant contends that permitting delays, not the weather,
prevented vertical construction.3 Defendant also argues, although it does not
provide proof, that, even assuming that weather was to blame, it was not
“unusually severe” as required by the contract’s excusable delay clause. See
48 C.F.R. § 552.270-18 (2014) (defining “excusable delay” as, among other
things, “unusually severe weather”).

       Plaintiff chose not to directly meet defendant’s arguments regarding the
specifics of delay in its response and cross-motion, relying instead on the
argument that it had no duty to complete construction. Nevertheless, we

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  Defendant also argues that the evidence demonstrates that plaintiff or its
subcontractors were late in applying for permits, November 2007, and thus
failed to act with due diligence to obtain the permits and finish construction on
time. Plaintiff contended during the contract period that permitting delays
were the fault of others, although it did not present a permitting delay claim to
the CO. While plaintiff is therefore prohibited from citing that as a basis for
its claim in this case, see Def.’s App. 329-33 (Certified Claim to the
Contracting Officer); Lake Charles, 2014 WL 5180797, at *8 n.10, defendant
has not put on its own evidence with respect to permitting delays attributable
to plaintiff, and we cannot say with certainty that permitting problems would
have prevented timely completion had plaintiff received a weather-related
extension.

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believe there are outstanding fact issues best resolved at trial. We cannot say
that there is no evidence that the weather was unusually severe. Mr. Blackmon
testified in his deposition that the rains were unusual, and plaintiff is entitled
to present that testimony and whatever other evidence it has in that regard at
trial. Further, while defendant may ultimately prove to be correct that, even
given 71 days for weather, plaintiff would not have met its new deadline, it has
not presented evidence to establish the point. The fact that plaintiff proposed
a revised schedule with a deadline extension longer than 71 days is, viewing
it in the light most favorable to plaintiff, only an offer to the government, not
a statement that the project could not have been completed faster.

       With regard to plaintiff’s bad faith claim, as we explained in the
October 15, 2014 Lake Charles opinion, that claim is unfounded. Plaintiff’s
argument in that regard is pure conjecture as there is no evidence to suggest
bad faith on the part of the government. We therefore grant defendant’s
motion for summary judgment with respect to the claim of bad faith on the part
of the government.

        In sum, we grant defendant’ motion for partial summary judgment in
part and deny it in part. We grant it with regard to the bad faith claim. Further,
we agree with the United States that plaintiff is barred from arguing that
defendant’s conduct prior to the issuance of SLA No. 3 excuses plaintiff’s
performance. We deny, however, defendant’s motion with respect to
plaintiff’s claim of weather delay. We deny plaintiff’s cross-motion for
summary judgment in full.

      The parties are directed to confer and propose further pretrial
proceedings in a joint status report to be filed by November 25, 2014.

                                                    s/ Eric G. Bruggink
                                                    ERIC G. BRUGGINK
                                                    Judge

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