Court Opinion

ID: 4016064
Source: CourtListenerOpinion
Date Created: 2016-07-15 15:01:29.575288+00
Date Added: 2024-06-11T13:52:42.009543
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

  WESTERN STATES FEDERAL CONTRACTING,
                  LLC,
                Appellant

                           v.

     DEPARTMENT OF VETERANS AFFAIRS,
                   Appellee
            ______________________

                      2016-1042
                ______________________

    Appeal from the Civilian Board of Contract Appeals in
No. CBCA 4612(3359)-REM, Administrative Judge Patri-
cia J. Sheridan.
                 ______________________

                Decided: July 15, 2016
                ______________________

   ROBERT J. BERENS, Salamirad Morrow Timpane &
Dunn LLP, Phoenix, AZ, argued for appellant.

    ELIZABETH ANNE SPECK, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for appellee. Also
represented by BENJAMIN C. MIZER, ROBERT E.
KIRSCHMAN, JR., PATRICIA M. MCCARTHY; DAVID G. FAGAN,
2                          WESTERN STATES FEDERAL   v. DVA

United States Department of Veterans Affairs, Washing-
ton, DC.
                ______________________

    Before NEWMAN, CHEN, and HUGHES, Circuit Judges.
HUGHES, Circuit Judge.
    Western States Federal Contracting, LLC appeals the
Civilian Board of Contract Appeals’ decision dismissing
its appeal for lack of jurisdiction. Because the Board
erred in finding that Western States lacked capacity to
maintain the lawsuit, we reverse the Board’s decision and
remand for further proceedings.
                             I
     On September 30, 2009, the Department of Veterans
Affairs contracted Western States to, among other things,
alter and expand the fire alarm and sprinkler system at
the VA facility located in Phoenix, Arizona. The project
took 699 days to complete—549 days longer than estimat-
ed.
    After the project was completed, Western States sub-
mitted a claim for $760,852.01 to the VA seeking compen-
sation for damages related to the delay. Because the VA
never issued a final decision on the claim it was deemed
denied.
    Upon denial of the claim, Western States appealed to
the Board. The Board requested, at least three times,
that Western States provide documentation establishing
that it was in good standing in Delaware, the state of its
organization. Western States failed to provide this docu-
mentation, and on February 11, 2014, the Board dis-
missed the case after finding that Western States did not
have the capacity to maintain the action because it was
not in good standing due to its failure to pay its Delaware
franchise taxes. Immediately thereafter, Western States
WESTERN STATES FEDERAL   v. DVA                            3

paid its franchise taxes and was returned to good stand-
ing.
     Western States appealed to this court on June 10,
2014. After Western States filed its opening brief, the VA
filed an unopposed motion seeking to voluntarily remand
the case so that the Board could address, among other
things, whether Western States was an “unincorporated
association” under Fed. R. Civ. P. 17(b)(3)(A). On March
19, 2015, we entered an order vacating the Board’s deci-
sion and remanding the case for additional proceedings
consistent with the order.
    On remand, Western States argued that because it
was then in good standing, and the decision dismissing its
claim had been completely vacated, the Board was re-
quired to consider the merits of its claim. The Board
disagreed “because, at the time [the Board] dismissed this
case for lack of jurisdiction, Western States was not in
good standing, and Board Rule 26(a) (48 CFR 6101.26(a)
(2014)) does not allow relief based on evidence that could
have been presented at the underlying proceeding.” J.A.
12. The Board dismissed the claim a second time after
concluding that Western States was not an “unincorpo-
rated association” under Fed. R. Civ. P. 17(b)(3)(A). J.A.
1–15.
    Western States again appeals, arguing that the Board
erred in finding that it did not have capacity to prosecute
the case on remand. We have jurisdiction under 28
U.S.C. § 1295(a)(10).
                             II
    We review the Board’s conclusions of law without def-
erence. Reliable Contracting Grp., LLC v. Dep’t of Veter-
ans Affairs, 779 F.3d 1329, 1331 (Fed. Cir. 2015). We will
uphold the Board’s factual findings unless those findings
are “(A) fraudulent, arbitrary, or capricious; (B) so grossly
erroneous as to necessarily imply bad faith; or (C) not
4                           WESTERN STATES FEDERAL   v. DVA

supported by      substantial   evidence.”      41   U.S.C.
§ 7107(b)(2).
     During the first appeal, this court vacated the Board’s
initial opinion in its entirety. J.A. 68. To “vacate” a
decision “means to annul; to cancel or rescind; to declare,
to make, or to render, void; to defeat, to deprive of force;
to make of no authority or validity; to set aside.” Ala.
Power Co. v. EPA, 40 F.3d 450, 456 (D.C. Cir. 1994).
     Although the Board initially dismissed the case be-
cause Western States was not in good standing under
Delaware law, see Del. Code Ann. tit. 6, § 18-1107(l); J.A.
55, the vacatur annulled this dismissal in its entirety,
Ala. Power Co., 40 F.3d at 456. Consequently, on remand,
the Board could not rely on the initial dismissal as
grounds for finding that Western States lacked the capac-
ity to maintain the action. Moreover, the Board could not
justify dismissing the case based on the fact that Western
States was not in good standing at the time of the initial
dismissal because Delaware law allows an LLC to main-
tain an action once it has been restored to good standing.
Del. Code Ann. tit. 6, § 18-1107(l).
    Because we vacated the Board’s initial dismissal in its
entirety and Western States had been restored to good
standing at the time of the remand, the Board was re-
quired to consider the merits of Western States’ claim.
Further, because Western States had the capacity to
maintain the action under Delaware law, we need not
decide whether the Board erred in its determination that
Western States was not an “unincorporated association”
under Fed. R. Civ. P. 17(b)(3)(A).
     We appreciate that Western States was not diligent in
this matter and that the Board gave them sufficient
opportunities to correct their lack of good standing before
initially dismissing the appeal. Moreover, we recognize
that the VA in good faith sought a limited remand to
address an alternative legal theory not first considered by
WESTERN STATES FEDERAL   v. DVA                       5

the Board. We applaud the government’s willingness to
seek such voluntary remands and do not intend to dis-
courage that practice. However, this court’s prior order
did not grant a limited remand, but, rather, vacated the
Board’s prior decision in its entirety. As a subsequent
panel, we are bound by the plain language of that order.
Therefore, we reverse and remand to the Board for con-
sideration of the merits of Western States’ claim.
           REVERSED AND REMANDED