Court Opinion

ID: 2734628
Source: CourtListenerOpinion
Date Created: 2014-09-19 01:36:04.706537+00
Date Added: 2024-06-11T09:46:29.108916
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Application Under the Equal Access              )
 to Justice Act of--                            )
                                                )
Gerald R. Rouillard III dba                     )      ASBCA No. 58692
 International Gear Technologies                )
                                                )
Under Contract No. W9098S-ll-D-0018             )

APPEARANCE FOR THE APPELLANT:                          Steven J. Boretos, Esq.
                                                        Law Offices of Steven J. Boretos
                                                        Everett, WA

APPEARANCES FOR THE GOVERNMENT:                        Raymond M. Saunders, Esq.
                                                        Army Chief Trial Attorney
                                                       Kyle E. Chadwick, Esq.
                                                        Trial Attorney

                  OPINION BY ADMINISTRATIVE JUDGE THRASHER
                         ON APPELLANT'S APPLICATION
                    UNDER THE EQUAL ACCESS TO JUSTICE ACT

       Gerald R. Rouillard III dba International Gear Technologies (IGT) timely applies
for an award under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, seeking
recovery of attorney fees and expenses incurred in connection with its appeal pursuant to
the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. The underlying appeal arose
from the government's termination for convenience ofthe contract on 18 June 2012 and
IGT's subsequent submittal of a Termination Settlement Proposal (TSP) on 7 August
2012. After the government did not respond to IGT's TSP for almost a year, IGT
appealed to the Board on a deemed denial basis on 11 June 2013. Shortly after appeal to
the Board prose, IGT entered into an attorney-client relationship with Mr. Steven J.
Boretos to represent IGT in this appeal by execution of an Agreement of Retainer
(Retainer) dated 21 August 2013. Mr. Boretos filed a notice of appearance with the
Board that same day.

       IGT elected to proceed under the Board's Expedited Procedure (Rule 12.2) with
both entitlement and quantum at issue. In my opinion of20 November 2013, IGT's
appeal was sustained in part and denied in part. See Gerald R. Rouillard III dba

1
    The CDA, implemented by Board Rule 12.2, provides that this decision shall have no
         value as precedent, and in the absence of fraud shall be final and conclusive and
         may not be appealed or set aside.
International Gear Technologies, ASBCA No. 58692, slip op. (20 Nov. 2013)
(unpublished). The claim for price adjustment in ASBCA No. 58692 was submitted by
IGT in the amount of$77,826.08, plus unquantified attorney fees, and was sustained in
the amount of$31,985.80. 2 IGT seeks attorney fees and expenses in the amount of
$25,381.25. The government concedes IGT's application was timely filed and it is an
eligible "party" under EAJA, 5 U.S.C. § 504(b)(l)(b) (gov't resp. at 2). However, the
government asserts IGT seeks reimbursement for attorney fees related to a time period
which is not cognizable under EAJA, and some of the attorney fees sought relate to issues
upon which IGT either did not prevail or the government's position was substantially
justified (gov't resp. at 2-5).

                                         DECISION

        The government points out that IGT applies for attorney fees dating back to 1 May
2012 and argues the record establishes IGT did not retain its attorney, Mr. Boretos, until
21 August 2013. IGT's application includes a Retainer between IGT and Mr. Boretos
dated 21 August 2013 for the purpose of representation in the appeal (appl., attach. 8).
Prior to that date, Mr. Boretos worked on the claim for IGT as a contract specialist
(ex. G-1-00 1). As a result, the government argues any fees incurred prior to 21 August
2013 are not awardable under EAJA (gov't resp. at 2). IGT responded that the Retainer
memorializes an attorney-client relationship dating back to 1 April2012 (app. reply at
1-2). However, in an email forwarded to government counsel on 31 July 2013,
Mr. Boretos stated in reference to this appeal, "I am a DC and Washington State attorney,
and plan to be representing IGT in this matter. I am currently a contract specialist for
IGT." The email was signed, "Steven J. Boretos Contract Specialist IGT
Representative." (Ex. G-1-001) I conclude the contemporaneous record does not support
a finding that Mr. Boretos was acting as an attorney on this claim within the coverage of
EAJA prior to entering into the Agreement on 21 August 2013. Therefore, only attorney
fees incurred after 21 August 2013 are awardable.

        EAJA only authorizes an award to a "prevailing party" if the government's position
was not "substantially justified." 5 U.S.C. § 504(a)(1). The test of whether the
government's position was substantially justified is whether "a reasonable person could
think it correct, that is, if it has a reasonable basis in law and fact." Pierce v. Underwood,
487 U.S. 552, 565 n.2 (1988). The government asserts IGT did not prevail on costs
claimed for process engineering, drawing errors and the first set of first articles (Rouillard,
slip op. at 14-15), and the government was substantially justified in not paying the costs
associated with the issues on which IGT prevailed; as a result, IGT should not recover
legal fees incurred in connection with litigating those issues (gov't resp. at 3). Although
the government asserts the argument that it was substantially justified in litigating the

2
    IGT's request for attorney fees was dismissed as premature. Rouillard dba Int'l Gear
         Techs., slip op. at 8-16.

                                              2
issues upon which IGT prevailed, it fails to articulate the basis for that·argument. The
government bears the burden of proof on this issue and has not presented any argument
why the evidence supports this argument. Community Heating & Plumbing Co.
v. Garrett, 2 F.3d 1143 (Fed. Cir. 1993). As a result, I find the government was not
substantially justified in litigating the issues on which IGT was the prevailing party.

Allocation ofAttorney Fees

        The contractor, as is the case here, need not prevail on all issues to be a prevailing
party. Goetz Demolition Company, ASBCA No. 39129, 91-2 BCA ~ 23,836. Where a
contractor prevails on some, but not all the issues, an EAJA award will only extend to
those costs of litigating those issues on which the contractor prevailed. Hart's Food
Services, Inc., ASBCA No. 30756R eta!., 93-1 BCA ~ 25,524. However, there is no
precise formula for allocating fees and other expenses between successful and
unsuccessful claims. See Hoyer Construction Co., ASBCA No. 32178, 88-3 BCA
~ 21,036 at 106,266. jnstead, the Board considers the record as a whole and exercises its
discretion in determining a fair and reasonable allocation. See C.H Hyperbarics, Inc.,
ex rei. Miller, ASBCA No. 49375 et al., 05-2 BCA ~ 32,989 at 163,494. The government
asserts IGT did not prevail on costs claimed for process engineering, drawing errors and
the first set of first articles (Rouillard, slip op. at 14-15) but argues that IGT's application
does not provide enough detail to precisely apportion attorney fees between the issues in
the appeal where IGT was the prevailing and non-prevailing party (gov't resp. at 3).
I agree and will therefore, in the nature of a jury verdict, determine a reasonable
approximation of an amount that should be subtracted from the total for work performed
on issu~s on which IGT did not prevail. 3

        IGT's application includes $11,268.75 in potentially awardable attorney fees post
entering into an Agreement with Mr. Boretos (appl., attach. 2 at 2-4). The government
identifies specific cost areas ofiGT's application that it asserts are associated with issues
where IGT did not prevail which should be subtracted from the total. We address each in
tum.

Time Preparing Expert Witnesses

       The government argues the Board should disallow 90% of the time spent
preparing expert witnesses on 24 September 2013 ($871.88t because the majority of
IGT's two expert witnesses' testimony focused upon alleged drawing errors and
process-engineering costs, but the Board found no drawing errors and awarded no

3
  Additionally, the government does not dispute IGT's billing rate of$125.00 per hour
       (gov't resp. at 3).
4
  There are several hours billed on 24 September 20 13. The government's reference
       appears to be 7.75 hours billed in the amount of$968.75.

                                               3
process-engineering costs (gov't resp. at 3-5) 5 . IGT did not specifically respond to this
argument but an examination ofiGT's application reveals the time claimed on that date
not only included expert witness preparation but also general preparation for the hearing.
I agree some portion of the expert preparation time should be disallowed but not the
90% proposed. Instead, I find that the amounts claimed on that date should be reduced
by 60%, $581.25. 6

Time Associated with Preparing Briefs and Hearing

       The government also asserts the Board should subtract 60% of the time spent
drafting briefs on 19-22 September and 21-29 October 2013 ($2,809.50f arguing that
discounting the fees for briefing by 60% is reasonable because IGT recovered only
41% of his claimed quantum (not including the premature attorney-fee request) and a
majority of appellant's merits briefs were devoted to arguments about drawing errors,
process-engineering costs, the value of the first set of first articles, and attorney fees,
which the Board either rejected or dismissed as premature. 8 Although there is no precise
formula for allocating the costs, I agree 60% is a reasonable allocation considering the
record as a whole.

        In addition, the government argues the Board should exclude $290.00,
approximately one-third, ofthe $875.00 invoiced for the hearing because a substantial
portion of the hearing was devoted to issues upon which IGT did not prevail (gov't resp.
at 4). I agree that is a reasonable allocation based upon the record.

Research Mistakes

       The government also argues all of the time spent by Mr. Boretos researching Red
River Holdings, LLC, ASBCA No. 56316, 09-2 BCA ~ 34,304, rev'd in part, aff'd in
part, and remanded sub nom. Red River Holdings, LLC v. United States, 802 F. Supp. 2d
648 (D. Md. 2011), on 8 September 2013, $325.00, should be disallowed because IGT's
"briefs misquoted both the Board's and the district court's decisions in Red River
Holdings, focused on irrelevant aspects of those decisions, and were otherwise unhelpful
to the Board in applying the law (app. post-hearing br. at 2-3; app. reply at 3-4)." In
addition, the government argues 50% of the time invoiced for 19 September 2013,
$125.00 9 should be disallowed because Mr. Boretos "researched the wrong EAJA and

5
  The Board found that the Army hampered IGT by not disclosing the exact dimensions
        of the "master worm" but this was not a drawing error. Rouillard, slip op. at 9,
        11, 14.
6
  (.6 X $968.75 = $581.25)
7
  (.6 X $4,682.50 = $2,809.50)
8
  Rouillard, slip op. at 14-16.
9
  (.5 X $250.00 = $125.00)

                                             4
continued to pursue the premature fee request after the Army cited Board precedent on
point (govt. posthearing br. at 19; app. reply at 7)." (Gov't resp. at 3-5)

       The government does not specifically identify the legal basis for disallowing these
costs. Presumably the government's position is that I should exercise my discretion
under 5 U.S.C. § 504(a)(l) or (a)(3) to find the identified mistakes constitute "special
circumstances [that] make an award unjust" or are "conduct which unduly and
unreasonably protracted the final resolution of the matter in controversy." 10 If that is the
government's position, I disagree. Both issues were relevant to the overall appeal and
any mistakes on Mr. Boretos' part do not rise to the level of an unjust award and did not
unduly and unreasonably protract the final resolution of the appeal.

                                        CONCLUSION

         For reasons stated, the application is allowed in the amount of$7,588.

         Dated: 4 March 2014

                                                              tive Judge
                                                   Anne Services Board
                                                   of Contract Appeals

10
     5 U.S.C. § 504(a)(l) states, "An agency that conducts an adversary adjudication shall
         award, to a prevailing party other than the United States, fees and other expenses
         incurred by that party in connection with that proceeding, unless the adjudicative
         officer of the agency finds that the position of the agency was substantially
         justified or that special circumstances make an award unjust. Whether or not the
         position of the agency was substantially justified shall be determined on the basis
         of the administrative record, as a whole, which is made in the adversary
         adjudication for which fees and other expenses are sought." 5 U.S.C. § 504(a)(3)
         states in pertinent part, "The adjudicative officer of the agency may reduce the
         amount to be awarded, or deny an award, to the extent that the party during the
         course of the proceedings engaged in conduct which unduly and unreasonably
         protracted the final resolution of the matter in controversy."

                                               5
       I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals on an application for fees and other expenses
incurred in connection with ASBCA No. 58692, Appeal of Gerald R. Rouillard III dba
International Gear Technologies, rendered in accordance with 5 U.S.C. § 504.

      Dated:

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

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