Court Opinion

ID: 4378456
Source: CourtListenerOpinion
Date Created: 2019-03-19 19:00:04.063845+00
Date Added: 2024-06-11T14:24:43.907610
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                 )
                                             )
Curtis Jue                                   )      ASBCA No. 61542
                                             )
Under Contract No. N624 73 l 1RP00035        )

APPEARANCE FOR THE APPELLANT:                       Mr. Curtis Jue

APPEARANCES FOR THE GOVERNMENT:                     Craig D. Jens en, Esq.
                                                     Navy Chief Trial Attorney
                                                    Karrin H. Minott, Esq.
                                                     Trial Attorney

              OPINION BY ADMINISTRATIVE JUDGE PAGE ON THE
             GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT

       Mr. Curtis Jue (lessee or appellant) appeals the termination of his lease for
agricultural purposes with the Department of the Navy (Navy or government). The
government moves for summary judgment, asserting that it had the right to terminate
the lease at any time. We have jurisdiction under the Contract Disputes Act, 41 U.S.C.
§§ 7101-7109. The government's motion is granted.

             STATEMENT OF FACTS FOR PURPOSES OF THE MOTION

       1. The Navy and the lessee executed Contract No. N62473 l 1RP00035 (lease)
on December 16, 2010 (R4, tab 2 at 90). The lease provided the lessee use of
approximately 358 acres of fannland onboard the Naval Air Station Lemoore,
California, at an annual rent of $36,183.69, for the period beginning January 1, 201 L
and ending on December 31, 2018 (id. at 69).

      2. The lease included the following relevant clause:

               12) TERMINATION BY GOVERNMENT:

               a) The GOVERNMENT shall have the right to terminate
               the LEASE, at any time, without prior notice, and
               regardless of any lack of breach by LESSEE of any of the
               terms and conditions of this LEASE. In the event of
               termination for any reason not involving a breach by
               LESSEE of the terms and conditions of the LEASE the
               GOVERNMENT shall make an equitable adjustment of
              any advance rentals paid by the LESSEE hereunder. In the
              event that the GOVERNMENT shall elect to terminate this
              LEASE on account of the breach by LESSEE of any of the
              terms and/or conditions of this LEASE, no adjustment in
              advance rentals paid by LESSEE shall be made, and the
              GOVERNMENT shall be entitled to recover and LESSEE
              shall pay the GOVERNMENT:

                     ( 1)  The costs incurred in resuming possession of
                     the LEASED PROPERTY.

                     (2)    The costs incurred in performing any
                     obligation on the part of LESSEE to be performed
                     hereunder.

                     (3)     An amount equal to the aggregate of all
                     rents, Long Term Maintenance Obligation and
                     charges assumed hereunder and not theretofore paid
                     or satisfied, less the net rentals, if any, collected by
                     the GOVERNMENT on the reletting of the
                     LEASED PROPERTY, which amounts shall be due
                     and payable at the time when such rents, obligations
                     and charges would have accrued or become due and
                     payable under this LEASE.

(R4, tab 2 at 76) (Hereinafter referred to as clause 12)*

       3. By letter dated June 21, 2017, the government provided the lessee a copy of
an inspection report performed on the leased premises on May 22, 2017. The
inspection report documented lack of compliance with various portions of the lease
and provided 10 maintenance activities the lessee was advised to perform to cure the
noted defects. (R4, tabs 25, 25.1, 25.2)

        4. By letter dated August 7, 2017, the government issued a show cause notice
to the lessee, citing inspections of the leased premises on July 21, 2017 and August 2,
2017, and alleging that prior-noted noncompliant conditions remained. The
government informed the lessee that it was considering terminating the lease for
default under clause 12 of the lease. The notice provided the lessee the opportunity to
present in writing, any facts bearing on the noted non-compliance within 10 calendar

* Although we grant the government's motion to dismiss, we express no opinion as to
       the government's monetary recovery as that is not before us.

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days of receipt. (R4, tabs 26, 26.1, 26.2) Appellant received, but did not respond to,
the notice (comp I. at 1).

       5. By letter dated January 24.2018. the government issued a notice of
termination for breach of lease to the lessee. The notice of termination cited the letter
dated June 2 L 2017, notice of non-compliance, and the letter dated August 7. 2017. notice
to show cause, as justification for termination of the lease. (R4, tabs 29, 29.1. 29.2)

       6. By letter dated February 19, 2018, received by the Board on February 22.
2018, appellant filed this timely appeal.

                                       DECISION

        The government moves for summary judgment, asserting that there are no material
facts in dispute and it is entitled to judgment as a matter of law because clause 12 of the
lease provided it the unequivocal right to terminate the lease at any time, without notice,
regardless of any breach by the lessee. In his response to the government's motion,
appellant concedes that he does not dispute the government"s right to terminate the lease
at any time. Appellant states that he is part of a small, family-owned operation, which
was unable to always manage the maintenance required in the lease, but that their status
as a lessee since the 1970's should be taken into consideration in reversing the
termination of the lease.

       Summary judgment is appropriate where there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law. Mingus
Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987); Arko
Executive Services, Inc. v. United States, 553 F.3d 1375, 1378 (Fed. Cir. 2009); see
also FED. R. CIV. P. 56(a). A material fact is one that might affect the outcome of an
appeal. Revenge Advanced Composites, ASBCA No. 5711 L 11-1 BCA ~ 34,698 at
170,883 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,248 (1986)). The
moving party bears the burden of establishing the absence of any genuine issue of
material fact, and all significant doubt over factual issues must be resolved in favor of
the party opposing summary judgment. Celotex Corp. v. Catrett, 4 77 U.S. 317, 322
(1986). We draw all justifiable inferences in favor of the nonmoving party. C/2, Inc.,
ASBCA Nos. 56257, 56337, 11-2 BCA ,J 34,823 at 171,353 (citing Maropakis
Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010)).

       The government has met its burden of proving that the basic termination was
proper. Appellant does not dispute that the Navy had the right to terminate the lease at
any time under clause 12, nor does appellant dispute any other material fact proposed
by the Navy. The Board notes appellant's contentions that, as a small, family-owned
farming operation, there are certain logistical limitations they may have experienced
during their time as a lessee with the Navy. However, that does not alter the

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    undisputed terms of the lease, nor raise a genuine issue of material fact sufficient to
    defeat summary judgment.

                                         CONCLUSION

           The government's motion for summary judgment is granted and the appeal is
    denied.

           Dated: March 7, 2019

                                                       Administrative Judge
                                                       Armed Services Board
                                                       of Contract Appeals

     I concur                                          I concur

     RICHARD SHACKLEFORD                               OWEN C. WILSON
     Administrative Judge                              Administrative Judge
     Acting Chairman                                   Vice Chairman
     Armed Services Board                              Armed Services Board
     of Contract Appeals                               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. 61542, Appeal of Curtis
    Jue, rendered in conformance with the Board's Charter.

           Dated:

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

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