Court Opinion

ID: 3201600
Source: CourtListenerOpinion
Date Created: 2016-05-09 18:00:34.876367+00
Date Added: 2024-06-11T14:28:16.597772
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals of --                                  )
                                               )
Joseph Sottolano                               )      ASBCA Nos. 59081, 60043
                                               )
Under Contract No. ODIA-10-04-009              )

APPEARANCE FOR THE APPELLANT:                         Michael H. Sussman, Esq.
                                                       Sussman & Watkins
                                                       Goshen, NY

APPEARANCES FOR THE GOVERNMENT:                       Raymond M. Saunders, Esq.
                                                       Army Chief Trial Attorney
                                                      Erica S. Beardsley, Esq.
                                                       Trial Attorney

                OPINION BY ADMINISTRATIVE JUDGE MCILMAIL

                                   INTRODUCTION

       Appellant, Joseph Sottolano, appeals from the termination for cause of a
baseball-coaching contract between him and the Army Athletic Association (the
Fund), a non-appropriated fund instrumentality, and from the denial of his claim for
breach damages allegedly arising from that termination. We deny the appeals.

                                 FINDINGS OF FACT

       Effective 1 July 2010, Mr. Sottolano and the Fund entered into Contract
No. ODIA-10-04-009 (the contract, or the 2010 contract), for his services as "Head
Baseball Coach, United States Military Academy [USMA]," from 1 July 2010 through
30 June 2014 (R4, tab 1 at 1, 5, ~ 5.0l(a)). The contract's Disputes clause states that the
contract is not subject to the Contract Disputes Act of 1978, and, at section 9.0l(e)(l) of
the contract, provides that "[a] claim by the Contractor shall be made in writing and
submitted ... to the Contracting Officer"; section 9.02 of the contract provides that "[t]he
Contracting Officer's decision on claims may be appealed by submitting a written
appeal to the Armed Services Board of Contract Appeals" (R4, tab 1 at 11-12).

       Section 8.01 of the contract, USMA Mission is Primary, provides that:

                       The parties agree that, although the Contract is
                sports-related, the primary purpose of the Fund is to
                support the mission of the USMA. The USMA Mission is

                                                                                               ,
              "To educate, train, and inspire the Corps of Cadets so that
              each graduate is a commissioned leader of character
              committed to the values of Duty, Honor, Country;
              professional growth throughout a career as an officer in the
              United States Army; and a lifetime of selfless service to
              the nation." Accordingly, all the Fund's legal
              arrangements, including the Contract, are in support of that
              mission. Thus, the USMA Mission shall have priority in
              the various provisions of the contract.

(R4, tab 1 at 11) Section 6.0l(a) of the contract, Termination By Fund/or Cause,
provides that:

              The Fund shall have the right to terminate the Contract for
              cause prior to its normal expiration date, or prior to any
              extended termination date. The term "cause" shall include,
              in addition to its normally understood meaning in
              nonfederal employment contracts, any of the following
              examples:

              (5) Conduct of the Contractor seriously prejudicial to the
              best interests of the USMA, the Fund, or its athletic
              program or which violates USMA's or the Fund's
              m1ss10n ....

(R4, tab 1 at 8-9)

      Section 6.0l(b) of the contract, Fund's Obligations Upon Termination/or
Cause, provides that:

              In the event the Contract is terminated for cause in
              accordance with the provisions of Section 6.0l(a) hereof,
              all obligations of the Fund to make further payments
              and/or to provide any other consideration hereunder shall
              cease at the end of the month in which such termination
              occurs. In no case shall the Fund be liable to the
              Contractor for the loss of any collateral business
              opportunities or any other benefits.

(R4, tab 1 at 9) In August 2010, the parties modified the contract to provide that:

                                           2
              A one[-]time payment of$5,000 will be paid to the
              contractor at the end of August 2010 in lieu of the
              previously contracted camp payment.

(R4, tab 2)

       Mr. Sottolano's involvement with the USMA baseball team dates to 1992, when
he began serving as an assistant coach (tr. 11280). Mr. Sottolano became interim head
coach in 2000 (id.). Mr. Sottolano saw himself as a role model for USMA baseball
players (tr. 11209), and, by 2013, the USMA athletic department viewed Mr. Sottolano
as one of the best college baseball coaches in the United States (tr. 4/59-60). In
May 2013, USMA athletic department representatives and Mr. Sottolano began
discussions regarding an "extension" of his contract (tr. 4/59). The department's
contracting office drafted Contract No. ODIA-13-07-026 (the 2013 contract), dated
17 July 2013, for Mr. Sottolano's services as head baseball coach, to take effect on
1August2013 and terminate on 30 June 2018 (ex. 5 at 1, 5, (Art. IV)). Section 10.02 of
the 2013 contract, Requirement of Contracting Officer Signature and Approval, provides
that:

                     It is understood and agreed that the Contract shall
              not be effective until executed by a duly authorized
              Contracting Officer on the behalf of the Fund.

(Ex. 5 at 15) Sections 6.0l(a)(5) and 8.01 of the 2013 contract, relating to termination
by the Fund for violation of the USMA Mission, and reciting the USMA Mission,
respectively, are identical to their counterparts in the 2010 contract (ex. 5 at 10, 13;
R4, tab 1 at 9, 11). The 2013 contract bears neither the signature of Mr. Sottolano nor
that of the contracting officer (ex. 5 at 16).

        On a Monday in May of 2013, at approximately 4:30 p.m., Mr. Sottolano, by
his own admission, willingly received oral sex from a subordinate, the baseball
program's primary administrative assistant, in his USMA office (tr. 1/218, 225-29,
258, 272-73, 4/170-71 ). According to Mr. Sottolano, that day was his day off, and the
encounter occurred just after the administrative assistant had ended her workday
(tr. 11225, 258). He admits that he could have stopped the encounter, but did not
(tr. 4/170-71 ). We assume without deciding that the encounter was consensual.

        On 2 August 2013, Mr. Sottolano and the administrative assistant had an
argument in the athletic department's offices involving why she had not sent recruiting
letters to potential USMA baseball players, as Mr. Sottolano had expected
(tr. 11237-41). On 5 August 2013, the administrative assistant reported to USMA that
she felt threatened by Mr. Sottolano (R4, tab 12 at 3). On the same day, the USMA
Executive Athletic Director ordered Mr. Sottolano to refrain from contact with the

                                           3
administrative assistant (R4, tab 7). On 12 August 2013, Mr. Sottolano was put on
administrative leave (R4, tab 9).

        On 24 September 2013, subsequent to a series of investigations conducted by
USMA and other government entities (R4, tabs 11, 12), the contracting officer
terminated the contract for cause (R4, tab 13 at 1). The contracting officer (who did
not investigate the matter herself but relied upon information arising from the
investigation of others), found, among other things, that Mr. Sottolano had "conducted
[him ]self in an inappropriate relationship with a female government employee
assigned to assist [him] in the performance of [his] duties and responsibilities,"
"engaged on several occasions in sexual activity with the female employee staff
member," "demanded sexual activity from the female employee staff member during
the official duty day in government facility offices," and "created a hostile workplace
environment" (R4, tab 13 at 1; see tr. 3/20-27, 95-96). Among other contract
provisions, the contracting officer cited section 6.0l(a)(5) (R4, tab 13 at 2). On
16 December 2013, Mr. Sottolano filed an appeal docketed as ASBCA No. 59081,
challenging the termination decision.

       On 5 May 2015, Mr. Sottolano presented to the contracting officer a certified
claim in the amount of $2,844,902, for damages allegedly arising from the contract
termination (R4, tab 43). 1 The claim consists of a list of damages categories and
amounts, including $55,000 for "[s]ummer camp salary" (id.). The contracting officer
denied the claim on 12 June 2015 (R4, tab 44). Mr. Sottolano timely appealed from
the contracting officer's final decision on 16 June 2015. The Board docketed that
appeal as ASBCA No. 60043, consolidated that appeal with ASBCA No. 59081, and
held a five-day hearing in August 2015.

                                      DECISION

ASBCA No. 59081: Termination of the contract for cause

        The Fund must prove that the termination for cause is justifiable. See ADT
Construction Group, Inc., ASBCA No. 55358, 13 BCA ~ 35,307 at 173,312, 173,315.
If the Fund establishes a primafacie case of cause for termination, Mr. Sottolano must
prove that the default was excusable, or that the termination decision was an abuse of
discretion. See id. at 173,312.

1
    On 22 April 2015, the Board dismissed for lack of jurisdiction ASBCA No. 59777,
        an appeal from the deemed denial of a similar, 5 May 2014 request for
        monetary damages that Mr. Sottolano had submitted to the contracting officer.
        Joseph Sottolano, ASBCA No. 59777, 15-1BCA~35,970 at 175,733. We
        reject any suggestion by Mr. Sottolano (app. br. at 1-2 & n.1, 4) that ASBCA
        No. 59777 somehow survived that dismissal.

                                           4
         Whether the termination was justifiable

       The Fund asserts several justifications for the termination of the 2010 contract, 2
including that Mr. Sottolano created a hostile work environment (see gov't br. at
54-61). In addition, the Fund asserts that Mr. Sottolano violated the USMA's mission
by having oral sex with his administrative assistant in his office (see gov't br. at
57-59). Although the Fund contends that the sexual activity between Mr. Sottolano
and the administrative assistant was not consensual, it argues in the alternative that the
termination was justified even if the activity was consensual (gov't br. at 60-61 ). As
explained below, we agree with the latter assertion; therefore, we need not decide
whether Mr. Sottolano created a hostile work environment, whether the administrative
assistant consented to the May 2013 sexual activity, or whether (as the parties dispute)
the administrative assistant's accounts of events are credible.

       The contract provides that "the USMA Mission shall have priority in the
various provisions of the contract," and gives the Fund "the right to terminate the
contract for cause," including for "[c]onduct of the Contractor... which violates
USMA's ... mission" (R4, tab 1 at 89). The contract goes further, expressly reciting the
USMA Mission as:

               To educate, train, and inspire the Corps of Cadets so that
               each graduate is a commissioned leader of character
               committed to the values of Duty, Honor, Country;
               professional growth throughout a career as an officer in the
               United States Army; and a lifetime of selfless service to
               the nation.

(R4, tab 1at11) We find the contract's recitation of the USMA Mission unambiguous
and self-explanatory, and hold that conduct that is inconsistent with that mission
statement violates the USMA Mission.

      Consistent with the USMA Mission, Mr. Sottolano viewed himself as a role
model for his baseball players. However, when he willingly received oral sex in a
USMA office from a subordinate during what is, conventionally, a workday, he

2   We reject any suggestion that the Fund and Mr. Sottolano entered into the 2013
        contract. That document expressly requires execution by a contracting officer
        to take effect, and no contracting officer ever signed the 2013 contract.
        Consequently, the 2013 contract did not replace or "extend" the 2010 contract.
        Even if it had, we cannot see how events would have transpired differently or
        changed the outcome of these appeals, particularly given that sections
        6.0l(a)(5) and 8.01 of both contracts are identical.

                                            5
violated the USMA Mission, to which the contract gives priority, providing cause for
his termination. Mr. Sottolano's conduct was inconsistent with the mission's goal of
inspiring USMA cadets to be "leader[s] of character" committed to professional
growth, and selfless service, and the values of duty and honor. 3 Rather, that conduct
exemplifies self-indulgent lack of professionalism. It is inconceivable that one would
hold that conduct up to a USMA baseball player as an example of how, in the future,
he should conduct himself as an officer in the United States Army, in his workplace,
with a subordinate. Given his candid and evidently remorseful admission to what
happened, we expect that Mr. Sottolano himself would counsel the baseball players he
coached not to conduct themselves as he did.

       Although he does not bear any burden of proof on the issue, we note that
Mr. Sottolano is essentially silent regarding the Fund's contention that when he
received oral sex in his USMA office from his administrative assistant at
approximately 4:30 p.m. on a weekday, he violated USMA's mission. Mr. Sottolano
contends that "[h]aving consensual sexual relations is NOT violative of the military's
mission," and states that "having sexual contact [does not] directly conflict with the
military's mission" (app. reply br. at 25). However, he does not directly address
whether doing so where, when, and with whom he engaged in that behavior violates
the USMA Mission. Because we find that Mr. Sottolano's conduct violated the
USMA Mission, the termination of his contract was justifiable.

        Whether Mr. Sottolano 's default was excusable

       Mr. Sottolano offers no excuse for his behavior; rather, he admitted that he
could have stopped the encounter, but did not. We find that Mr. Sottolano has not
proved that his violation of the USMA's Mission was excusable.

        Whether the contracting officer abused her discretion

        Mr. Sottolano contends that in terminating the contract for cause, the
contracting officer acted in bad faith and abused her discretion (app. 2nct reply br. at
27-33). The burden of proof to show abuse of discretion is very high. Empire Energy
Management Systems, Inc., ASBCA No. 46741, 03-1BCA~32,079 at 158,553. To
determine whether a termination was an abuse of discretion, the Board considers
1) whether the government official acted with subjective bad faith; 2) whether the
official had a reasonable, contract-related basis supporting the decision under review;
3) the amount of discretion vested in the official whose action is being reviewed; and

3
    We so conclude even assuming, as Mr. Sottolano contends, that the Monday the
        incident occurred was his day off, and that the administrative assistant's
        workday had just ended. We find drawing such fine distinctions inconsistent
        with the sweeping language of the USMA Mission.

                                           6
4) whether a proven violation of relevant statutes or regulations can render a decision
arbitrary and capricious. Id. Government agents are presumed to discharge their
duties in good faith, and a party alleging "bad faith" or "bad intent" can overcome this
presumption only by clear and convincing evidence. SIA Construction, Inc., ASBCA
No. 57693, 14-1 BCA ~ 35,762 at 174,986. To overcome this presumption, a
contractor must show with convincing clarity a high probability that the government
official acted from personal animus with specific intent to injure the contractor. See
Empire Energy, 03-1BCA~32,079 at 158,553.

        Mr. Sottolano fails to demonstrate that the contracting officer abused her discretion.
First, Mr. Sottolano fails to overcome the presumption that the contracting officer acted in
good faith; he neither asserts nor points to any evidence that the contracting officer
terminated Mr. Sottolano's contract out of personal animus toward him.

        Second, the contracting officer had a reasonable, contract-related basis
supporting her decision. Among the contracting officer's reasons for terminating the
contract was her finding that Mr. Sottolano engaged in sexual activity with an
employee staff member, although the contracting officer found that he had done so on
several occasions. Similarly, we have found that the single encounter to which
Mr. Sottolano admitted violated the USMA Mission, providing cause to terminate the
contract. Third, the contract does not expressly limit the contracting officer's
discretion to terminate the contract for cause. Finally, Mr. Sottolano does not assert
that the termination decision violated any statute or regulation.

        In essence, Mr. Sottolano contends that the contracting officer abused her
discretion because, in his view, she was ill- or under-informed, relied on erroneous or
otherwise flawed information from others rather than conducting her own
investigation, did not weigh the evidence correctly, decided to terminate the contract
prematurely (and weeks before she issued her decision), offered testimony during the
hearing that conflicted with her deposition testimony and the testimony of others, and
did not explain her decision well (app. 2nd reply br. at 27-33, 37). We disagree that
any of those issues, alone or in combination, demonstrates an abuse of her discretion.
A contracting officer's assessment need not be correct or based upon perfect
information in order to constitute a valid exercise of discretion. See ADT
Construction, 13 BCA ~ 35,307 at 173,314-15. Nor does the contracting officer have
to have conducted her own investigation; all that is required is that she put her mind to
the problem and render her own decision, even if in doing so she relies upon
information from others. See Pacific Architects & Engineers, Inc. v. United States,
491 F.2d 734, 744 (Ct. Cl. 1974); Space Age Engineering, Inc., ASBCA No. 25761 et
al., 86-1BCA~18,611at93,451-52. Here, the contracting officer learned from others
that Mr. Sottolano had engaged in sexual activity with an employee staff member in
his USMA office during what the contracting officer understood was a workday. Her
information was essentially correct (Mr. Sottolano admitted to that basic story), even if

                                            7
she had some of the details wrong, came to incorrect legal conclusions, provided
testimony that conflicted with her previous accounts and the accounts of others,
arrived at a decision before she had all the information, and could have explained her
decision better. Notably, Mr. Sottolano does not even suggest that the contracting
officer failed to put her mind to the problem or make her own decision; 4 essentially, he
complains about how she made that decision and later defended it. We have found
that when Mr. Sottolano received oral sex in his USMA office from his administrative
assistant at approximately 4:30 p.m. on a weekday, he violated USMA's mission,
justifying the termination of his contract. Nothing that Mr. Sottolano points to
regarding how the contracting officer arrived at essentially the same conclusion, or
how she explained it, demonstrates that she abused her discretion.

        Mr. Sottolano also contends that the contracting officer did not terminate the
contract on the basis of consensual sexual activity (app. br. at 116; app. reply br. at
27). While the contracting officer found that Mr. Sottolano "demanded sexual
activity," she also found that he "engaged .. .in sexual activity," a formulation that is
not, on its face, dependent upon coercion. In any event, a party can justify a
termination if there existed at the time an adequate cause, even if then unknown.
Joseph Morton Co. v. United States, 757 F.2d 1273, 1277 (Fed. Cir. 1985). Here,
regardless of whether the contracting officer terminated the contract based upon
consensual sexual activity, the Fund has expressly contended that Mr. Sottolano's
behavior justified the termination of his contract even ifthe sexual activity was
consensual (see gov't br. at 61 ), an argument that is also not dependent upon a
demonstration of coercion. Here, in deciding that Mr. Sottolano's conduct justifies the
termination of his contract, we have assumed, without deciding, that the sexual activity
at issue was consensual.

       Because Mr. Sottolano violated USMA's mission and has not proved that his
default was excusable, or that the termination of his contract was an abuse of
discretion, the termination of his contract for cause was justified. Consequently, we
deny ASBCA No. 59081.

Damages

        Because the termination of the contract for cause was justified, any recovery by
Mr. Sottolano is governed by section 6.0l(b) of the 2010 contract. That section provides
that the Fund's payment obligations ended at the end of the month in which the

4   In his recitation of the contracting officer's testimony, Mr. Sottolano puts the term
         "her decision" in quotation marks (app. br. at 67), but never expressly contends
         that the contracting officer did not exercise her independent judgment in
         terminating the contract.

                                             8
termination occurred. The termination occurred on 24 September 2013; consequently,
the Fund's payment obligations to Mr. Sottolano ended on 30 September 2013.
Mr. Sottolano does not contend that the Fund owes him money under section 6.0l(b);
rather, he contends that the Fund owes him breach damages, consisting of what he
would have earned under the 2010 contract had it not been terminated, and what he
would have earned under the 2013 contract had that document been "fully executed"
(app. br. at 126-27). However, having found unexcused cause for the termination of the
2010 contract, and that the termination was not an abuse of discretion, we find that the
termination of the contract was not a breach. 5 Consequently, Mr. Sottolano is not
entitled to breach damages, and ASBCA No. 60043 is denied. 6

                                      CONCLUSION

         For these reasons, the appeals are denied.

         Dated: 24 March 2016

                                                      Administrative udge
                                                      Armed Services Board
                                                      of Contract Appeals

(Signatures continued)

5
    The parties dispute whether, under the particular terms of the contract, the recovery
        for a termination for cause that is found to be without "good cause" is breach
        damages or liquidated damages (gov't br. at 65; app. br. at 125). Because we
        find the termination for cause justified, we need not resolve that dispute.
6
    We do not consider whether Mr. Sottolano and USMA entered into a written, oral,
        or implied-in-fact contract separate from the 2013 contract for him to run a
        summer baseball camp in July 2013, or to extend his 2010 contract, as his
        post-hearing briefing at least to some extent suggests (app. br. at 121, 127-28;
        app. reply br. at 35; app. 2nd reply br. at 22-25). No such claims have been
        presented to the contracting officer, as required by section 9.0l(e)(l) of the
        2010 contract; consequently, we do not possess jurisdiction to entertain them.
        In addition, although Mr. Sottolano points to testimony of the contracting
        officer in support of a suggestion that the summer camp was the subject of a
        signed modification to the 2010 contract (app. 2nd reply br. at 22-23), we find in
        the record only an August 2010, signed modification providing for payment of
        $5,000 for a camp ostensibly held in 2010, not any modification relating to a
        2013 camp.

                                             9
 I concur                                       I concur

 ~~-
/MAR]&S~LER
                                                   M---
                                               RICHARD SHACKLEFORD
 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 Nos. 59081, 60043, Appeals of
 Joseph Sottolano, rendered in conformance with the Board's Charter.

       Dated:

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

                                         10