La Crosse Garment Manufacturing Co. v. United States

• Decision Date: 16 October 1970
• Docket Number: No. 85-68.,85-68.
• Citation: 193 Ct. Cl. 168,432 F.2d 1377
• Parties: LA CROSSE GARMENT MANUFACTURING CO. v. The UNITED STATES.
• Court: U.S. Claims Court

193 Ct. Cl. 168, 432 F.2d 1377 (1970)

LA CROSSE GARMENT MANUFACTURING CO. v. The UNITED STATES.

No. 85-68.

United States Court of Claims.

October 16, 1970.

COPYRIGHT MATERIAL OMITTED

Samuel F. Schwag, Philadelphia, Pa., attorney of record, for plaintiff.

Peter J. P. Brickfield, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON and NICHOLS, Judges.

ON PLAINTIFF'S MOTION AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

PER CURIAM:

This case was referred to Trial Commissioner David Schwartz with directions to prepare and file his opinion on the issues of plaintiff's motion and defendant's cross-motion for summary judgment under the order of reference and Rule 166(c). The commissioner has done so in an opinion and report filed on June 5, 1970, wherein such facts as are necessary to the opinion are set forth. On August 5, 1970, defendant filed a motion requesting that the court adopt the commissioner's report in which motion defendant has stated as follows: "Plaintiff has advised the Clerk of the Court, in a letter dated June 26, 1970, that `Plaintiff does not seek review pursuant to Rule 50(b) (3), * * *'." On September 2, 1970, the plaintiff filed a motion requesting that the court adopt the commissioner's report and issue judgment based thereon. Therefore, the case has been submitted to the court on the report, opinion and recommended conclusion of the trial commissioner and the defendant's motion for adoption without oral argument. Since the court agrees with the opinion and recommended conclusion of the trial commissioner, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Therefore, plaintiff's motion for summary judgment is granted in part, defendant's cross-motion is correspondingly denied, and partial summary judgment is entered that plaintiff is entitled to recover on its claims numbered II and III in this opinion, and that further proceedings are stayed pursuant to Rule 167 with which plaintiff shall comply, for a period of 120 days pending an administrative determination of the equitable adjustment to which plaintiff is entitled. Plaintiff is not entitled to recover on any other claims in the petition, as to which defendant's cross-motion is allowed, and plaintiff's motion correspondingly denied with the petition dismissed as to such claims.

OPINION OF COMMISSIONER

SCHWARTZ, Commissioner:

Plaintiff was awarded two contracts in March and December 1963, for the manufacture, from Government-furnished cotton duck, webbing and buckles, of almost 900,000 gas mask carriers called "Carriers Field Protective Mask, M15," for $1.53 each, or a total cost of over $550,000, exclusive of the value of the furnished materials.

The Government's drawings, a part of the specifications were defective in several respects and were the subject of claims for equitable adjustments, some of which were upheld and some denied by the Armed Services Board of Contract Appeals. Three of the claims denied by the Board are pressed in the present petition, in two counts, in which the petitioner contends that the Board committed reversible errors of fact and of law.

The applicable standards for the determination of the issues, presented by cross-motions for summary judgment, are those of the Wunderlich Act. The Board's findings of fact are final if supported by substantial evidence, and its decisions of questions of law are open to independent judicial consideration. 41 U.S.C. §§ 321, 322. Alternative claims of breach of contract and trial de novo require no consideration. Complete redress was available administratively, under the contract, and suit for breach is consequently barred. Morrison-Knudsen Co. v. United States, 345 F.2d 833, 170 Ct.Cl. 757 (1965); L. W. Foster Sportswear Co., Inc. v. United States, 405 F.2d 1285, 1287, 186 Ct.Cl. 499, 502 (1969).

I

One of the inconsistencies in the drawings concerned the gusset for the carrier's side panel which, if the drawings were followed, would have caused the gusset to be overlong in one direction or another. Clarification of the drawing was requested, and did not come. Plaintiff, required to choose between shortening the gusset panel, increasing its hem or feeding the excess material into other parts of the carrier, chose shortening.

Some 42,000 carriers with short gussets were tested, accepted and delivered. At that point, a complaint was received by the Government that the carriers were skimpy, and 130,000 carriers ready for delivery were rejected for short gussets, as contrary to specifications. After some negotiations, plaintiff offered to accept a price reduction of two cents per carrier, a total of $2,600, if the Government would grant a deviation under which the short gussets could be approved. The Government agreed.

The issue is the enforceability of the agreement. It arises on a claim — the first of two in count one — for the $2,600 withheld by the Government. The ground is that the essential fault was that of the specifications, which plaintiff reasonably or correctly interpreted, and that the agreement for the price reduction and the deviation were based upon an offer exacted from plaintiff by duress and made under protest. The Government's defense rests on the written agreement for the reduction, voluntarily signed by plaintiff some months after the offer claimed to have been made under duress. This agreement, plaintiff responds, was obtained by fraud. The Board rejected the contentions of fraud and duress, and enforced the written agreement.

The facts are these:

A conference was held by the parties on October 28, 1963, at Edgewood Arsenal, to discuss the difficulties being encountered by plaintiff, and particularly the problem of the short gussets. When Mr. Bezozo, plaintiff's New York-based contract liaison officer, asked for permission to ship the 130,000 carriers, the chief Government representative present, the contract specialist, responded that if plaintiff requested a deviation accompanied by a two-cent reduction in price per unit, the Government would agree to accept the 130,000 units with the short gussets.

By letter of the following day, Bezozo requested the deviation, but made no mention of a price reduction. In telephone conversations which followed, Mr. Huss, the contracting officer, told Bezozo that plaintiff would have to give the price reduction as consideration for the deviation. Huss testified that though Bezozo was not happy about the terms, he made no mention of appealing the decision, and left Huss with the impression that the agreement would be unconditional. Mr. Huss in his testimony said that Bezozo "was forced — well, he wanted to accept my terms because he wanted to be able to ship — if he couldn't ship, he couldn't get paid and the company needed the money." It does not appear whether these words were an attempt to restate Bezozo's words or the witness' impression from what Bezozo and perhaps others had told him.

On November 12, 1963, Mr. Bezozo telegraphed the contracting officer, offering the two-cent reduction. The telegram added that "This offer is made under duress and protest since we disagree with the findings. We intend to appeal the decisions and findings reached. We do wish to advise that we are compiling information and data for a claim which we intend to bring in the area of 25,000 dollars." Mr. Huss testified that he did not receive this telegram until after he had talked to and telegraphed Bezozo on the following day, November 13.

On November 13, Bezozo and Huss talked on the telephone, and thereafter Huss sent a telegram to Bezozo agreeing to accept the carriers, as follows: "Confirming our telephone conversation this date * * *. Not more than 130,000 Carriers will be accepted with the short gusset, and acceptance is further conditioned upon your telephonic agreement on 13 November 1963 to reduce the unit price of these 130,000 Carriers by $.02 each. * * * Formal contract modification is being prepared incorporating this agreement."

At a meeting between the two men in the following month, on December 5, Bezozo again broached the subject of the short gusset carriers. He testified that Huss left him with the impression that plaintiff's appeal rights had been fully protected by Bezozo's prior protests.

In January Huss prepared and sent for signature to plaintiff's home office in LaCrosse, Wisconsin, copies of a Supplemental Agreement No. 6 By Article IV of this agreement, the Government accepted the 130,000 carriers with the short gusset. Article V provided that "By reason of Article IV * * * the parties have agreed to a price reduction of two cents ($.02) per Carrier for the acceptance of the 130,000 Carriers." The agreement was signed by a vice-president of plaintiff on January 20, 1964, and by Huss as contracting officer on January 24, 1964.

Huss testified that he noted the reference to duress in Bezozo's telegram of November 12. He said that when he drafted the formal documents in January he "chose to ignore that particular statement because those weren't the terms of my understanding with him. I deliberately ignored that proviso because I felt that that was not what we had agreed upon."

On these facts, the Board held the supplemental agreement to be a voluntary, enforceable "accord and satisfaction of the short gusset price reduction dispute," and, further, that plaintiff had made insufficient proof of economic coercion, compulsion or duress. One member of the Board dissented, briefly stating that "Supplemental Agreement No. 6 does not `stand alone,' but must be read in conjunction with the reservation on file with the contracting officer," presumably a reference to Bezozo's telegram of November 12.

Plaintiff urges that the contracting officer was guilty of misrepresentation, in sending to plaintiff's home office for signature, after having...