EXCAVATION CONST. v. Wash. Metro. Area Transit Auth., Civ. A. No. 83-1125.

CourtUnited States District Courts. United States District Court (Columbia)
Writing for the CourtJOHN LEWIS SMITH, Jr., Senior
Citation624 F. Supp. 582
Decision Date21 June 1984
Docket NumberCiv. A. No. 83-1125.
PartiesEXCAVATION CONSTRUCTION, INC., Plaintiff, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendant.

624 F. Supp. 582

EXCAVATION CONSTRUCTION, INC., Plaintiff,
v.
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendant.

Civ. A. No. 83-1125.

United States District Court, District of Columbia.

June 21, 1984.


624 F. Supp. 583

Tarrant H. Lomax, Rhodes, Dunbar & Lomax, Washington, D.C., for plaintiff Excavation Const., Inc.

Frank R. Filiatreau, Jr. and Robert L. Polk, Associates Gen. Counsel, Washington Metropolitan Area Transit Authority, Washington, D.C., for defendant.

MEMORANDUM

JOHN LEWIS SMITH, Jr., Senior District Judge.

Plaintiff Excavation Construction, Inc. brings this action for monetary relief against defendant Washington Metropolitan Area Transit Authority ("WMATA"). Currently before the Court are cross-motions for summary judgment with respect to Count I of the complaint, and defendant's motion for summary judgment on Count II.

This case is a dispute about a "disputes clause" in a construction contract. In May 1973, defendant awarded a $21 million contract to plaintiff for construction of the Fort Totten, Takoma Park, and Silver Spring Metrorail stations. The contract included a provision, standard in WMATA construction agreements, concerning disputes "arising under this contract." In brief, the contract called for administrative disposition involving initial review by a

624 F. Supp. 584
"contracting officer," and then by WMATA's "Board of Directors or its duly authorized representative for the determination of such appeals." The contract also included a standard "suspension of work" clause.1

Defendant did not issue its "notice to proceed" on the project until August 1973. As a result, plaintiff submitted a claim to WMATA for additional compensation in the amount of $818,000 because of the delay. The matter was processed pursuant to the disputes clause, and in September 1976, the WMATA contracting officer issued a decision awarding some $272,576 to plaintiff.

In December 1976, plaintiff noticed an appeal to the United States Army Corps of Engineers Board of Contract Appeals ("BCA"). The BCA held hearings in October 1979, and on April 30, 1982, granted plaintiff an award of $420,036 (including the $272,576 previously awarded). The award included compensation for "Home Office Overhead" allegedly incurred by plaintiff as a result of the 66-day delay in the issuance of the notice to proceed.2

In May 1982, defendant moved the BCA to reconsider its ruling on the home office overhead issue. The BCA in a six-page opinion denied the motion on September 14, 1982.

Throughout late 1982 and early 1983, plaintiff and defendant corresponded about the WMATA General Manager's review of the matter. On February 22, 1983, the General Manager executed a "final decision" on the appeal:

"Pursuant to the authority vested in the undersigned by the Washington Metropolitan Area Transit Authority (WMATA) Board of Directors to render a final decision in any dispute under the disputes article of a WMATA contract, and
"upon consideration of the record of proceedings before the Corps of Engineers Board of Contract Appeals together with the advisory opinions of that Board dated April 30, 1982 and September 14, 1982, which I hereby adopt, it is the final decision of the undersigned that the captioned appeal is in all respects SUSTAINED in the amount of $420,036.
624 F. Supp. 585
/s/ Richard S. Page Richard S. Page General Manager"

Defendant, however, did not notify plaintiff of this decision, and plaintiff did not receive a copy until May 1983.

Meanwhile, on April 19, 1983, plaintiff filed this suit, seeking recovery of the $147,460 difference between the BCA's and the contracting officer's award, and punitive damages for defendant's "bad faith in the administering the Contract with respect to the resolution" of this matter (Count I). Count II involved several other disputes and their resolution and sought over $12 million in damages.

Ten days after plaintiff filed suit, defendant's general manager issued an "amended final decision:"

"upon re-consideration of my unissued decision dated February 22, 1983 in light of the decision of the GSBCA in Capital Electric Company, GSBCA Nos. 5316 and 5317, February 17, 1983, and the legal precedent therein cited, and it appearing that applicability of the Eichleay formula in this appeal rises sic a substantial legal question and that by reason of the Contractor's action in the United States District Court for the District of Columbia, CA No. 83-1125 filed on April 19, 1983, the claim involved in this appeal has been made the subject of litigation between WMATA and the Contractor, it is the final decision of the undersigned that my unissued decision dated February 22, 1983 is hereby vacated; that the advisory opinions of the Eng BCA dated April 30, 1982 and September 14, 1982, to the extent they recommend entitlement for items other than home office overhead in the sum of $317,365.00 for an equitable adjustment to the Contract are hereby adopted; and the captioned appeal is SUSTAINED in the amount of $317,365.00."

Defendant forwarded this document and the original (February 22) decision to plaintiff on May 2.

A. Count I

As noted, plaintiff filed its complaint before WMATA's general manager issued his decision; indeed, defendant's "failure to act on the Board's decision" was the basis of the suit. See Complaint ¶ 56. Although plaintiff has not sought leave under Fed.R. Civ.P. 15(d) to supplement its pleadings to reflect this development, both parties treat the validity of the general manager's decision as the central issue presented in Count I. Plaintiff makes a threshold challenge. The dispute resolution provision, plaintiff argues, does not contemplate any participation by the general manager; he has "no authority to alter, modify, or reverse a decision made by the BCA" under the terms of the disputes clause in the contract. Pls.Mem.Pts.Auth.S.J. at 1-4. Defendant submits that the contract places final appeals authority in the general manager and that the BCA merely provides "advisory opinions," which may be accepted or rejected by the general manager.

Defendant is correct: final authority in disputes clause appeals rests with the WMATA general manager. The question turns on interpretation of the contractual provision placing "final and conclusive" authority in the WMATA "Board of Directors or its duly authorized representative for the determination of such appeals" (emphasis supplied). By resolution dated July 7, 1967, the WMATA Board expressly designated the general manager as its "duly authorized representative" for "fully and finally" deciding disputes clause appeals (DX 1a). Moreover, the Board by resolution dated June 3, 1971, designated the BCA as its "authorized representative" to "hear and render advisory opinions and to "recommend to the general manager ... final decisions on appeals arising under the Disputes clause of Authority contracts" (DX 1) (emphasis supplied).

It thus appears that the WMATA Board has spoken quite clearly as to the identity of its "duly authorized representative" for final determinations on appeals, see Square Construction Co. v. WMATA, 657 F.2d 68, 69 n.1 (4th Cir.1981); WMATA v. Ragonese,

624 F. Supp. 586
617 F.2d 828, 829 (D.C.Cir.1980); General Railway Signal Co. v. WMATA, 527 F.Supp. 359, 360 (D.D.C.1979) aff'd, 664 F.2d 296 (D.C.Cir.1980), cert. denied, 452 U.S. 915, 101 S.Ct. 3049, 69 L.Ed.2d 418 (1981); Metro Track Constructors v. WMATA, CA No. 75-2129 (D.D.C. July 15, 1976), slip op. at 4-5 & nn.3,4, and it is noteworthy that at no point did plaintiff ever object to further review by the general manager. The final decision under review here therefore is the April 29 decision by the general manager

Under the terms of the disputes clause, this determination is "final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence." Rulings on purely legal issues, however, are subject to much broader review: "nothing in this contract ... shall be construed as making final the decisions of the Board of Directors or its representative on a question of law."

Plaintiff correctly observes that the general manager in his original decision expressly "adopted" the advisory opinions of the BCA, which contained detailed evidentiary analyses and findings. In his "amended final decision," the general manager gave two reasons for modification of the original order. First, he found that an interim decision by the General Services Board of Contract Appeals ("GSBCA") raised a "substantial legal question" as to the correctness of the home office overhead calculation formula utilized by the BCA. Second, the general manager pointed to the filing of this law suit by plaintiff. Plaintiff argues that: 1) the general manager lacks power to vacate or modify a prior "adoption" of a BCA advisory opinion; and 2) even if he can reconsider an earlier decision, the reasons offered here do not support the result.

Plaintiff's first argument is not persuasive. The Court has little doubt that the general manager, as the final administrative arbiter of contract disputes, possesses the "inherent right of every tribunal to reconsider his own decision...

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4 practice notes
  • Lucero-Nelson v. Washington Metrop. Transit Author., No. CIV. A. 92-2401 EGS.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 24 Febrero 1998
    ...WMATA and generally, this omission is fatal to plaintiff's position. See Teart, 686 F.Supp. at 13; Excavation Constr., Inc. v. WMATA, 624 F.Supp. 582, 588 The only exception to this rule was set forth in dicta by the D.C. Court of Appeals in Smith. Smith, 336 A.2d at 832. Smith established ......
  • Safex Found., Inc. v. Safeth, Ltd., Civil Action No. 21-cv-161
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 26 Marzo 2021
    ...same market. Preventing this confusion is in the public interest, see Delta Sigma Theta, 215 F. Supp. 3d at 21; Crime Control, Inc., 624 F. Supp. at 582, and the public interest therefore favors an injunction with respect to defendants' alleged trademark infringement. As all four factors we......
  • George Hyman Const. Co. v. Washington Metropolitan Area Transit Authority, Nos. 85-6145
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 21 Abril 1987
    ...746-47; Nebraska Public Power District v. Austin Power, Inc., 773 F.2d 960, 972 (8th Cir.1985); Excavation Construction, Inc. v. WMATA, 624 F.Supp. 582 (D.D.C.1984); Golf Landscaping, Inc. v. Century Construction Co., 696 P.2d 590, 592-93 (Wash.Ct.App.1984); Southern New England Contracting......
  • Teart v. Washington Metro. Area Transit Authority, Civ. A. No. 87-1718-OG.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 24 Mayo 1988
    ...awards against WMATA. See Williams v. WMATA, No. 83-2747 (D.D.C. Dec. 4, 1984) (Harris, J.); Excavation Construction, Inc. v. WMATA, 624 F.Supp. 582, 588 (D.D.C. 1984) (Smith, J.); Savoy Construction Co. v. WMATA, No. 83-75, slip op. at 5 (D.D.C. Aug. 22, 1983) (Parker, J.); Davis v. WMATA,......
4 cases
  • Lucero-Nelson v. Washington Metrop. Transit Author., No. CIV. A. 92-2401 EGS.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 24 Febrero 1998
    ...WMATA and generally, this omission is fatal to plaintiff's position. See Teart, 686 F.Supp. at 13; Excavation Constr., Inc. v. WMATA, 624 F.Supp. 582, 588 The only exception to this rule was set forth in dicta by the D.C. Court of Appeals in Smith. Smith, 336 A.2d at 832. Smith established ......
  • Safex Found., Inc. v. Safeth, Ltd., Civil Action No. 21-cv-161
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 26 Marzo 2021
    ...same market. Preventing this confusion is in the public interest, see Delta Sigma Theta, 215 F. Supp. 3d at 21; Crime Control, Inc., 624 F. Supp. at 582, and the public interest therefore favors an injunction with respect to defendants' alleged trademark infringement. As all four factors we......
  • George Hyman Const. Co. v. Washington Metropolitan Area Transit Authority, Nos. 85-6145
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 21 Abril 1987
    ...746-47; Nebraska Public Power District v. Austin Power, Inc., 773 F.2d 960, 972 (8th Cir.1985); Excavation Construction, Inc. v. WMATA, 624 F.Supp. 582 (D.D.C.1984); Golf Landscaping, Inc. v. Century Construction Co., 696 P.2d 590, 592-93 (Wash.Ct.App.1984); Southern New England Contracting......
  • Teart v. Washington Metro. Area Transit Authority, Civ. A. No. 87-1718-OG.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 24 Mayo 1988
    ...awards against WMATA. See Williams v. WMATA, No. 83-2747 (D.D.C. Dec. 4, 1984) (Harris, J.); Excavation Construction, Inc. v. WMATA, 624 F.Supp. 582, 588 (D.D.C. 1984) (Smith, J.); Savoy Construction Co. v. WMATA, No. 83-75, slip op. at 5 (D.D.C. Aug. 22, 1983) (Parker, J.); Davis v. WMATA,......

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