Gov't Servs. Corp. v. United States, 15-666 C

• Decision Date: 30 March 2017
• Docket Number: No. 15-666 C,15-666 C
• Parties: GOVERNMENT SERVICES CORP., Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

GOVERNMENT SERVICES CORP., Plaintiff, v. THE UNITED STATES, Defendant.

No. 15-666 C

United States Court of Federal Claims

March 30, 2017

Breach Of Contract;

Breach Of Covenant Of Good Faith And Fair Dealing;

Breach of Implied Contract;

Contract Disputes Act (41 U.S.C. § 7104);

Counterclaims (28 U.S.C. § 2508);

False Claims Act (31 U.S.C. § 3729);

Federal Acquisition Regulation ("FAR") 48 C.F.R §§ 1.104, 2.101, 12.604(c), 14.208(a), 14.301, 33.211, 52.212;

Rules of The United States Court Of Federal Claims ("RCFC") 6(b)(1) (Extending Time), 8 (General Rules Of Pleading), 12 (Defenses And Objections), 15(a)(2),(3) (Amended Pleadings), 56(a) (Summary Judgment);

Special Plea In Fraud (28 U.S.C. § 2514);

Uniform Electronic Transaction Act ("UETA"), Idaho Code Ann. § 28-50-115.

Jefferson Ragnar Griffeath, Bamcis Legal PLLC, Moscow, Idaho, Counsel for Plaintiff.

Mark Edward Porada, United States Department of Justice, Civil Division, Washington, D.C., Counsel for the Government.

MEMORANDUM OPINION AND ORDER GRANTING-IN-PART AND DENYING-IN-PART THE GOVERNMENT'S CROSS-MOTION FOR SUMMARY JUDGMENT

This Memorandum Opinion And Order adjudicates Cross-Motions For Summary Judgment filed in a breach of contract case initiated by Government Services Corporation, a corporation with its principal office and place of business in Moscow, Idaho.

To facilitate review of this Memorandum Opinion And Order, the court has provided the following outline:

I. RELEVANT FACTUAL BACKGROUND.

II. PROCEDURAL HISTORY.

III. DISCUSSION.

A. Jurisdiction.

1. Counts Alleged By Plaintiff's October 7, 2015 Amended Complaint.

2. Counterclaims Alleged By The Government's December 10, 2015 Answer.

B. Standing.

C. Standard Of Review For A Motion For Summary Judgment, Pursuant To RCFC 56.

D. The Parties' Cross-Motions For Summary Judgment.

1. Plaintiff's September 15, 2016 Motion For Summary Judgment.

2. The Government's September 15, 2016 Cross-Motion For Summary Judgment And Counterclaims.

3. Plaintiff's October 17, 2016 Response.

4. The Government's October 17, 2016 Response.

5. The Government's November 3, 2016 Reply.

6. The Government's March 20, 2017 Supplemental Brief.

E. The Court's Resolution.

1. Claims Alleged By Plaintiff's October 7, 2015 Amended Complaint.

a. Counts One And Two: Cardinal And Constructive Change.

b. Count Three: Implied-In-Fact Contract.

c. Count Four: Breach Of Duty Of Good Faith And Fair Dealing.

2. Counterclaims Alleged by The Government's December 10, 2015 Answer.

IV. CONCLUSION.

I. RELEVANT FACTUAL BACKGROUND.¹

On Monday, November 5, 2012, at 1:34 PM Eastern Standard Time ("EST"),² in response to a declared State of Emergency after Super Storm Sandy, the United States Department of Homeland Security ("DHS"), acting through United States Customs and Border Protection ("CBP"), issued Solicitation Number 20074623 ("the Solicitation"), for an estimated 40,000 gallons of fuel to be delivered to John F. Kennedy International Airport ("JFK Airport"). Am. Compl. Att. 1 at 1; Gov't App'x at A8-A9. The Solicitation was posted on www.Fedbid.com, the Internet-based reverse auction marketplace. Am. Compl. Att. 1 at 1; Gov't App'x at A8. On that same day, at 2:52 PM, the Solicitation was amended to state that CBP needed "a vendor to provide a gasoline tanker at JFK [I]nternational Airport. The estimated amount of regular unleaded gasoline required is 40,000 gallons[.] Also, this will be dispensed from the truck to the tank. Vendors should include all taxes in the price of fuel." Am. Compl. Att. 2 at 2; Gov't App'x at A17. The Solicitation, as amended, stated that the auction period would end at 4:30 PM that same day. Am. Compl. Att. 2 at 1; Gov't App'x at A17.

At the close of the auction period, Government Services Corporation ("GSC") was listed as the "lead" contractor, because it offered the lowest bid price. Gov't App'x at A14. On that same day, at 5:27 PM, Mr. Matt Ruck, GSC's President, sent an e-mail to Mr. Ebrima Conteh, the CBP Contracting Officer ("CO") and Contracting Specialist ("CS"), identified in the Solicitation, stating that: "I am trying to schedule the loads. Can you confirm a contract award yet. I don't need the paperwork yet but I do need [i]n writing from you [to] go ahead." Gov't App'x at A27. The CO responded a minute later that he was attempting to "coordinate with Avis Car rental." Gov't App'x at A27; 9/9/16 Conteh Decl. ¶ 9 (explaining that CPB intended to make use of Avis Rent-a-Car's underground storage tank).

On that same day, at 6:02 PM, the CO sent an e-mail to Mr. Ruck, stating:

What CBP needs currently is a Fuel tank with capabilities to dispense fuel into our employee's personal own vehicles. Also, we will require you to accept personal credit cards from CBP employees. Although I cannot guarantee that you will sellall the fuel; I estimated that the current need for fuel is approximately 80,000 gallons. 40,000 gallons for JFK [A]irport and 40,000 for Newark [L]iberty Airport.

Gov't App'x at A30.³

At 7:50 PM, Mr. Ruck replied to the CO: "I have required arrangements in place and am dispatching trucks. If you want to send the orders we will be ready." Gov't App'x at A27.

At 8:19 PM,⁴ the CO sent an e-mail to Mr. Ruck "to inform you of the selection of your company to bring fuel trucks to John F. Kennedy International Airport and Newark Liberty [I]nternational Airport and sell fuel directly to US Customs Employees." Am. Compl. Att. 3; Gov't App'x at A35.

At 10:04 PM, Mr. Ruck replied by an e-mail to the CO: "I need exact location and on site contact information for these two locations." Gov't App'x at A124. After dispatching multiple fuel trucks to both JFK Airport and to Newark Liberty International Airport ("Newark Airport"), GSC allegedly learned for the first time that this was not a bulk delivery to underground storage tanks, but required gas-station style services to CBP employees and acceptance of payments, via debit cards and credit cards, from the individuals purchasing gasoline. Am. Compl. ¶¶ 11-13.

In response and to comply with CBP's requirements, GSC sent four senior supervisory employees to New York and New Jersey to set up impromptu "gas stations." Am. Compl. ¶¶ 14-16. GSC, however, dispensed only a fraction of the fuel ordered and had to sell the rest at a discount to mitigate potential damages. Am. Compl. ¶ 17. On February 15, 2013, CBP cancelled the Solicitation on www.Fedbid.com. Am. Compl. Att. 5.

On April 17, 2014, GSC submitted a certified claim to CBP, seeking $176,193.60 for costs incurred to comply with changes to the Solicitation. Am. Compl. Att. 6, at 1. On July 17, 2014, Denise Williams, a CBP CO, issued a final decision denying GSC's claim. Am. Compl. Att. 7.

II. PROCEDURAL HISTORY.

On June 26, 2015, GSC ("Plaintiff") filed a Complaint ("Compl.") in the United States Court of Federal Claims, requesting $183,788.86 in damages. ECF No. 1. Count One alleged a breach of contract by cardinal change; Count Two alleged a constructive change to the contract; Count Three alleged an implied-in-fact contract requiring compensation under principles of quantum meruit; and Count Four alleged a violation of the duty of good faith and fair dealing.Compl. ¶¶ 1-65. In support, Plaintiff filed seven Attachments ("Compl. Atts. 1-7"). Attachment 4 was the Monday, November 5, 2012 6:02 PM e-mail from the CO to Mr. Ruck, regarding CBP's requirement that gasoline be dispensed directly to employees' personal vehicles, but was marked "Monday, November 06, 2012 6:02 AM."⁵ Compl. Att. 4.

On August 27, 2015, the Government filed an Answer. ECF No. 6.

On October 2, 2015, Plaintiff filed a Motion To Amend Pleadings, because the date on Attachment 4 was incorrect, allegedly due to a "computer server program error;" the correct date was Monday, November 5, 2012 at either "23:02:20 UTC [Coordinated Universal Time]" or "15:02:20 Pacific Time."⁶ ECF No. 7-1 at 1. Plaintiff also filed a September 30, 2015 Affidavit from Mr. Ruck ("9/30/15 Ruck Affidavit"), who attested that the incorrectly dated e-mail was the result of a computer error and that the e-mail was received by Plaintiff's server either at 23:02:20 UTC or 3:02 PM PST. 9/30/15 Ruck Affidavit ¶¶ 2-7.

On October 5, 2015, the court granted Plaintiff's October 2, 2015 Motion, pursuant to Rule of the United States Court of Federal Claims ("RCFC") 15(a)(2). ECF No. 8. On October 7, 2015, Plaintiff filed an Amended Complaint.⁷ ECF No. 9. On October 19, 2015, the parties submitted a Joint Preliminary Status Report. ECF No. 10. On October 26, 2015, the court issued a Scheduling Order. ECF No. 12.

On December 10, 2015, the Government filed an Answer to the October 7, 2015 Amended Complaint. ECF No. 15. The December 10, 2015 Answer alleged that the November 6, 2012 e-mail referenced in the original Complaint, in fact, "was sent on Monday, November 5, 2012 at 6:02 [PM]. . . . [B]efore GSC responded that it had commenced scheduling its gasoline shipments and before CBP informed GSC [via e-mail] that it had been awarded the contract." Gov't Answer ¶ 116 (emphasis original). Therefore, the Government asserted that Plaintiff's claim was fraudulent and raised three additional counterclaims. Gov't Answer ¶ 116. The first counterclaim alleged that, under the Special Plea in Fraud, 28 U.S.C. § 2514, Plaintiff's entire claim should be forfeited. Gov't Answer ¶¶ 127-29. The second counterclaim alleged that, under the False Claims Act, 31 U.S.C. § 3729, Plaintiff knowingly submitted a false or fraudulent claim for payment by the United States and used a false record to support its claim, and was liable for up to $11,000. Gov't Answer ¶¶ 131-35. The third counterclaim alleged that, under the Contract Disputes Act, 41 U.S.C. § 7103, Plaintiff was liable for at least $183,788.86 in damages, plus the costs of reviewing Plaintiff's fraudulent claim. Gov't Answer ¶¶ 137-39.

On January 4, 2016, Plaintiff filed a Motion To Strike And Motion To Dismiss The Government's Answer To Amended Complaint. ECF No. 16. On January...