Locke v. United States

• Decision Date: 02 November 1960
• Docket Number: No. 258-59.,258-59.
• Citation: 283 F.2d 521
• Parties: Harvey Ward LOCKE v. UNITED STATES.
• Court: U.S. Claims Court

283 F.2d 521 (1960)

Harvey Ward LOCKE v. UNITED STATES.

No. 258-59.

United States Court of Claims.

November 2, 1960.

Harvey Ward Locke, pro se.

David V. Anthony, Washington, D. C., with whom was George Cochran Doub, Asst. Atty. Gen., for defendant.

JONES, Chief Judge.

This is a suit, first, for lost profits resulting from an alleged breach of a requirements contract held by plaintiff with the General Services Administration. The contract covered the repair of typewriters in the San Diego, California, area. Secondly, plaintiff sues for damages allegedly resulting from the Government's improper refusal to accept his bid on another typewriter-repair contract for the Fort Worth, Texas, area. For convenience we shall refer to these as the California contract and the Texas contract. The case comes before the court on the parties' cross-motions for summary judgment under Rule 51, 28 U.S.C.A.

I

We shall consider the California contract first. The plaintiff, Harvey Ward Locke, was the owner of a typewriter-repair company doing business variously under the names "Ward's Typewriter Repair" and "Allied Typewriter Company." As Ward's Typewriter Repair, of San Diego, California, plaintiff was awarded GSA Federal Supply Schedule Contract GS-09S-1329. The contract covered the repair, maintenance and reconditioning of manual typewriters in the San Diego area for the period July 1, 1955, through June 30, 1956. Similar typewriter-repair contracts were awarded to three other local companies covering the same period of time. These contracts provided that upon an acceptable bid and a showing of responsibility¹ the contractor's name, address, and telephone number would be placed in a Federal Supply Schedule which was widely distributed to Government installations in the area. Apart from certain exceptional conditions not pertinent here, it was mandatory upon the various departments of the Executive Branch of the Federal Government in the area to use contractors whose names appeared in this schedule when typewriter-repair services were desired. (The Department of Defense was specifically excluded.) However, these agencies were at liberty to choose any name from the schedule and were not bound to proceed in the schedule in a given order. In addition to "mandatory use" all agencies of the Federal Government, particularly the Department of Defense, optionally might order repair services from contractors appearing in the schedule. Each bidder whose bid was accepted and whose name was listed in the schedule was obligated to perform all the services for which he contracted that resulted from the "mandatory" provisions of the contract. However, contractors were at liberty to decline those progressive awards which arose from the "optional" provisions of the contract.

Plaintiff operated under his contract for several months and received some business from the Government. But on February 2, 1956, the Government's contracting officer terminated the contract for default and plaintiff's name was stricken from the schedule. Other contractors in the schedule continued to receive Government business until the expiration of their contracts. Plaintiff filed an appeal with the Board of Review, General Services Administration, and following a full hearing,² the board rendered the following decision:

"1. Contract No. GS-09S-1329 was terminated for default on February 2, 1956, without proper cause.

"2. The Appellant\'s claim for the payment of $30,000 as compensation for lost profits is denied.

"3. The Appellant\'s claim for the payment of $60,000 as compensation for alleged defamation of character and loss of other business is denied."

Following this denial of relief the plaintiff filed his appeal to this court.

The question brought to this court for determination is what if any compensable damage did plaintiff suffer as a direct result of the Government's improper termination of plaintiff's contract. The Government says no damage has occurred and has moved to dismiss the complaint for failure to state a cause of action upon which relief can be granted. The plaintiff, appearing pro se, has alleged in his jumble of testimony, less explicitly but no less expressively, that various forms of damages have occurred. He has asked "this Court to assist him to see that justice does not suffer miscarriage under American Jurisprudence."

Simply phrased, the defendant takes the position that while the contract may have been improperly terminated no loss of profits is recoverable because the contract was a "requirements contract" and did not guarantee that any minimum requirement would exist. Furthermore, where a requirement did in fact occur, the contract by its terms did not guarantee that the Government would give all or any part of this requirement to the plaintiff. The contract merely provided that plaintiff's name would appear in a Federal Supply Schedule along with other typewriter-repair contractors. Certain Federal agencies could select typewriter-repair companies from the schedule to fulfill their requirements, if any. Furthermore, since plaintiff could not have demanded business while he remained in the schedule, he cannot now be heard to complain that he received no business, albeit he may have been improperly removed from the schedule. With this we cannot agree.

It is now beyond question that contracts for requirements do not lack mutality and are enforceable. In every case it is the reasonable expectation by both parties that there will be requirements on which the bargain is grounded. Ready-Mix Concrete Co., Ltd. v. United States, 130 F.Supp. 390, 131 Ct.Cl. 204; Walters v. United States, 130 F.Supp. 360, 131 Ct.Cl. 218; Gemsco, Inc. v. United States, 115 Ct.Cl. 209; Hirsch et al. v. United States, 104 Ct.Cl. 45; Johnstown Coal & Coke Co. v. United States, 66 Ct.Cl. 616. The facts, as alleged, show that plaintiff in the past had received substantially all of his business from Government agencies under similar contracts. We cannot believe that in this instance plaintiff bargained merely to have his name printed in the supply schedule. It appears more important that being in the schedule created a reasonable probability that business would be obtained. Particularly is this so when it is noted that among the four San Diego repair companies originally put in the schedule plaintiff was the low bidder.

We agree that nothing in the contract would have prevented the Government from enlarging its own repair facilities to fill completely its needs. This would have left nothing to be awarded under the Federal Supply Schedule contracts. But the facts as alleged show that the Government did have some service requirements beyond its own capacity. Presumably, these requirements were awarded to contractors in the schedule. Plaintiff's chance of obtaining some of these awards, by being in the schedule and competing with the other contractors, had value in a business sense. The Government by its breach deprived plaintiff of this value.

The defendant further takes the position that the fact of damage as well as the amount that resulted from the removal of plaintiff's name from the schedule is too speculative to permit of proof. But the constant tendency of the courts is to find some way in which damages can be awarded where a wrong has been done. Bigelow et al. v. RKO Radio Pictures, 327 U.S. 251, 265, 66 S. Ct. 574, 90 L.Ed. 652. Difficulty of ascertainment is not to be confused with right of recovery. Nor does it exonerate the defendant that his misconduct, which has made necessary the inquiry into the question of harm, renders that inquiry difficult. Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 379, 47 S.Ct. 400, 71 L.Ed. 684. The defendant who has wrongfully broken a contract should not be permitted to reap advantage from his own wrong by insisting on proof which by reason of his breach is unobtainable. Crichfield v. Julia, 2 Cir., 147 F. 65. It remains true, however, that the plaintiff must meet a higher standard of proof to establish that he has sustained some injury than to fix the amount. Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 51 S.Ct. 248, 75 L.Ed. 544.

If a reasonable probability of damage can be clearly established, uncertainty as to the amount will not preclude recovery. Story Parchment Co., supra. The amount may be approximated if a reasonable basis of computation is afforded. Eastman Kodak Co., supra; Palmer et al. v. Connecticut Ry. & Lighting Co., 311 U.S. 544, 61 S.Ct. 379, 85 L.Ed. 336. "All that the law requires is that such damage be allowed as, in the judgment of fair men, directly and naturally resulted from the breach of the contract for which the suit is brought." Needles et al. v. United States, 101 Ct.Cl. 535, 618. First-Citizens Bank & Trust Co. et al. v. United States, 76 F.Supp. 250, 110 Ct.Cl. 280, 327; Houston Ready-Cut House Co. et al. v. United States, 96 F.Supp. 629, 119 Ct.Cl. 120, 193. Certainty is sufficient if the evidence adduced enables the court to make a fair and reasonable approximation of the damages. Stern v. Dunlap Co., 10 Cir., 228 F.2d 939. In circumstances such as these we may act upon probable and inferential as well as direct and positive proof. Bigelow et al. v. RKO Radio Pictures, supra.

"Any other rule would enable the wrongdoer to profit by his wrongdoing at the expense of his victim. It would be an inducement to make wrongdoing so effective and complete in every case as to preclude any recovery by rendering the measure of damages uncertain. Failure to apply this rule would mean that the more grievous the wrong done, the less likelihood there would be of a recovery.

"The most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created." Bigelow v. RKO Radio Pictures, supra, 327 U.S. at page 264, 66 S.Ct. at page

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