Norair Engineering v. Wash. Metro. Area Transit, Civ.A. DKC 96-3980.

• Decision Date: 04 March 1998
• Docket Number: No. Civ.A. DKC 96-3980.,Civ.A. DKC 96-3980.
• Citation: 33 F.Supp.2d 422
• Parties: NORAIR ENGINEERING CORP. v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY.
• Court: U.S. District Court — District of Maryland

33 F.Supp.2d 422

NORAIR ENGINEERING CORP. v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY.

No. Civ.A. DKC 96-3980.

United States District Court, D. Maryland.

March 4, 1998.

Order Supplementing Opinion May 15, 1998.

Charles A. Patrizia, Paul, Hastings, Janofsky & Walker, Washington, DC, for Norair Engineering Corp., plaintiff.

Thomas B. Dorrier, Washington Metro Area Transit Authority, Washington, DC, Robert L. Polk, Law Office, Washington, DC, for Washington Metropolitan Area Transit Authority, defendant.

Charles A. Patrizia, Paul, Hastings, Janofsky & Walker, Washington, DC, for Slattery Associates, Inc., movant.

MEMORANDUM OPINION

CHASANOW, District Judge.

Currently pending and ready for resolution are Plaintiff Norair Engineering Corporation's ("Norair") Motion for Partial Summary Judgment, Defendant Washington Metropolitan Transit Authority's ("WMATA") Cross-Motion for Partial Summary Judgment, and a Motion to Intervene by Slattery Associates, Inc. ("Slattery") and G.T. Group, Inc. ("G.T.Group") (collectively "the Intervenors"). WMATA has opposed the Intervenors' motion. No hearing is deemed necessary and the court now rules pursuant to Local Rule 105.6.

I. Facts

Norair and WMATA entered into a Joint Stipulation of Facts concerning their dispute that this court adopts for the purposes of this Memorandum Opinion. A copy of the statement is attached hereto.

Like Norair, the Intervenors contracted to build subway stations for WMATA and now are embroiled in a controversy over the isolation pads used therein. The contract the Intervenors signed with WMATA was identical in form to the contract between Norair and WMATA. Additionally, the Intervenors and Norair share counsel and have filed nearly identical complaints.

II. Motion to Intervene

The permissive intervention of a third party to an action is governed by FED.R.CIV.P. 24(b), which provides as follows in relevant part:

Upon timely application anyone may be permitted to intervene in an action: ... (2) when an applicant's claim or defense and the main action have a question of law or fact in common.... In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

FED.R.CIV.P. 24(b)(2); see also Zimmerman v. Bell, 101 F.R.D. 329, 331 (D.Md.1984).

Given these general guidelines, permissive intervention primarily lies at the discretion of the court. See Hill v. Western Elec. Co., 672 F.2d 381, 385 (4th Cir.), cert. denied, 459 U.S. 981, 103 S.Ct. 318, 74 L.Ed.2d 294 (1982). The court has reviewed the memoranda submitted by the Intervenors and WMATA in this matter. Despite the existence of common facts and questions of law, the court concludes that it will exercise its discretion to deny the Intervenors' motion. The need to avoid unduly prejudicing the existing parties supports this decision. The present case centers around the issue of whether Norair is prohibited from challenging the Army Corps of Engineers Board of Contract Appeals' ("BCA") jurisdiction. Because this question raises issues that are not common to Norair and the Intervenors, the introduction of other parties into the present litigation would unduly complicate matters.

III. Motions for Summary Judgment

A. Standard of Review

It is well established that a motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In other words, if there clearly exist factual issues "that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," then summary judgment is inappropriate. Anderson, 477 U.S. at 250, 106 S.Ct. 2505; see also Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir.1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir.1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir.1950). The moving party bears the burden of showing that there is no genuine issue as to any material fact. FED.R.CIV.P. 56(c); Pulliam Inv. Co., 810 F.2d at 1282 (citing Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir.1979)).

When ruling on a motion for summary judgment, the court must construe the facts alleged in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Gill v. Rollins Protective Servs. Co., 773 F.2d 592, 595 (4th Cir. 1985). A party who bears the burden of proof on a particular claim must factually support each element of his or her claim. "[A] complete failure of proof concerning an essential element ... necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. Thus, on those issues on which the nonmoving party will have the burden of proof, it is his or her responsibility to confront the motion for summary judgment with an affidavit or other similar evidence. Anderson, 477 U.S. at 256, 106 S.Ct. 2505.

In Celotex Corp., the Supreme Court stated:

In cases like the instant one, where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file." Such a motion, whether or not accompanied by affidavits, will be "made and supported as provided in this rule," and Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial."

Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. However, "`a mere scintilla of evidence is not enough to create a fact issue.'" Barwick v. Celotex Corp., 736 F.2d 946, 958-59 (4th Cir. 1984) (quoting Seago v. North Carolina Theatres, Inc., 42 F.R.D. 627, 632 (E.D.N.C. 1966), aff'd, 388 F.2d 987 (4th Cir.1967)). There must be "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted).

B. Analysis

The lone question subject to the cross motions for partial summary judgment is whether the BCA has jurisdiction over the dispute between Norair and WMATA. Rather than arising as a legislative creation, board jurisdiction in government contract cases arises out of the parties' agreement. See United States v. Utah Constr. & Mining Co., 384 U.S. 394, 404, 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966) ("The power of the administrative tribunal to make final and conclusive findings on factual issues rests on the contract, more specifically on the disputes clause."); see also General Dynamics v. United States, 214 Ct.Cl. 607, 558 F.2d 985, 989 (1977). Therefore, the issue of jurisdiction is a matter of contract interpretation. See Utah Constr., 384 U.S. at 413, 86 S.Ct. 1545. As a result, two questions arise: (1) whether prior judicial interpretations of standard government contract language control the issue of whether the BCA has jurisdiction; and (2) whether, if controlling precedent finds an absence of jurisdiction, the prior proceedings before the BCA prevent a challenge to the BCA's jurisdiction at this hour. For the reasons that follow, the court concludes that the BCA has jurisdiction over the parties' dispute.

1. Contractual Provisions Do Not Create Jurisdiction

The law in the Fourth Circuit is settled as to how government contracts endow contract appeals boards with jurisdiction to resolve disputes between the parties. See WMATA v. Buchart-Horn, Inc. 886 F.2d 733, 735 (4th Cir.1989). Applying the Supreme Court's holding in Utah Construction, the Fourth Circuit found that disputes clauses do not themselves create jurisdiction in the reviewing body, but merely create the framework for administrative review. See id. "[A]dministrative review of a given claim is only authorized if some other provision of the contract establishes an administrative remedy sufficient to afford full relief." Id. The disputes clause in this case is identical to the disputes clause at issue in Buchart-Horn.¹ Therefore, this court must look to the underlying clauses in the contract to determine whether jurisdiction is created thereunder.²

Portions of the "Inspection and Acceptance" (§ 1.10(b)(c) and (f)) and "Warranty of Construction" (§ 1.48) clauses constitute the basis of WMATA's claim against Norair. Neither clause contains language granting the contract administrator authority to provide full relief to disputes between the parties.³ Without directly citing to the contractual language it feels provides for the administrative remedy, WMATA adopted the reasoning of the BCA's decision on jurisdiction and attached a copy to its reply. The BCA found that the identification of latent defects revived WMATA's rights under 1.10(b) to accept non-conforming materials and make an adjustment in the contract price. Whether or not BCA was correct regarding the effect of latent defects on acceptance rights, this clause mentions neither the contracting officer nor the disputes clause. On the other hand, a number of other clauses contain language specifically invoking the contracting officer's authority and the disputes clause. Examples include the changes clause and the termination provisions. The use of specific language in other clauses demonstrates that the language used in 1.10(b) is insufficient to vest the contracting officer with authority to remedy the dispute.

The cases WMATA cites to demonstrate that...