United Pacific Ins. Co. v. Roche

• Decision Date: 27 June 2002
• Docket Number: No. 01-1242.,01-1242.
• Parties: UNITED PACIFIC INSURANCE COMPANY, Appellant, v. James G. ROCHE, Secretary of the Air Force, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

294 F.3d 1367

UNITED PACIFIC INSURANCE COMPANY, Appellant, v. James G. ROCHE, Secretary of the Air Force, Appellee.

No. 01-1242.

United States Court of Appeals, Federal Circuit.

June 27, 2002.

Gary A. Wilson, Duane Morris LLP, of Philadelphia, Pennsylvania, argued for appellant. With him on the brief was Salil P. Patel.

William G. Kanellis, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for appellee. With him on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; and James M. Kinsella, Deputy Director. Of counsel on the brief was Lt. Col. Blane B. Lewis, Air Force Legal Services Agency, of Arlington, Virginia.

Edward G. Gallagher, Wickwire Gavin, P.C., of Vienna, Virginia, argued for amicus curiae The Surety Association of America.

Before CLEVENGER, Circuit Judge, ARCHER, Senior Circuit Judge, and DYK, Circuit Judge.

ARCHER, Senior Circuit Judge.

United Pacific Insurance Co. ("United Pacific") appeals the decision of the Armed Services Board of Contract Appeals ("ASBCA" or "board") dismissing in part its claims against the United States. See United Pac. Ins. Co. v. United States, No. 52419, slip op. (ASBCA Feb. 7, 2001). Because the board's decision was not final pursuant to 28 U.S.C. § 1295(a)(10), we dismiss this appeal for lack of jurisdiction.

Factual Background

On September 28, 1995, Castle Abatement Corporation ("Castle") was awarded a contract to repair a secondary containment system at McGuire Air Force Base in New Jersey. United Pacific agreed to act as surety, and issued a performance bond in the amount of $2,312,267 (the total contract price) and a payment bond in the amount of $1,156,134.

The government and Castle entered into a contract, which included the standard Differing Site Conditions Clause requiring the government to make an equitable adjustment to the contract if the site conditions materially differed from those indicated in the contract. On July 21, 1997, the government terminated the contract for default. Castle had ceased work on the project, stating that as a result of severe environmental contamination of the work site, it incurred substantial expenses for environmental remediation that it did not anticipate in its bid. United Pacific and the government entered into a takeover agreement on August 5, 1997 (the "Takeover Agreement"), under which United Pacific arranged for the completion of the project.

On October 28, 1998, United Pacific filed a "Request for Equitable Adjustment" with the government, consisting of ten individual claims totaling $1,759,966.80. United Pacific alleged that many of these claims stemmed from unexpected site conditions encountered either by Castle or United Pacific's completion contractor. The contracting officer granted the request only in the aggregate amount of $1,431.16 (adjusted for a credit taken by the government).

The contracting officer's analysis of the request varied on a claim-by-claim basis. For example, she allowed portions of certain claims (i.e. $3,500 of a $109,440 claim for transportation costs relating to precast wall sections) that United Pacific alleges arose during work by Castle. She denied outright a claim for delay that United Pacific alleged arose partially during Castle's work and partially during the completion contractor's work. Her reasons for denial included inadequate contractor substantiation of the alleged equitable adjustment items, specification of the alleged adjustments in the original agreement, cost adjustments, and fault of the contractor.

United Pacific filed a complaint with the board. Under various legal theories, it sought the recovery of the remainder of its equitable adjustment claims, specific performance of settlement, and recovery of $46,288.37 on the contract balance. The government filed a motion to dismiss for lack of jurisdiction any portions of United Pacific's claims that arose before the Takeover Agreement. It argued that United Pacific did not independently possess standing as a surety to pursue such claims, and that without an assignment by Castle to United Pacific, only Castle was in contractual privity with the government for such claims.

The board granted the motion, but retained jurisdiction over the post-takeover portions of the equitable adjustment claims and the equitable subrogation claim for the contract balance. The board did not define which claims, or which portions of claims, "arose prior to" the Takeover Agreement, and did not reach the issue of the monetary quantum of these claims.

Discussion

Our jurisdiction under 28 U.S.C. § 1295(a)(10) is to review only final decisions of agency boards of contract appeals. United States v. W.H. Moseley Co., 730 F.2d 1472, 1474 (Fed.Cir.1984); see also 28 U.S.C. § 1295(a)(10). A final order is generally one that "`ends the litigation on the merits and leaves nothing for the court to do but execute judgment.'" Teledyne Continental Motors, Gen. Prods. Div. v. United States, 906 F.2d 1579, 1581 (Fed.Cir.1990) (quoting Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981) (citations omitted)).

Pursuant to the Contract Disputes Act, 41 U.S.C. §§ 606, 607(d), a contractor may appeal an adverse decision of a contracting officer to the appropriate agency board of contract appeals. "It is thus necessary to determine the scope of the contracting officer's decision, for this determines the extent of the contractor's right of appeal and the board's jurisdiction." Dewey Elecs. Corp. v. United States, 803 F.2d 650,...