PSBCA No. 5356


February 11, 2008 


Appeal of
JOSEPH J. FANUCCHI, M.D.

EMPLOYMENT CONTRACT

PSBCA No. 5356

APPEARANCE FOR APPELLANT:
Colleen O'Brien, Esq.
O'Brien & Kelleher, LLP

APPEARANCE FOR RESPONDENT:
Stephen D. Lobaugh, Esq.
Office of the General Counsel
United States Postal Service

OPINION OF THE BOARD ON MOTION TO DISMISS

            Respondent, United States Postal Service, has filed a motion to dismiss this appeal for failure to state a claim upon which relief can be granted and for lack of jurisdiction.  Appellant, Joseph J. Fanucchi, M.D., opposes the motion.  The following findings of fact are made solely for the purpose of deciding the motion.

FINDINGS OF FACT

            1.  On April 10, 2001, in accordance with authority provided in 39 U.S.C. § 1001(c), the parties entered into an employment contract through which Respondent agreed to employ Appellant as the Associate Area Medical Director in Respondent’s Pacific Area.  The term of the contract was for five years commencing on May 1, 2001.  (Appeal File, Tab (AF) 14).

            2.  Under the provisions of 39 U.S.C. § 1001(c), and as recited in the contract, Respondent could at its discretion, upon written notice to Appellant, terminate his employment at any time without cause.  Under the contract, if Respondent exercised its right to terminate Appellant without cause, Appellant was entitled to 10 weeks severance pay.  The contract also provided that, “[a]side from the … severance pay, [Appellant] shall not be entitled to any compensation under this contract for any period beyond the date on which his employment is terminated.”  Under the contract, written notices were required to be sent by either certified or registered mail.  (AF 14).

            3.  In June 2005, the contracting officer advised Appellant orally that his contract was being terminated at the direction of the Director of Human Resources for the Pacific Area.  In late June or early July, Appellant received a certified letter from a Human Resources Specialist explaining how he could arrange to have his health benefits continue after his separation.  Appellant was paid the 10 weeks severance pay required under the contract.  (AF 1; Declaration of Joseph Fanucci, M.D., dated August 2, [2006]).

            4.  At some point after July 1, 2005, a dispute apparently arose over whether Appellant had been properly notified of the contract termination.  In an October 14, 2005 letter to Appellant, sent by certified mail, the contracting officer claimed that Appellant had been notified by the contracting officer orally and in a letter dated June 16, 2005, that the termination of his contract would be effective June 30, 2005 (AF 4).

            5.  By letter dated December 27, 2005, Appellant, through counsel, sought reinstatement to his position, contending that the reason for the termination was that he had been selected for service on a federal grand jury and would be required to be absent for three or four days per month over the succeeding eighteen months.  Appellant contended that his termination thus contravened 28 U.S.C. § 1875, which, in part, prohibited employers from discharging permanent employees by reason of an employee’s jury service and provided for the recovery of damages against an offending employer.  Appellant stated that if he were not reinstated he intended to file an action in federal district court seeking recovery under the statute.  (AF 3).

            6.  In a January 9, 2006 response, counsel for Respondent took the position that Appellant had been properly notified of the termination, in accordance with the contract terms, and that his termination did not violate 28 U.S.C. § 1875.  Respondent refused to agree to reinstate Appellant.  (AF 2).

            7.  Appellant, through counsel, responded to the January 9, 2006 letter in a letter to Respondent’s counsel, dated April 14, 2006.  In the letter, Appellant took issue with Respondent’s position that Appellant’s termination did not violate 28 U.S.C. § 1875, argued that his recovery was not barred by his acceptance of the severance pay, and complained that he had not received documents that he had requested.  He concluded by noting that he had not received the termination notice required by the contract until October 2005 and that under the contract he was entitled to be paid his salary and benefits to October 14, 2005, and his “annual performance bonuses” for the fiscal years ending September 30, 2004 and 2005.  (Exhibit A to Respondent’s Motion to Dismiss).

            8.  The contracting officer chose to treat Appellant’s April 14, 2006 letter as a claim and calculated the monetary value of Appellant's claimed compensation to be $38,462 for salary from July 1, 2005, until October 14, 2005, plus benefits.  In a final decision dated May 12, 2006, the contracting officer denied the claim, concluding that Appellant had been provided proper notice of termination effective June 30, 2005.  (AF 1; Exhibit D to Appellant’s Opposition to Motion to Dismiss).  Appellant filed a timely appeal from the final decision.

            9.  In his Complaint, Appellant set out two causes of action, based on breach of contract.  In the first cause of action, Appellant asserted that his contract had not been terminated until on or about October 15, 2005, and that he was owed approximately $38,500 in salary, plus approximately $26,500 in benefits, for a total of $65,000, for the period between July 1 and October 15, 2005.  In the second cause of action, Appellant asserted that his contract had been terminated for an illegal reason – i.e., because of his grand jury service -  and that he was, therefore, owed approximately $89,000 in salary, plus benefits, for the period of July 1, 2005, through April 30, 2006 (the contract expiration date), for a total of $119,000.  (Complaint).

            10.  In his October 31, 2006 Opposition to Respondent's Motion to Dismiss, Appellant alleged for the first time that he performed work for Respondent, following his alleged termination in June 2005, for which he was not compensated. 

DECISION

            In its motion, Respondent makes two arguments.  With respect to count one of the Complaint, Respondent argues that Appellant has failed to state a claim upon which relief can be granted because he has admitted that he was paid the full compensation – ten weeks’ severance pay - due him under the contract in the event of a termination, and because he is not entitled to compensation for any period after June 2005 inasmuch as he performed no work thereafter.  With respect to count two, Respondent argues that the Board lacks subject matter jurisdiction because the relief being sought under this count is not the same as the relief sought under the claim letter – i.e., that Appellant did not seek the payment of salary and benefits through April 30, 2006 in the April 14, 2006 claim letter, but only sought salary and benefits through October 14, 2005.  Therefore, Respondent contends that Appellant’s claim for $119,000 was not first presented to the contracting officer, as required by the Contract Disputes Act.  Moreover, Respondent contends that even if the claim letter can be read to encompass the $119,000 claim, the Board lacks jurisdiction to consider it since it was not certified.

            In response, Appellant argues that he did not receive all the compensation due him because the contract was not terminated in accordance with its terms and because he performed work after the alleged termination of the contract.  He further argues that he brought all the issues covered in the Complaint to the attention of the contracting officer, that the contracting officer elected to treat his assertions as a claim without notifying him of any jurisdictional defects, and that any defects in his claim were attributable to Respondent's unilateral decision to treat his letter as a claim and, therefore, the claim and certification requirements should be waived.

            In the April 14, 2006 letter that the parties have chosen to treat as Appellant’s claim and in correspondence preceding the claim, Appellant sought payment of salary and benefits through October 14, 2005, and payment of two annual performance bonuses based on the claimed lack of proper notice of termination.  The contracting officer’s decision, appealed by Appellant, addressed that claim, concluding proper notice had been given and that the termination was, therefore, effective June 30, 2005.  The proper scope of the appeal before us “is circumscribed by the parameters of the claim, the contracting officer’s decision thereon, and the contractor’s appeal therefrom,” Stencel Aero Engineering Corp., ASBCA No. 28654, 84-1 BCA ¶ 16,951 at 84,315, and may not be expanded through the pleadings, Magnavox Government and Industrial Electronics Co., ASBCA No. 32834, 91-2 BCA ¶ 23,758 at 118,989.  The claim before the contracting officer did not assert the right to recover salary and benefit payments through April 2006, based on a violation of 28 U.S.C. §1875 or on any other basis, and we see no evidence in the record that Appellant ever submitted a claim for compensation beyond October 14, 2005, to the contracting officer.  Therefore, the claim for such payments, asserted for the first time in count two of Appellant’s Complaint, is not within the proper scope of this appeal, was not first submitted to the contracting officer for a decision, and is dismissed for lack of jurisdiction.  See 41 U.S.C. § 605(a); Paragon Energy Corp. v. United States, 645 F.2d 966, 971 (Ct. Cl. 1981); Ronald L. Johnson, PSBCA No. 5282, 06-1 BCA ¶ 33,234.  This dismissal, however, is without prejudice to Appellant’s right to file such a claim, properly certified if in excess of $100,000, with the contracting officer.

            With regard to count one, however, the April 14, 2006 letter asserted Appellant’s claim that an improper termination notice constituted a breach of the contract between the parties, entitling him to recover as damages the pay and benefits he would have earned under the contract through October 14, 2005.  This portion of the appeal is properly before us.  Respondent’s argument that Appellant has received everything he was entitled to under the contract and that any further recovery would amount to an improper windfall is an argument that takes issue with Appellant’s assertion that Respondent materially breached the contract.  Respondent’s argument addresses the merits of the appeal, but does not present a basis for challenging the Board’s jurisdiction.  Therefore, the motion to dismiss is denied as to count one of the Complaint.

            Accordingly, as explained above, Respondent’s motion to dismiss is granted in part and denied in part.


David I. Brochstein
Administrative Judge
Vice Chairman

 

I concur:                                                                      I concur:                                 
William A. Campbell                                                     Norman D. Menegat
Administrative Judge                                                  Administrative Judge
Chairman                                                                     Board Member