Appeal of

SAMSON J. HYPOLITE

Under Contract No. HCR 302M3

PSBCA No. 5415

APPEARANCE FOR APPELLANT:
Samson J. Hypolite

APPEARANCE FOR RESPONDENT:
Gary Shapiro, Esq.
Office Of The General Counsel
United States Postal Service

OPINION OF THE BOARD ON MOTION FOR SUMMARY JUDGMENT

            In 2005, Respondent terminated Appellant’s mail transportation contract for default.  Appellant appealed, and in the entitlement phase of the appeal, the Board converted the default termination to a termination for Respondent’s convenience.  Samson J. Hypolite, PSBCA No. 5266, 06-2 BCA ¶ 33,337, recon. denied, 07-1 BCA ¶ 33,468.  Calculation of the amount of damages was remanded to the parties.  Respondent paid Appellant the amount it believed Appellant was entitled to under the contract, but Appellant filed a claim for more.  The contracting officer denied the claim, and Appellant appealed.

            Respondent filed a Motion to Enter Judgment in which it contends that it is entitled to judgment in its favor based on the undisputed facts established in the record.  In support of the motion Respondent included its June 21, 2007 Discovery Requests and Appellant’s July 20 and August 7 responses.  The Board advised the parties that it would treat the motion as a motion for summary judgment and provided an opportunity for further filings.  Both parties have submitted additional argument.  For purposes of deciding the motion for summary judgment, we make the following findings of fact.

FINDINGS OF FACT

            1.  On April 5, 2004, Respondent awarded Appellant contract HCR 302M3 for mail delivery service for the term May 1, 2004, through June 30, 2007, at the rate of $51,447.39 per year (Contract (pp. 1, 53, 67-68)).[1]

            2.  The Termination for Default clause of the contract provided that if after Respondent terminated the contract for default it was determined that Appellant was not in default, “the rights and obligations of the parties will be the same as if the termination had been issued for convenience.”  (Contract Clause H.4, TERMINATION FOR DEFAULT (Clause B-13) (January 1997) (Modified), subsection H.4.g (p. 116)).

            3.  The contract’s Termination for Convenience clause provided that in the event Respondent terminated the contract for convenience, Appellant, as his full remedy, would be entitled to be paid as liquidated damages the sum set forth in the contract’s Changes clause.  The Changes clause authorized liquidated damages of one-third of the contract’s annual rate if the convenience termination occurred in the first two years of contract performance.  (Contract Clauses H.3, TERMINATION FOR CONVENIENCE (TRANSPORTATION) (Clause B-71) (January 1997) and H.8, CHANGES (TRANSPORTATION) (Clause B-67) (January 1997), subsection e.(2) (pp. 115, 118-119)).

            4.  Respondent terminated Appellant’s contract for default on March 7, 2005, and Appellant appealed.  Samson J. Hypolite, PSBCA No. 5266, 06-2 BCA ¶ 33,337, recon. denied, 07-1 BCA ¶ 33,468.

            5.  By decision dated July 12, 2006, the Board converted the default termination to a termination for Respondent’s convenience.  Id.

            6.  On or about July 26, 2006, Respondent paid Appellant $17,149.13, which was one-third of the contract’s annual rate at the time of the termination for default (Appeal File for PSBCA No. 5415, tab (“AF”) 7; July 20, 2007 Admissions 1, 3; August 7, 2007 Supplemental Admission 1, and Answer to Interrogatory 3).

            7.  On February 1, 2007, Appellant submitted a certified claim to the contracting officer claiming that due to Respondent’s bad faith breach of contract, he was not limited to the liquidated damages allowed under the contract’s termination for convenience scheme.  He demanded breach damages of $17,000,000.  (AF 4).

            8.  By final decision dated April 17, 2007, the contracting officer denied the claim (AF 3), and this appeal followed.

DECISION

Appellant’s Damages

            Once the Board converted the termination of Appellant’s contract into one for the convenience of Respondent (Finding 5), the contract’s Termination for Convenience and Changes clauses (Findings 2, 3) established the full recovery to which Appellant is entitled on account of the termination for convenience.  See Richard R. Wilson, PSBCA No. 3469, 96-2 BCA ¶ 28,366; Melvin R. Kessler, PSBCA Nos. 2820, 2972, 92-2 BCA ¶ 24,857.  Under the contract, Appellant was entitled to receive as his sole relief liquidated damages in the amount of one-third of the annual contract rate, or $17,149.13 (Findings 1-3), and Appellant has received that amount (Finding 6).  Accordingly, Appellant has been paid all damages he is entitled to under the contract.  

            Appellant argues his recovery is not limited to the liquidated damages provided under the contract because he alleges that Respondent acted in bad faith.  In the Board’s reconsideration of its entitlement Opinion, we held that Respondent’s officials were not shown to have acted in bad faith.  Samson J. Hypolite, PSBCA No. 5266, 07‑1 BCA ¶ 33,468.  That is the law of the case, and Appellant has not shown any basis for departing from that holding in this the quantum portion of the appeal.  See Yachts America, Inc. v. United States, 779 F.2d 656, 659 (Fed. Cir. 1985); C.M. Moore Division, K.S.H., Inc., PSBCA No. 2208, 90-3 BCA ¶ 23,174 at 116,312.

            Appellant has not shown entitlement to damages in excess of the amount provided by the contract and paid by the contracting officer.  As Respondent has paid Appellant all damages to which Appellant has shown entitlement, Appellant’s claim for further damages is denied.  On that issue, summary judgment is granted Respondent.

Respondent’s Claim for Return of Interest Paid Appellant

            Respondent represents that it erroneously paid Appellant interest on the liquidated damages.  It asks the Board to determine that Appellant was paid $1,109.38 as interest in error and that Appellant is obligated to reimburse Respondent.  The Board has jurisdiction “to decide any appeal from a decision of a contracting officer of the United States Postal Service . . . relative to a contract made by [the Postal Service].”  41 U.S.C. 607(c).  Here, there has been no decision of the contracting officer asserting the claim at issue, and, therefore, the Board is without jurisdiction to consider it.  See 41 U.S.C. §§605(a), 607(c); Sharman Co. v. United States, 2 F.3d 1564, 1568-69 (Fed. Cir. 1993); Larry J. Miller, PSBCA No. 3632, 95‑1 BCA ¶ 27,448.[2]

Alleged Fraudulent Claims

            Respondent asks the Board to make findings that Appellant “has prosecuted his claim and this appeal in a bad faith, frivolous manner consistent with fraud” by claiming entitlement to a recovery far in excess of reasonable damages and by his repeated misstatements of the Board’s findings in its earlier decisions.  Respondent’s Supplemental Submission of Authority, p. 3.  Respondent distinguishes this situation from decisions finding a lack of Board jurisdiction to consider fraud allegations, e.g. Martin J. Simko Constr., Inc. v. United States, 852 F.2d 540, 545-547 (Fed. Cir. 1988); National Constr. Co., PSBCA Nos. 3902, 3929, 99‑2 BCA ¶ 30,509 at 150,649, by pointing out that it is not asking the Board to decide that Appellant has forfeited his claim under 41 U.S.C. §604.  Rather, Respondent asks that we make findings that Appellant engaged in fraudulent conduct in prosecuting his claim that Respondent might use in another, appropriate forum to seek relief based on this fraudulent conduct.

            Respondent relies on TDC Management Corp., DOT BCA No. 1802, 90-1 BCA ¶ 22,627, in which the board held it had jurisdiction to find facts demonstrating an appellant’s possible fraudulent conduct as a necessary part of evaluating evidence in a contract appeal within the Board’s jurisdiction.  Id. at 113,492-493.  The findings Respondent urges the Board to make are not necessary to decide this motion for summary judgment, and, accordingly, we decline to make them.

CONCLUSION

            Appellant is entitled to liquidated damages in the amount of $17,149.13.  As he has received that amount, further relief is denied.  To that extent, Respondent’s motion is granted.  Respondent’s counterclaim for recovery of interest paid is dismissed without prejudice.  Respondent’s request that the Board make additional findings regarding Appellant’s alleged fraudulent conduct is denied.

Norman D. Menegat
Administrative Judge
Board Member

I concur:                                                                                  I concur:
William A. Campbell                                                                 David I. Brochstein
Administrative Judge                                                              Administrative Judge
Chairman                                                                                Vice Chairman

[1] The record for this quantum appeal does not contain a copy of the contract.  However, the contract is tab 1 of the appeal file for PSBCA No. 5266, the entitlement appeal, and the Board incorporates it into the record for this decision.  The page references are to the numbered pages of the contract as it appears in the appeal file for PSBCA No. 5266.

[2] Additionally, Respondent has not established as an undisputed fact that it paid Appellant $1,109.38 in interest on the liquidated damages.  The response to Respondent’s request for admission 7 was hardly an unqualified admission that Appellant received that amount, and the documents Respondent relies upon (AF 7) establish only that a payment was authorized.