Babenco Development Co. v. United States

15 Cl. Ct. 637, 1988 U.S. Claims LEXIS 162, 1988 WL 111879
CourtUnited States Court of Claims
DecidedOctober 25, 1988
DocketNo. 263-86C
StatusPublished
Cited by3 cases

This text of 15 Cl. Ct. 637 (Babenco Development Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Babenco Development Co. v. United States, 15 Cl. Ct. 637, 1988 U.S. Claims LEXIS 162, 1988 WL 111879 (cc 1988).

Opinion

OPINION

MARGOLIS, Judge.

Pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d), the plaintiff, Babenco Development Company, Inc. (Babenco), seeks attorney’s fees and expenses incurred in bringing an action against the United States for $913,255 in damages that ultimately settled for $175,-000 plus interest. Plaintiff alleges that it is a “prevailing party” under the EAJA and that the position of the United States was not substantially justified. Plaintiff seeks an award of $65,651.08: $47,758.26 in attorney’s fees and expenses and $17,892.82 in costs.

Defendant argues that even if Babenco qualifies as a prevailing party, the government’s position was substantially justified. After a careful review of the record, but without hearing oral argument, the plaintiff's application for attorney’s fees and expenses is denied.

[639]*639FACTS

On July 13, 1986, Babenco entered into Contract No. DACW63-82-C-0109 with the Department of the Army, Fort Worth District Corps of Engineers, for the replacement of the High Explosives Development Machining Facility, Pantex Plant, 20 miles outside of Amarillo, Texas. The parties agree that work on the facility commenced on August 9,1982 and that the facility was substantially completed on September 25, 1984.

By letter dated October 19, 1984, Baben-co presented fourteen separate claims seeking an equitable adjustment in the contract totaling $913,255. The claims varied in amount from $3,000 to nearly $300,000. On January 27, 1986, the contracting officer issued a seventy-nine page final decision denying plaintiffs request for an equitable adjustment. Plaintiff then filed suit in the United States Claims Court challenging the contracting officer’s final decision.

On September 17, 1987, the defendant filed a partial motion for summary judgment relating to five of Babenco’s fourteen claims. On September 25, 1987, this court, finding that genuine issues of material fact existed with respect to these five claims, denied the defendant’s motion for partial summary judgment.

Shortly before trial, the parties engaged in settlement negotiations on October 2, 1987, in Washington, D.C. During the settlement conference, the parties reached an agreement to enter judgment in favor of the plaintiff in the amount of $175,000 plus interest to accrue from October 1, 1986. The settlement agreement expressly provided that this amount was exclusive of the payment of costs, attorney’s fees, and expenses. In accordance with the settlement agreement, the court granted the parties’ stipulation for dismissal on December 4, 1987.

DISCUSSION

As stated in Eastern Marine, Inc. v. United States, 10 Cl.Ct. 184, 186 (1986):

The Equal Access to Justice Act [EAJA] was first enacted in 1980 with a sunset date of October 1, 1984. The purpose of the Act was to ensure that certain individuals and small businesses would not be deterred from seeking review of, or defending against, unjustified government action because of the expense involved in securing vindication of their rights. The EAJA expired as scheduled, but was retroactively revived, modified, re-enacted and made permanent by the passage of H.R. 2378 signed by the President on August 5, 1985.

The standard for recovery under the EAJA is that a qualified “prevailing party” can recover attorney’s fees and expenses unless the United States can show that its position, both at the agency level and during litigation, was “substantially justified.” 28 U.S.C. § 2412(d)(1)(A).

Although this case settled prior to trial, plaintiff does qualify as a “prevailing party” within the meaning of the EAJA. While the EAJA does not define “prevailing party,” in Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed. 2d 40 (1983), the United States Supreme Court noted that a “typical formulation” of this threshold determination is that “plaintiffs may be considered ‘prevailing parties’ for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Further, it has been established that a party may be deemed “prevailing” under EAJA if it obtains a favorable settlement of its claim. St. Paul Fire & Marine Insurance Co. v. United States, 4 Cl.Ct. 762, 766-67 (1984). Therefore, under these generous standards, Babenco qualifies as a prevailing party.

Having found that Babenco qualifies as a prevailing party, the next inquiry is whether the government has met its burden of proving that its position was “substantially justified.” The Supreme Court recently interpreted the meaning of “substantial justification” and concluded that the proper standard was whether the government’s position had a reasonable basis both in law and fact. Pierce v. Underwood, — U.S. [640]*640-, 108 S.Ct. 2541, 2549-51, 101 L.Ed.2d 490 (1988). The Court stated that the government’s position must be “ ‘justified in substance or in the main’ — that is, justified to a degree to satisfy a reasonable person.” Id. 108 S.Ct. at 2550.

Further, the 1985 amendments to the EAJA require courts to ensure that the government meets this standard both at the agency level and during litigation. Pub.L. No. 99-80, § 2, 99 Stat. 185 (codified at 28 U.S.C. § 2412(d)(2)(D)). In conducting such an inquiry, the court will look to “all the pertinent facts of the case,” instead of any one single factor. Essex Electro Engineers, Inc. v. United States, 757 F.2d 247, 252-53 (Fed.Cir.1985).

This determination becomes difficult when a case settles prior to trial. In such a case, the court does not have the opportunity to witness a full airing of the evidence. The court also does not have the benefit of a decision that indicates on which claim or claims the plaintiff actually prevailed and to what extent.

A contractor’s recovery on a claim does not automatically entail recovery of attorney’s fees and expenses upon application. Gava v. United States, 699 F.2d 1367, 1370 (Fed.Cir.1983). The mere fact that the plaintiff was the prevailing party does not raise a presumption that the defendant’s position was not substantially justified. Nor does that fact require the government to establish its decision to litigate was based on a substantial probability of prevailing. H.R.Rep. No. 1418, 96th Cong., 2d Sess., 11, reprinted in 1980 U.S. Code Cong. & Ad.News 4953, 4984, 4990.

In determining whether the government’s position was substantially justified, courts have looked to whether the government cooperated in resolving the litigation, or whether the government departed from established policy in such a way to single out a particular party. Essex Electro Engineers, 757 F.2d at 253-54. This court has also considered time factors in determining whether a litigation position was substantially justified. Greenberg v. United States, 1 Cl.Ct. 406, 408 (1983).

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15 Cl. Ct. 637, 1988 U.S. Claims LEXIS 162, 1988 WL 111879, Counsel Stack Legal Research, https://law.counselstack.com/opinion/babenco-development-co-v-united-states-cc-1988.