Bannum, Inc. v. United States

80 Fed. Cl. 239, 2008 U.S. Claims LEXIS 10, 2008 WL 215815
CourtUnited States Court of Federal Claims
DecidedJanuary 23, 2008
DocketNo. 01-639C
StatusPublished
Cited by10 cases

This text of 80 Fed. Cl. 239 (Bannum, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bannum, Inc. v. United States, 80 Fed. Cl. 239, 2008 U.S. Claims LEXIS 10, 2008 WL 215815 (uscfc 2008).

Opinion

OPINION AND ORDER

LETTOW, Judge.

Bannum, Inc. (“Bannum”) filed a ten-count complaint in this court seeking equitable adjustments and other remedies respecting contracts it has and has had with the Bureau of Prisons (“Bureau” or “BOP”). Bannum operates residential Community Correctional Centers (“Centers”) for federal offenders, both male and female, at various locations for the Bureau.1 The ten counts in Bannum’s initial complaint related to sixteen contracts regarding fifteen different Centers operated for the Bureau. At this juncture in the case, nine of the ten counts are still in dispute. One count, related to wage determinations at all of the Centers, has been resolved by a [241]*241final judgment. See Bannum, Inc. v. United States, 59 Fed.Cl. 241 (2003) (denying motion for reconsideration of final judgment entered under Rule 54(b) of the Rules of the Court of Federal Claims (“RCFC”) respecting Count Seven), aff'd, 121 Fed.Appx. 849 (Fed.Cir.2005) (addressing date on which interest began accruing on the amount of the judgment). Protracted discovery and an extended but failed mediation effort have delayed judicial action on the nine remaining counts, until now.

Pending before the court are a motion by the government for partial summary judgment on Counts Six and Eight of the Second Amended Complaint and a corresponding cross-motion by Bannum for leave to file a proposed Third Amended Complaint. Besides dealing with Counts Six and Eight, the proposed amended complaint would reintroduce an aspect of Count Seven and also address Count Ten. These motions have been fully briefed and a hearing was held on October 30, 2007. The competing motions accordingly are ready for disposition.

BACKGROUND2

A. Count Six: Bannum’s Beaumont Facility

Bannum’s Beaumont contract with the Bureau was awarded July 17, 1997, and required Bannum to operate a Center to house federal inmates assigned to the Beaumont, Texas area in the late stages of their incarceration. Appendix to Def.’s Mot. (“Def.’s App.”) at 1-3 (Contract J200c-336 (“Beaumont Contract”)). The Beaumont Contract required Bannum to “furnish the necessary facilities” for performance of the contract, i.e., obtain a building in which to house the federal inmates. Def.’s App. at 10, 14-16 (Statement of Work; Community Corrections Center with Transitional Drug Treatment Services). To satisfy this requirement, on or about February 5, 1997, Bannum entered into a sublease agreement for a building located at 1310 Pennsylvania Avenue, Beaumont, Texas. Def.’s App. at 42-44 (Lease Agreement). The lessor on the lease agreement was Mr. Ken Webb, id. at 42; however his business partner, Mr. John McCray, was the actual owner of the building, and, according to Mr. McCray’s agent, Mr. Webb’s lease did not permit him to sublet the building. Def.’s App. at 20-21 (Memorandum from Charles Ala, Contract Oversight Specialist, BOP, to Kathy Campbell, Assistant Community Corrections Administrator) (Dec. 18, 2000). At the request of Mrs. Webb, Bannum began to make its lease payments directly to Mr. McCray in February 1999. Def.’s App. at 92 (recital from a Second Amended Complaint filed in Bannum, Inc. v. McCray, No. 8:01-CV-1099-T-27MAP, 1139 (M.D. Fla., filed Nov. 20,2001)).

According to a memorandum prepared by Mr. Ala of the Bureau dated November 7, 2000, Fire Chief Jack Maddox of the Beaumont Fire Department told the Bureau that the Beaumont City Council had approved a Catholic school for troubled youths to operate in a vacant section of the building then occupied by Bannum in Beaumont. Pl.’s Resp. to Def.’s Mot. for Partial Summary Judgment and Cross-Mot. for Leave to File an Amended Compl. (“Pl.’s Resp.”) at Ex. 1 (Mem. from Ala to Gina Lane Mustain, Community Corrections Regional Administrator (Nov. 7, 2000)). Reportedly, it had been agreed that Bannum would vacate the premises prior to the school’s operation scheduled to begin in September 2001. Id. The persons who had reached such an agreement were not disclosed. As of the date of Mr. Ala’s memorandum, Bannum had not informed the Bureau of any future move. Id. There is no evidence that the Bureau contemporaneously communicated the information obtained from the Fire Chief to Bannum, and Bannum claims no knowledge of any discussions about its vacating the Beaumont building. Pl.’s Resp. Attach. 1 (Aff. of David Lowry, former Executive Director of Bannum (Count 6) (Oct. 11, 2007) (“Lowry Count 6 Aff.”)) at H11.

On December 8, 2000, Mr. McCray, acting through his property manager, sent Bannum [242]*242a notice stating that Bannum’s tenancy would terminate in 30 days. Def.’s App. at 49 (Letter from Lee Y. Wheeler, III, Property Manager, to Lowry (Dec. 8, 2000)). Ten days later, Mr. Ala sent a memorandum to the Bureau’s Assistant Community Corrections Administrator relating his knowledge of the termination notice and recounting a phone call he had placed to Mr. McCray’s property manager to determine what had led to the notice. Def.’s App. at 20 (Mem. from Ala to Campbell (Dec. 18, 2000)). On December 19, 2000, Ms. Mustain, the Bureau’s Regional Administrator, informed Mr. Lowry that the Bureau had a copy of the notice of termination. Def.’s App. at 52 (Bannum’s Response to BOP’s Cure Notice, Ex. E (Aff. of Lowry (Dec. 21, 2000) (“Lowry 2000 Aff.”)) at 1Í10). On the same day, the Bureau obtained a legal opinion about its rights under the sublease which recommended that a cure notice be issued to Bannum. Def.’s App. at 22 (Letter from Benjamin R. Tousley, Community Corrections Manager to Katharina Washington, Community Corrections Contracting Officer (Dec. 19, 2000)). The next day, December 20, 2000, the Bureau informed Mr. Lowry that because the pending termination threatened performance of the contract, the Bureau planned to issue a cure notice the following week, which would give Bannum ten days to either remedy the problem or assure the Bureau that the problem would be remedied. Def.’s App. at 53 (Low-ry 2000 Aff. at HI 13-14).3

The Cure Notice was issued to Bannum by the Bureau on December 22, 2000. Def.’s App. at 23-24 (Letter from Washington, Contracting Officer, to Lowry (Dec. 22, 2000) (“Cure Notice”)). The Cure Notice stated that the Bureau had received a copy of the notice of termination and required Bannum to “provide a written plan of action and a copy of a valid lease for the duration of the contract.” Id. at 23 (Cure Notice). Bannum was further notified that “[ujnless Bannum can cure the ... apparent loss of right to use the facility or provide an acceptable plan of action ... within ten ... calendar days ..., the [government may terminate the referenced contract for default.” Id. at 24 (Cure Notice).

On January 3, 2001, Bannum filed a response to the Cure Notice and a claim for equitable adjustment. Def.’s App. at 25-63 (Bannum’s Response to BOP’s Cure Notice). In its response, Bannum asserted that there was no breach because Bannum had a valid lease and thus there was nothing to cure. Id. at 25-29. Bannum also took “strong exception to the manner in which the BOP has chosen to deal with this matter,” complaining that the BOP’s actions, such as failing to verify the validity of the termination notice or to review the terms of the lease previously submitted, constituted a breach of the duties of cooperation and good faith and fair dealing. Id.

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Cite This Page — Counsel Stack

Bluebook (online)
80 Fed. Cl. 239, 2008 U.S. Claims LEXIS 10, 2008 WL 215815, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bannum-inc-v-united-states-uscfc-2008.