Blake Construction Co. v. United States

34 Cont. Cas. Fed. 75,365, 13 Cl. Ct. 250, 1987 U.S. Claims LEXIS 161
United States Court of Claims·Decided September 21, 1987·No. No. 556-85C·Published

Opinion

OPINION

SMITH, Chief Judge.

This matter came before the court on the Defendant’s Motion to Dismiss, or in the alternative, for Summary Judgment. This opinion follows the court’s oral ruling issued on February 5, 1987 and paragraph 1 of its February 10, 1987 order. The court issues this follow-up opinion because it believes the question is still of some relevance. The defendant bases its motion on the ground that this court lacks jurisdiction over the instant action. This is due to conduct by the plaintiff which the defendant asserts is a binding election to proceed before the Armed Services Board of Contract Appeals. For the reasons set forth below, the court rejected the defendant’s argument and accordingly, the defendant’s motion was denied.

Facts

On June 15, 1983, Blake Construction Co., Inc. (Blake) the plaintiff entered into a contract with the Department of the Navy (Navy) for improvements at the Main Hospital Complex Center, Naval Regional Medical Center, San Diego, California. The contract price was $98,411,000.00.

On or about December 14, 1983, the plaintiff’s electrical subcontractor, Steiny & Company, Inc. (Steiny), proceeded to install electrical duct bank conduits at the tunnel corridor area of the project. According to the plaintiff, all work was performed in accordance with the Navy contract drawings and specifications. The Navy advised the plaintiff, on or about December 15, 1983, that the electrical duct bank did not conform with the contract requirement and ordered the removal of all the electrical conduits not installed in conformance with the Navy’s interpretation of the contract drawings and specifications. This resulted in the relocation of the concrete encased electrical duct bank.

On December 19, 1983, and again on December 21st, the plaintiff notified the defendant that the aforesaid directive, relating to the electrical conduits, constituted a constructive change and, thus, plaintiff was entitled to additional compensation. The plaintiff submitted its claim for additional compensation in the amount of $3,493,967.00 on March 30, 1984, and certified that claim on October 12, 1984. The contracting officer’s adverse final decision dated November 21, 1984, denied the plaintiff’s claim.

The key facts upon which this motion turns center upon Blake’s mailing of the notice of appeal to the Armed Services Board of Contract Appeals (ASBCA or Board). These facts are as follows:

David J. Lipper, a vice-president of Blake, mailed a notice of appeal to the ASBCA on January 15, 1985. The claim was filed on behalf of Steiny. Mr. Lipper also mailed a copy of that notice to Steiny’s counsel, who then notified Blake that Steiny desired to bring the action in the United States Claims Court, not the ASBCA. Upon receiving that advice from Steiny’s counsel, the plaintiff ascertained that the notice of appeal had not yet been received by the ASBCA, and made arrangements to retrieve the notice before the appeal was filed and docketed. These arrangements were successful. Plaintiff filed its complaint in this court on September 25, 1985. The case is currently still in discovery.

[252] Discussion

The defendant’s motion raises a novel issue as a result of the unusual set of facts which surround the mailing of the notice of appeal to the ASBCA and its retrieval by the plaintiff prior to the actual filing and docketing of the appeal.

The question upon which the court must focus is whether the mere mailing of a notice of appeal, which is neither filed nor docketed, and which is retrieved by the sender, constitutes a binding election to proceed before the Board so as to deprive this court of jurisdiction. It is the court’s view that we must reject the theory that mailing equals filing in every instance, and consequently the court must deny the defendant’s motion.

To support its position the defendant cites Diamond Manufacturing Co. v. U.S., 3 Cl.Ct. 424 (1983), and Prime Construction Co., Inc. v. U.S., 677 F.2d 876 (1982) for the proposition that once an election to bring an appeal before a board of contract appeals is made, the contractor cannot change that election. Although this is a correct statement of the law, the question presented by the case at bar, which appears to be one of first impression, is whether Blake could and whether it did successfully retrieve the notice of appeal to the ASBCA. Put another way, what actions of the plaintiff constitute an irrevocable or binding election? Is mere deposit in a mail box sufficient? Or is some type of receipt and docketing by the Board required?

In both cases relied upon by the defendant, the contractor filed its appeal of the contracting officer’s final decision with a board of contract appeals. Obviously, in those instances, not only did the plaintiff mail the notice of appeal, but the notice was received, filed, and docketed.

The defendant points to the fact that the ASBCA has adopted a rule which permits the mailing date to serve as the filing date.1 The court, however, must examine the meaning and policy reasons for such a rule. In doing so, a review of Board decisions dealing with these situations is instructive for determining the purpose of the rule. The policy which underlies the rule appears to be for the protection of those contractors who properly mail an appeal which does not reach or does not timely reach the appropriate board. This supports a basic philosophic commitment of our system of law; that is, it is preferable to decide a case on its merits, rather than upon a purely procedural ground. From this long standing commitment stems the creation of the Court of Chancery in England prior to the reign of Henry II, as well as our whole concept of equity. H. McClintock, Principles of Equity § 2 (2d ed. 1948). Underlying this notion is the very purpose of a judicial system; to help parties resolve real disputes. Procedural rules serve the very important, but subsidiary purpose, of allowing the courts to function effectively in their primary role as institutions for the resolution of social, political and economic disputes.

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Blake Construction Co. v. United States, 34 Cont. Cas. Fed. 75,365, 13 Cl. Ct. 250, 1987 U.S. Claims LEXIS 161 (cc 1987).

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