Contel of California, Inc. v. United States

41 Cont. Cas. Fed. 77,031, 37 Fed. Cl. 68, 1996 U.S. Claims LEXIS 199, 1996 WL 710906
CourtUnited States Court of Federal Claims
DecidedDecember 4, 1996
DocketNo. 93-594C
StatusPublished
Cited by4 cases

This text of 41 Cont. Cas. Fed. 77,031 (Contel of California, 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
Contel of California, Inc. v. United States, 41 Cont. Cas. Fed. 77,031, 37 Fed. Cl. 68, 1996 U.S. Claims LEXIS 199, 1996 WL 710906 (uscfc 1996).

Opinion

[71]*71OPINION

MEROW, Judge.

This suit involves a contract dispute between plaintiff Contel of California, Inc., and the Department of the Navy over communications equipment at the China Lake Naval Weapons Center. In an August 18, 1995, order the parties’ respective motions for summary judgment were denied without prejudice to their renewal after certain information was submitted to the Court. For the reasons discussed below, defendant’s renewed motion for summary judgment is granted and plaintiffs is denied.

FACTS

Certain facts recited in the August 18 order merit repetition. In May 1992, the Navy terminated its use of plaintiffs telecommunication services and switched to a government-owned network. This action has allegedly precluded Contel from recovering its investment in outside cable plant that it had installed between 1975 and 1992. Plaintiff subsequently brought suit to recoup its unre-covered investment ($778,506.00) and termination for convenience costs (shutdown costs ($240,402.84), profit on shutdown ($26,-444.00), and claim preparation costs ($59,-201.90)).

The August 18 order noted that the governing agreement, its predecessor agreements, the 1975 communication service authorization (CSA), and master CSA’s mandated that the parties execute supplemental CSA’s before particular equipment (including outside cable plant) could be installed at the Weapons Center. The governing agreement and each supplemental CSA were to comprise a separate contract governing the ordered equipment. The August 18 order directed the parties to identify the CSA’s that had authorized the installation of the outside cable plant. Those CSA’s were to be used to determine whether defendant is hable for Contel’s unreeovered investment and termination costs and, if so, the amount of that liability.

The parties have ascertained that CSA’s were not used to procure the equipment at issue, but acknowledge that they were required.

DISCUSSION

In its initial motion plaintiff argued that the governing agreement mandated the relief it seeks: Articles B5(a) and B5(d) obligated reimbursement for Contel’s “nonreeoverable costs;” Article B5(d)(4) compelled reimbursement for its shutdown costs; 48 C.F.R. § 49.202 (FAR) allowed profits on shutdown; and 48 C.F.R. § 31.205-42 (FAR) authorized claim preparation costs. Plaintiff has recanted this position and now argues that the outside cable plant was not installed pursuant to the governing agreement, but rather to an implied-in-fact contract. The defendant challenges this revised position.

It is concluded that the plaintiff is not entitled to the relief it seeks for three reasons. First, as discussed in the August 18 order, the government incurs no liability under the governing agreement alone. See Article A68 (governing agreement); Article 18 (1972 basic agreement). The government’s liability “shall arise, if appropriate, upon the issuance of a CSA pursuant to the terms” of a governing agreement. Id. Again, CSA’s were not used to authorize the placement of the outside cable plant at the Weapons Center. Accordingly, the defendant is relieved of liability arising from the Navy’s decision to terminate its use of Contel’s telecommunications network in 1992.

Second, “where a suit is filed on an express contract, recovery cannot be had on another ground, such as on an implied contract unless the implied contract is pleaded in the alternative.” Algonac Mfg. Co. v. United States, 192 Ct.Cl. 649, 673, 428 F.2d 1241, 1255 (1970). Plaintiff has made no effort to amend its complaint and allege an implied-in-fact contract. Plaintiff still alleges that the “Navy’s actions in terminating service ... give rise to Defendant’s liability under Article B5(d) of the 1991 Basic Agreement for Contel’s stranded Outside Cable Plant investment.” 1 Compl. at IT 33.

[72]*72Third, Contel’s revised argument for recovery is without merit. Specifically, Con-tel maintains that, because it installed the cable plant at the Navy’s “request and for the [Navy’s] benefit,” it is “entitled to the reasonable value of the benefits provided [unrecovered investment in cable plant] under a theory of quantum meruit based on a contract implied-in-fact.” Pl.’s Mot. (Dec. 14, 1995) at 6, 15. Contel also maintains that its termination costs were either incurred pursuant to an implied-in-fact contract and “thus are part and parcel of Contel’s investment in outside cable plant which the government ordered and enjoyed,” or were incurred “to preserve the outside cable plant on the government’s behalf.” Id. at 16-17. In either case, Contel argues, “defendant is liable for the value to the government of Contel’s expenditures under a theory of quantum meru-it." Id. at 17.

The defendant responds that the former claim is essentially one that is implied-in-law and thus beyond the court’s jurisdiction. The latter claim is also unwarranted, defendant asserts, because Contel has not “identified anyone who possessed the requisite authority to obligate the government to termination liability.” Def.’s Resp. (Mar. 14, 1996) at 8.

It is concluded that any contractual relationship for the telecommunication services and equipment at issue would be one implied-in-law: the parties neglected to execute the CSA’s that would have formed express contracts; and Contel has not established the authorization element of contracts that are implied-in-fact. The court’s Tucker Act jurisdiction extends to contracts either express or implied-in-fact, but not to claims on contracts implied-in-law. Hercules, Inc. v. United States, — U.S. -, -, 116 S.Ct. 981, 985, 134 L.Ed.2d 47 (1996) (citations omitted); 28 U.S.C. § 1491(a)(1). Accordingly, the court may not entertain plaintiffs claims.

An implied-in-fact contract is one “founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.” Id. (citing Baltimore & Ohio R. Co. v. United States, 261 U.S. 592, 597, 43 S.Ct. 425, 426-27, 67 L.Ed. 816 (1923)). An implied-in-fact contract requires proof of the same elements necessary to evidence an express contract: mutuality of intent, consideration, and lack of ambiguity in offer and acceptance. City of El Centro v. United States, 922 F.2d 816, 820 (Fed.Cir.1990) (citations omitted), cert. denied, 501 U.S. 1230, 111 S.Ct. 2851, 115 L.Ed.2d 1019 (1991). When the United States is a party to such an agreement, the contractor must also show that the official(s) whose conduct it relied upon had the authority to bind the government in contract. Id.; see also Kania v. United States, 227 Ct.Cl. 458, 465, 650 F.2d 264, 268, cert. denied, 454 U.S. 895, 102 S.Ct.

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41 Cont. Cas. Fed. 77,031, 37 Fed. Cl. 68, 1996 U.S. Claims LEXIS 199, 1996 WL 710906, Counsel Stack Legal Research, https://law.counselstack.com/opinion/contel-of-california-inc-v-united-states-uscfc-1996.