Cross Petroleum v. United States

51 Fed. Cl. 549, 2002 U.S. Claims LEXIS 17, 2002 WL 100494
CourtUnited States Court of Federal Claims
DecidedJanuary 25, 2002
DocketNo. 97-251C
StatusPublished
Cited by8 cases

This text of 51 Fed. Cl. 549 (Cross Petroleum 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
Cross Petroleum v. United States, 51 Fed. Cl. 549, 2002 U.S. Claims LEXIS 17, 2002 WL 100494 (uscfc 2002).

Opinion

ORDER

MILLER, Judge.

This case is before the court after argument on cross-motions for summary judgment. The issue to be decided is whether the parties’ several contracts allocated the risk of a fuel spill. The tension arises from the fact that, on the date of the spill, plaintiff made a separate delivery of fuel under a contract that included an indemnity provision and that potentially reaches the fuel spilled.

FACTS

The following facts are undisputed.1 The United States Department of Agriculture Forest Service (the “Forest Service”) manages the Klamath National Forest (“KNF”), which spans approximately 2,656 square miles in Siskiyou County, California, and Jackson County, Oregon. Several sites throughout KNF serve as year-round support centers for Forest Service activities. One of these sites is the Oak Knoll Work Center (“Oak Knoll”), located approximately 20 miles northwest of Yreka, California.

For over 12 years, Cross Petroleum (“plaintiff’) has supplied gasoline and diesel fuel to Forest Service facilities in KNF, including Oak Knoll. On April 30,1993, plaintiff delivered 960 gallons of diesel fuel to Oak [551]*551Knoll. On the same trip, plaintiff also attempted to deliver 2,000 gallons of unleaded gasoline to an underground storage tank at Oak Knoll, but instead deposited the gasoline into a nearby monitoring well. The monitoring well, designed to detect leaks from the underground tank, is extensively perforated, and the gasoline therefore passed through the well and into the subsurface. On April 8, 1996, the Forest Service contracting officer issued a final decision asserting a claim against plaintiff in the amount of $705,657.82 for costs associated with the spill. Plaintiff responded by filing a complaint in the Court of Federal Claims challenging the final decision, specifically the contractual basis for the Government’s claim. Each party has cross-moved for summary judgment on whether liability for the April 30 spill and subsequent clean up allocated to plaintiff by a contract with the Government.2

The Forest Service awards two types of contracts for the delivery of fuel in KNF based on the estimated annual gallonage of the tank location served. Tank locations with an estimated annual gallonage of over 10.000 gallons are supplied through biannual contracts solicited by the Defense Logistics Agency (the “DLA”) and subject to national competitive bidding, while tank locations with an estimated annual gallonage of 10,000 gallons or less are supplied through annual contracts solicited by the Forest Service. See 41 C.F.R. § 101-26.602 (1993). Plaintiff has supplied fuel to KNF under both types of contract.

1. Diesel fuel delivery

At the time of the spill, the Forest Service had a local fuel contract with plaintiff, contract no. 54-91W8-3-3005 (the “1993 local contract”). The 1993 local contract expressly provided for the delivery of diesel fuel to a 1.000 gallon tank at Oak Knoll, but did not provide for the delivery of unleaded gasoline because Oak Knoll’s unleaded tank had an estimated annual gallonage of roughly 29,100 gallons. Per the regulatory scheme described above, each of the tank locations in the 1993 local contract, including Oak Knoll’s diesel tank, had an estimated annual gallon-age of less than 10,000 gallons.

Section C-2.1 of the 1993 local contract, entitled “Protection of Government Property and Spill Prevention,” provides:

The Contractor shall use reasonable care to avoid damaging or contaminating existing buildings, equipment, asphalt pavement, soil or vegetation (such as trees, shrubs, and grass) on the Government installation. If the Contractor fails to use reasonable care and damages or contaminates any such buildings, equipment, asphalt pavement, soil or vegetation, or other Government facilities, the Contractor shall replace the damaged items or repair the damage at no expense to the Government, and to the satisfaction of the Government. Further, if as a result of failure of the Contractor to comply with the requirements of this contract, Government buildings, equipment, asphalt pavement, soil or vegetation or other Government facilities become damaged or destroyed, the Contractor shall replace or repair the'damage at no expense to the Government, and to the satisfaction of the Government. Should the Contractor fail or refuse to make such repairs or replacements, the Government may have the repairs or replacement accomplished, and the Contractor shall be liable for the cost thereof---In the event the Contractor spills any oil (including, but not limited to, gasoline, diesel fuel, fuel oil, or jet fuel), the Contractor shall be responsible for the containment, clean up, and disposal of the oil spilled. Should the Contractor fail or refuse to take the appropriate containment, clean up and disposal actions, the Government may do so itself. The Contractor shall reimburse the Government for all expenses incurred including fines levied by federal, state or local governments.

This provision is the same as, or substantially similar to, a provision contained in prior local contracts between the Forest Service and plaintiff for the purchase and delivery of fuel [552]*552to KNF. Price under the 1993 local contract was based on the weekly Oil Price Index Service figure. The 1993 local contract also provided that invoices would not be paid unless itemized with unit prices, taxes, and contract number.

It is undisputed that the April 30 delivery of unleaded gasoline to Oak Knoll was not made under the 1993 local contract. It is also undisputed that plaintiff successfully delivered 960 gallons of diesel fuel to Oak Knoll on April 30 pursuant to the 1993 local contract. Consequently, defendant argues that the indemnity provision of the 1993 local contract allocates liability for the April 30 spill, even though the fuel spilled was unleaded gasoline, and even though the spill occurred after completion of the diesel delivery and during the attempted delivery of unleaded gasoline.

2. Unleaded fuel delivery

The contractual basis for the delivery of unleaded gasoline to Oak Knoll on April 30, 1993, is not documented in the record. Historically, Oak Knoll has received its unleaded fuel supply through a DLA contract, because the estimated annual gallonage of the unleaded tank at that location exceeds 10,000 gallons. For the term commencing on November 1, 1990, and running through October 31, 1992, plaintiff supplied unleaded gasoline to Oak Knoll under a DLA contract. The Forest Service did not submit Oak Knoll’s unleaded fuel requirements in time for Oak Knoll to be included in the DLA’s solicitation for the next fuel supply contract, No. DLA 600-93-D-4508 (the “1992-94 DLA contract”),3 commencing on November 1, 1992, and running through October 31,1994, which also was awarded to plaintiff.4

Section 1-186 of the 1992-94 DLA contract, entitled “Protection of Government Property and Spill Prevention,” is identical to Section C-2.1 of the 1993 local contract and is the same as, or substantially similar to, a provision contained in other DLA contracts for the purchase and delivery of fuel to KNF. The 1992-94 DLA contract based price on the “CPC” reference index.

Neither the 1992-94 DLA contract nor the 1993 local contract was modified formally to provide for the delivery of unleaded gasoline to Oak Knoll.

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Cite This Page — Counsel Stack

Bluebook (online)
51 Fed. Cl. 549, 2002 U.S. Claims LEXIS 17, 2002 WL 100494, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cross-petroleum-v-united-states-uscfc-2002.