Frawley v. United States

34 Cont. Cas. Fed. 75,503, 14 Cl. Ct. 766, 1988 U.S. Claims LEXIS 92, 1988 WL 53384
CourtUnited States Court of Claims
DecidedMay 31, 1988
DocketNo. 517-87C
StatusPublished
Cited by9 cases

This text of 34 Cont. Cas. Fed. 75,503 (Frawley 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
Frawley v. United States, 34 Cont. Cas. Fed. 75,503, 14 Cl. Ct. 766, 1988 U.S. Claims LEXIS 92, 1988 WL 53384 (cc 1988).

Opinion

ORDER

MOODY R. TIDWELL, III, Judge:

This contract case came before the court on defendant’s motion to dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. RUSCC 12(b)(1), (b)(4). For reasons set forth below, defendant’s motion to dismiss is granted and plaintiff’s complaint is dismissed.

FACTS

On May 30, 1985, plaintiff was awarded a contract by the United States Postal Service for the purpose of operating and managing a postal substation in Juneau, Alaska. After operating and managing the postal substation for approximately two years, plaintiff entered into an agreement with a third party to purchase plaintiff’s business for $50,000 and take over, by assignment, the Postal Service contract. Pri- or to consummation of the sale, the United States Postal Service gave plaintiff a “60 day Termination Notice” effective July 7, 1987. The notice bore no indication that it was a termination for the convenience of the government or a termination for default. Reasons delineated in the terse notice purporting to justify termination were complaints ranging from “bank errors, paperwork errors, and consumer complaints on both service and location.” In view of this language, the court may infer that defendant intended for the termination to be one for default. The notice was signed by Kent Eriksen, Director, Customer Service, U.S.P.S., Juneau, Alaska.

By letter dated June 11, 1987, before the “Termination Notice” became effective, plaintiffs attorney wrote the Postmaster for the United States Postal Service in Juneau, Alaska, requesting reinstatement of plaintiffs contract and conveying plaintiffs intention to file suit in this court for damages if the contract was not reinstated. Plaintiff received no response to his attorney’s letter, and his complaint was filed in this court on August 21, 1987.

In support of defendant’s motion to dismiss, defendant argued that the only document submitted by plaintiff that could possibly be interpreted as a claim, i.e., the letter of June 11, 1988, which also requested damages in excess of $50,000.00, was not properly certified in accordance with the Contract Disputes Act. Defendant also argued that plaintiff’s claims seek damages sounding in tort and, as such, are clearly beyond the jurisdiction of this court. 28 U.S.C. § 1491 (1982).

Plaintiff contended that the letter dated June 11, 1987, sent to the Postmaster, Juneau, Alaska, was a properly certified claim, submitted in writing to the contracting officer. Plaintiff also argued that the “action [in this court] is not precluded by the fact that it includes claims which are in the nature of tort.” Rather, plaintiff contended that “this entire matter is a claim, which, broadly speaking is one for wrongful termination of a government contract.” In his complaint and supporting documents, plaintiff alleged that defendant “fraudulently interfered with a contract between Plaintiff and a third unrelated party causing Plaintiff damages for the sale of his business in the amount of Fifty Thousand Dollars and no cents.” (Apparently, the sale was contingent upon assignment of the USPS contract to the purchaser.) When the contract was terminated, the purchaser declined to complete the purchase thereby forcing plaintiff to liquidate his business. Plaintiff also sued for $30,000 in lost profits anticipated from the USPS contract; damage to reputation; and punitive damages. The complaint concluded: “Actual Damages before award of punitives (sic) are estimated by Plaintiff to exceed Eight[y] Thousand dollars ($80,000.00).”

DISCUSSION

A. Tort Claims and Punitive Damages

Plaintiff is reminded that a claim for damage to reputation is a claim sounding in tort over which this court has no jurisdiction. 28 U.S.C. § 1491 (1982). Nor, can the court award punitive damages. [768]*768Leesona Corp. v. United States, 220 Ct.Cl. 234, 252, 599 F.2d 958, 969, cert. denied, 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979); Laningham v. United States, 2 Cl.Ct. 535, 558 (1983). As to these claims, defendant’s motion to dismiss is easily granted.

B. Claims Under The Contract Disputes Act

When, for whatever reason, parties to an action fail to, or inadequately, address the court’s subject matter jurisdiction, the court is obliged to do so of its own accord. Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 165, 79 L.Ed. 338 (1934). This court opines that the parties in this action have not recognized the threshold inquiries: whether a claim has accrued and, if so, whether plaintiff’s claim in this court is the same claim presented to the contracting officer for a final decision? In other words, did plaintiff seek the requisite contracting officer’s decision vis-a-vis any accrued claims and did that decision address the same damage claims now presented to this court? The court concludes that no claim has yet accrued and, in the alternative, that the damage claims now before the court have not been the subject of a final decision by a contracting officer.

It is black letter law that a contractor may appeal only “disputes” as defined in the Contract Disputes Act. 41 U.S.C. §§ 601-613 (1982). A termination for default, for example, without more, is not such a contract dispute. Gunn-Williams v. United States, 8 Cl.Ct. 531, 534 (1985). The Gunn-Williams court held that:

The Government in terminating a contract for default has merely administratively exercised one of its contractual rights. At this point, there is no dispute between the parties—the contractor can accept the default termination, and the Government can decide not to pursue its contractual remedies for default (e.g., assessment of excess costs of reprocurement, assessment of liquidated damages, and recovery of earlier paid progress payments). A “claim,” under the Contract Disputes Act, does not exist until there is a dispute between the parties. See Keystone Coat & Apron Mfg. Corp. v. United States, 150 Ct.Cl. 277 (1960).

The court believes that any contract termination, even one properly executed, does not create a claim cognizable under the Contract Disputes Act unless and until a party to the contract asserts contractually remedial rights against the other. In the first instance, there must be a dispute, something more than the bare termination of a contract.

If, for example, a contractor disputes a termination for default, it may appeal the contracting officer’s final decision and seek to convert the default termination to one for the convenience of the government and to recover the statutory and contractually authorized monetary damages. A “claim” must be submitted to the contracting officer in writing, demanding payment of money; adjustment of the contract; or other such relief; which is disputed. No claim exists in the absence of a dispute. Mayfair Constr. Co. v. United States, 841 F.2d 1576

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Cite This Page — Counsel Stack

Bluebook (online)
34 Cont. Cas. Fed. 75,503, 14 Cl. Ct. 766, 1988 U.S. Claims LEXIS 92, 1988 WL 53384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frawley-v-united-states-cc-1988.