Hoskins Lumber Co. v. United States

37 Cont. Cas. Fed. 76,178, 24 Cl. Ct. 259, 1991 U.S. Claims LEXIS 447, 1991 WL 190714
CourtUnited States Court of Claims
DecidedSeptember 25, 1991
DocketNo. 323-88 C
StatusPublished
Cited by5 cases

This text of 37 Cont. Cas. Fed. 76,178 (Hoskins Lumber Co. 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
Hoskins Lumber Co. v. United States, 37 Cont. Cas. Fed. 76,178, 24 Cl. Ct. 259, 1991 U.S. Claims LEXIS 447, 1991 WL 190714 (cc 1991).

Opinion

OPINION AND ORDER

HODGES, Judge.

This court has jurisdiction of this case pursuant to the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 (1988). The parties have filed cross-motions for summary judgment pursuant to RUSCC 56. Because there are no issues of material fact in dispute, disposition in a summary [261]*261judgment proceeding is appropriate. Defendant’s motion for summary judgment is granted as to liability.

FACTS

The Griffith Middlefork 78 timber sale contract was awarded to Hoskins Lumber Co. Inc. (“Hoskins”) on October 13,1978 by the United States Forest Service. During the late 1970’s and early 1980’s, the timber market collapsed. Federal timber contracts became unprofitable and even onerous for many of the companies which held them. Fearing defaults by holders of these contracts and the industry-wide effects which could follow, the Forest Service authorized the Multi-Sale Extension Program.

The program allowed the holders of contracts such as the Griffith contract to file a Multi-Sale Extension Plan (MSEP), by which their contract termination dates could be extended by a maximum of five years. Such a plan would spread the collapsed market’s negative impact over a longer period of time, or possibly return the contract to profitability.

The program was instituted after the Secretary of Agriculture, in accordance with 16 U.S.C. § 472a(c) (1988), determined that a substantial, overriding public interest justified contract extensions of up to five years on certain National Forest timber sales. A contractor could apply for an “interim modification” until its MSEP was approved. However, if the contractor were facing immediate termination, a “conditional extension” could be issued which would keep the contract in effect until a MSEP could be approved.

The program was announced in the Federal Register on August 26, 1983 (48 FR 38,862) as an Interim Policy. The Final Notice of Policy was published in the Federal Register on December 7, 1983 (48 FR 54,812). The Final Notice extended the deadline for filing the MSEP to February 15, 1984, and incorporated many of the guidelines set forth in the . Interim Policy.

Under the Griffith contract, Hoskins had agreed to cut and remove approximately five million feet of timber by December 31, 1982 from the Suislaw National Forest, Oregon. The contract completion date was extended to December 31, 1984.

In April 1983, North Side Lumber Company filed suit in district court, requesting relief from enforcement of a timber contract on the basis of contractual impracticability. North Side Lumber Co. v. Block, Civ. No. 83-490-BU (D.Or.). The suit was subsequently converted into a class action which included Hoskins as a conditionally certified member. On February 15, 1984, the filing deadline for submitting a MSEP, a federal district court in Oregon issued an order enjoining the government:

(1) from enforcing in any manner the contracts at issue in this action ...; (2) from enforcing the current February 15, 1984 deadline for the submission of a [MSEP] ...; and (3) [granting] the members of plaintiffs’ class 30 days following the dissolution of the preliminary injunction to submit and have considered by the [government] a five-year plan____

On February 16,1984, Hoskins asked the Regional Forester if he interpreted the injunction as allowing Hoskins 30 days after the dissolution of the injunction to file a MSEP. The Regional Forester responded that he did.

On March 21, 1984, the Contracting Officer notified Hoskins that its contract was subject to the injunction. Attached to this notification was a copy of a March 12, 1984 Forest Service memorandum from the Forest Service Deputy Chief. The memo stated that following dissolution of the injunction, purchasers must file a MSEP which meets the standards established in the December 7, 1983 Federal Register notice and the Forest Service Manual. The filing was to be “within the time frames set by the Court.”

Hoskins alleges that it purchased other timber contracts based on these assurances and representations, and that the contract would have been completed, if the company had known that it could not file a MSEP. Hoskins had logged approximately two million board feet of timber.

[262]*262On April 10, 1984, the Contracting Officer executed an “interim modification” based upon Hoskins’ intent to submit a Multi-Sale Extension Plan. Hoskins had not filed a MSEP at that time, so plaintiff maintains that the “interim modification” was intended to extend the time for filing. The Forest Service argues that the purpose of the modification was to extend the contract while a MSEP was being considered.

The Contracting Officer notified Hoskins on October 29, 1984, that the Griffith contract would be extended conditionally from the December 31, 1984 termination date until 30 days after the dissolution of the injunction. However, the performance period was not increased because the felling or removal of timber was prohibited while the contract was under "conditional extension.”

On February 20, 1985, the Court of Appeals for the 9th Circuit ruled that the North Side court lacked subject matter jurisdiction to consider a claim of contractual impracticability. North Side Lumber Co. v. Block, 753 F.2d 1482 (9th Cir.1985). While the North Side plaintiffs’ petition for certiorari was pending, the class members were offered a settlement by which they could file their MSEPs in exchange for dismissal with prejudice. An October 11, 1985 letter from defendant’s counsel stated:

Class members who reject the settlement offered by the government will not be entitled to the benefits of the settlement, nor will they be bound by the terms thereof. Whether they will be permitted to file an MSEP ... will not be determined by the settlement. The Forest Service contends that it does not have to accept MSEP’s from class members, except from those who choose to accept and sign the settlement agreement.

Hoskins was asked to join the settlement but declined because the company believed that it was entitled to file pursuant to the terms of the court order. Most of the class action plaintiffs joined the settlement, which was executed on October 31, 1985.

After the petition for certiorari was denied by the Supreme Court, North Side Lumber Co. v. Block, 474 U.S. 931, 106 S.Ct. 265, 88 L.Ed.2d 271 (1985), the 9th Circuit issued a November 29, 1985 mandate dissolving the injunction. Hoskins filed its MSEP with the Forest Service on December 27, 1985, 28 days after dissolution of the injunction.

The Contracting Officer notified Hoskins on March 28, 1986 that it was in default. The Forest Service also rejected Hoskins’ MSEP because it was filed after February 15, 1984, the deadline set forth in the Federal Register.

After the termination of Hoskins’ contract, the Forest Service decided not to resell the timber, citing concern for the Spotted Owl. On March 4, 1988, the Contracting Officer assessed damages against Hoskins in the amount of $234,347.32 pursuant to Clause B9.4 of the contract.

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37 Cont. Cas. Fed. 76,178, 24 Cl. Ct. 259, 1991 U.S. Claims LEXIS 447, 1991 WL 190714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoskins-lumber-co-v-united-states-cc-1991.