Hubbard v. United States

52 Fed. Cl. 192, 2002 U.S. Claims LEXIS 83, 2002 WL 539008
CourtUnited States Court of Federal Claims
DecidedMarch 28, 2002
DocketNo. 95-396C
StatusPublished
Cited by5 cases

This text of 52 Fed. Cl. 192 (Hubbard 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
Hubbard v. United States, 52 Fed. Cl. 192, 2002 U.S. Claims LEXIS 83, 2002 WL 539008 (uscfc 2002).

Opinion

FINAL OPINION AND ORDER

SMITH, Senior Judge.

This case is before the court after trial on both liability and damages. Plaintiff, Bill Hubbard, doing business as Bill Hubbard & Associates, contracted with the United States Navy Exchange (Exchange) in 1984 to build and operate a mini-storage facility at Le-moore Naval Air Station (Lemoore) in California. Plaintiff contends that, beginning in 1993, the Exchange engaged in a series of acts that breached provisions of the contract and violated the implied covenant of good faith and fair dealing. This final opinion is identical in all respects to a Preliminary Opinion issued to the parties on February 5, 1999, except that the court denied plaintiffs motion filed under RCFC 59 subsequent to the issuance of the preliminary opinion. The Preliminary Opinion was issued in an attempt to promote a settlement of this case.

FACTS

On May 31, 1984, the Navy Resale and Services Support Office in Oakland, California issued a Request for Proposals (RFP) for the construction and possible operation of a mini-storage rental facility for military personnel stationed at Lemoore Naval Air Station. The RFP advised prospective bidders that the storage facility would be either Exchange operated — that is, operated by service personnel employed by the Navy Exchange — or concession operated — that is, operated by the contractor as concessionaire. Contractors would be paid for the construction and operation of the storage facility by receiving a percentage of the revenues from the rental of the units. The RFP thus advised prospective bidders to submit contract offers which included the percentage of rental revenue that the Exchange would be entitled to under either an Exchange-operated or contractor-as-concessionaire-operated system.

Plaintiff Bill Hubbard, a Contra Costa, California contractor who does business as Bill Hubbard and Associates, submitted a proposal to build and operate the facility. Mr. Hubbard’s offer proposed returning 6.5% of the revenue to the Exchange if the facility were concession-operated and 17.5% if it were Exchange-operated. (That is, Mr. Hubbard would receive 93.5% of the gross revenues if he ran the storage facility, and 82.5% of gross revenues if Exchange personnel were used to staff the storage facility.)

On July 27, 1984, the contracting officer issued an acceptance of Mr. Hubbard’s proposal, with the facility to be Exchange-operated and Mr. Hubbard to return 17.5% of gross revenue to the Exchange. The period of performance was to be five years, from August 6, 1984 to August 5, 1989, with the possibility that the parties could extend the agreement for three one-year periods by mutual consent. Ultimately, the contract was modified to extend the period of performance until July 1997.

[194]*194After formation of the contract, Hubbard proceeded to build the facility subject to the specifications of the contract and subsequent modifications. The Navy in return provided a rental office and cheek-in/cheek-out area near the site of the storage units, known as the Rent All Center. The Rent All Center was also used by the Exchange to rent other products to service personnel, such as televisions and washers and dryers. The Exchange also trained Exchange personnel to operate the facility.

The instant dispute centers around a series of actions taken by the Navy beginning in 1993 that Mr. Hubbard contends either breached express or implied-in-faet provisions of the contract, or which breached the implied covenant of good faith and fair dealing.

First, over the vigorous protestations of Mr. Hubbard, the Commander of NAS Le-moore, Captain A1 Gorthy, Jr., moved the Rent All Center from its location at the time he bid for the contract to a more distant off-site location. Mr. Hubbard contends that this violates a requirement of the contract that the Exchange provide an on-site rental and management office.

Second, just prior to the move plaintiff contends that the Navy cut off telephone service to the facility, in violation of the express and implied terms of the contract. Plaintiff contends that this cut-off greatly impaired plaintiffs ability to operate the mini-storage in a viable and profitable manner.

Third, plaintiff contends that the Exchange, in violation of the express terms of the contract, reduced the hours of operation for the Rent All Center.

Fourth, plaintiff contends that the Exchange failed to post appropriate signs and notices to inform customers of the new location of the mini-storage facility.

Fifth, plaintiff contends that Captain Gor-thy permitted firefighters to engage in practice and training exercises on the site of the mini-storage facility, and permitted the firefighters to direct high-powered hoses at the mini-storage facility, damaging the structures and the contents of patrons of the facility.

Sixth, plaintiff contends that the Navy permitted other contractors to park then* trucks at the mini-storage facility, impairing Mr. Hubbard’s ability to operate the facility and also directly damaging the concrete slab on which Mr. Hubbard planned to build the fourth and last of the mini storage buildings on the site.

Seventh, in a contention not contained in plaintiffs complaint, but argued at trial, plaintiff contends that the parties entered into a modification of the contract to extend its terms for three additional years, until July 2000.

DISCUSSION

Movement of the Rent All Center

In June 1993 the Commander of NAS Lemoore, Captain Gorthy, ordered the Rent All Center moved from the location it had inhabited since the inception of Mr. Hubbard’s contract to a new location. The old location, although it did not abut the mini-storage units, was within view of the units and was on the access road to the mini-storage area. The Rent All Center was moved to the base service station, which, according to the testimony, was approximately two miles from the storage units, was not within view of the units and was not on the access road to the mini-storage facility.

Mr. Hubbard had vigorously opposed the proposed move of the Rent All Center, and had expressed his opposition to Captain Gor-thy, to no avail. Mr. Hubbard believed that, for a variety of reasons, the movement of the office would affect business negatively. He believed that the move would impair customer service and would make it less convenient for customers to use the facility. He also believed that the move away from the site would impair security, or more importantly, the perception of security at the mini-storage units, which both Mr. Hubbard and his expert testified were critical to attracting and keeping customers.

Captain Gorthy testified that he decided to move the Rent All Center for two principal reasons. The first, which he conveyed to Mr. [195]*195Hubbard prior to the move, was because he viewed the Rent All Center office to be an eyesore. The second reason, which Captain Gorthy testified to at trial and which he testified was the primary reason for the move, was his concern about the welfare of the Exchange workers at the Rent All Center. Though he also admitted on cross examination that he had never spoken to those workers about any workplace issues.

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Related

Hubbard v. United States
80 Fed. Cl. 282 (Federal Claims, 2008)
Hubbard v. United States
480 F.3d 1327 (Federal Circuit, 2007)
North Star Alaska Housing Corp. v. United States
76 Fed. Cl. 158 (Federal Claims, 2007)
Boston Edison Co. v. States
64 Fed. Cl. 167 (Federal Claims, 2005)
Southern California Edison v. United States
58 Fed. Cl. 313 (Federal Claims, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
52 Fed. Cl. 192, 2002 U.S. Claims LEXIS 83, 2002 WL 539008, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hubbard-v-united-states-uscfc-2002.