Jacintoport International LLC v. United States

121 Fed. Cl. 196, 2015 U.S. Claims LEXIS 619, 2015 WL 2437557
CourtUnited States Court of Federal Claims
DecidedMay 20, 2015
Docket14-541C
StatusPublished
Cited by2 cases

This text of 121 Fed. Cl. 196 (Jacintoport International LLC 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
Jacintoport International LLC v. United States, 121 Fed. Cl. 196, 2015 U.S. Claims LEXIS 619, 2015 WL 2437557 (uscfc 2015).

Opinion

Contract Disputes Act (“CDA”), 41 Plaintiff, U.S.C. § 7104; Motion for Judgment on the Pleadings, RCFC 12(c); Motion for v. Summary Judgment, RCFC 56; Contract Interpretation; Patent Ambiguity; Latent Ambiguity; Extrinsic Evidence.

OPINION AND ORDER

ELAINE D. KAPLAN, Judge

This case, which presents a claim under the Contract Disputes Act (“CDA”), 41 U.S.C. § 7104(b)(1), is currently before the Court on plaintiffs motion for partial judgment on the pleadings and the government’s cross-motion for partial summary judgment. For the reasons set forth below, plaintiffs motion is DENIED, and the government’s cross-motion is GRANTED IN PART and DENIED IN PART.

BACKGROUND

On August 11, 2006, the United States Agency for International Development (“USAID”) posted Solicitation Number USAID-RFP-TRN-06-060 (“the solicitation”). Solicitation 1, Apr. 20, 2015, ECF No. 21-1. The solicitation requested proposals to “provide pre-positioned packaged food storage, cargo handling, custodial and logistics services, covering food commodities for the [USAID] Title II Food Ad Program.” Solicitation 2. Plaintiff Jacintoport International LLC (“Jacintoport”), a private port facility operator in Houston, Texas, submit *199 ted the offer that USAID ultimately accepted. Accordingly, effective May 1, 2007, USAID and Jacintoport entered into a contract, which initially ran until April 30, 2009 but was extended several times until it ultimately terminated in October 2009. Compl. ¶ 2, Ex. A (“Contract”) at 1,18-19.

There are two issues before the Court in this case. The first concerns the extent to which the contract obligated the government to reimburse Jacintoport for costs it incurred to fumigate the warehouse within which the USAID commodities were stored. According to the government, the contract provided reimbursement for the costs of fumigating the commodities themselves, but not the warehouse. Def.’s Opp’n & Cross-Mot. 11-16, Jan. 12, 2015, ECF No. 14.

The provision of the contract that- is' relevant to the resolution of this issue is Section VI, specifically paragraphs A and D. Section VI is captioned “RESPONSIBILITY FOR CONDITION OF' WAREHOUSE AND PROTECTION OF COMMODITIES” and states, in pertinent part, as follows:

A. The Contractor must maintain the warehouse in a sound, clean condition and in accordance with the standards in this contract, take all commercially reasonable steps to keep it free of insects, rodents, birds, and other conditions which may adversely affect the condition of the commodities or their containers, including but not limited to fumigation which shall be reimbursed by USAID.
B. The Contractor must, in accordance with the standards in this contract, take all commercially reasonable steps to promptly detect any deterioration, insect infestation, rodent damage, mold, or any other condition which may adversely affect the condition of the commodities or their containers. Contractor will conduct daily inspections of cargo in the warehouse, provide ventilation as needed and order inspectors [sic] when necessary.
C. If any of the conditions above are detected, the Contractor must notify USAID by telephone and confirm such notification in writing. Pending receipt of instructions from USAID, the Contractor must take all reasonable steps necessary to protect and preserve the affected commodities or their containers.
D. Contractor shall fumigate the commodities as necessary or as determined to be necessary by inspection. All fumigation costs shall be reimbursed by USAID and shall be billed at cost.

Contract at 7.

Also relevant to the issue of whether the contract promised reimbursement for warehouse fumigation in addition to commodity fumigation is the following paragraph, contained in the solicitation appended to the contract:

Fumigation: If condition inspectors find infested commodities, the contractor shall arrange and pay for fumigation of any lots found to be infested.... Fumigation is to be done in accordance with the FGIS fumigation handbook. The contractor shall pay all cost associated with fumigation. The contractor shall be reimbursed by the government for these costs on a cost reimbursable basis in accordance with the contract rates, terms and conditions. Copies of all fumigation reports shall be sent to the USAID CTO.

Contract at 15.

The second issue before the Court concerns the rate that Jacintoport was entitled to charge for fumigation services. Schedule B of the Contract, entitled “Schedule of Rates,” states that “[u]nless otherwise provided, charges payable by USAID or commodity vendors or carriers for receipt, storage, inspection and re-delivery of commodities pursuant to this Agreement will be as follows:”

*200 [[Image here]]

Contract at 11.

Jacintoport submitted two fumigation-related invoices to USAID during the term of the contract. Those invoices, which USAID paid in full, were dated October 5 and September 27, 2007. See Def.’s Opp’n & Cross-Mot. Ex. B. The total amount billed in the invoices was $10,918.65, which constituted reimbursement for the fumigation of certain lots of cargo at the cost to Jacintoport of hiring a third party vendor. See id.

Jacintoport’s complaint in this case arose out of a certified claim that it filed on May 22, 2013, some three and a half years after the contract terminated. 1 Compl. Ex. B. That claim sought an additional $552,658.35 for expenses Jacintoport allegedly incurred for fumigation of. its warehouse, charged at $3.00 per metric ton. Id. The contracting officer denied Jaeintoport’s claim on July 18, 2013. Compl. Ex. C.

The contracting officer reasoned that “our contract scope of services, and pricing, do not require (as a separate performance service) the fumigation of a warehouse.” Id. Rather, according to the contracting officer, the word “fumigation” in the contract “is in reference to the commodities.” Id. Furthermore, the contracting officer found that the rate that Jacintoport sought to charge for warehouse fumigation, which was based upon the quantity of commodities stored in the warehouse and set at $3.00 per metric ton, departed from the intent of the parties as well as the logistics industry standard. Id. According to the contracting officer, “[t]he government and Jacintoport had a meeting of the minds regarding the fact that commodity fumigation (not warehouse fumigation) would be budgeted at $3.00 per fumigated metric ton,” but that, in practice, it “would be reimbursed by the government ‘at cost.’ ” Id. Regarding the industry standard, the contracting officer observed that “[t]ypically, if warehouse fumigation is contemplated, a warehouse owner and a fumigator may agree on costs or prices related to warehouse area, square or cube footage, rather than the quantity of cargo stored in the warehouse,” measured by metric ton. Id.

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121 Fed. Cl. 196, 2015 U.S. Claims LEXIS 619, 2015 WL 2437557, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jacintoport-international-llc-v-united-states-uscfc-2015.