McAbee Construction, Inc. v. United States

97 F.3d 1431, 42 Cont. Cas. Fed. 77,328, 1996 U.S. App. LEXIS 26329, 1996 WL 571475
CourtCourt of Appeals for the Federal Circuit
DecidedOctober 8, 1996
Docket96-5004
StatusPublished
Cited by321 cases

This text of 97 F.3d 1431 (McAbee Construction, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McAbee Construction, Inc. v. United States, 97 F.3d 1431, 42 Cont. Cas. Fed. 77,328, 1996 U.S. App. LEXIS 26329, 1996 WL 571475 (Fed. Cir. 1996).

Opinion

MAYER, Circuit Judge.

The United States appeals the judgment of the United States Court of Federal Claims, No. 94-274 C (Aug. 16,1995), awarding McAbee Construction, Inc. damages for the diminished value of its property caused by the breach of an easement it had granted to the United States Army Corps of Engineers. Because the finding of a breach was based on an erroneous interpretation of the easement, we reverse.

Background

In 1983, the Corps of Engineers announced plans to replace the William Bacon Oliver Lock and Dam in Tuscaloosa, Alabama (the “project”). As part of the project, the Corps had to acquire real estate for use as a disposal site for dredged and excavated material. In March of 1986, the Corps approached McAbee Construction, Inc. about acquiring an interest in certain parcels of land that McAbee owned. Several months of negotiations and meetings ensued, at least some of which McAbee’s counsel attended. In September 1986, the Corps secured a five-year easement (“easement” or “contract”) from McAbee to meet its disposal needs.

The easement permitted the Corps “to deposit fill, spoil and waste material [on McA-bee’s land] ... and to perform any other work necessary and incident to the construction of the [project].” It also contained an integration clause, which provided that “[a]ll terms and conditions with respect to this [contract] are expressly contained herein and [McAbee] agrees that no representative or agent of the United States ha[s] made any representation or promise with respect to this [contract] not expressly contained herein.”

After the easement expired and the land reverted, McAbee submitted a claim to the Corps for $922,500 in damages caused by depositing an allegedly “excessive” amount of spoil material on its land. The Corps did not respond to the claim, and McAbee filed suit in the United States District Court for the Northern District of Alabama under the Federal Tort Claims Act. McAbee alleged that the Corps had negligently or wrongfully deposited more than 200,000 cubic yards of dirt and waste “in excess of its authority,” thereby committing trespass and waste.

The government moved to dismiss for lack of jurisdiction or to transfer the case to the Court of Federal Claims, arguing that it was a contract action in excess of $10,000, over which that court has exclusive jurisdiction. The court denied the motion, and the government appealed. We reversed and remanded with instructions to transfer the case. McAbee Constr., Inc. v. United States, 22 F.3d 1106 (Fed.Cir.1994) (table).

The trial court found that the elevation of the tract ranged from approximately 135 to 160 feet above mean sea level before the easement. McAbee argued that the parties had agreed that the Corps could place 15 to 20 feet of fill on the tract over the life of the easement and that the top elevation would be 165 feet above mean sea level when the easement expired. The court recognized that the contract did not include a specific height limitation, but it held that “[t]he missing height restriction term create[d] an ambiguity.” It therefore resorted to extrinsic evidence to hold that the Corps had agreed to return the property at an elevation no higher than 165 feet. Returning the property at an elevation of 183 feet was a breach. It awarded McAbee $328,000 for the diminution in fair market value of the property. This appeal followed.

Discussion

The first question is whether the contract was fully integrated. McAbee argues that neither party intended for the “easement to be the final, exclusive statement of all of their agreements”; the easement was only partially integrated. Thus, it contends that the court’s reliance on extrinsic evidence to hold that the contract contained a specific *1434 height limitation did not run afoul of the parol evidence rule. We disagree.

MeAbee is correct that the Court of Claims, whose decisions bind us unless we overrule them in banc, see South Corp. v. United States, 690 F.2d 1368, 1370-71 & n. 2 (Fed.Cir.1982) (in banc), held that parol evidence “must be admissible on the issue of the extent to which a written agreement is integrated, for ... the writing cannot prove its own integration.” Sylvania Elec. Prods., Inc. v. United States, 198 Ct.Cl. 106, 458 F.2d 994, 1006 (1972); see also David Nassif Assocs. v. United States, 214 Ct.Cl. 407, 557 F.2d 249, 256 (1977). Thus, it is not only the writing that controls whether the document is fully integrated, but also the circumstances surrounding its execution. Nassif, 557 F.2d at 256.

The parties here explicitly stated that the contract was fully integrated; that is, they agreed that all of its terms and conditions were “expressly contained” within the four corners of the easement itself. As if that provision were not sufficiently clear, MeAbee agreed further that no representative or agent of the United States had made any representation or promise that was not expressly contained in the contract. So MeA-bee carries an extremely heavy burden in overcoming this attestation to the document’s finality and completeness. See Campbell v. United States, 228 Ct.Cl. 661, 661 F.2d 209, 218 (1981) (where contract includes an integration elause, “it is a fair bet that the parties agreed to no more than they said”); Nassif, 557 F.2d at 256 (extrinsic evidence is “especially pertinent in instances where ... the writing itself contains no recitals or other evidence testifying to its intended completeness and finality”); Restatement (Second) of Contracts § 216 cmt. e (1981) (existence of integration clause is “likely to conclude the issue whether the agreement is completely integrated”).

MeAbee has pointed to no extrinsic evidence that supports its assertion that the contract was not fully integrated. The available parol evidence comports with the substance of the integration clause. The execution of the agreement concluded several months of negotiations between the Corps and MeAbee, during which they discussed the elevation at which the Corps would return the property. Indeed, during negotiations, MeAbee requested that the parties enter into a “statement of understanding” that included a height limitation, yet there is none. MeAbee should have requested that the integration clause be stricken or modified if the agreement did not expressly address all of the issues on which the parties had agreed.

Of course, the parties could have expressly incorporated any documentary or other evidence of the alleged height limitation agreement into the contract via the integration clause itself. But the contract contains no references to any external documents or agreements. See United States v. Winstar Corp., — U.S. -, -, -, 116 S.Ct. 2432, 2448-53, 2472, 135 L.Ed.2d 964 (1996) (giving effect to contract integration clauses incorporating extrinsic documents as part of the contract).

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Bluebook (online)
97 F.3d 1431, 42 Cont. Cas. Fed. 77,328, 1996 U.S. App. LEXIS 26329, 1996 WL 571475, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcabee-construction-inc-v-united-states-cafc-1996.