Mountain Fir Lumber Co. v. United States

34 Cont. Cas. Fed. 75,314, 12 Cl. Ct. 521, 1987 U.S. Claims LEXIS 103
CourtUnited States Court of Claims
DecidedJune 9, 1987
DocketNo. 520-85C
StatusPublished

This text of 34 Cont. Cas. Fed. 75,314 (Mountain Fir 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
Mountain Fir Lumber Co. v. United States, 34 Cont. Cas. Fed. 75,314, 12 Cl. Ct. 521, 1987 U.S. Claims LEXIS 103 (cc 1987).

Opinion

OPINION

BRUGGINK, Judge.

Plaintiff seeks to recover alleged overcharges paid pursuant to certain contracts for the sale of timber. Presently before the court are the parties’ cross-motions for summary judgment. After consideration of the pleadings and oral argument, the court concludes that there are no issues of material fact and that plaintiff is entitled to judgment as a matter of law.

FACTUAL BACKGROUND

Mountain Fir Lumber Co. (“Mountain Fir”) is engaged in the business of manufacturing wood products from timber purchased from various sources, including the United States Forest Service. This action involves the following contracts for the purchase by Mountain Fir of timber on tracts located within the Mt. Hood National Forest:

Sale Contract No. Date
Cedar Creek 03476-3 11/20/74
Baseball 03621-4 08/27/75
Reline 03873-1 01/12/77

Each of the contracts was prepared on the Forest Service’s standard contract form 2400-6 (9/73). Although the contracts are particularized with respect to location, tree species, volume estimates, and rates per unit of measure, the contractual provisions at issue for all three contracts are identical in relevant respects.

The contracts require plaintiff to pay for all timber removed in either of two ways. Material meeting certain minimum requirements is paid for at a contractually specified rate per thousand board feet (MBF). This is referred to by the parties variously as “MBF material,” “merchantable timber,” or “net scale” material. Remaining substandard or nonmerchantable material is paid for at a flat rate by the acre. This [522]*522is referred to as per acre or “PAM” material.

The process of making the gross and net volume determinations required by the contract to identify merchantable timber is known as scaling.1 After logs are cut, they are scaled, usually by an independent logging service, before being taken to the mill. Timber removed by Mountain Fir was scaled by the Columbia River Scaling and Grading Bureau (“Columbia River”), an independent scaler service approved by the Forest Service. Scaling was performed in accordance with the National Forest Scaling Handbook.

The present dispute primarily involves the meaning of two contract provisions, Sections A2 and A5. Both consist of standard printed matter with significant typewritten additions. Section A2 is entitled “VOLUME ESTIMATE AND UTILIZATION STANDARDS.” The present version of Section A2 was developed and incorporated into the standard timber sales contract in 1973. The prior version of the section, used by the Forest Service in contract form 2400-5 (9/70), was the subject of a dispute between the parties which was resolved in Mountain Fir Lumber Company v. United States, 222 Ct.Cl. 619 (1980). That prior version of Section A2, however, differed from the present version in certain respects which will be discussed subsequently.

The form of Section A2 used in both the Baseball and Cedar Creek contracts is set out below. Only the specific quantity of board feet and acres are omitted.2

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The column headings, such as “SPECIES AND PRODUCT,” “ESTIMATED QUANTITY AND UNIT OF MEASURE,” etc., are printed material. Everything below the column and subcolumn headings is typed. Beneath the column “SPECIES AND PRODUCT” are two typed categories: “ * Pieces of at least 50 Bd. Ft. Net Scale Subject to Per M Pricing” and “ * Pieces of at least 20 and less than 50 Bd. [523]*523Ft. Net Scale Subject to Per Acre Pricing.” Both categories are described in terms of species of wood such as Ponderosa Pine or Douglas Fir. The term “Pieces” in both categories is marked with a footnote. The note at the bottom of the chart defines the term: “ * A piece is one or more A13 products (one or more scaling segments).” Except where the term is marked with an asterisk, the term piece is not otherwise defined in the contract. An “A13 product,” in turn, is specified in Section A13, “Scaling Instructions and Specifications,” as a segment of a log of between 8 and 20 feet. A maximum scaling length is thus 20 feet. The parties agree that under applicable scaling specifications, a log exceeding 20 feet in length would be broken down, in an imaginary sense only, into two or more scaling segments of less than 20 feet. As a rule, a log would have more than one individual scaling segment. Consequently, the term piece as defined in this manner in effect means the whole log, regardless of the number of scaling segments.

Column one, “SPECIES AND PRODUCT” does triple duty in the version of Section A2 presently in dispute, and therein lies the reason for most of the parties’ disagreement on the section’s overall meaning. In both the earlier and present versions of Section A2, this column creates two classes of product—viz., that subject to MBF pricing, and that subject to PAM pricing—and also identifies the particular species of trees being sold. The criteria which was added to the “SPECIES AND PRODUCT” column by the 1973 change was that each piece had to have at least 50 board feet “net scale” of merchantable timber to be subject to MBF pricing. Any piece not meeting that standard would be treated as PAM material.

The second column of Section A2 is entitled “ESTIMATED QUANTITY AND UNIT OF MEASURE.” It lists the anticipated volume of timber by species and acre. The third column is captioned, “MINIMUM TREE SPECIFICATIONS—INCLUDE ONE MINIMUM PIECE: DIAMETER BREAST HIGH.” Underneath, the minimum diameter is given in inches. The fourth column, “MINIMUM PIECE SPECIFICATIONS,” presently has three sub-columns: “Length,” “Diameter Inside Bark at Small End,” and “Net Scale in % of Gross Scale.” These minimum specifications are termed by the parties in their briefs as “minimum utilization standards.” The percentage given under “Net Scale in % of Gross Scale” 3 is 33V3. This refers to the minimum amount of merchantable or net scale material as a percentage of the total gross scale for the piece. If a piece is at least 33Vs% merchantable or net scale, then it meets the net/gross scale test. It is this latter requirement which is the specific focus of the plaintiff's claim. Plaintiff argues that defendant incorrectly ordered Columbia River to apply the one-third net scale/gross scale requirement to individual scaling segments rather than to a whole log, which might consist of several scaling segments. As a result, it claims it overpaid defendant $7,887.57. Plaintiff alleges that it is in effect being charged twice for the same wood, since it paid for the wood represented by the $7,887.58 when it made a PAM payment for the relevant acreage.

Once timber is classified under Section A2 as to merchantability, Section A5 sets out applicable payment rates. Subsection A5a gives the rates for MBF or merchantable material. Subsection A5b creates flat rates for PAM or nonmerchantable material. The entire section appears in the Baseball and Cedar Creek contracts, less prices, as set forth below:

[524]*524[[Image here]]
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The Prior Litigation

Since the 1973 changes to the standard form contract had their origins in the parties’ earlier dispute, the prior version of Section A2 needs to be considered. A sample is set forth below:

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Bluebook (online)
34 Cont. Cas. Fed. 75,314, 12 Cl. Ct. 521, 1987 U.S. Claims LEXIS 103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mountain-fir-lumber-co-v-united-states-cc-1987.