United States v. Morrison

370 F. Supp. 193, 20 Cont. Cas. Fed. 82,982, 1974 U.S. Dist. LEXIS 12311
CourtDistrict Court, E.D. Virginia
DecidedFebruary 11, 1974
DocketCiv. No. 91-72-NN
StatusPublished
Cited by1 cases

This text of 370 F. Supp. 193 (United States v. Morrison) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Morrison, 370 F. Supp. 193, 20 Cont. Cas. Fed. 82,982, 1974 U.S. Dist. LEXIS 12311 (E.D. Va. 1974).

Opinion

MEMORANDUM OPINION

WALTER E. HOFFMAN, District Judge.

Defendant entered into a contract with the Government for the storage of household goods of military personnel. Inter alia the contract had provisions limiting the contractor’s liability to damage or loss of goods as the result of the contractor’s fault or negligence; limiting the amount of recovery in the event of fault or negligence to $50.00 per article or package listed on the warehouse receipt unless a higher value was declared and additional payment made; and incorporating the standard government “disputes clause” into .the contract.1

[195]*195On December 19, 1968, defendant’s warehouse burned down destroying nine lots of household goods valued at $14,537.50 stored under an extension of this contract.

On March 11, 1969, the Contracting Officer sent a copy of his findings of fact to defendant regarding the goods destroyed in the fire. Defendant contended that he did not receive this letter or any of nine other demand letters mailed to him. After hearing testimony on this issue, the Court has determined that defendant did receive the Contracting Officer’s findings of fact and did not appeal from them within thirty days of receipt as required.

In addition, other findings of fact concerning damage not the result of the fire to the goods of eight military personnel aggregating $1153.23 were sent to defendant in 1969 and 1970. We have concluded that defendant also" received these letters and did not appeal the findings within the thirty-day period.2

The Contracting Officer’s findings of fact are little more than a recitation that the goods were stored under the contract, their value was $14,537.50, they were destroyed in the fire, and their loss was the result of the contractor’s fault or negligence. No facts are recited in support of the conclusion as to fault or negligence, and despite some reference to the $50.00 per article or package limitation of liability, there is no suggestion that a higher value was declared and additional fees paid, or as to the total number of packages involved.

The findings of fact in regard to the eight individual claims for other than fire-caused damage are made on a form. The final line of the form states “analysis of the claim has resulted in the determination that the loss and damage sustained were not beyond the control of the contractor.” No facts are given in support of this conclusion, and there is no finding of fault or negligence. The contract makes the contractor liable for loss or damage only if the goods are damaged or lost within the control of the contractor and with fault or negligence on the part of the contractor.

Were this ease presented in the form of a judicial review of the final determination of an administrative agency, we would have no hesitancy in rejecting the administrative findings under the “substantial evidence” requirement of 41 U. S.C. § 321. But the defendant has failed to exhaust his administrative remedy by appealing the Contracting Officer’s finding to the Administrative Appeals Board, and without such appeal the findings of fact by the Contracting Officer are final and conclusive absent fraud.

The decisions of the Administrative Agency or Contracting Officer, if conclusions of law rather than fact, are not, however, conclusive both by the terms of the contract and by statute, 41 U.S.C. § 322.

[196]*196The distinction between a question of fact and a question of law is an artificial one, much litigated, and not precisely defined.

In United States v. Adams, 160 F. Supp. 143 (W.D.Ark.1958), the contractor had defaulted by failure to deliver. The non-delivery was caused by the contractor’s insolvency which the contracting officer concluded to be the result of the contractor’s fault or negligence without making a finding of any factual basis for the conclusion. The contractor did not administratively appeal the contracting officer’s finding.

The district court concluded that the determination of fault or negligence was a determination of law and that the failure to appeal did not foreclose judicial determination of a question of law.3 After consideration of the facts the district court reversed the contracting officer’s decision.

In Meinberg v. United States, 310 F. Supp. 86 (W.D.Mo.1969), a similar conclusion was reached as to determination of negligence or fault being a legal question. A contrary result was reached in Whitlock Corp. v. United States, 159 F. Supp. 602, 142 Ct.Cl. 758 (1958).

The Wunderlich Acts, limiting the conclusiveness of administrative determinations of contract disputes, were passed in response to the Supreme Court’s holdings in United States v. Moormann, 338 U.S. 457, 70 S.Ct. 288, 94 L.Ed. 256 (1950), and United States v. Wunderlich, 342 U.S. 98, 72 S.Ct. 154, 96 L.Ed. 113 (1951), limiting judicial review of administrative contract decisions. The Second Circuit has stated in United States v. Lennox Metal Manufacturing Co., 225 F.2d 302, 318-319 (2 Cir. 1955):

“The Senate Report discloses that the Congressional purpose was to wipe out the ruling in United States v. Wun-derlich, 342 U.S. 98, 72 S.Ct. 154, 96 L.Ed. 113, and to restore the views expressed in Ripley v. United States 223 U.S. 695, 701-702, 32 S.Ct. 352, 56 L. Ed. 614, i.e., that where the power of the government under a contract is complete and its agent’s decision conclusive, then the government owes a corresponding duty to have its agent’s judgment exercised reasonably, and not capriciously or in bad faith. In effect, Congress adopted the views of Justices Douglas and Jackson in their dissenting opinions in Wunderlich, 342 U.S. at pages 101-103, 72 S.Ct. 156-157.
“True, the new statute, literally read, applies only to the ‘disputes’ clause of a contract like that before us here. Congress, however, stated a general policy forbidding a government official to act capriciously in the exercise of a power of decision under such a contract. Such a policy should not be interpreted in a niggardly manner.”

The contract term itself provides : “ . . . nothing in this contract shall be construed as making final the decision of any administrative official, representative, or board on a question of law.” It is a general rule of contract law that ambiguous contract terms should be interpreted against the drafter which, in this case, was the United States.

All of these factors suggest that the determination of negligence or fault should be held a determination of law and not of fact. Common sense suggests the same. Negligence and fault are themselves legal words of art. Though we may leave the ultimate conclusion of negligence in a tort case to the jury as the trier of fact, it is only after carefully defining and limiting the term to its legal usage that we do so.

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370 F. Supp. 193, 20 Cont. Cas. Fed. 82,982, 1974 U.S. Dist. LEXIS 12311, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-morrison-vaed-1974.