PATRICIA CAMPBELL-SMITH, Chief Judge.
This is a contract case. The subject contract pertains to the construction and subsequent lease of a federal courthouse. At issue is the parties' conflicting interpretation of a tax adjustment clause in the lease.
On July 22, 2013, defendant moved to dismiss plaintiff's claim for lack of jurisdiction. Defendant argued,
Before the court is the Complaint, filed April 8, 2013; Defendant's Motion to Dismiss, attached to which is an appendix (Def.'s App'x), filed July 22, 2013; Plaintiff's Opposition to Defendant's Motion to Dismiss (Pl.'s Opp'n), ECF No. 12, filed September 23, 2013; Defendant's Reply to Plaintiff's Response (Def.'s Reply), ECF No. 17, filed October 29, 2013; Defendant's Supplemental Brief (Def.'s Suppl. Br.), ECF No. 25, filed March 6, 2014; Plaintiff's Response to Defendant's Supplemental Brief (Pl.'s Suppl. Resp.), ECF No. 30, filed March 20, 2014; and Defendant's Reply (Def.'s Suppl. Reply), ECF No. 33, filed March 26, 2014.
For the reasons explained below, the portion of defendant's motion not decided by the
The background facts and procedural history of this case are set out in detail in the court's February decision.
Palafox is the successor in interest to Keating Development Company (Keating) under a lease between Keating and the General Services Administration (GSA) for the construction and lease of a federal courthouse. Compl. ¶ 3. The lease contains a tax adjustment clause, which provides that "[t]he Government shall make an annual lump sum adjustment, as additional payment to or deduction from, its share of any increase or decrease in real estate taxes that are assessed over the agreed upon base year or negotiated dollar amount," and "the base year real estate taxes for purposes of adjustments are hereby established as $250,000." Def.'s App'x A84 ¶ 1.4, A86 ¶ B. From August 1997 through December 2011, GSA paid plaintiff the yearly $250,000 adjustment. Compl. ¶ 15. In 2011, GSA conducted an audit of the lease and determined that the real estate taxes actually paid by plaintiff were less than the $250,000 the government had paid yearly. Id. ¶ 17.
On June 8, 2011, the contracting officer sent a letter to the trustee under the lease, the Bank of New York, stating that the discrepancy between the annual real estate taxes paid by plaintiff and the annual $250,000 paid by GSA to plaintiff "created an excess obligation due the government in the amount of $824,416.01." Compl. ¶¶ 14, 17 (internal quotation marks omitted);
From December 1, 2011 through May 1, 2012, GSA attempted to offset the amount allegedly owed by sending half of the monthly rent payments due. Compl. ¶ 20. The Bank of New York refused the partial rent payments, essentially effecting a setoff of six full monthly rent payments, or $831,858.
On April 9, 2012, the contracting officer issued a decision (the April 2012 decision),
Palafox appealed the April 2012 decision to the United States Civilian Board of Contract Appeals (CBCA or the Board) on July 2, 2012.
Plaintiff initially opposed the Board's recommended course, asserting that certification was unnecessary because Palafox was appealing a government claim.
The Board granted the parties' joint motion on October 17, 2012, Def.'s App'x A53, and five days later plaintiff submitted a certified claim to the contracting officer for $831,858 withheld by the government as a setoff (the October 2012 certified claim). Compl. ¶ 30; Def.'s App'x A54-80. Plaintiff advanced various arguments in support of its position, including claims of breach of contract, estoppel, waiver, laches, and the expiration of the statute of limitations.
The contracting officer issued a decision denying the certified claim on December 20, 2012 (the December 2012 decision). Def.'s App'x A81-83. The December 2012 decision, similar to the earlier April 2012 decision, identified as the issue in dispute between the parties the government's claimed entitlement to the $824,416.01 for which it had withheld rent payments as an offset to the allegedly excessive amounts paid to plaintiff.
Plaintiff filed a complaint in this court on April 8, 2012. Defendant filed a motion to dismiss, arguing
However, as the court explained in its February decision, it was unclear from the initial briefing on defendant's motion to dismiss whether the election doctrine barred the court from hearing plaintiff's appeal of the contracting officer's December 2012 decision—the second decision on plaintiff's claim.
Defendant conceded that it was "unaware of any jurisdictional hurdle to plaintiff's $7,441.99 claim," an admission that, in the court's view, suggested that there might be no jurisdictional hurdle to plaintiff's appeal of the entirety of the December 20, 2012 decision.
In considering a motion to dismiss for lack of jurisdiction, the court must "view the alleged facts in the complaint as true, and if the facts reveal any reasonable basis upon which the non-movant [might] prevail, dismissal is inappropriate."
This court has jurisdiction over certain contract claims against the United States pursuant to the Tucker Act,
Defendant has responded to the court's request for supplemental briefing, contending that the court does not have jurisdiction over plaintiff's appeal of the December 2012 decision. Defendant offers three arguments: (1) plaintiff's October 2012 certified claim effectively sought reconsideration of the contracting officer's April 2012 decision (and asserted a claim for the $7,441.99 difference); (2) because the election doctrine does not permit a contractor to appeal the same claim to a different forum through the use of a post-election request for reconsideration, plaintiff's claim cannot stand, and (3) plaintiff did not request timely reconsideration of the April 2012 decision and thus, the finality of that decision cannot be suspended.
Plaintiff responded to the court's request for supplemental briefing, making five arguments: (1) its October 2012 certified claim was not a request for reconsideration of the April 2012 decision but a new claim; (2) even if a portion or all of its October 2012 certified claim constituted a request for reconsideration, it was timely presented; (3) acceptance of the government's position before the court—which is contrary to the one it took before the Board—requires an invalidation of the Board's dismissal without prejudice because it denied plaintiff the right to pursue its claims—which were not included in the government's claim; (4) plaintiff was prejudiced by the contracting officer's provision of erroneous notice to Palafox regarding its appeal rights; and (5) should the court determine it lacks jurisdiction, it should transfer plaintiff's appeal to the Board.
Defendant argues in its supplemental brief that plaintiff's October 2012 certified claim, which was filed at the urging of the government, constituted a new claim for $7,441.99 and a request for reconsideration of the contracting officer's April 2012 decision. Def.'s Suppl. Br. 5. Defendant contends that the request for reconsideration was untimely and therefore, did not suspend the finality of the April 2012 decision.
Defendant acknowledged in its briefing that the CDA does not address requests for reconsideration of a contracting officer's final decision.
Defendant adds that correspondence with a contracting officer need not be labeled a "`request for reconsideration' to constitute such a request." Def.'s Suppl. Br. 6. It is the substance of the request that determines its character.
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These cases, and the rules derived therefrom, are inapposite on the facts of this case. The cited cases reflect court consideration of contractors' efforts to revive their appeal rights as well as court examination of correspondence between contractors and contracting officers to determine whether such correspondence qualified as reconsideration and thus, tolled the running of the statute of limitations for appealing the contracting officer's decision. Evidence of similar consideration on examination in the case at bar is wanting. Here, plaintiff filed a timely appeal of the contracting officer's April 2012 decision with the Board, and then filed a certified claim, as contemplated by the parties, shortly after the joint dismissal.
Defendant has not pointed to a case construing a certified claim, like the one Palafox filed, as a request for reconsideration, and the court has not identified one. Not only did the contracting officer, in this case, recognize Palafox's request as a certified claim, but it also issued a new final decision on that claim. Correspondence between the contracting officer and Palafox cannot be labeled properly as a request for reconsideration—a process for which there is no provision under the statute—where it explicitly follows the process set out in the Contract Disputes Act for the filing of a certified claim and the receipt of a contracting officer's decision.
The court finds that plaintiff's certified claim to the contracting officer was precisely that—a certified claim—that was filed at the government's urging. Because the court does not find that plaintiff's claim was a request for reconsideration, it need not decide whether such request was timely.
The court considers important the more straightforward question of whether plaintiff's appeal of the December 2012 decision was subject to plaintiff's election to file its initial claim with the Board. Because the parties' supplemental briefing does not squarely address this question, the court requests additional briefing. Counsel should address the following:
The court invites the parties to consider an equitable resolution to this dispute. If counsel are inclined to attempt mediation or another form of alternative dispute resolution, one option available to the parties is the assignment of a settlement judge for this purpose.
If the parties are not amenable to an equitable resolution of this matter, they simultaneously shall file supplemental briefs, on or before
IT IS SO ORDERED.