Bes design/build, LLC v. United States ( 2022 )

In the United States Court of Federal Claims
No. 20-1834C
(E-Filed: January 11, 2022)
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BES DESIGN/BUILD, LLC, )
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Plaintiff, ) Motion to Transfer; 41 U.S.C. § 7107(d).
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v. )
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THE UNITED STATES, )
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Defendant. )
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Todd A. Jones, Raleigh, NC, for plaintiff.
Ioana Cristei, Trial Attorney, with whom were Brian M. Boynton, Acting Assistant
Attorney General, Martin F. Hockey, Jr., Acting Director, Steven J. Gillingham, Assistant
Director, Commercial Litigation Branch, Civil Division, United States Department of
Justice, Washington, DC, for defendant. Bailey Kapfer, of counsel.
OPINION
CAMPBELL-SMITH, Judge.
On September 20, 2021, defendant filed a motion to transfer this case to the
Civilian Board of Contract Appeals (CBCA) for potential consolidation with plaintiff’s
cases that are currently pending before that board and to stay all proceedings in this court
until the court rules on the motion to transfer. See ECF No. 17. Plaintiff filed a response
in opposition to the motion to transfer on October 18, 2021, see ECF No. 20; and on
October 29, 2021, defendant filed a reply in support of the motion, see ECF No. 23.
The motion is now fully briefed, and ripe for decision. The court has considered
all of the parties’ arguments and addresses the issues that are pertinent to the court’s
ruling in this opinion. For the following reasons, defendant’s motion is GRANTED in
part, as to the request for transfer, and DENIED in part as moot, as to the request for a
stay.
I. Background
Plaintiff filed this Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-09, case on
December 11, 2020. See ECF No. 1 (complaint). Plaintiff and the United States
Department of Veteran’s Affairs (VA) contracted in 2015 for plaintiff to provide all the
necessary labor and materials for a clinic renovation in Fayetteville, Arkansas. See id. at
1. The VA terminated the contract for default in April 2019. See ECF No. 20 at 6. The
parties had purportedly agreed to multiple contract modifications and equitable
adjustments as a result of discrepancies between the contract specifications and the
conditions at the clinic, including the type of paint required and the location of a sanitary
sewer to be rerouted. See ECF No. 1 at 4-5, 7. According to plaintiff, defendant
breached the contract and its duty of good faith and fair dealing when it failed to pay
plaintiff for these changes. 1 See id. at 9-11.
Plaintiff also filed two claims at the CBCA—both in October 2019—related to
defendant’s purported failure to pay plaintiff’s final pay application, defendant’s
purported failure to compensate plaintiff for a delay, and defendant’s termination of the
contract for default. See ECF No. 20 at 6-7. Defendant now moves to transfer this case
to the CBCA to be considered for consolidation with plaintiff’s other cases. See ECF No.
17 at 10.
II. Legal Standards
Pursuant to the CDA, the court has the authority to direct consolidation or transfer
of a case under the following circumstances:
If 2 or more actions arising from one contract are filed in the United States
Court of Federal Claims and one or more agency boards, for the convenience
of parties or witnesses or in the interest of justice, the United States Court of
Federal Claims may order the consolidation of the actions in that court or
transfer any actions to or among the agency boards involved.
41 U.S.C. § 7107(d). The decision to consolidate or transfer a case “is a discretionary
action that embraces a variety of factors, and is an ad hoc determination.” Multi-Roof
Sys. Co. v. United States, 5 Cl. Ct. 245, 247 (1984) (citation omitted); see also Joseph
Morton Co. v. United States, 757 F.2d 1273, 1280 (Fed. Cir. 1985) (noting the court’s
“broad discretion in exercising its power to consolidate” matters pursuant to the CDA).
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Plaintiff also alleged a claim related to a delay caused by the discovery of asbestos but
has since dismissed that claim voluntarily. See ECF No. 14 (stipulation of dismissal).
2
In assessing whether consolidation or transfer is appropriate under this statute, the court
considers several factors, including:
(1) whether the same contract is involved; (2) whether the cases present the
same or overlapping issues; (3) whether the [p]laintiff chose to proceed
initially in the board or at the court; (4) whether substantial efforts have been
expended in one forum, but not the other; and (5) whether transfer will
eliminate duplication of efforts.
Precision Pine & Timber, Inc. v. United States, 45 Fed. Cl. 134, 135-36 (1999); see also
In re Morse Diesel Int’l, 163 F. App’x 878, 879 (Fed. Cir. 2006) (upholding a decision by
this court based on this framework for determining whether consolidation or transfer is
appropriate).
III. Analysis
In its motion, defendant argues that the circumstances in this case militate in favor
of transfer. See ECF No. 17 at 6-10. Plaintiff opposes the motion, arguing that the
factors weigh against transfer. See ECF No. 20 at 10-15. The court will address each
factor in turn.
A. Whether the Same Contract Is Involved
The parties agree that the claims presented in this case and those addressed in
plaintiff’s cases before the CBCA “arise under the same [c]ontract.” ECF No. 20 at 10;
see also ECF No. 17 at 6. As such, this factor is satisfied in favor of transfer.
B. Whether the Cases Present the Same or Overlapping Issues
Defendant argues that this case and the cases before the CBCA, while not
“packaged in identical counts,” have the same central question—“the nature of
[plaintiff’s] performance on the [c]ontract.” ECF No. 17 at 7. According to defendant,
the evidence that plaintiff has presented at the CBCA “involves the issues it is litigating
before the [c]ourt,” id., and “many of the same witnesses and documents will be central
to supporting” plaintiff’s case here and at the CBCA, id. at 8. Defendant thus argues that
the issues “arise out of the same operative facts and seek the same relief,” ECF No. 23 at
2, in addition to requiring “similar, if not identical, legal analysis,” and are therefore
overlapping, id. at 3.
Plaintiff, however, argues that the issues are “vastly different,” because they
involve different aspects of defendant’s failure to compensate plaintiff—the CBCA cases
relate to a delay, a specific pay application, and the termination for default, while this
case relates to pay for additional paint and sewer line work. ECF No. 20 at 10. Plaintiff
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asserts that the work it claims in this case is not covered by the pay application in the
CBCA cases and “just because testimony was offered at the CBCA hearing relating to the
additional paint work and the sanitary sewer lines, does not mean that those issues were
presented to the Board for adjudication.” Id. at 11. Plaintiff further argues that the
central question is also different—while the CBCA cases may have been about plaintiff’s
performance on the contract, this case is about “two specific items of performance.” Id.
at 12.
After a careful review of the issues raised in each proceeding, the court agrees
with defendant that this factor supports transfer to the CBCA. Neither the statute nor the
caselaw requires that the issues presented in each case be entirely synonymous to justify
consolidation or transfer. Here, plaintiff seeks damages for defendant’s alleged breach of
contract, which, as defendant argues, is predicated on an analysis of the language of the
contract and the VA’s duties thereunder. See ECF No. 23 at 3. The same issues, broadly
speaking, will be addressed by the CBCA as it determines whether plaintiff is entitled to
compensation for other issues that arose under the contract and whether defendant
appropriately terminated the contract for default.
C. Whether the Plaintiff Chose to Proceed Initially Either before the Board or
the Court
According to plaintiff, it appealed the VA’s denial of its first certified claim to
the CBCA on July 17, 2019, and filed its formal complaint, BES Design/Build, LLC v.
Department of Veterans Affairs, CBCA Case No. 6560, on October 10, 2019. See ECF
No. 20 at 6 (citing ECF No. 17-1 at 91). Plaintiff appealed the VA’s failure to issue a
decision on its second certified claim to the CBCA, BES Design/Build, LLC v.
Department of Veteran’s Affairs, CBCA Case No. 6453, on October 11, 2019. See id. at
7 (citing ECF No. 17-1 at 96). Plaintiff filed this case on December 11, 2020. See ECF
No. 1.
Plaintiff does not dispute these facts, but argues that this factor does not support
transfer because its CBCA cases are “so much ‘further along’[ ] that [they] have
essentially concluded.” ECF No. 20 at 13. Plaintiff argues that because the record is
closed in its other cases, and the issues in this case were not argued before the CBCA,
plaintiff “would not be able to have these issues adjudicated based on the current (and
closed) record before the Board.” Id. While this may be true, plaintiff’s argument on this
point is irrelevant as to which forum it first pursued. Further, this court cannot order
consolidation of cases in another forum, and trusts that the CBCA would undertake an
appropriate analysis to determine whether this case should remain a separate but related
case or be consolidated with plaintiff’s other cases.
Because plaintiff’s CBCA cases were filed first, this factor favors transfer.
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D. Whether Substantial Efforts Have Been Expended in One Forum
Defendant argues that both parties have “already expended—and will continue to
expend—substantial effort” litigating plaintiff’s CBCA cases. ECF No. 17 at 8. Plaintiff
repeats its prior argument that the CBCA cases are much further along, to the point that
they have “essentially concluded.” ECF No. 20 at 14.
The parties have been through the CBCA’s discovery process and concluded a
hearing at the CBCA on both cases. See id. In comparison, proceedings before the court
have not progressed even to the filing of an answer. The CBCA has clearly invested
more substantial resources in plaintiff’s cases than the court has in the instant litigation.
For these reasons, this factor supports transfer.
E. Whether Transfer Will Eliminate Duplication of Efforts
Given the overlapping nature of the issues presented before the CBCA and the
court, defendant argues that litigation in one forum will “eliminate unnecessary
duplication of efforts” and mitigate against the possibility of this court’s decision being
collaterally estopped by the CBCA’s decision. Id. at 9. Specifically, defendant argues
that the CBCA’s decision, given the evidence before it, “would likely result in claim or
issue preclusion with one or both claims here.” ECF No. 23 at 5. Defendant further
contends that transferring this case would permit both the forum and defendant’s
attorneys with the most familiarity with the facts at issue to hear the case, eliminating
unnecessary effort by the court and counsel in becoming familiar with the case. See id. at
6. In opposition, plaintiff reiterates its argument that the issues in this case are different
from the CBCA issues, and that a transfer would necessarily require the CBCA to reopen
discovery and the record to litigate the additional issues. See ECF No. 20 at 14-15.
The court, again, agrees with defendant. The court’s and the parties’ resources are
better allocated to matters that are not being evaluated concurrently by a separate
tribunal. In addition, plaintiff’s argument that the CBCA would be required to re-open
the previously-filed cases assumes that this matter would be consolidated with the earlier
cases, which is not necessarily the case. As such, this factor supports transfer.
IV. Conclusion
Accordingly, for foregoing reasons:
(1) Defendant’s motion to transfer this case to the CBCA, ECF No. 17, is
GRANTED in part, as to the request for transfer, and DENIED in part as
moot, as to the request for stay; and
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(2) The clerk’s office is directed to TRANSFER this case to the Civilian
Board of Contract Appeals by DELIVERING a certified copy of this
opinion, a copy of the docket sheet in this matter, and copies of the
documents that comprise the balance of the record to:
Civilian Board of Contract Appeals
Scott W. Sylke, Clerk of the Board
1800 M Street, NW, 6th Floor
Washington, DC 20036
IT IS SO ORDERED.
s/Patricia E. Campbell-Smith
PATRICIA E. CAMPBELL-SMITH
Judge
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