JRS Management v. Lynch

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
JRS MANAGEMENT,
Appellant
v.
LORETTA E. LYNCH, Attorney General,
Appellee
______________________
2014-1834
______________________
Appeal from the Civilian Board of Contract Appeals in
No. 3288, Administrative Judge James L. Stern, Adminis-
trative Judge Joseph A. Vergilio, Administrative Judge R.
Anthony McCann.
______________________
Decided: June 16, 2015
______________________
MICHELE YVETTE SIMS, Sims Law Firm, Duluth, GA,
for appellant.
DEVIN ANDREW WOLAK, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, for appellee. Also represented
by JOYCE R. BRANDA, ROBERT E. KIRSCHMAN, JR., DONALD
E. KINNER; NIHAR H. VORA, Office of General Counsel,
2 JRS MANAGEMENT v. DOJ
Federal Bureau of Prisons, United States Department of
Justice.
______________________
Before O’MALLEY, PLAGER, and TARANTO, Circuit
Judges.
O’MALLEY, Circuit Judge.
JRS Management (“JRS”) appeals from a decision of
the Civilian Board of Contract Appeals (“the Board”)
denying its appeal for failure to raise a genuine issue of
material fact with respect to JRS’s contractual dispute
with the Department of Justice (“DOJ”). Because the
Board, in reaching its decision to deny JRS’s claim,
abused its discretion in treating the DOJ’s motion to
dismiss as a motion for summary judgment, we vacate
and remand.
BACKGROUND
JRS entered into a one-year contract with the DOJ to
provide culinary arts instruction at a Bureau of Prison
Federal Correctional Institution (“FCI”) in Miami, Flori-
da. The contract had an effective date of August 8, 2011,
with four optional one year extension periods. Under the
terms of the contract, JRS was required to provide a
qualified instructor with: at least one year teaching
experience; a Florida teaching certificate or non-degree
vocational teaching certificate; three years specialized
experience in hospitality, hotel/restaurant management,
or a related culinary arts field; and a bachelor or associate
degree in culinary arts or related fields. Joint Appendix
(“J.A.”) 75. The contract stated that DOJ would “furnish”
the curriculum and that JRS would “develop, teach and
manage the culinary arts program.” Id.
Soon after the contract went into effect, JRS began its
efforts to find a suitable instructor, but was unable to do
so for several months. Because of the delay, the DOJ
JRS MANAGEMENT v. DOJ 3
informed JRS that it might terminate the contract, but in
March 2012, the DOJ placed a task order, requesting
instructor services for FCI Miami from April 2 through
August 7, 2012. In May 2012, JRS submitted five poten-
tial candidates to the DOJ, and requested a copy of the
curriculum and other materials to be used during the
culinary course from the DOJ. With respect to the pro-
posed instructors, the DOJ concluded that four of the five
were not viable candidates. The last candidate did meet
the DOJ’s educational and experience standards, howev-
er, and was told to report on June 8, 2012 to complete the
background and clearance processes. Regarding the
curriculum, the DOJ indicated its belief that it was JRS’s
duty to provide the curriculum, but, “to avoid confusion,”
it agreed to supply a copy of the curriculum. JA 154. On
this same day, the DOJ notified JRS of its preliminary
intent to exercise the first option year. JRS acknowledged
this preliminary notice on June 1, 2012. It also contacted
the DOJ to discuss the qualifications of the rejected
candidates and ask for details regarding the June 8, 2012
appointment for the qualifying candidate. JRS claims
that the DOJ never provided sufficient details regarding
the June 8 appointment to facilitate the instructor’s
ability to keep that appointment. The DOJ does not
directly refute this point, simply stating that the candi-
date did not appear on June 8, 2012. The DOJ decided
not to exercise the first year option on June 15, 2012 and
the contract expired on August 7, 2012.
On October 15, 2012, JRS submitted a claim to the
DOJ, seeking $18,431.73 in monetary damages resulting
from the DOJ’s alleged breach of contract and its arbi-
trary decision not to exercise its option. The DOJ denied
this claim on December 13, 2012. JRS appealed this
decision to the Board in March 2013.
Before the Board, JRS filed a complaint alleging that
the DOJ was liable under four theories: (1) the DOJ
materially breached the contract by failing to perform
4 JRS MANAGEMENT v. DOJ
several of its obligations, including processing background
checks for JRS’s instructors and furnishing curriculum so
that JRS could further develop the curriculum; (2) the
DOJ breached the contract when it interpreted the con-
tract to require that, among other things, JRS furnish
passport photos of potential instructors to assist the DOJ
in its clearance process; (3) the DOJ breached the cove-
nant of good faith and fair dealing when it prevented JRS
from providing culinary art instruction because it improp-
erly disqualified potential instructors, did not complete
background checks, and failed to provide security orienta-
tion training and furnish curriculum to JRS; and (4) the
DOJ acted in bad faith and retaliated against JRS for its
objections to DOJ’s conduct during the year by electing
not to exercise the first year option.
Following JRS’s complaint, the DOJ filed its answer
on May 20, 2013, and then filed a motion to dismiss with
prejudice under Board Rule 12(c), alleging that JRS’s
complaint did not support any of its allegations, and,
thus, should be dismissed. 1 JRS opposed the motion,
arguing that the existence of disputed material facts
precluded the entry of judgment on the pleadings. At the
same time, JRS also sought and was granted leave to file
an amended complaint, which further detailed JRS’s
asserted grounds for relief. JRS also attached a number
of supporting documents to its amended complaint.
Upon consideration, the Board decided to treat the
DOJ’s motion to dismiss the original complaint as a
1 Before the Board, the parties agreed that the
DOJ’s motion was akin to a motion for judgment on the
pleadings under Federal Rule of Civil Procedure 12(c).
See J.A. 212. Unlike a motion to dismiss, which must be
filed before a defendant answers or is waived, a motion for
judgment on the pleadings is filed after a defendant files
its answer. Fed. R. Civ. P. 12(b)–(c).
JRS MANAGEMENT v. DOJ 5
motion for summary relief on the amended complaint and
did so without providing notice to the parties. JRS Mgmt.
v. Dep’t of Justice, No. CBCA 3288, slip op. at 2 (May 28,
2014) (“Bd. Decision”). In addressing the merits, the
Board determined that there were no material facts in
dispute and that the issues between the parties largely
could be decided by the language of the contract. Id. at
11. Specifically, the Board concluded that, under the
contract, the DOJ had no obligation to, inter alia, provide
curriculum, complete background checks or provide
security training for unqualified candidates, or provide
notice that it would not be exercising the option to extend
the term of the contract. Id. at 12–15. Because it con-
cluded that JRS had intended to use multiple instructors
to complete performance, and only one candidate possibly
satisfied the qualifications outlined in the contract, the
Board also determined that JRS had failed to satisfy its
obligation to provide instructors under the contract, and,
thus, there could be no breach of the contract by the DOJ.
Additionally, because the DOJ was not obligated to exer-
cise the option to continue the contract, the Board found
that the DOJ’s failure to do so could not be equated to bad
faith or unfair dealing, or an arbitrary or capricious abuse
of discretion. Id. at 14–15. Accordingly, the Board denied
JRS’s appeal.
JRS filed a motion to reconsider, asking the Board to
either reverse or set aside its decision. Because the Board
failed to provide JRS notice of its intention to treat the
DOJ’s motion to dismiss as a motion for summary judg-
ment, JRS asserted that it was deprived of the opportuni-
ty to set forth specific facts that would have illustrated
genuine issues of material fact. Among other things, JRS
claims that it would have provided evidence that the DOJ,
in fact, agreed to provide the curriculum, that JRS only
proposed additional candidates to act as substitutes and
that a single candidate could easily satisfy the require-
ments, and that it was the DOJ who made it impossible
6 JRS MANAGEMENT v. DOJ
for the qualifying candidate to complete the background
process. The Board disagreed, explaining that, because
JRS filed an amended complaint and additional evidence
that went beyond its initial complaint, it was appropriate
for the Board to treat the DOJ’s motion to dismiss as one
for summary judgment. JRS Mgmt. v. Dep’t of Justice,
No. CBCA 3288-R, slip op. at 2 (August 5, 2014) (“Recon-
sideration Decision”). And, the Board found that the
issues raised by JRS were controlled by the language of
the contract, which the Board found it had the authority
to construe. Id. Thus, the Board denied JRS’s request for
reconsideration.
JRS timely appealed to this court. We have jurisdic-
tion pursuant to 28 U.S.C. § 1295(a)(10).
DISCUSSION
The Board’s decision to treat a motion to dismiss as a
motion for summary judgment is reviewed for an abuse of
discretion. See Easter v. United States, 575 F.3d 1332,
1335 (Fed. Cir. 2009). A decision to grant summary
judgment is a legal conclusion we review without defer-
ence. Rex Sys., Inc. v. Cohen, 224 F.3d 1367, 1371 (Fed.
Cir. 2000). Summary judgment is appropriate when,
drawing all justifiable inferences in the nonmovant’s
favor, there exists no genuine issue of material fact and
the movant is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986). Lastly, any “decision of [an] agency
board on a question of law is not final or conclusive; but
[a] decision of the agency board on a question of fact is
final and conclusive and may not be set aside unless the
decision is—[]fraudulent, arbitrary, or capricious; [] so
grossly erroneous as to necessarily imply bad faith; [] or
not supported by substantial evidence.” 41 U.S.C.
§ 7107(b).
When resolving procedural matters not directly ad-
dressed by the Board’s own rules, the Board consults the
JRS MANAGEMENT v. DOJ 7
Federal Rules of Civil Procedure for guidance. Orlando
Helicopter Airways v. Widnall, 51 F.3d 258, 262 n. 1 (Fed.
Cir. 1995). With respect to the decision to convert a
motion to dismiss into a motion for summary judgment,
the Board’s rules are silent. Accordingly, we review the
propriety of the Board’s decision in this case in light of
Federal Rule of Procedure 12(d), which states, “[i]f, on a
motion under Rule 12(b)(6) or 12(c), matters outside the
pleading are presented to and not excluded by the court,
the motion must be treated as one for summary judgment
under Rule 56 [and] [a]ll parties must be given a reasona-
ble opportunity to present all the material that is perti-
nent to the motion.”
Here, there is no dispute that the Board provided no
notice to the parties before it decided to treat the DOJ’s
motion to dismiss as a motion for summary judgment.
The DOJ argues, however, that the Board did not need to
provide actual notice to JRS, because JRS had construc-
tive notice of the potential conversion. Specifically, the
DOJ alleges that JRS was aware that the DOJ filed extra-
pleading evidence in the form of the appeal file, which is a
collection of “all documents and other tangible things
relevant to the claim and to the contracting officer’s
decision which has been appealed.” Bd. R. 4(a). Addi-
tionally, the DOJ asserts that JRS knew the motion to
dismiss was based upon extra-pleading evidence, because
JRS, in its response to the motion, objected to the fact
that the motion to dismiss contained material factual
allegations outside the pleadings. Lastly, the DOJ con-
tends that JRS’s original and amended complaints con-
tained several pinpoint citations to evidence in the appeal
file, and JRS’s amended complaint included five other
documents. The DOJ argues that these cites and materi-
als were outside the pleadings; thus, the DOJ alleges that
JRS knew or should have known that evidence beyond the
initial pleadings had been presented to the Board.
8 JRS MANAGEMENT v. DOJ
Some courts have concluded that “in a case . . .
[where] it is the non-moving party that introduces extra-
pleading matter, that party is deemed to be on construc-
tive notice that the court may convert the motion into a
motion for summary judgment.” Easter v. United States,
575 F.3d 1332, 1335 (Fed. Cir. 2009) (citing Rubert-Torres
v. Hospital San Pablo, Inc., 205 F.3d 472, 475 (1st Cir.
2000); Gurary v. Winehouse, 190 F.3d 37, 42–43 (2d Cir.
1999); Hamm v. Rhone-Poulenc Rorer Pharms., Inc., 187
F.3d 941, 948–50 (8th Cir. 1999); San Pedro Hotel Co. v.
City of Los Angeles, 159 F.3d 470, 477 (9th Cir. 1998)).
Here, although the DOJ argues that JRS should have
been aware that the appeal file was before the Board, that
file was submitted by the DOJ—not JRS. Thus, we
cannot say that JRS had constructive notice based on
these materials.
Further, to the extent that JRS itself submitted extra-
pleading materials to the Board, the Board did not make
a determination that extra-pleading matters had been
presented to it in its original opinion. Instead, the Board
merely said that “[t]he agency has filed a motion to dis-
miss, which the Board treats as a motion for summary
relief,” and “[t]he amended complaint is not substantively
different from the complaint for purposes of resolving the
motion, which the Board treats as a motion for summary
relief.” Bd. Decision at 2, 10. It was not until JRS moved
for reconsideration that the Board concluded that JRS
“submitted an amended complaint and additional evi-
dence, as well as a response in opposition to the motion”
and that “[t]he amended complaint and additional evi-
dence went beyond the initial pleadings addressed in the
agency’s motion to dismiss.” Reconsideration Decision at
2. The Board determined that this extra evidence justi-
fied its decision to consider the DOJ’s motion to dismiss
as a motion for summary judgment. Id.There are several problems with the procedures em-
ployed by the Board in this case. First, once the Board
JRS MANAGEMENT v. DOJ 9
authorized JRS to file an amended complaint, the motion
to dismiss the original complaint, which had been super-
seded, was rendered moot. The DOJ could have filed a
new motion to dismiss, and even could have asked to
incorporate its prior arguments therein, but it did not do
so.
Second, while JRS’s amended complaint did include
attachments, attachments to a complaint are considered
part of the complaint. See Bd. R. 6(b) (“No particular form
is prescribed for a complaint . . . .”); Fed. R. Civ. P. (10)(c)
(“A copy of a written instrument that is an exhibit to a
pleading is part of the pleadings for all purposes.”). Thus,
while the Board was free to consider those attachments
when ruling on the 12(c) motion (assuming one was
actually pending), it could not use those attachments to
justify converting the DOJ’s motion to a motion for sum-
mary judgment without notice. See Bd. R. 6(a) (“Plead-
ings required and permitted. Except as the Board may
otherwise order, the Board requires the submission of a
complaint and an answer.”); Fed. R. Civ. P. 7(a) (noting
that a pleading includes a complaint); Fed. R. Civ. P.
12(d) (premising the conversion of a motion to one for
summary judgment on the finding that matters outside
the pleadings had been presented to the court). This is
particularly true where the Board did not limit its sum-
mary judgment review to only those attachments.
The Board compounded its procedural errors, moreo-
ver, by resolving material factual disputes against JRS,
the non-movant. It is evident from the record that the
parties disagreed about key aspects of this case, including
who would provide the curriculum, how many instructors
JRS was required to provide, and whether the DOJ had
prevented JRS from performing by failing to process its
proposed candidates properly. Both sides cite to conflict-
ing evidence regarding the intent of the parties, creating
“question[s] of material fact underlying the issue of con-
tract interpretation.” Beta Sys., Inc. v. United States, 838
10 JRS MANAGEMENT v. DOJ
F.2d 1179, 1183 (Fed. Cir. 1988). In light of these factual
disputes, it was inappropriate for the Board to grant
summary judgment in favor of the DOJ. See id. (revers-
ing a grant of summary judgment when extrinsic evidence
had to be considered in order to determine the parties’
intent with respect to a contract). Accordingly, we vacate
the Board’s denial of JRS’s claim and remand the case for
further proceedings following full development and con-
sideration of all relevant disputes.
CONCLUSION
For the foregoing reasons, the Board’s decision deny-
ing JRS’s appeal is vacated and remanded.
VACATED AND REMANDED