Coffman Specialties, Inc. v. United States

In the United States Court of Federal Claims
No. 18-1882C
(E-Filed: October 31, 2019)
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COFFMAN SPECIALTIES, INC., )
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Plaintiff, )
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v. ) Motion to Dismiss; RCFC 12(b)(6).
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THE UNITED STATES, )
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Defendant. )
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William J. Braun, La Jolla, CA, for plaintiff.
Daniel K. Greene, Trial Attorney, with whom were Joseph H. Hunt, Assistant Attorney
General, Robert E. Kirschman, Jr., Director, Lisa L. Donahue, Assistant Director,
Commercial Litigation Branch, Civil Division, United States Department of Justice,
Washington, DC, for defendant. Ellen Evans, Navy Litigation Office, Washington, DC,
of counsel.
OPINION
CAMPBELL-SMITH, Judge.
On December 7, 2018, plaintiff filed its complaint alleging claims for relief related
to its performance under a construction contract with the United States Department of the
Navy, at Naval Air Facility El Centro, California. See ECF No. 1. Defendant moved the
court to dismiss the first cause of action in plaintiff’s complaint on April 8, 2019. See
ECF No. 7. Plaintiff filed its opposition to defendant’s motion for partial dismissal on
May 6, 2019, see ECF No. 8; and defendant filed its reply in support of its motion on
May 20, 2019, see ECF No. 9. The motion is fully briefed and ripe for decision by the
court. For the following reasons, defendant’s motion is DENIED.
I. Background
On or about September 28, 2015, plaintiff entered into Contract No. N62473-14-
D-0044 with the Navy. See ECF No. 1 at 2. Under the contract, plaintiff was “required
. . . to, among other things, repair Runway 12/30 including full depth runway
reconstruction, repair of asphalt shoulders, demolition, and re-striping of pavement
markings, along with pavement repairs . . . .” Id. (emphasis in original). Plaintiff was to
“complete the work within 545 days after the Notice of Award, or by March 27, 2017.”
Id.
In the complaint, plaintiff alleges two causes of action, only the first of which is
the subject of defendant’s motion for partial dismissal. 1 Plaintiff claims, in its first cause
of action, that it is entitled to recover costs associated with the disposal of excess soil
because defendant improperly imposed expensive restrictions on plaintiff with regard to
such disposal, which were contrary to the terms of the contract. See ECF No. 1 at 2-5.
Plaintiff alleges that it relied on the contract terms when it arranged “to haul excess soil
generated on the Project to a commercial farm located in El Centro owned and operated
by Joe Heger (hereinafter the ‘Joe Heger Farms’).” Id. at 3. Defendant objected to
plaintiff’s plan to “dispose of soil materials at Joe Heger Farms because it was not
licensed or permitted.” Id. Plaintiff notified defendant that it considered defendant’s
objection to be a “constructive change to the contract.” Id.
On June 15, 2016, plaintiff notified defendant that it would comply, “under
protest,” with defendant’s “directive that the excess soil materials be hauled to either a
licensed landfill facility or to a commercial recycling facility.” Id. Plaintiff hauled the
excess soil to Republic Services, a commercial landfill. Id. at 4. Republic Services
tested the soil, and deemed it contaminated, though plaintiff contends that the testing
standards were “more stringent” than required by local, state, or federal regulations. Id.
Plaintiff provided the testing data to defendant, “reflecting that the soil was contaminated
with heavy metals and petroleum hydrocarbons, increasing Republic Services’ disposal
costs by an estimated $17.00 to $19.00 per ton.” Id. The soil disposal effort was
concluded by July 11, 2016, and plaintiff estimates that it incurred increased fees “in the
approximate amount of $1,415,800.00 above what it would have paid had the material
been hauled to Joe Heger Farms.” Id.
On October 31, 2016, plaintiff filed a Request for Equitable Adjustment in an
effort to recover the $1,415,800.00, based on what it viewed as a constructive change to
the contract. Id. Defendant denied plaintiff’s equitable adjustment request on December
14, 2016, on the basis that “Republic Services had not charged additional sums since they
1
For this reason, the court will focus on the facts relevant only to the first cause of action
in this opinion.
2
considered the soil to be contaminated.” Id. Plaintiff submitted additional
documentation to support their request the same day defendant denied the claim. See id.
Thereafter, on February 28, 2017, defendant “informed [plaintiff] that its basic denial of
the Request had not changed but that it would consider compensation of some expenses,
and requested a cost breakdown ‘since the specifications did not identify potential
contamination of the soils.’” Id. (quoting an uncited document). In response, plaintiff
submitted a cost proposal on or about March 16, 2017, which defendant treated as a
second Request for Equitable Adjustment. See id. at 5. Defendant denied the second
equitable adjustment request on October 2, 2017. See id.
Plaintiff submitted a Contract Disputes Act Claim, pursuant to 41 U.S.C. § 601-
613, to the contracting officer on February 13, 2018. See id. 2 In its claim, plaintiff
sought $1,409,254.00 in compensation “for its increased costs of disposing of the excess
soil at a commercial landfill.” Id. The contracting officer issued her final decision
denying plaintiff’s claim on April 11, 2018. Id.On May 6, 2019, plaintiff filed the instant complaint. See ECF No. 1. Rather than
file an answer, on April 4, 2019, the government moved for partial dismissal of the first
cause of action in plaintiff’s complaint. See ECF No. 7. In their briefing on defendant’s
motion for partial dismissal, the parties cite to a variety of contract provisions they
believe are relevant to the court’s analysis. Plaintiff did not attach a copy of the contract
to the complaint, see ECF No. 1; defendant attached excerpts of the contract to the
motion for partial dismissal, see ECF No. 7 at 12-119; and plaintiff attached a separate
excerpt of the contract to its response, see ECF No. 8-1. Neither party has provided the
court with a complete copy of the contract.
II. Legal Standards
When considering a motion to dismiss brought under RCFC 12(b)(6), the court
“must presume that the facts are as alleged in the complaint, and make all reasonable
inferences in favor of the plaintiff.” Cary v. United States, 552 F.3d 1373, 1376 (Fed.
Cir. 2009) (citing Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)). It
is well-settled that a complaint should be dismissed under RCFC 12(b)(6) “when the facts
asserted by the claimant do not entitle him to a legal remedy.” Lindsay v. United States,
295 F.3d 1252, 1257 (Fed. Cir. 2002). “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In evaluating a motion to dismiss for
2
Plaintiff cites the Contract Disputes Act as set forth in 41 U.S.C. §§ 601-613, see ECF
No. 1 at 5, but the relevant statutes are now codified at 41 U.S.C. §§ 7101-7109. See Lee’s Ford
Dock, Inc. v. Sec’y of the Army, 865 F.3d 1361, 1364 n.1 (Fed. Cir. 2017).
3
failure to state a claim, the court “primarily consider[s] the allegations in the complaint,”
but is “not limited to the four corners of the complaint,” and may also look to the
“matters incorporated by reference or integral to the claim.” See Dimare Fresh, Inc. v.
United States, 808 F.3d 1301, 1306 (Fed. Cir. 2015) (citations omitted).
III. Analysis
Plaintiff explains the central premise of its complaint as follows: “Plaintiff
essentially plead[s] that Defendant is inappropriately attempting to enforce commercial
landfill licensing and permitting requirements on a commercial farm when they do not
apply.” ECF No. 8 at 6 (citations omitted). The parties fundamentally disagree,
however, as to which parts of the contract are relevant to determining plaintiff’s rights
under the contract, and whether the terms of the contract itself ultimately resolve their
dispute. See, e.g., ECF No. 7 at 3, 8 (defendant noting that it “describe[s]” and
“append[s]” to its opening brief what it considers to be “the relevant contract provisions,”
and claims that those provisions are a sufficient basis for granting its motion to dismiss
the first cause of action in the complaint); ECF No. 8 at 2 (plaintiff arguing that
“Defendant’s Motion to Dismiss mis-states the basis of Plaintiff’s claim and plead
allegations, mis-states the contract requirements in relation to disposal of surplus soil, and
raises certain factual disputes which cannot be resolved by a Motion to Dismiss under
Rule 12(b)(6)”); ECF No. 8 at 3 (plaintiff claiming that “Defendant incorrectly alleges in
its Motion to Dismiss that the contract specification clearly mandated that any facilities
[plaintiff] designed to accept surplus soil must possess licenses and permits, but never
actually directs the Court’s attention to any such provision”) (citation omitted); ECF No.
9 at 2 (defendant arguing that “[plaintiff] disputes only that the farm was a reuse facility,
but [plaintiff’s] arguments are not supported by the contract”); ECF No. 9 at 6 (defendant
arguing that the contract provisions to which it has cited are dispositive, and that “the
correct interpretation of the contract requires the Court to dismiss [plaintiff’s] count I”).
The court, of course, may properly consider the terms of the contract in resolving a
motion made pursuant to RCFC 12(b)(6), as the parties urge it to do in this instance. See
Dimare Fresh, 808 F.3d at 1306. Here, however, neither party has provided a complete
copy of the contract to the court. See ECF No. 1 (plaintiff’s complaint, which does not
attach the contract or any portion thereof); ECF No. 7 at 12-119 (defendant’s motion for
partial dismissal appending excerpts of the contract documents); see ECF No. 8-1
(attachment to plaintiff’s response appending a different set of contract documents); ECF
No. 9 at 6 (defendant stating, in its reply, that “the parties have provided the Court with
the contract provisions that they believe are relevant to the issue [its] motion raises”).
Defendant contends that “the Court has before it everything it needs to determine whether
Coffman has stated a claim for relief under the Changes Clause,” and argues that
“[d]isposing of [its] motion, therefore, requires only that the Court interpret the Contract,
which the Court may do at this juncture.” ECF No. 9 at 6 (citation omitted).
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The court does not agree. It is “well established . . . that the provisions of a
contract must be read as a whole.” Merando, Inc. v. United States, 475 F.2d 603, 605
(Ct. Cl. 1973) (citations omitted). See also Lockheed Martin IR Imaging Sys., Inc. v.
West, 108 F.3d 319, 322 (Fed. Cir. 1997) (stating that “the various contract provisions
must be read as part of an organic whole, according reasonable meaning to all of the
contract terms”) (citations omitted). This precept has particular force in the present
circumstances, where the court does not have a copy of the complete contract and the
parties do not agree on either the universe of relevant contract provisions, or the legal
import of those provisions. Further complicating matters, neither party has presented a
comprehensive explanation of the potentially relevant contract provisions. The court
simply is not confident that it has sufficient evidence to determine, as a matter of law,
whether the contract operates in the manner advocated by either party. Without a better
understanding of the contract, the court will not presume that the portions identified by
the parties—in piecemeal fashion—provide a solid foundation for adjudication of the
parties’ rights and obligations under the contract.
IV. Conclusion
Accordingly, defendant’s motion for partial dismissal, ECF No. 7, is DENIED.
Defendant is directed to FILE its answer to plaintiff’s complaint, on or before
November 27, 2019.
IT IS SO ORDERED.
s/Patricia E. Campbell-Smith
PATRICIA E. CAMPBELL-SMITH
Judge
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