October 26, 1987

Appeal of

STANLEY MYRIE

 

Under Control No. HCR 08041

PSBCA No. 1674

 

APPEARANCE FOR APPELLANT

Lewis. G. Adler, Esq.

 

APPEARANCE FOR RESPONDENT

Deborah A. Davis, Esq.

 

OPINION OF THE BOARD ON

MOTION FOR SUMMARY JUDGMENT

 

            Appellant, Stanley Myrie, has appealed from the Contracting Officer's decision terminating his highway transportation contract for default because of unsatisfactory performance.

            Appellant contends he substantially performed the contract and was not in default.  He further asserts that any default or irregularities in performance were due to actions of the United States Postal Service (Respondent), or were beyond his control, and that the termination action was taken in bad faith.

            Respondent has filed a Motion for Summary Judgment, and Appellant has opposed the motion.

BACKGROUND

            On June 24, 1985, Appellant and Respondent entered into a contract for the highway transportation of mail between the South Jersey MSC, NJ, and Bridgeton, NJ, commencing July 1, 1985, and ending June 30, 1989 (Appeal File (AF) Section I p.#3 (1-3)).  Included in the contract were the Basic Surface Transportation Services Contract General Provisions (PS Form 7407, Oct. 1981) (AF 1-3E).

            Clause 4 of the general provisions, "Service Requirements and Prohibitions," required that mail be carried "with certainty, celerity and security" in accordance with the specified operating schedule (id.).  Clause 16 of the general provisions set forth causes warranting termination of the contract for default, including, at subclause (a)(1), "failure to perform service according to the terms of the contract."  Subclause (c) declared that if the default termination was subsequently determined to have been improper, the contractor's rights would be the same as though a termination for convenience had been issued under Clause 17, including the receipt of the indemnity prescribed in Clause 12, "Changes in Service" (id.).-

            During 1986 Respondent issued various notices of contract irregularities to Appellant (AF II-10A, III, IV).  Counseling sessions were held with Appellant on October 3 and November 18, 1986 (AF II-8, 10A).  A letter of warning dated October 23, 1986, was sent by the Contracting Officer advising Appellant that he was to bring "service back to a level required by the Postal Service and to continue on that level," and that failure to do so would result in termination action being taken (AF II-9).

            The contract irregularities charged against Appellant included instances of omitted service, late departures, and use of an undersized vehicle.  Appellant has disputed one of the charges of omitted service and has claimed excusable causes with respect to several of the other irregularities (Affdvt. Stanley Myrie, May 28, 1987).

            Respondent has submitted into the record excerpts captioned "Irregularity Procedures" from the Administrative Official's Guide for the Administration of Highway Contracts which set forth various performance standards in terms of percentages ranging between 95 and 100 percent (Supplemental Appeal File (SAF) Tab 1).

            By letter dated January 2, 1987, the Contracting Officer in a final decision terminated Appellant's contract for his "inability to consistently provide adequate service and equipment" (AF II-5).  Appellant timely appealed the Contracting Officer's final decision.

DECISION

            Summary judgment will be granted only where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.  American Federal Contractors, Inc., PSBCA No. 1360, 86-2 BCA 18,855.  The party moving for summary judgment bears the burden of demonstrating both elements, and for purposes of ruling on the motion, the record documents are viewed in the light most favorable to the opposing party.  Northway Development, Inc., PSBCA No. 1453, 86-2 BCA 18,998.  In deciding a motion for summary judgment the Board's function is not to resolve any questions of material fact, but to ascertain whether any such questions exist.  American Federal Contractors, Inc., PSBCA No. 1424, 86-2 BCA 18,891.

            Respondent argues that Appellant's service deteriorated to an unacceptable level during 1986 and, despite warnings and counseling sessions, it did not improve.  Acknowledging that Appellant's affidavit alleges instances of excusable causes for certain violations, Respondent nevertheless urges that even if those irregularities are disregarded, there are still numerous others which justify the default termination.  Respondent also argues that the Board is without authority to grant reinstatement of the contract, one of the requests for relief made by Appellant.

            Appellant contends that he substantially performed the contract, and has asserted that his efficiency level was 98 percent.  Appellant has also disputed certain of the charges of contract irregularities and has put forth what he considers excusable causes for others.

            Respondent has not carried its burden to demonstrate the absence of genuine issues of material fact.  Appellant has presented evidence of equipment breakdowns, traffic accidents in which his drivers were not at fault, and intentional damage to his equipment by a prospective successor to his business.  Appellant asserts that the use of a smaller truck while his vehicle was being repaired (due to an accident which was not his fault) in no way impacted on his ability to carry all of the mail available for delivery.  Appellant's evidence challenges the legitimacy of certain irregularities and whether they were properly chargeable to Appellant.  Appellant has also made factual contentions relating to his efficiency rating, which could call into question the standards applied by the Contracting Officer, and whether uniform procedures existed that allowed a threshold percentage for highway contractors.  See Del Transport, Inc., PSBCA No. 1279 (Sept. 3, 1985).

            Appellant has alleged facts which, if proved, could constitute legal excuses to the performance failures that led to the termination action.  Further, there are genuine issues of material fact concerning the alleged performance failures.  These factors will not permit a resolution of the legal issues on the record.

            With regard to the issue of contract reinstatement, Respondent correctly argues that the Board has no authority to order reinstatement.  Paul A. Mason, PSBCA No. 1187, 84-3 BCA ¶ 17,735; Spaulding Radiator Service, PSBCA No. 1068, 82-2 BCA ¶ 16,088.  However, the Board has jurisdiction to determine the propriety of a default termination, and if found to be improper, the contract allows for a conversion to a termination for convenience, with the specified indemnity as stipulated damages.  Samuel A. Moore, PSBCA No. 1063, 83-1 BCA ¶ 16,376; Interstate United Corp., PSBCA No. 966, 82-1 BCA ¶ 15,758.  Thus there is a basis to grant relief if Appellant prevails on the default termination issue and Respondent is not entitled to judgment as a matter of law.

            Respondent's Motion for Summary Judgment is denied.

 

 

James E. Lemert

Administrative Judge

Board Member

 

I concur

James A. Cohen

Administrative Judge

Chairman

 

I concur

James D. Finn, Jr.

Administrative Judge

Vice Chairman