May 7, 1993

Appeal of

MONTGOMERY ROSS FISHER, INC.

H.A. LEWIS, INC., J.V.

Under Contract No. 059986-89-B-0010

PSBCA No. 3261

APPEARANCE FOR APPELLANT:

David W. Cornwell, Esq.

APPEARANCE FOR RESPONDENT:

Robert E. O'Connell, Esq.

OPINION OF THE BOARD ON EAJA APPLICATION

Appellant has filed an application under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, for attorney fees related to this appeal. In a decision dated December 14, 1992, the Board concluded that Appellant was entitled to recover the costs it incurred attempting to comply with a testing requirement found by the Board to be impossible. Montgomery Ross Fisher, Inc., H.A. Lewis, Inc., J.V., PSBCA No. 3261 (December 14, 1992). Appellant had claimed entitlement to the payment of $6,312.00 because of difficulties in meeting testing requirements for waste, vent, and storm drain piping installed as part of the construction of a post office in Beverly Hills, California. The Board concluded that Appellant had proven, by a preponderance of the evidence, that the pressure test required by the specifications could not be met using the components specified in the contract. The Board further concluded that Appellant was entitled to recover the sum of $3,118.73 plus interest. The difference between the amount sought by Appellant and the amount awarded by the Board was primarily attributable to the cost of work which the Board determined was related to Appellant's initial attempts to meet the testing requirements with components other than those specified in the contract.

In its application, Appellant seeks attorney fees in the amount of $7,490.00 (37.45 hours at $200.00 per hour). Respondent concedes that Appellant was a prevailing party and is an eligible applicant under EAJA standards. However, Respondent argues that its position in this matter was substantially justified and, therefore, Appellant may not recover its attorney fees. Alternatively, Respondent challenges the hourly rate claimed by Appellant as beyond the rate permitted by regulation.

Substantial Justification

As we stated in The Little Susitna Company, PSBCA Nos. 2216, 2333, 2511, 93-1 BCA ¶ 25,497 at p. 127,004:

"In order for Respondent to establish its position as substantially justified, it must demonstrate that its position is 'justified in substance or in the main -- that is justified to a degree that would satisfy a reasonable person.' Pierce v. Underwood, 487 U.S. 552 (1988); Lee McLaughlin, PSBCA No. 2199, 89-3 BCA ¶ 22,178. Thus, the standard is whether Respondent's position was reasonable, that is, would a reasonable person think it correct, and has it a reasonable basis in law and fact. Pierce v. Underwood; Bula Forge, Inc., PSBCA No. 1490, 89-1 BCA ¶ 21,380. The fact that the Board ruled for Appellant rather than Respondent does not by itself establish a lack of substantial justification in Respondent's position. (Id.)"

In its application, Appellant argues, as it must, that Respondent's position was not substantially justified. Appellant bases its argument, however, solely on the fact that the Board found in Appellant's favor. Respondent contends that its position was substantially justified, arguing that it was supported by reasonable evidence and that resolution of the appeal required resolution of a close evidentiary question.

In the Board's original decision, the finding of liability was the product of the evaluation of conflicting evidence on a disputed question of fact -- i.e., whether the testing requirement could have been met using the specified components. Although the question was ultimately resolved in Appellant's favor, the position taken by Respondent was reasonable. Respondent's reliance on product literature and its mechanical engineering consultant was not unreasonable, although ultimately not successful on appeal. Where, as here, the decision in an appeal turns on the resolution of a close and disputed question of fact, Respondent's litigation position is substantially justified and Appellant may not recover its attorney fees under EAJA. See, e.g., Infotec Development Inc., ASBCA Nos. 31809, 32235, 92-2 BCA ¶ 24,817; Giuliani Contracting Co., Inc., AGBCA No. 91-166-10, 92-2 BCA ¶ 24,930; OK's Company, AGBCA No. 88-260-10, 89-2 BCA ¶ 21,751.

Accordingly, Appellant's application for attorney fees is denied.

David I. Brochstein

Administrative Judge

Board Member

I concur:

James A. Cohen

Administrative Judge

Chairman

I concur:

James D. Finn, Jr.

Administrative Judge

Vice Chairman