April 10, 2002
Appeal of
UPWEST CORPORATION
LEASE AGREEMENT
PSBCA No. 4281
APPEARANCE FOR APPELLANT:
Raymond R. Flowers, Jr., Esq.
APPEARANCE FOR RESPONDENT:
Robert E. O’Connell, Esq.
OPINION OF THE BOARD ON APPLICATION FOR ATTORNEY FEES AND EXPENSES
Appellant, UpWest Corporation, has filed an application for attorney fees and other expenses incurred in connection with the successful prosecution of the captioned appeal. UpWest Corporation, PSBCA No. 4281, 01-2 BCA ¶ 31,474.
Appellant argues that it may recover all of its attorney fees and expenses, a total of $21,571.05, as "ordinary and necessary costs in defense of [Respondent's] claim," citing Blue Cross Association and Blue Shield Association, ASBCA No. 25778, 89-2 BCA ¶ 21,840. In the alternative, Appellant contends that it may recover its fees and expenses (with attorney fees limited to $125.00 per hour), in the amount of $19,108.27, under the Equal Access to Justice Act ("EAJA"), 5 U.S.C. §504.
Appellant alleges and Respondent concedes that Appellant meets the small business eligibility requirements of EAJA and that it is a prevailing party for the purposes of an EAJA award. Appellant also alleges that Respondent's position was not substantially justified. Respondent neither challenges that allegation nor alleges the existence of special circumstances that would make an award unjust.
Respondent argues, however, that Appellant's application is premature and that, therefore, Appellant should not recover any of its fees. Respondent's contention is that when the Board sustains an appeal as to entitlement only and remands the matter to the parties for a determination of quantum, there has been no "final disposition" of the appeal and an application under EAJA may not be considered until the matter of quantum is decided. Although recognizing that in this instance the Board did not remand the matter to the parties, Respondent argues that the descriptions of some of the attorney hours claimed by Appellant indicate that it intends to file a quantum claim. Because of this, Respondent contends that the current application is premature and should not be considered.
In the alternative, Respondent argues that a number of hours claimed by Appellant are for work that does not qualify for recovery. Specifically, Respondent challenges a total of 3.3 hours incurred before the contracting officer issued the final decision which was at issue in this appeal. In addition, Respondent challenges a total of 7.5 hours related to Appellant's unsuccessful attempt to reopen the record after the close of the hearing.
Appellant's reliance on Blue Cross, supra, as supporting its claim for all of its attorney fees and expenses is misplaced. In that case, the contractor was allowed to recover such costs under language in a particular contract allowing the recovery of "administrative expenses," which the Board held were defined broadly enough to include attorney fees. The case does not hold that such expenses may be recovered in all instances. Appellant has not shown that there is language in the contract before us that would authorize the recovery of legal costs incurred in defending against a default termination. Accordingly, Appellant may not recover on that basis. Jamco Constructors, Inc., VABCA Nos. 3271E, 3516E, 95-2 BCA ¶ 27,632, citing Balentine's South Bay Caterers, Inc., DOTBCA No. 2319, 92-2 BCA ¶ 25,006; see also William P. Schaetzel, ENGBCA No. 6365, 98-2 BCA ¶ 29,937.
Appellant may recover, however, under the Equal Access to Justice Act. Based on the record before the Board, Appellant meets the size and net worth eligibility requirements of EAJA. Further, Appellant is a prevailing party in the litigation. Finally, Respondent has not argued that its position was substantially justified or that there are circumstances which would make an award unjust.
Contrary to
Respondent's argument, Appellant's EAJA application was not premature. The
termination for default which was the issue before the Board in this appeal was
a Postal Service claim. Bogue Electric Manufacturing Co., ASBCA Nos.
25184, 29606, 89-3 BCA ¶ 21,951. Since no appeal to the Court of Appeals
for the Federal Circuit was filed, the Board's decision on that issue became
final 120 days after the parties received copies of the Opinion. 41 U.S.C.
§607(g)(1); 39 C.F.R. §960.12; J.M.T. Machine Co., Inc. v. United States,
826 F.2d 1042, 1048 (Fed. Cir. 1987); U.S. General, Inc., ASBCA No.
48528, 98-2 BCA ¶ 29,867. If Appellant files a quantum claim, that claim
would be considered a separate matter if ultimately brought to the Board for
resolution. D.E.W., Inc., ASBCA No. 35896, 96‑1 BCA
¶ 28,031, and cases cited therein. Accordingly, Appellant's application
is not premature.
Appellant claims and Respondent agrees that Appellant's attorney fees and expenses, when adjusted for the $125.00 per hour allowable maximum,[1] totaled $19,108.27. As noted above, Respondent has challenged a total of 10.8 hours.
Respondent challenges 3.3 hours on the basis that the services were rendered prior to the issuance of the contracting officer's final decision. In this appeal, the final decision terminating the contract was issued in June 1998. The challenged legal fees were for service rendered in November and December 1997. Since "at its earliest, EAJA coverage may begin after the decision of and in pursuit of an appeal from the decision of a contracting officer," Levernier Constr. Co., Inc. v. United States, 947 F.2d 497, 502 (Fed. Cir. 1991); Karcher Environmental, Inc., PSBCA Nos. 4085, 4093, 4282, 2002 PSBCA LEXIS 3 (February 21, 2002), and cases cited therein, Appellant may not recover the fees for the services rendered in November and December 1997.
In addition, as noted by Respondent, some of the attorney hours claimed by Appellant were for work performed after the Board issued its Opinion, and described as research regarding damages. That effort, which totaled 7.1 hours,[2] was unrelated to the entitlement issue that was before the Board and may not be recovered.
Respondent also challenges 7.5 hours on the basis that the services were rendered in connection with Appellant's unsuccessful motion to reopen the record, filed shortly after the close of the hearing in this appeal. Appellant sought to have the Board accept an additional document into the record on the basis that the document had just been discovered in the files of a witness who testified at the hearing. While the Board has apportioned recovery of attorney fees and expenses based on a party's success or lack thereof in distinct claims or issues or phases of litigation, see, e.g., Karcher Environmental, Inc., PSBCA Nos. 4085, 4093, 4282, 2002 PSBCA LEXIS 3 (February 21, 2002); Lee McLaughlin, PSBCA No. 2199, 89-3 BCA ¶ 22,178; American Federal Contractors, Inc., PSBCA No. 1359, 88-2 BCA ¶ 20,526, we do not consider Appellant's motion, although unsuccessful, a sufficiently distinct part of the litigation to justify separate treatment. Accordingly, we reject Respondent's challenge to these fees.
Appellant's recovery of attorney fees is reduced by $1,300.00.[3] The expenses portion of Appellant's recovery is reduced by the amount of the New Mexico gross receipts tax assessed on the rejected hours, or $75.56.[4] Accordingly, Appellant may recover $17,732.71 in attorney fees and expenses.[5]
David I. Brochstein
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
Norman D. Menegat
Administrative Judge
Board Member