September 1, 2005

 

Appeals of

SIERRA CONSTRUCTION, INC.

PSBCA Nos. 4950, 4951, 5006 and 5007

LEASE AGREEMENTS

 

APPEARANCE FOR APPELLANT:

Steven L. Tiedemann, Esq.

Coover, Barr & Tiedemann, LLC

 

 

APPEARANCE FOR RESPONDENT:

Patrice R. Dickey, Esq.

Memphis Law Office

United States Postal Service

 

OPINION OF THE BOARD

Appellant, Sierra Construction, Inc., filed claims for certain unexpected costs it allegedly incurred in connection with the construction phases of two construction/lease contracts with Respondent, United States Postal Service.  The contracting officer denied the claims, and Appellant appealed.  The proceedings were bifurcated, the Board deciding on May 13, 2005, that Appellant was bound by general releases given Respondent after construction of the two post offices was complete.  Sierra Construction, Inc., PSBCA Nos. 4950, 4951, 5006, 5007, 05-1 BCA ¶32,974.  The parties were given an opportunity to identify any further proceedings necessary to the Board’s decision in these consolidated appeals, and neither requested that the Board hold further proceedings before deciding the appeals.  At the election of the parties, the appeals are being decided on the record in accordance with 39 C.F.R. §955.12. 

FINDINGS OF FACT

1.  On November 29, 1999, Respondent awarded Appellant two new-construction-lease contracts (“NCL”).  One was for construction of a post office in Gore, Virginia to be followed by a twenty-year lease of the facility to the Postal Service (Appeal File, PSBCA Nos.4950, 5006, Tabs (“AF (Gore)”) 5, 12, 13, 15).  The second was for a similar project in Linden, Virginia (Appeal File, PSBCA Nos. 4951, 5007, Tabs (“AF (Linden)”) 21, 24, 25). 

2.  Appellant completed construction of the post offices, and Respondent accepted the Gore Post Office on Novem­ber 23, 2001, and the Linden Post Office on March 12, 2002 (AF (Gore) 3; AF (Linden) 4, 5, 6; McNiece Deposition, pp. (“McNiece Depo.”) 16, 18-19; Declaration of Lawrence M. Basalyga (“Basalyga Decl.”) ¶2 and Exhibit 2; see Declaration of Robert K. McNiece (“McNiece Decl.”) ¶¶7, 10).

3.  On April 14, 2002, Appellant submitted to the contracting officer a consolidated request for modifications to both leases.  Appellant sought adjustments because of asserted substantial cost overruns it experienced during construction of both post offices.  In the request, Appellant described several problem areas for discussion and possible compensation for each facility.  On July 3, 2002, the contracting officer denied the request as to each post office as being submitted too late.  (AF (Gore) 2 and AF (Linden) 1, 2; McNiece Depo. 27 and Exhibit A).

4.  Sometime between August 28 and September 3, 2002, Appellant’s president signed on Appellant’s behalf a release form for each of the projects containing language releasing and discharging Respondent “from all liabilities, obligations, claims, and demands whatsoever, regardless of whether such claims have been asserted or could have been asserted under or arising from the said contract.”  Appellant took no exception to the release of its claims for the Gore and Linden Post Office construction cost overruns.  (McNiece Decl. ¶¶ 10, 10 (a);[1] Basalyga Decl. ¶ 2; McNiece Depo. 32-33, 40-41).

5.  On October 1, 2002, Appellant appealed the contracting officer’s July 3, 2002 denials of its April 2002 request for adjustment (see Finding 3).  The appeals were docketed by the Board as PSBCA Nos. 4950 (Gore lease) and 4951 (Linden lease). 

6.  On February 18, 2003, while action on the above appeals was suspended by the Board, Appellant submitted certified monetary claims under the Gore and Linden leases, seeking additional compensation under both contracts on the same bases described in its earlier consolidated request for contract modification (AF (Gore) 16; AF (Linden) 26). 

7.  In final decisions dated March 6, 2003, the contracting officer denied Appellant’s certified claims on the merits, addressing each claimed basis for relief.  In supplemen­tary decisions on March 13, 2003, he denied the claims on the additional ground that they were barred by the releases given by Appellant regarding the Gore and Linden projects.  (AF (Gore) 17; AF (Linden) 27).  Appellant’s appeals of those decisions were docketed as PSBCA Nos. 5006 and 5007 and consolidated with PSBCA Nos. 4950 and 4951.

8.  On May 13, 2005, the Board ruled that Appellant was bound by its president’s execution of the releases.  Sierra Construction, Inc., PSBCA Nos. 4950, 4951, 5006, 5007, 05-1 BCA ¶32,974.  On May 26, 2005, the Board offered the parties an opportunity to request further proceedings before the Board ruled on the appeals, noting that denial of the appeals based on the May 13, 2005 Decision may be appropriate.  Respondent filed a response asking that the appeals be denied without further proceedings.  Appellant did not respond to the May 26 Order.

DECISION

Through the authorized acts of its president, Appellant executed a release for each of the post office projects that released and discharged Respondent “from all liabilities, obligations, claims, and demands whatsoever, regardless of whether such claims have been asserted or could have been asserted under or arising from the said contract.”  (Finding 4).  Appellant did not exclude from the releases the claims for cost overruns on each project that it had presented to the contracting officer before the releases were executed (Findings 3, 4).

“It is well settled that a contractor who executes a general release is thereafter barred from maintaining a suit for damages or for additional compensation under the contract based upon events that occurred prior to the execution of the release.”  B. D. Click Co. v. United States, 614 F.2d 748, 756, 222 Ct. Cl. 290, 305 (Ct. Cl. 1980), citing United States v. Wm. Cramp & Sons Co., 206 U.S. 118, 27 S.Ct. 676, 51 L.Ed. 983 (1907).  As Appellant’s claims arose and were known before the releases were executed, the releases bar prosecution of the claims in these appeals.  See Environmental Devices, Inc., ASBCA Nos. 37430, 39308, 39719, 93-3 BCA ¶26,138 at 129,940; L.W. Charlebois, Inc., PSBCA No. 315, 77-1 BCA ¶12,432 at 60,189.

The appeals are denied.

 

Norman D. Menegat

Administrative Judge

Board Member

 

 

I concur:

James A. Cohen

Administrative Judge

Chairman

 

I concur:

David I. Brochstein

Administrative Judge

Vice Chairman

 


[1]  The declaration contains two paragraphs numbered 10.  The Board has marked the second such paragraph as 10 (a).