PSBCA Nos. 5320 and 5321
Appeals of
METCALFE TRUCKING
Under Contract Nos. HCR 44812 and HCR 44832
APPEARANCE FOR APPELLANT:
Tim D. Metcalfe
Metcalfe Trucking
APPEARANCE FOR RESPONDENT:
Melissa M. Mortimer, Esq.
Office of the General Counsel
United States Postal Service
OPINION OF THE BOARD ON MOTION FOR SUMMARY
JUDGMENT
Respondent, United
States Postal Service, has filed a Motion for Summary Judgment in PSBCA Nos.
5320 and 5321.[1] Appellant, Metcalfe Trucking, was given the
opportunity to respond to the Motion for Summary Judgment, but did not do
so. The following findings of fact are
made solely for the purpose of deciding the Motion.
FINDINGS OF FACT
1. On
2. On
3. Both contracts contained a Termination for
Default clause that allowed Respondent to terminate the contract, or any part
thereof, for default for any of the reasons listed in the Events of Default
clause (AF 1, p. 32 and AF 2, p. 102).
4. The Events of Default clause was incorporated
by reference in both contracts and identified numerous events that would
justify a termination for default, including:
(g) If the supplier…or a principal owner or a corporate officer, if the
supplier is a corporation, (a) has been or is, during the term of the contract,
convicted of a crime of moral turpitude affecting his or her reliability or
trustworthiness as a mail transportation supplier, such as any form of theft,
fraud, embezzlement or assault…or (c) otherwise is not reliable, trustworthy or
of good character.
(AF 1, p. 33 and AF
2, p. 103; Purchasing Manual, Clause B-69 (January 1997)).
5. On
6. Based on the evidence discovered on January
26, 2005, Appellant’s owner was charged and on May 10, 2005, was convicted of violating
Ohio Criminal Statute Revised
Code 2907.321 (A)(5), Pandering Obscenity Involving a Minor, a fourth degree
felony to which he pleaded guilty.
(Balfour Decl. ¶3 and Exh. 1; AF 8).[2]
7. In
June 2005, Appellant contacted Respondent and informed the assigned contract
specialist of the conviction of Appellant’s owner, but did not provide any
details. Based on this limited
information, the contracting officer initiated an investigation which was
conducted by the Postal Service’s Office of the Inspector General (OIG). (Declaration of K. Harris (Harris Decl.), ¶¶2 & 3).
8. On June
27, 2005, Appellant’s owner was fined $4,000 and sentenced to three years of
"community control," which required him to report to a probation
officer and comply with several conditions, including restricting his contact
with minor children and forbidding any internet access. Any violation of these conditions could
result in "a more restrictive sanction including a prison term of 17
months." (AF 4, pp. 140-41 and AF
8, pp. 168-72).
9. On
August 10, 2005, the OIG issued a report to the contracting officer advising
him of the details regarding the conviction of Appellant’s owner as discussed in
Findings 5 through 8 (AF 8).
10. After
receiving the OIG report, the contracting officer concluded that the conviction
of Appellant’s owner indicated that he had "extremely poor character and
morals" and that continuing to contract with Appellant would undermine
public confidence in the Postal Service (Harris Decl.,
¶6). On
OPINION
Summary judgment may be granted only after
an examination of the record in the light most favorable to the non-moving
party reveals that no genuine issues of material fact exist and that the moving
party is entitled to judgment as a matter of law. Celotex
Corp. v. Catrett, 477
Respondent contends that the felony conviction of Appellant's owner for pandering and obscenity involving a minor precludes Appellant from disputing the relevant facts supporting the termination for default and entitles Respondent to summary judgment. Specifically, Respondent contends that the felony conviction of Appellant’s owner was a crime of moral turpitude that resulted in Appellant and its owner being unreliable and/or untrustworthy as a supplier of mail transportation services and its owner being a person not of good character, all bases for default under Appellant's contracts. Respondent also argues that Appellant's failure to disclose fully the details surrounding the conviction of Appellant’s owner and other concerns related to his truthfulness and honesty with respect to these contracts further demonstrate Appellant's lack of good character, trustworthiness and reliability.
As the moving party in this matter, Respondent bears the burden of demonstrating that there are no genuine issues of material fact and that it is entitled to a judgment as a matter of law sustaining the default termination of Appellant’s contracts. Respondent has met its burden.
Respondent relies
on sections (g)(a) and (g)(c) of Clause B-69, Events of Default, as grounds for the termination. In order to justify the termination under section
(g)(a) and portions of section (g)(c), Respondent must demonstrate that Appellant
and/or its owner were not reliable or trustworthy (Finding 4). Although Appellant did not respond to the motion,
it argues in its Complaint that its owner’s years of service coupled with the
Postal Service permitting him to continue performance for an additional three
months from the time he notified the contracting officer (Finding 7) of his
conviction evidences the existence of a disputed material fact regarding Appellant’s
reliability and trustworthiness.
However, we need not decide the issue of Appellant’s reliability and
trustworthiness as section (g)(c) also permits the termination of Appellant’s
contracts if it is determined that Appellant’s owner is not a person “of good
character.” The Board addressed a
similar contract provision in Contract
Master Services, Inc.,
PSBCA No. 273, 1978 PSBCA LEXIS 30, February 28, 1978, aff’d,
225 Ct. Cl. 735 (1980) as follows:
"'Good character' refers to the moral quality of a person, one whose character is as it should be and morally sound, hence who will do what is right and his or her duty."
We find that the possession and dissemination of child pornography by Appellant’s owner and his conviction on felony charges for pandering and obscenity involving a minor demonstrate that Appellant's owner is not a person of good character and support the contracting officer's determination that Appellant’s owner had "extremely poor character and morals" (Finding 9). This is sufficient to uphold the contracting officer’s exercise of his discretion to terminate the contracts for default under Section (g)(c) of Clause B-69.[3]
Accordingly, there are no material facts in dispute regarding the relevant conduct and character of Appellant’s owner and the undisputed facts serve as a proper basis for the contracting officer’s decision to terminate the contract for default. Respondent‘s motion for summary judgment is granted and these appeals are denied.
William A. Campbell
Administrative Judge
Chairman
I concur: I concur:
David I. Brochstein Norman D. Menegat
Administrative Judge Administrative Judge
Vice Chairman Board Member
[1] Appellant,
Metcalfe Trucking, has two additional appeals pending before the Board that arise
under the same contracts. Those appeals
are not addressed in this decision.
[2]
The
“(A) No person, with knowledge of the
character of the material or performance
involved, shall do any of the following;
* * *
(5) Buy, procure, possess, or control any
obscene material that has a minor as one of its participants.”
[3] Based on this decision, there is no need for the
Board to address Respondent's other arguments.