MOTION TO DISMISS COUNT IV DENIED: November 14, 2012
CBCA 2878
JANE MOBLEY ASSOCIATES, INC.,
Appellant,
v.
GENERAL SERVICES ADMINISTRATION,
Respondent.
The case caption as the decision prints it. Every word is kept; the rule the Board draws around it is not text, so it is not repeated here.
Ralph C. Thomas, III of Barton Baker Thomas & Tolle, LLP, McLean, VA, counsel for Appellant.
Catherine Crow and John S. Tobey, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent.
Before Board Judges McCANN, SHERIDAN, and KULLBERG.
McCANN, Board Judge.
Respondent, the General Services Administration (GSA), has moved to dismiss count IV of the complaint on the grounds that appellant, Jane Mobley Associates, Inc. (JMA), has failed to state a claim upon which relief can be granted. We deny the motion.
Background
The facts alleged by appellant are more fully set forth in its complaint. In summary, GSA awarded a task order to JMA in the amount of $99,940.25 under JMA’s Federal Supply Schedule contract GS-23F-0354P. The services to be provided were expertise and technical CBCA 2878
support, equipment, materials, and supplies needed to support the Government in responding to complaints against government officials by current and former government employees indicating health concerns caused by toxic substances at the Bannister Federal Complex in Kansas City, Missouri.
The task order was issued as a firm fixed-price contract. On March 8, 2010, GSA issued a modification to extend the task order for two months. The modification stated that JMA “will be paid based on the hours documented and verified for each labor category and task during that month.” Appellant contends that it was assured that the language did not change the nature or terms of the contract.
After completion of the contract and after contract closeout, an audit was conducted by the Office of the GSA Inspector General (IG). The IG reported that during the two-month contract extension period, JMA had incorrectly invoiced for hours that “grossly exceeded hours” in JMA’s time records. The Government issued a demand letter in the amount of $37,235.60. Appellant disputed it and the contracting officer issued a final decision on June 1, 2012, asserting the Government’s right to recoup an overpayment of $37,235.60. JMA appealed the final decision.
In count IV of the complaint, appellant contends that respondent “improperly compromised JMA’s firm fixed price contract and failed to ensure that JMA received impartial, fair and equitable treatment as required by the FAR [Federal Acquisition Regulation].” The issue raised by this count is whether respondent, by changing the practice as to payments through the modification, violated the implied covenant of good faith and fair dealing present in all contracts. The Government’s motion to dismiss argues that a violation of the implied covenant of good faith and fair dealing must be analyzed in the same manner as an allegation of bad faith, and since appellant has not alleged any facts to support a finding of bad faith, count IV should be dismissed for failure to state a claim upon which relief could be granted.
Discussion
The Board has addressed the elements necessary to support a motion to dismiss for failure to state a claim:
A motion to dismiss for failure to state a claim upon which relief [is appropriate and] can be granted . . . when the facts asserted by the claimant do not entitle it to a legal remedy. Boyle v. United States, 200 F.3d 1369 (Fed. Cir. 2000). Controlling precedent at the Court of Appeals for the Federal CBCA 2878
Circuit[] noted recently that “[i]n reviewing a dismissal for failure to state a claim, we must assume all well-pled factual allegations are true and indulge in all reasonable inferences in favor of the nonmovant.” Anaheim Gardens v. United States, 444 F.3d 1309, 1314-15 (Fed. Cir. 2006) (quoting Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)). Dismissal for failure to state a claim should not be granted unless it appears beyond doubt that the appellant cannot prove any set of facts in support of its claim that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Icenogle Construction Management, Inc., VABCA 7534, 06-2 BCA ¶ 33,325, at 165,271; South Carolina Public Service Authority, ASBCA 53701, 04-2 BCA ¶ 132,651 at 161,607; Thai Hai, ASBCA 53375, 02-2 BCA ¶ 31,971, at 157,920, reconsideration denied, 03-1 BCA ¶ 32,130, aff’d, 82 F. App’x 226 (Fed. Cir. 2003).
Blackstone Consulting, Inc. v. General Services Administration, CBCA 718, 08-1 BCA ¶ 33,770, at 167,160 (quoting Charles Engineering Co. v. Department of Veterans Affairs, CBCA 582, 07-2 BCA 33,698, at 166,831).
We recently issued a decision on a motion involving a breach of the covenant of good faith and fair dealing in which the appellant did not allege bad faith. In denying the Government’s motion to dismiss for failure to state a claim, the Board stated, “A claim that [the agency] breached the implied covenant of good faith does not require a showing of bad faith.” Sigma Services, Inc. v. Department of Housing and Urban Development, CBCA 2704, slip op. at 3 (Nov. 5, 2012) (citing Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005); Rivera Agredano v. United States, 70 Fed. Cl. 564, 574 n.8 (2006)). Respondent is incorrect in arguing that appellant must allege facts supporting a finding of bad faith for count IV to survive. By asserting that respondent issued an improper modification that violated the covenant of good faith and fair dealing, appellant has stated a claim upon which relief can be granted. For appellant to prevail on this count, appellant does not necessarily have to prove that respondent acted in bad faith in issuing the modification. Other circumstances might be present that do not rise to the level of bad faith but still support a finding that the Government violated the covenant of good faith and fair dealing. Ultimately, appellant bears the burden of proving that the issuance of the modification violated the covenant.
CBCA 2878
Decision
The motion is DENIED.
R. ANTHONY McCANN
Board Judge
We concur:
PATRICIA J. SHERIDAN
Board Judge
H. CHUCK KULLBERG
Board Judge
This is a verbatim capture of the text layer of the Board's own document in Jane Mobley Associates, Inc., CBCA 2878. Nothing is summarized or reworded, and the sections run in the order the Board wrote them. What the page shows and the text does not repeat is the pagination furniture: the page numbers and the rules the Board draws around its caption and under its signatures. The signatures are set back into the columns the Board prints them in, each judge under the name he or she signed, and the typed copy of that name the page carries beneath each signature is not repeated.