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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ____________________________________ ) ) ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES OF AMERICA, ) ) Defendant. ) ____________________________________) THE SWEETWATER, A WILDERNESS LODGE LLC,
No. 02-1795C (Judge Merow)
PLAINTIFF'S POST-TRIAL BRIEF
Kevin R. Garden THE GARDEN LAW FIRM P.C. Suite 325 901 North Pitt Street Alexandria, VA 22314 (703) 535-5565
Date: December 22, 2005
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TABLE OF CONTENTS
STATEMENT OF THE CASE................................................................................................ 1 A. B. Nature of the Case........................................................................................................... 1 Statement of the Facts ..................................................................................................... 2
STATEMENT OF THE ISSUES........................................................................................... 10 ARGUMENT......................................................................................................................... 11 I. II. The Contract Disputes Act applies to the Term SUP. ................................................ 11 The Forest Service committed a breach of contract by representing that the bridges, which provided the only access to the lodge, were safe for vehicular travel. ........... 15 The Forest Service breached its duty to cooperate and not to hinder contract performance by preventing funds from being used to replace the Sweetwater bridges, which were critical for commercial lodge operations .............. 22 A. The purpose of the Term SUP, as well as the Forest Service's representations to The Sweetwater, demonstrate that the Forest Service was obligated to seek funding to maintain vehicular access to the lodge..................................................................................................... 25 The Forest Service's culpability in creating the situation in 1997 that precluded performance further established its duty to assist in seeking funding necessary to maintain vehicular access to the lodge. ....................... 27 Because of The Sweetwater's reliance on the Forest Service's specific assurances prior to entering into the contract as well as during the contract, the Forest Service could not cease its efforts to seek and apply available funds to restore vehicular access to the lodge. ............................................. 30 The Forest Service's specific reasons for blocking available funding from being used to restore vehicular access to the lodge constituted a breach of its implied duty to cooperate and not to hinder performance of the contract. ... 35 Even if the Forest Service had decided to cease efforts to fund the repair of the Sweetwater bridges because the bridges were too low of a priority compared to other projects on the Forest, this decision would still constitute a breach of the Forest Service's implied duty to cooperate and not hinder ii
III.
B.
C.
D.
E.
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contract performance. .................................................................................... 37 IV. The Forest Service breached the contract by failing to compensate The Sweetwater as required under clause 15 in situations such as the present where it terminates lodge operations in the public interest. .............................................................................. 41 The Forest Service is liable to The Sweetwater for all damages directly flowing from the Forest Service's breach of contract, which total $3,066,208 ...................... 45 A. Operating expenses actually incurred.................................................................. 47 B. Lost profits........................................................................................................... 47 C. Value of Sweetwater Lodge .................................................................................. 49 VI. In the event that the Forest Service did not breach its contract with The Sweetwater, its actions in preventing further operations under the Term SUP constituted a taking which is compensable under the Fifth Amendment................................................... 51
V.
VII.
Conclusion................................................................................................................. 53
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TABLE OF AUTHORITIES
Cases Ace-Federal Reporters, Inc. v. Barram, 226 F.3d 1329 (Fed. Cir. 2000) .............................................................................................48 Aerodex, Inc. v. United States, 417 F.2d 1361, 189 Ct. Cl. 344 (1969) ................................................................................. 17 Alpine Camping Services, B-238625, B-238625.2, 90-1 CPD ¶ 580.............................................................................. 14 Anderson v. Hayes Constr. Co., 243 N.Y. 140, 153 N.E. 28 (1926)........................................................................................ 40 Bluebonnett Savings Bank v. United States, 266 F.3d 1348 (Fed. Cir. 2001) .................................................................................45, 46, 48 Bluebonnet Savings Bank FSB v. United States, 67 Fed. Cl. 231 (2005) ...........................................................................................................51 Cedar Lumber, Inc. v. United States, 5 Cl. Ct. 539 (1984)............................................................................................................. 23, 37 CEMS, Inc. v. United States, 59 Fed. Cl. 168 (2003) ...................................................................................................... 24 Centex Corp. v. United States, 395 F.3d 1283 (Fed. Cir. 2005).....................................................................................23, 25, 40 Commerce International Co. v. United States, 338 F.2d 81 (Ct. Cl. 1964) .................................................................................... 25, 26, 29 Davidson Industries, Inc., AGBCA No. 95-166-1, 96-2 BCA ¶ 28,299 (1996) ......................................................... 44 Detroit Housing Corp. v. United States, 55 Fed. Cl. 410 (2003) ...................................................................................................... 15 Elec. & Missile Facilities, Inc. v. United States, 189 Ct. Cl. 237, 416 F.2d 1345 (Ct. Cl. 1969) ................................................................. 46
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Energy Capital Corp. v. United States, 302 F.3d 1314 (Fed. Cir. 2002) .................................................................................. 48, 49 Fordyce v. United States, 7 Cl. Ct. 591 (1985) .......................................................................................................... 50 Franconia Associates v. United States, 61 Fed. Cl. 718 (2004) ................................................................................................. 40-41 George A. Fuller v. United States, 108 Ct. Cl. 70, 69 F. Supp. 409 (1947) ............................................................................ 23 Greyback Concession, B-239913, 90-2 CPD ¶ 278 (1990) ................................................................................... 14 Hardeman-Monier-Hutcherson v. United States, 458 F.2d 1364 (Ct. Cl. 1972) ...................................................................................... 17, 21 Helene Curtis Indus., Inc. v. United States, 312 F.2d 774, 160 Ct. Cl. 437 (1963) ............................................................................... 17 J.A. Jones Constr. Co. v. United States, 390 F.2d 886, 182 Ct. Cl. 615 (1968) ............................................................................... 17 J.F Shea Co., Inc. v. United States, 4 Cl. Ct. 46 (1983) ............................................................................................................ 21 Kehm Corp. v. United States, 93 F. Supp. 620 (Ct. Cl. 1950) ............................................................................................ 23, 25 Kirby Forest Industries, Inc. v. United States, 467 U.S. 1 (1984).............................................................................................................. 52 LaSalle Tallman Bank, FSB v. United States, 317 F.3d 1363 (Fed. Cir. 2003) ........................................................................................ 47 LaVan v. United States, 382 F.3d 1340 (Fed. Cir. 2004) ........................................................................................ 47 Lenry, Inc. v. United States, 297 F.2d 550 (Ct. Cl. 1962) .............................................................................................. 30 Lewis-Nicholson v. United States, 550 F.2d 26 (Ct. Cl. 1977) .................................................................................... 23, 25, 37 v
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L.L. Hall Construction Company v. United States, 379 F.2d 559 (Ct. Cl. 1966) ...................................................................................................... 23 Locke v. United States, 151 Ct. Cl. 262, 283 F.2d 521 (1960) ............................................................................... 48 Meyers Cos., Inc. v. United States, 41 Fed. Cl. 303 (1998). ..................................................................................................... 18 Nat'l Park Hospitality Ass'n v. Dep't of the Interior, 538 U.S. 803 (2003).......................................................................................................... 13 Oman-Fishbach International (JV) v. Pirie, 276 F.3d 1380 (Fed. Cir. 2002) ........................................................................................ 30 Oroville-Tonasket Irrigation District v. United States, 33 Fed. Cl. 14 (1995) ........................................................................................................ 14 Peter Kiewet Sons' Co. v. United States, 138 Ct. Cl. 668 (1954) ...................................................................................................... 24 Petrochem Services, Inc. v. United States, 837 F.2d 1076 (Fed. Cir. 1988) ........................................................................................ 21 Precision Pine & Timber, Inc. v. United States, 50 Fed. Cl. 35 (2001)........................................................................................................... 23, 33 Ryco Constr., Inc. v. United States, 55 Fed. Cl. 184 (2002) ..................................................................................................... 24 S.A. Healey Co. v. United States, 576 F.2d 299 (Ct. Cl. 1978) .................................................................................. 29, 31, 34 Sacramento Nav. Co. v. Salz, 273 U.S. 326 (1927).................................................................................................... 23, 37 Son Broadcasting, Inc. v. United States, 42 Fed. Cl. 532 (1998) ...................................................................................................... 34 Specialty Assembling & Packing Co. v. United States, 174 Ct. Cl. 153, 355 F.2d 554 (1966) ............................................................................... 47 Steve Rados, Inc., vi
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AGBCA No. 77-130-4, 82-1 BCA ¶ 15,624 .................................................................... 23 Tecom, Inc. v. United States, 66 Fed. Cl. 736 (2005) ...................................................................................................... 24 The Federal Group, Inc. v. United States, 67 Fed. Cl. 87 (2005) ........................................................................................................ 21 Thompson v. Cherokee Nation of Oklahoma, 334 F.3d 1075 (Fed. Cir. 2003), aff'd, 125 S. Ct. 1172 (2005) ........................................ 39 United States v. Beebe, 180 U.S. 343 (1901).......................................................................................................... 43 Walter Dawgie Ski Corporation v. United States, 30 Fed. Cl. 115 (1993).............................................................................................23, 25, 26, 29 Watch Hill Concession, Inc., IBCA No. 4284-2000, 01-1 BCA ¶ 31,298 (2001)........................................................... 13 Wetsel-Oviatt Lumber Co. Inc. v. United States, 38 Fed. Cl. 563 (1997) ...................................................................................................... 44 Womack v. United States, 182 Ct. Cl. 299 (1968) ...................................................................................................... 17
Statutes and Regulations 16 U.S.C. § 497........................................................................................................................ 2 28 U.S.C. § 2680(a) ............................................................................................................... 18 31 U.S.C. § 3551(1)(A).................................................................................................... 14, 15 41 U.S.C. § 601 et seq............................................................................................................ 11 41 U.S.C. § 602(a) ................................................................................................................. 12
36 C.F.R. § 251.50(a)......................................................................................................... 2, 20 36 C.F.R. § 251.52 ................................................................................................................. 43
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36 C.F.R. § 251.53(d) ............................................................................................................ 2 36 C.F.R. § 251.60(h)(2)(i).................................................................................................... 20
Miscellaneous RESTATEMENT (SECOND) OF CONTRACTS § 205 (1981)......................................................... 24 John Cibinic, Jr. & Ralph C. Nash, Jr., Administration of Government Contracts 297 (3d ed. 1995)). .................................................................................................................................. 24 GAO Redbook ...................................................................................................................... 40
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STATEMENT OF THE CASE I. Nature of the Case Pursuant to the Court's Order dated December 16, 2005, plaintiff The Sweetwater, A Wilderness Lodge LLC ("The Sweetwater") respectfully submits its post-trial brief. As the Court is aware, this case involves the issue of whether the Forest Service breached its contract with The Sweetwater. The contract between the parties called for The Sweetwater to provide for public recreation by operating facilities which it had purchased on the Shoshone National Forest ("Shoshone") as a commercial lodge. Joint Exhibit 1 [hereinafter cited to as "JX __}; Plaintiff's Proposed Findings of Fact at ¶¶ 16-18 (submitted along with Plaintiff's Post-trial Brief)[hereinafter cited to as "PPFF ¶_]. However, as the Forest Service's own expert admitted, the only way viable commercial operations could occur was if there was vehicular access over several Forest Service bridges leading to the lodge. As the evidence in this case shows, the Forest Service's failure to disclose to The Sweetwater that it "basically condemned" those bridges as of 1992 caused the cessation of operations in 1997. Thereafter, the Forest Service subsequently rejected funding to replace those bridges which would have allowed for operations to resume after the Forest Service had repeatedly assured The Sweetwater that it was seeking funds to replace the bridges and restore vehicular access to the lodge. Finally, the Forest Service's decision to prevent any vehicular access to The Sweetwater by prohibiting such access over the North Fork bridge conclusively shows that the agency has decided that it does not intend to permit any further operations under the Term Special Use Permit ("Term SUP") it had entered into with The Sweetwater. The evidence conclusively shows that the Forest Service has breached its contract with The Sweetwater in several instances. First, the Forest Service's failure to disclose its reports and 1
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conclusions as to the unsafe condition of the bridges as of 1992 to The Sweetwater prior to it closing on its purchase of the lodge facilities in 1995 constituted a breach of contract. In addition, the evidence also shows that the Forest Service's subsequent rejection of funding which was made available in 1999 to restore vehicular access to the lodge also constituted a breach of contract. Finally, the Forest Service's decision to restrict any vehicular access to The Sweetwater obligated the Forest Service to provide equitable consideration to The Sweetwater for its lodge facilities, and the agency's failure to do so constitutes an additional breach of contract.
II.
Statement of the Facts In 1995, The Sweetwater became interested in purchasing a lodge and all of its assets
which were located on federally-owned land within the Shoshone. PPFF ¶ 34. Because the lodge was located on Forest System land, the lodge owner must obtain a Forest Service Term SUP in order for the lodge to remain on the Forest. 36 C.F.R. §§ 251.50(a), 251.53(d). In addition, in order to obtain the Term SUP, the lodge owner must operate the lodge and provide public recreational opportunities. PPFF ¶ 14. The Forest Service issues Term SUPs to private entities to ensure a stability of tenure where recreational facilities have been constructed on Forest System land for long-term use. Defendant's Responses to Plaintiff's Proposed Finding of Uncontroverted Facts at ¶ 3 (March 29, 2004)(Forest Service Manual 2711.3); 36 C.F.R. § 251.53(d); 16 U.S.C. § 497. The lodge assets are located along Sweetwater Creek at the bottom of a canyon that runs off of a main highway which provides access to Yellowstone National Park. PPFF ¶ 2. The facilities are three and one-half (3 ½) miles up Sweetwater Road, which is a Forest Service road (also referred to as "FSR 423") that first crosses a main bridge over the North Fork of the 2
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Shoshone River and then twice crosses Sweetwater Creek. PPFF ¶ 3. The bridges at issue in this case are the two which cross Sweetwater Creek and are inspected, controlled and maintained by the Forest Service, as is Sweetwater Road itself. PPFF ¶ 3. Sweetwater Road provides the only way vehicles can access the lodge. PPFF ¶ 3. This vehicular access is crucial to having feasible commercial lodge operations. PPFF ¶¶ 6. The bridges and Sweetwater Road are identified on the map attached to the Term SUP, but are not included within the permit area. JX 1 (at JX 1/16). The lodge facilities include extensive, well-maintained cabins and other buildings which are located along Sweetwater Creek. PPFF ¶¶ 11-13. In May of 1995, The Sweetwater initiated discussions with the lodge owners at the time, David and Nancy Brannon, and then met with representatives of the Forest Service before completing its purchase of the lodge assets to discuss the Forest Service road and bridges which provided the necessary access to the lodge. PPFF ¶¶ 34-88. At that meeting, the Acting Forest Supervisor took the position that "[t]he Forest Plan of the Shoshone National Forest allocates that area up there to a public lodge facility; therefore, there is a commitment on the part of the Forest to provide for that use to the extent it can. All Forest Plan implementation is subject to dollars available, but I think it's probably no, it's not probably, it's standard practice and intent when one has allocated a use on the Forest to do your best to implement that." PPFF ¶¶ 55-56. The Forest Service also stated to the representatives of The Sweetwater at the June 1995 meeting that "it [is] our intent to keep the [Sweetwater] road open to the best of our ability." PPFF ¶ 53. The Forest Service also stated that "it [is] our intent to support, to the degree that we [can], access to the lodge facility." PPFF ¶ 53. At the June 12, 1995 meeting the parties discussed the use of fords as a means of accessing the lodge temporarily if bridge access were lost. PPFF ¶¶ 63-69. As stated by Mr. Barker, who 3
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attended the meeting on behalf of the Forest Service, the parties did not discuss the use of fords as a means to operate the lodge given the safety issues which would arise. PPFF ¶ 66; PX 38. 1 In addition, Mr. Rossman further stated that, if the Forest Service installed fords in an emergency situation, it would not in any way affect the Forest Service's efforts to obtain funds to restore vehicular access with bridges. PPFF ¶ 68. The Sweetwater and Forest Service agreed to the terms of the Term SUP and the document was subsequently executed on August 21, 1995. PPFF ¶ 92. The Term SUP was issued for the purpose of The Sweetwater "maintaining and operating a public resort" by renting cabins and implementing the lodge facilities. JX 1. In addition, the Term SUP stated that "[t]his use shall actually be exercised at least 93 days each year." JX 1. The Term SUP also included a provision (clause 15) that addressed the allocation of risk if the Forest Service subsequently took action to terminate the lodge operations in the public interest. PPFF ¶ 96; JX 1. After cleaning up the lodge area in 1995 from the prior owner's activities, The Sweetwater operated in 1996 in a manner consistent with its permit's terms and representations made to it by Forest Service personnel as to what type of operations were expected and allowed. PPFF ¶¶ 98-103. Notwithstanding that it was the first season it was open for business and it was just beginning to develop a client base, The Sweetwater operated at a profit of $ 34,995. JX 23 (at
The individual who later became the Forest Supervisor in 1996, Rebecca Aus, incorrectly understood that The Sweetwater had agreed in the meeting in 1995 to the use of fords as a method to operate the lodge on a permanent basis. PPFF ¶ 162. However, the email drafted by Mr. Rossman the day after the meeting did not explicitly state whether fords were to be used to operate the lodge, and Mr. Barker, who also attended the meeting, unequivocally stated that no such agreement had been made by The Sweetwater or proposed by the Forest Service at the meeting or at any time thereafter. PPFF ¶¶ 64-66; JX 6. In addition, Mr. Rossman stated that the use of fords would not in any way impact the effort of the Forest Service to seek funds to restore vehicular access over the bridges. PPFF ¶ 63. 4
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23/7); PPFF ¶ 99. In January of 1997, The Sweetwater entered into an agreement to sell the lodge assets to Ray and Judi Sutherland for $595,000. PPFF ¶ 106. As did The Sweetwater when it was pursuing a purchase of the lodge assets, the Sutherlands had discussions with the Forest Service as to the Forest Service road and bridges providing access to the lodge. PPFF ¶ 107. However, unlike with its communications with The Sweetwater, the Forest Service provided the Sutherlands with a newly created written document that stated that the bridges over Sweetwater Creek had been "basically condemned" back in 1992 and the bridges were "inadequate, should be closed." PPFF ¶ 107. This document was not included in the Forest Service file in 1995 when The Sweetwater purchased the lodge, but was added in 1997 by the Forest Engineer in a note he drafted and sent to the Sutherlands. PPFF ¶¶ 108-109. While the Forest Service later attempted to withdraw its statement to the Sutherlands by asserting that no `formal' condemnation had occurred, the Sutherlands did not complete their purchase because of this information. PPFF ¶ 110. Because of safety and liability concerns over the bridges, The Sweetwater then informed the Forest Service that it could not operate the lodge in the 1997 season and invite paying guests to the lodge. PPFF ¶ 120. The Forest Service agreed with this decision and did not require The Sweetwater to operate or to submit an Operating Plan. PPFF ¶ 121. In February of 1997, The Sweetwater requested that the Forest Service clarify exactly what its position was as to the Sweetwater bridges and the continuation of lodge operations under the permit. See PPFF ¶ 114. The Forest Service shortly thereafter wrote a letter to The Sweetwater which stated that the Forest Service would include the Sweetwater bridges in its list of projects to be funded in FY 1999. JX 12; PPFF ¶¶ 114-115. The only qualification the Forest Service placed on its commitment was to state that the receipt of the funds was dependent upon Congress's approval. Id. The letter 5
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identified no other restrictions or caveats. Id. Based on this letter and the Forest Service's continuing assurances that it was seeking funds to replace the Forest Service bridges, The Sweetwater continued to incur the expense of maintaining the lodge in the absence of any cash flow from on-going operations. PPFF ¶ 118. Brent Larson, the District Ranger and a line officer, stated to The Sweetwater that the Forest Service would continue its efforts to rebuild the bridges or, if not, "find another solution" to the problem. PPFF ¶ 126. After issuing this letter, Mr. Larson concluded that the lodge operations were not the best use of the permit area. PPFF ¶ 127. The lodge was unique in that it was the only facility anywhere in the area that penetrated deep into the forest and was well away from the main highway. PPFF ¶ 132. The lodge area was immediately adjacent to pristine lands and designated sensitive Wilderness area. PPFF ¶ 133. The area near the lodge was considered crucial habitat for bighorn sheep as well as elk, and was also important habitat for grizzly bear. PPFF ¶ 13. Human activity in these types of areas was determined by Forest Service biologists to have a detrimental effect on these threatened and sensitive wildlife species. PPFF ¶¶ 135, 138. In addition, Sweetwater Road was causing harmful impacts on Sweetwater Creek because it was contributing to sedimentation that was harming the trout fishery in that stream. PPFF ¶136. If the road was to remain open, these problems had to be fixed. PPFF ¶ 137. Because he felt the lodge was not the best use of the permit area, Mr. Larson determined that it was in the overall interest of the public as well as the lodge owner to pursue a so-called "conservation buyer." PPFF ¶ 127. Mr. Larson testified: I have said several times, we would be better off trying to secure the lodge through a conservation buyer than- than continuing on with the permit up there; or, you know, do away with the permit and not have to deal with the road issues and the bridge issues . . . . 6
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PPFF ¶ 129. A "conservation buyer" was a private individual or entity that would agree to purchase the lodge assets and then remove the lodge and restore the area to its natural condition. PPFF ¶ 130. Mr. Larson also stated that he took this action to terminate lodge operations in order to eliminate the Forest Service's continuing financial road and bridge obligations caused by the presence of the lodge and thereby save the government money. PPFF ¶ 142. Mr. Larson informed The Sweetwater of his efforts to locate a conservation buyer. PPFF ¶ 145. However, The Sweetwater informed him that, while it was not opposed to selling its lodge to a conservation buyer, it did not think such efforts were worthwhile because a conservation buyer would not likely be able to pay a fair value for the lodge due to having inadequate financial resources. PPFF ¶ 145. Mr. Larson continued his efforts nonetheless. However, potential conservation buyers informed Mr. Larson that the sales price for The Sweetwater was too high for them to afford. PPFF ¶ 140. Completely unknown to The Sweetwater, Mr. Larson had apparently also decided that he would take efforts to prevent any funds that otherwise were granted by Congress for replacement of the Sweetwater bridges from being used for that purpose because using funds to replace the bridges conflicted with his efforts to locate a conservation buyer. PPFF ¶¶ 146-148. Mr. Larson had called Mr. Jim Fischer, who was the Forest Service employee on the Shoshone responsible for obtaining and appropriating the funding for bridge replacement projects, and shared this strategy with him. PPFF ¶ 146. As a result of that conversation, Mr. Fischer admitted that he started "dragging his feet" as to pursuing the funding for the bridges. PPFF ¶ 148. In late 1999, while Mr. Larson was still seeking a conservation buyer in order to terminate lodge operations and despite Mr. Fischer's foot-dragging, the funding that was necessary to 7
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replace the Sweetwater bridges was approved by Congress and sent to the Forest Service for use in replacing the Sweetwater bridges. PPFF ¶ 149. Mr. Fischer, who received notification that the funding had been made available, then spoke to Mr. Larson. PPFF ¶ 150. Mr. Larson stated to Mr. Fischer that there was "really good possibility" that he would locate a conservation buyer to buy the lodge. PPFF ¶ 150. As a result, they decided that Mr. Fischer should return the money to the Regional Office because replacement of the bridges was inconsistent with the goal of obtaining a conservation buyer. PPFF ¶ 151. Mr. Fischer testified: It was pretty much between Brent [the District Ranger] and myself of- of let's you know let's pull the bridges from the program until we know for sure what's going to happen with these [conservation buyer] proposals. PPFF ¶ 151. Mr. Fischer then testified that he called the Regional Office to reject the funds, telling them: Hey, you know, our decision is we're not going to build this bridge this year because of the conservation because of what appeared at the time as a really good possibility that the conservation organizations would you know, were going to be able to buy the lodge. PPFF ¶ 153. Mr. Larson subsequently admitted that, when he spoke to Mr. Fischer, he did not have any conservation buyers lined up, much less any letters of intent, draft contracts or any indication of interest. PPFF ¶ 156. But for this conversation with District Ranger Larson about the goal of a conservation buyer and the "manipulations" by the Forest Service as to the funding issues, the bridges would have been built. PPFF ¶ 157. The Sweetwater was never informed that (1) the Forest Service was intending to, or in fact did, block the application of funds provided by Congress and approved by the Region to replace the Sweetwater bridges, and that (2) any future efforts to obtain funding were non-existent. PPFF ¶ 164. In reliance on the Forest Service's previous written statements in 1997 and continuing oral 8
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assertions that it was trying to locate funding to replace the bridges, The Sweetwater continued to maintain the lodge, and kept it in excellent condition so that it was ready for operations. PPFF ¶ 166. When The Sweetwater began to explore other possible solutions in 2000 that might enable it to operate, which included its possibly undertaking efforts to repair the bridges in exchange for improved permit terms that would allow it to absorb the expense and resume operations, the Forest Service then instructed The Sweetwater to hire a structural engineer to determine if the bridge could be "load rated" (i.e., assigned a maximum weight load). PPFF ¶ 171. The bridges at that point in time had no load rating, which was contrary to Forest Service policy. PPFF ¶ 172. The private structural engineer concluded that the bridge could not be load-rated, and the Forest Service then used this conclusion to formally close the bridges in April 2001 and prevent any possibility of a resumption of operations. PPFF ¶ 173. 2 To prevent any public or lodge visitors from using the bridges, the Forest Service placed a padlocked gate on the bridge over the North Fork of the Shoshone River at the beginning of the road to the lodge in April 2001. PPFF ¶ 176. The Forest Service then initiated an appraisal of the lodge assets for the purpose of purchasing them, but terminated that process when it was unable to finance a purchase. PPFF ¶ 178. The next action the Forest Service took towards The Sweetwater was to issue a letter to it in December 2001 stating that The Sweetwater was not in compliance with its permit because it
The Forest Service's own inspector admitted that, the prior summer, he inspected the bridges and was aware of the same physical conditions that led to the private inspector concluding that the bridge could not be load rated. PPFF ¶ 173, n.10. The Forest Service inspector stated that, had the Forest Service attempted to load rate the bridges in 2000, it would have come to the same conclusion as the private inspector. Id. Instead of arranging to have the bridge load rated by the Forest Service, he encouraged The Sweetwater to do so. Id. This avoided the appearance of the Forest Service being responsible for the closing. 9
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was not open to the public. PPFF ¶ 183. As a result of this alleged non-compliance, the Forest Service had the authority to order The Sweetwater to tear down its lodge, remove all remnants of its facilities and return the area to its natural state, all at The Sweetwater's expense. PPFF ¶ 184.
Notwithstanding its representations before and during the term of the contract at issue, the Forest Service has now removed the Sweetwater bridges from eligibility for funding. PPFF ¶ 192. In addition, the Forest Service has decided to tear out the current bridge structures over Sweetwater Creek and restrict high clearance access over the North Fork bridge, thus precluding even high-clearance vehicles from accessing the lodge. PPFF ¶ 193.
STATEMENT OF THE ISSUES 1. Whether the Forest Service committed a breach of contract by failing to disclose, prior to
executing the Term SUP, that it had previously determined that the Sweetwater bridges were unsafe for vehicular use? 2. Whether the Forest Service breached its duty to cooperate and not to hinder by preventing
funds from being used to replace the Sweetwater bridges which were critical to lodge operations when it had informed The Sweetwater that such funds were being sought? 3. Whether the Forest Service breached the contract by failing to compensate The Sweetwater
as required under the contract's terms when it took actions to terminate lodge operations in the public interest? 4. If the Forest Service actions do not constitute a breach of contract, whether the Forest
Service has taken The Sweetwater's property in violation of the Fifth Amendment?
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ARGUMENT I. The Contract Disputes Act applies to the Term SUP. As demonstrated by the testimony of the Forest Service personnel who are most experienced with Term SUPs, the Term SUP in this case was entered into by the Forest Service in order to procure recreational services which it would have provided had no contract been issued. PPFF ¶ 17. This type of procurement falls under the Contract Disputes Act, 41 U.S.C. § 601 et seq. ("CDA"). Therefore, contrary to the Forest Service's assertions, the clear evidence in this case demonstrates that The Sweetwater's Term SUP is subject to the terms of the CDA. The Contract Dispute Act ("CDA") states: Unless otherwise specifically provided herein, this chapter applies to any express or implied contract (including those of the nonappropriated fund activities described in sections 1346 and 1491 of title 28) entered into by an executive agency for-- (1) the procurement of property, other than real property in being; (2) the procurement of services; (3) the procurement of construction, alteration, repair or maintenance of real property; or, (4) the disposal of personal property. 41 U.S.C. § 602(a)(emphasis added). As to whether or not a Term SUP is entered into in order for the Forest Service to obtain services, the Forest Service officials involved in administering these contracts have stated it best. Ms. Aus, in her letter asserting that The Sweetwater had not complied with the terms of the Term SUP, stated that "the Sweetwater Lodge Special Use Authorization [was] issued to you for the purposes of operating a public resort." JX 21 (p. 1). Ms. Aus then further stated:
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Commercial developments for public resort operations are permitted only to the extent that they serve a public need for services or facilities. The minimum public services to be provided by the permittee and the minimum number of days of operation, are identified as a condition of the permit. The minimum requirements for public services contained in the Sweetwater Lodge permit are for the operation of a public resort, providing rental of cabins, meals and day use trail rides. These services are required to be available for a minimum of 93 days each year. JX 21 (p. 1). As the Forest Service Recreation, Wilderness and Land Staff Officer testified,[Term SUPs are, by regulation and by purpose, a delivery system to provide public services. PPFF ¶ 16. Another Forest Service official who was a member of the Shoshone National Forest special use permit team reiterated the same statement: [C]oncessionaire permittees are part of the Forest Service who are permitted to provide a service that we want provided, it's not for convenience of the permittee, it's to meet a responsibility providing public service to the public, and so we allow the numbers and the locations in order to provide what we feel to meet the public need. PPFF ¶ 18; see PPFF ¶¶ 54, 87. In addition, the Forest Service's form for collecting payments under the Term SUP is entitled ""Fee Determination Data- Commercial Public Service Use." PX 21. Thus, while the Forest Service has arrived at a different conclusion, the evidence in this case related to why the Term SUP was issued and what it achieves shows that it clearly is the type of contract which is covered by the CDA. Notably, the Interior Board of Contract Appeals ("IBCA") in Watch Hill Concession, Inc., IBCA No. 4284-2000, 01-1 BCA ¶ 31,298 (2001) reaffirmed the Board's long-held position that National Park Service concession contracts are CDA contracts over which it has jurisdiction. The IBCA's reasoning, which is equally applicable to Forest Service Term SUPs, is that where a contract requires the holder to perform specific 12
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services or make improvements for the benefit of federal lands in the course of its business operations such as those requirements placed on a campground operator, the contract is one for the procurement of services and thus covered by the CDA. 3 Among other obligations, The Sweetwater's Term SUP states that "[t]he permittee shall maintain the improvements and premises to standards of repair, orderliness, neatness, sanitation, and safety acceptable to the forest officer in charge." JX 1 (clause 4 of Term SUP )(emphasis added); see Oroville-Tonasket Irrigation District v. United States, 33 Fed. Cl. 14, 22 (1995)(finding that contract requiring repair, operation, and maintenance of federal property falls under the CDA). Thus, The Sweetwater's Term SUP is a contract for the procurement of services and thus is covered by the CDA. Additional support for the Term SUP being covered by the CDA is provided by Alpine Camping Services, B-238625, B-238625.2, 90-1 CPD ¶ 580. That matter involved a bid protest to GAO of a Forest Service campground concession issued pursuant to a SUP. GAO has jurisdiction over protests of solicitations by federal agencies "for offers for a contract for the procurement of property or services." 31 U.S.C. § 3551(1)(A)("CICA"). GAO held that the contract was one for the procurement of services because the FS "requires concessionaires to perform specific tasks designed to protect the land, maintain the campsites, preserve structures in accordance with Forest Service standards and specifications, and enforce Forest Service rules and regulations." The GAO concluded that:
3
The United States Supreme Court in Nat'l Park Hospitality Ass'n v. Dep't of the Interior, 538 U.S. 803, 811 (2003), specifically cited affirmatively to the IBCA's decision in Watch Hill as providing concessioners with the ability to pursue CDA claims under concession type contracts. 13
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[W]hile the prospectus ultimately results in permits to use and occupy federal land, the tasks required to be performed as a condition to receiving the permits are intended to benefit the government and further the functions of the Forest Service. [citations omitted.] Under the circumstances here, we conclude that the prospectus at issue is a procurement for services which we will consider under our CICA bid protest authority. Alpine Camping at 2 (emphasis added); see also Greyback Concession, B-239913, 90-2 CPD ¶ 278 (1990)(GAO decided a post-Alpine Camping protest of award of a Forest Service SUP). Notably, the CDA uses the same language as CICA to identify contracts to which it applies. Compare 41 U.S.C. § 602(a)(2)(the CDA applies to contracts "for the procurement of services") to 31 U.S.C. § 3551(1)(A)(CICA applies to solicitations for contracts "for the procurement of property or services"). As demonstrated above, the Term SUP at issue in this case was entered into by the Forest Service for the purpose of procuring public recreational services and thus falls within the applicability of the CDA.
II.
The Forest Service committed a breach of contract by representing that the bridges, which provided the only access to the lodge, were safe for vehicular travel. When The Sweetwater was considering purchasing the lodge facilities and entering into
the Term SUP which was necessary for operation of those facilities, the Forest Service represented that the bridges over Sweetwater Creek were safe for vehicular use. PPFF ¶¶ 39, 53, 55. However, this representation was false (PPFF ¶¶ 24-28), and the Forest Service failed to disclose critical information it possessed which demonstrated that, as of 1992, the Forest Service had concluded that the bridges were not safe for vehicular use. PPFF ¶ 82. The Forest Service's false
14
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representations and failure to disclose this critical information constituted a breach of contract. The government has committed a breach of the contract if the plaintiff can show that: (1) the government made a representation; (2) the misrepresentation was either fraudulent or material; (3) the misrepresentation induced plaintiff to enter into the contract; and (4) plaintiff was justified in relying on the misrepresentation. Detroit Housing Corp. v. United States, 55 Fed. Cl. 410 (2003). Each of these elements is present in this case. The critical representation in this case was that the Forest Service bridges leading to the lodge were in a safe condition and could be used by a lodge operator to perform its contract with the Forest Service. This representation was made by the Forest Service when it kept the road and bridges open for public use with no signs warning that it was unsafe for lodge use or other indicia of the fact that qualified Forest Service bridge inspectors had reviewed the bridges in 1992 and had concluded that they "need[ed] to close those bridges immediately" because of the safety risk they posed. PPFF ¶ 26. 4 The Shoshone employees argued in 1992 that they could not close the bridges because of the ramifications due to the lodge needing the bridges for operations. PPFF ¶ 26. 5 Because of this argument, a "compromise" was reached that left the bridges open. PPFF ¶ 27. The determination of the qualified Forest Service bridge inspectors was kept out of the
4
In addition, the Forest Service policy was to close any bridge that had not been load rated. PPFF ¶ 25. While the Sweetwater bridges had not been load rated, they were kept open and a 3-ton weight limit sign indicating such a load rating had occurred was placed by them. PPFF ¶ 27. This fact further demonstrates that the Forest Service was aware that lodge operations required vehicular access. If such access was not necessary and the lodge could be operated by means of alternative means, the Shoshone would not have kept otherwise dangerous bridges open for public use after 1992. Further, it is consistent both with the Forest Service written determination that "[s]hould the bridges fail and this access be lost, . . . the service to the public [will be] lost" (JX 10 (at 10/5) as well as the prior lodge owners' notification to the Forest Service of this same fact. PX 4 (page 2). 15
5
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Forest Service files and only came to light in 1997 when it was disclosed to the Sutherlands, who were interested in buying the lodge from The Sweetwater. PPFF ¶¶ 107-109. At that point in time, the Forest Service informed the prospective purchasers that the bridges had been "basically condemned" in 1992 and that the bridges should be replaced. PPFF ¶ 107. While the Forest Service's purpose at the meeting between the parties on June 12, 1995 had been to provide The Sweetwater with all pertinent information so that it could make its own decision on the purchase of the lodge facilities, this information and the Forest Service's conclusion was not disclosed to The Sweetwater at that time. PPFF ¶¶ 82-83, 107-109. As stated in Hardeman-Monier-Hutcherson v. United States, 458 F.2d 1364, 1371-72 (Ct. Cl. 1972): It is well settled in this court that where the Government possesses special knowledge, not shared by the contractor, which is vital to the performance of the contract, the Government has an affirmative duty to disclose such knowledge. It cannot remain silent with impunity. Helene Curtis Indus., Inc. v. United States, 312 F.2d 774, 160 Ct. Cl. 437 (1963). See also, e.g., Aerodex, Inc. v. United States, 417 F.2d 1361, 189 Ct. Cl. 344 (1969); J.A. Jones Constr. Co. v. United States, 390 F.2d 886, 182 Ct. Cl. 615 (1968). While The Sweetwater does not need to demonstrate that the Forest Service intended to mislead it, 6 Forest Service personnel revealed that, in the month prior to The Sweetwater purchasing the lodge, the Forest Service had provided information about the bridges to a woman interested in buying the lodge. PPFF ¶ 32. After speaking to the Forest Service, the woman subsequently terminated her efforts to purchase the lodge after receiving information about the bridges. PPFF ¶ 32. When the lodge owner at the time heard of this fact, he became very upset
"An intent to mislead is not an essential element of actionable misrepresentation in the breach of contract context." Womack v. United States, 182 Ct. Cl. 299 (1968), quoted in Detroit Housing, 55 Fed. Cl. at 414.
6
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with the Forest Service for disclosing information about the bridges to the woman and strongly conveyed his displeasure to the agency. PPFF ¶ 32. In the immediately following month, the Forest Service provided no information about the bridges' structural status or prior inspections to The Sweetwater when it became interested in purchasing the lodge assets. PPFF ¶¶ 82-85. The Sweetwater's understanding was that the woman had not purchased the lodge because she could not get adequate financing. PPFF ¶ 35. Misrepresentation occurs when the government misleads a contractor by a negligently untrue representation of fact, or fails to disclose information that it has a duty to disclose. Meyers Cos., Inc. v. United States, 41 Fed. Cl. 303 (1998). The misrepresentation about the status of the lodge was material because the safe status of the bridges was critical to lodge operations. PPFF ¶¶ 3-8. The status of the bridges is important not only for ensuring the public's physical safety, but also for not causing legal liability should an accident occur. PPFF ¶ 95; JX 1 (clauses 28, 29). While the government may be able to take the risk of leaving a defective bridge open because it enjoys sovereign immunity where the decision to leave the bridge open is discretionary, 7 a private business has no such protection. Therefore, by being aware that qualified Forest Service bridge inspectors concluded in 1992 that the bridges were in poor enough shape to be "basically condemned" and that no work had been done to repair the bridges since this time, the lodge operator would take on an unreasonable liability risk if it were to invite paying guests to its lodge knowing they had to cross these unsafe bridges.
7
See 28 U.S.C. § 2680(a).
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In addition, the Forest Service required The Sweetwater to agree to indemnify the Forest Service should there be any liability resulting from the lodge's operation. 8 Therefore, not only was the Forest Service likely protected by sovereign immunity, it also had the additional protection of an indemnification from the lodge owner for accidents to lodge guests occurring on the Forest Service's own poorly maintained bridges. Thus, even if not otherwise obligated to disclose the critical facts related to the prior bridge inspections, the Forest Service had an obligation to inform The Sweetwater of these facts given that it was explicitly requiring The Sweetwater to sign an indemnification agreement that would protect the Forest Service from liability arising from those same facts. Also, the Forest Service required The Sweetwater to identify the United States as a co-insured entity on its insurance policy. JX 1 (clause 29). By having the United States expressly named as an insured party on the policy, and with the Forest Service having knowledge of the unsafe condition of the bridges, the Forest Service created a significant risk that the policy would not be honored if someone were injured due to the bridges because of the agency having withheld material information. However, if such event were to occur, the Forest Service would likely be immune from liability, and the lodge operator would be left with full liability and no insurance coverage whatsoever. At a minimum, by requiring The Sweetwater to obtain an insurance policy that included the United States as a co-insured, and also indemnify the Forest Service, the Forest Service had an obligation to inform The Sweetwater of facts that could result in the nullification of the required insurance policy.
Clause 28 of the Term SUP states "[t]he holder shall indemnify the United States against any liability for damage to life or property arising from the occupancy or use of National Forest lands under his permit." JX 1. 18
8
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As The Sweetwater's actual conduct in 1997 shows, as soon as The Sweetwater learned of this information, it shut down its operations. PPFF ¶ 120. Obviously, had The Sweetwater known of this information in 1995, it never would have purchased a lodge it would be unable to operate. In addition, the Forest Service knew that safe vehicular access over the bridges was critical to any lodge owner being able to operate a business. PPFF ¶¶ 6-9. In fact, the prior lodge owner informed the Forest Service of this precise fact. PPFF ¶ 9. Therefore, it is clear that the Forest Service's representations by keeping the road publicly open with no warning signs induced The Sweetwater to purchase the lodge assets and enter into a contract with the Forest Service to operate those assets as an on-going lodge business. Finally, The Sweetwater was justified in relying on the Forest Service's representations. First, the Forest Service was involved in the purchase of the lodge assets and clearly understood that the value of the lodge assets was totally dependent on them being operated as an on-going business. PPFF ¶¶ 14, 91. In order for the lodge owners to operate an on-going business, the Forest Service required any lodge owner to have a permit which specifically obligated it to provide a recreational business to members of the public. 36 C.F.R. § 251.50(a); PPUF ¶ 14. Without a permit, the assets would have to be removed. 36 C.F.R. § 251.60(h)(2)(i). In addition, by not placing any warning signs on its own bridges which it knew were the only way vehicles could access the lodge, the Forest Service was aware that its actions indicated that it had determined the bridges to be safe and usable by the lodge for its business. PPFF ¶ 39. Therefore, given the Forest Service's awareness of the significance of its bridges to lodge operations and that its keeping the bridges open to the public indicated their adequacy for lodge operations, The Sweetwater had every reason to rely on the Forest Service's representations and conduct. Based on the same facts which show a tortious breach of contract, the Forest Service 19
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breached the contract by failing to disclose superior knowledge related to the Forest Service's determinations that the bridges had been "basically condemned" back in 1992. The government breaches a contract where: (1) a contractor undertakes to perform without vital knowledge of a fact that affects performance costs or duration; (2) the government was aware the contractor had no knowledge of and had no reason to obtain such information; (3) any contract specification supplied misled the contractor; and (4) the government failed to provide the relevant information. Petrochem Services, Inc. v. United States, 837 F.2d 1076, 1079 (Fed. Cir. 1988)(citations omitted); see The Federal Group, Inc. v. United States, 67 Fed. Cl. 87, 100 (2005); J.F Shea Co., Inc. v. United States, 4 Cl. Ct. 46, 53 (1983). As the courts have held, when the government possesses superior knowledge, "[i]t cannot remain silent with impunity." See The Federal Group, 67 Fed. Cl. at 102, quoting Hardeman-Monier-Hutcherson v. United States, 198 Ct. Cl. 472, 475, 458 F.2d 1364 (1972). In the present case, The Sweetwater undertook to perform the contract by providing commercial lodge operations without knowledge that the bridges over which its guests had to travel had in fact been found unsafe by the Forest Service and "basically condemned." PPFF ¶ 109. The Forest Service knew that The Sweetwater had no knowledge of these findings because they had not been disclosed outside the agency. PPFF ¶ 109. In addition, The Sweetwater had no reason to obtain this information because the bridges were currently open for public use, thus leading any reasonable person to believe that they had been found to be safe for public travel. PPFF ¶ 39. In addition, the Forest Service had placed official signs by the bridges stating that they were safe for public use in vehicles at or below 3 tons, further indicating that the bridges had been
20
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load rated for that weight. PPFF ¶ 39. 9 Also, no contract terms placed The Sweetwater on notice to inquire about whether the bridges had been found to be unsafe. See JX 1. Finally, the Forest Service has admitted that they never provided The Sweetwater with the information about the unsafe condition of the bridges. PPFF ¶¶ 82, 85. While Mr. Rossman, who later signed the contract, stated that he was unaware of the information's existence and would certainly have disclosed it if he had known of it (PPFF ¶ 83), Ms. Watson stated that she would have provided it if The Sweetwater had shown more concern about the bridge condition. PPFF ¶ 84. The foregoing demonstrates that the Forest Service's actions in 1995 in falsely representing the status of the Sweetwater bridges and withholding critical information as to the actual condition of those bridges constituted a breach of contract as either a tortious breach of the contract in this matter or due to its failure to disclose superior knowledge related to its evaluation of the condition of those bridges.
III.
The Forest Service breached its duty to cooperate and not to hinder contract performance by preventing funds from being used to replace the Sweetwater bridges, which were critical for commercial lodge operations. After some of the information regarding the Forest Service's inspection of the bridges in
1992 was disclosed in 1997 and The Sweetwater was forced to cease operations, the Forest Service then induced The Sweetwater to continue maintaining the lodge in preparation for resuming operations by reaffirming its commitment to seek funds to replace the Sweetwater bridges. However, as demonstrated below, the Forest Service instead was actually committed to preventing any further operations at the lodge, and took affirmative actions to block such operations. These
9
In fact, no load rating had been made for the bridges, which made the signs indicating a specific safe weight completely misleading. PPFF ¶¶ 25, 28. 21
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actions constituted a breach of the Forest Service's duty to cooperate and not hinder performance of the contract which it had entered into with The Sweetwater. It is well-established that there is an "implied provision of every contract, whether it be one between individuals or between an individual and the Government, that neither party to the contract will do anything to prevent performance thereof by the other party or that will hinder or delay him in its performance." Lewis-Nicholson, 550 F.2d 26, 32 (Ct. Cl. 1977), quoting George A. Fuller, 69 F. Supp. at 411 (Ct. Cl. 1947); L.L. Hall Construction Company v. United States, 379 F.2d 559, 563 (Ct. Cl. 1966); Precision Pine & Timber, Inc. v. United States, 50 Fed. Cl. 35, 58-59 (2001); Walter Dawgie Ski Corporation v. United States, 30 Fed. Cl. 115, 130 (1993); Cedar Lumber, Inc. v. United States, 5 Cl. Ct. 539, 549 (1984); Steve Rados, Inc., AGBCA No. 77-130-4, 82-1 BCA ¶ 15,624 (citing Sacramento Nav. Co. v. Salz, 273 U.S. 326, 329 (1927)). 10 This obligation is binding on the parties as if it were expressly written out in the contract (Kehm Corp. v. United States, 93 F. Supp. 620, 623 (Ct. Cl. 1950); Precision Pine, 50 Fed. Cl. at 54) and applies to the government just as it does to private parties. Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005).11 The Court of Claims further held that: Indeed, not only must the Government refrain from hindering the contractor's
The duty to cooperate and the duty not to interfere are separate, but related duties. Precision Pine, 50 Fed. Cl. at 59, n.31. Breach of the duty to cooperate requires an unreasonable action or a failure to take essential action ("such as failing to help in a solution of a problem that has arisen in contract performance"), and breach of the duty not to interfere requires wrongful action or "active interference." Id. As the facts in this case demonstrate, the government has breached both of these duties. The duty also includes an obligation not to act so as to destroy the reasonable expectations of the other party regarding the fruits of the contract. Centex, 395 F.3d at 1304. 22
11
10
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performance, it must do whatever is necessary to enable the contractor to perform. Lewis-Nicholson, 550 F.2d at 32 (emphasis added), citing Kehm Corp., 93 F. Supp. at 623 (Ct. Cl. 1950). Furthermore: [W]hen some government action is essential for the contractor to perform and the government wrongfully fails or refuses to take that action, then the government has breached its implied duty to cooperate. CEMS, Inc. v. United States, 59 Fed. Cl. 168, 195 (2003), quoting Ryco Constr., Inc. v. United States, 55 Fed. Cl. 184, 192 (2002) (citing John Cibinic, Jr. & Ralph C. Nash, Jr., Administration of Government Contracts 297 (3d ed. 1995)). This Court has recently held in explaining the duties to cooperate and not to hinder, which are part of the over-arching duty of good faith and fair dealing: Subterfuges and evasions violate the obligation of good faith in performance even though the actor believes his conduct to be justified. But the obligation goes further; bad faith may be overt or may consist of inaction, and fair dealing may require more than honesty. A complete catalogue of types of bad faith is impossible, but the following types are among those which have been recognized in judicial decisions: . . . [evasion of the spirit of the bargain] . . . lack of diligence and slacking off . . . and interference with or failure to cooperate in the other party's performance . . . Similarly, under the implied duty not to hinder performance, Government actions that are unreasonable under the circumstances constitute a breach. Tecom, Inc. v. United States, 66 Fed. Cl. 736, 770 (2005), quoting RESTATEMENT (SECOND) OF CONTRACTS § 205 (1981)(emphasis in original); see also Tecom, at 767, 770 (noting that a breach of the duty to cooperate and not to hinder can be caused by gross negligence or gross error in decision making as well as subterfuges, evasiveness and inaction). In addition, this duty has been expressed as the obligation "not to willfully or negligently interfere with the contractor in the performance of his contract." Peter Kiewet Sons' Co. v. United States, 138 Ct. Cl. 668, 674 (1954)(emphasis added). Further, claims for a breach of the government's duty to cooperate and 23
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not to hinder are to be treated like any other claim for breach of contract and the presumption of good faith by the government has no relevance. Tecom, 66 Fed. Cl. at 771. The specific nature and scope of the government's duty to cooperate and not to hinder is dependent on the particular facts and circumstances of the case at hand. Commerce International Co. v. United States, 338 F.2d 81, 86 (Ct. Cl. 1964) ("the nature and scope of [the duty to cooperate] is to be gathered from the particular contract, its context, and its surrounding circumstances"); Walter Dawgie, 30 Fed. Cl. at 130 ("the nature and scope of this duty depends on the facts and circumstances of the case"). As set forth below, the Forest Service's wrongful and unreasonable actions in the present case constituted a breach of its duty to cooperate and not to hinder The Sweetwater's performance of its contract.
A.
The purpose of the Term SUP, as well as the Forest Service's representations to The Sweetwater, demonstrate that the Forest Service was obligated to seek funding to maintain vehicular access to the lodge.
The Term SUP requires The Sweetwater to provide services to the public on the Shoshone as a commercial lodge. JX 1. However, vehicular access over the bridges on the Forest Service road leading to the lodge is essential for commercial lodge operations. PPFF ¶¶ 6-9. Therefore, it is clear that, by issuing the permit, the Forest Service not only intended to maintain vehicular access over Sweetwater Road in a manner that allowed contract performance, but was also obligated to take reasonable efforts to ensure such access was available. See Lewis-Nicholson, 550 F.2d at 32 (emphasis added)("not only must the Government refrain from hindering the contractor's performance, it must do whatever is necessary to enable the contractor to perform"),
24
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citing Kehm Corp., 93 F. Supp. at 623 (Ct. Cl. 1950). 12 This obligation was further enhanced by the Forest Service's explicit representations to The Sweetwater at the time that The Sweetwater was considering the purchase of the lodge facilities and entering into the required contract with the Forest Service to operate those facilities. See Commerce International Co. v. United States, 338 F.2d 81, 86 (Ct. Cl. 1964) ("the nature and scope of [the duty to cooperate] is to be gathered