Free Response to Motion - District Court of Federal Claims - federal

Case 1:98-cv-00168-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS NORTH STAR ALASKA HOUSING CORP., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 98-168C (Judge Allegra)

DEFENDANT'S RESPONSE TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT I. Count I - Fire Damage To 765 Bataan Court The United States does not dispute that, prior to the August 23, 1996 fire at 765 Bataan Court, the Army reimbursed North Star Alaska Housing Corp. for fire damage, to two apartments, that was caused by occupant negligence. II. Count II - Frequency Of Refuse Collection The Court should deny North Star's motion for summary judgment upon Count II. Summary judgment is only appropriate if

there is "no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." See

Rule 56(c) of the Rules of the United States Court of Federal Claims. North Star presents a 2003 affidavit of its former

counsel, John Spencer Stewart in support of it position that the parties "agreed that North Star's responsibility with respect to the 1995 Settlement Agreement would be satisfied by once-weekly refuse collection with deposit at the Fort Wainwright landfill." Plaintiff's Motion For Summary Judgment ("Pl. Mot.") at 15. In

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the affidavit, Mr. Stewart testifies that "[d]uring [the 1995 settlement] negotiations, I had multiple conversations with Donald Kinner, the attorney for the government, wherein Mr. Kinner and I agreed that North Star's responsibility under the 1995 Settlement Agreement would be satisfied by collecting the refuse once per week as the government had done previously." That testimony, however, conflicts with the 1999 testimony of North Star's president, Richard Fischer. When asked in a

deposition (attended by Mr. Stewart as counsel for North Star) to identify the Government representatives who North Star alleged in its complaint had indicated that once-weekly refuse collection was satisfactory, Mr. Fischer identified only a Colonel Brown. Defendant's Appendix ("Def. App.") 28, Tr. 71-73. Mr. Fischer

failed to identify any other Government representatives, much less Mr. Kinner, who allegedly had indicated that once-weekly refuse collection was satisfactory. Def. App. 28, Tr. 71-73.

Although Mr. Fischer, in Mr. Stewart's presence, stated that he could not recall who else had made such statements and promised to "furnish in addition that other information to you through counsel," he did not supplement his answer with any contention that Mr. Kinner had made that representation to Mr. Stewart during the 1999 settlement negotiations - nor did Mr. Stewart, at the time, offer such a contention, even though he interjected responses on behalf of the witness frequently during the -2-

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deposition, as evidenced in that exchange with his offering the name "Brown." Def. App. 28, Tr. 72. Mr. Stewart also failed to raise such a contention in a January 1996 letter to Mr. Kinner, even though that letter referenced the 1995 settlement negotiations. Def. App. 1.

Rather, without contending that the Army had taken any position contrary to the 1995 settlement, Mr. Stewart assured Mr. Kinner that "Mr. Fischer has advised the Government that North Star Alaska Housing Corporation will handle the refuse collection consistent with the demands (unreasonable we believe) of the Government." Def. App. 1.

The conflict between Mr. Stewart's testimony of last year and Mr. Fischer's testimony of five years ago, as well as the conflict between Mr. Stewart's testimony and his 1996 letter, raises a genuine issue for trial regarding the evidentiary value of Mr. Stewart's recollection of the 1995 settlement negotiations. North Star also relies upon the November 1995 memorandum of Karen Goodrich (Pl. Mot. 6-16), but Ms. Goodrich testifies that her statement in that memorandum that "[a]n out-of-court settlement was reached to allow the contractor to decrease pickup from twice a week to once a week" was based upon the representation of a North Star plant manager, that she did not participate in the 1995 settlement discussions, and that she -3-

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executed the November memorandum without having first reviewed the 1995 settlement agreement. Def. App. 26 ¶¶ 3-4. For all

these reasons, the Court should hold the issue of the frequency of refuse collection over for trial. III. Count III - Downtime For Change Of Occupancy Work The Court should deny North Star's motion for summary judgment upon Count III. There is a genuine issue of material

fact regarding the prior course of dealing regarding downtime for change of occupancy work. Although North Star presents an

affidavit of Richard Fischer in support of its position that, for approximately nine years, when multiple units up to eight were released, the permissible downtime was "three works days times the number of released units" (Pl. Mot. at 19), paragraph 9 of the affidavit of Willie Mae Harrell, Division Housing Chief for Fort Wainwright, Alaska (Def. App. 5), establishes that the controversy arose before the 1995 settlement. Although the

settlement was agreed to in September 1995 (Exhibit 1, p. 6 to Fischer Affidavit), an attachment to Ms. Harrell's affidavit reflects that the downtime controversy arose at least as early as July and August 1995. Def. App. 12.

The affidavits of Ms. Harrell, Tomas Petersen, Rodney Everett, and Connie Kiser dispute North Star's contention that downtime was ever calculated "consecutively" or "collectively." Def. App. 4 ¶ 3; 6-7 ¶ 4; 15-16 ¶¶ 2-3; 20-21 ¶ 6. -4Mr. Everett

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testifies that the Army "always calculated the start time in accordance with the contract, that is, by beginning the time when the unit is made available to the Plaintiff and ending when the Government, in writing, accepts the unit." Def. App. 4 ¶ 3. And

Mr. Petersen testifies that "'[t]he Government consistently tracked downtime by individual units, never collectively." App. 20-21 ¶ 6. To the extent that the Army's downtime calculations ever diverged from the lease, that was a matter of administrative discretion; not a reflection of contract interpretation. In Def.

fact, the testimony of Ms. Harrell, Ms. Kiser, and Mr. Petersen reflects that the Army forbore enforcement of the downtime provision only on a case-by-case basis; not because it ever adopted North Star's interpretation of the downtime provisions of the lease. IV. Def. App. 7 ¶ 7; 15 ¶ 3; 21 ¶ 7. Count IV - Carpet Replacement And Depreciation Pursuant to the court's reasoning in WDC West Carthage Associates v. United States, 324 F.3d 1359, 1364 (Fed. Cir.), the Government is responsible for reimbursing North Star the full costs of replacing carpeting due to damages which are caused by the Government and are "beyond normal wear and tear," without regard to depreciation of the replaced carpet. The Government

retains the contractual right to direct replacement of carpet at North Star's expense due to normal wear and tear when it -5-

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determines that the carpet has lost a "pleasing appearance." Defendant's Proposed Findings Of Uncontroverted Fact ("DPFUF") 6; Pl. App. 39 ¶ E (emphasis added), 41 ¶ (b)(6). North Star

remains responsible for replacement of the carpet at least twice during the lease. V. DPFUF 7; Def. App. 34.

Count VII - Incentive Fee Awards The Court should reserve judgment upon North Star's motion

for summary judgment upon Count VII until after trial.

In its

July 3, 2002 order, the Court reserved judgment upon our summary judgment motion in regards to Count VII until after trial. Star has not requested that the Court reconsider that reservation. If the Court does not reserve judgment, the Court should deny North Star's motion for summary judgment upon Count VII, both for the reasons that we set forth in support of our motion for summary judgment upon Count VII, and because the relief that North Star requests in its summary judgment motion goes beyond Count VII of its second amended complaint. In Count VII, North North

Star requests that the Court declare that North Star "is entitled to an award in the maximum amount provided by the Lease . . . ." Second Amend. Compl. at 17, ¶ 62. And in its prayer for relief,

North Star requests that the Court "[d]eclare that North Star is entitled to an incentive award fee in the maximum amount provided by the contract." Second Amend. Compl. at 18 ¶ 7. -6Although

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Count VII of the April 15, 2002 complaint alleges that "the Government has, in recent years, without just cause, refused, in good faith, to award the proper incentive bonus . . . ," the

only "award" that North Star specifically complains of is the "award" that North Star claimed it did not receive for 1998. Second Amend. Compl. at 17, ¶ 60. Therefore, the only incentive

award fee that North Star seeks in its complaint is for 1998. North Star's own brief, however, demonstrates that it has received an incentive award for 1998. Pl. Mot. at 4. Exhibit 22

to Mr. Fischer's affidavit demonstrates that North Star was informed of that award in May 1999. The claim that North Star

did not receive an incentive award fee for 1998 is, therefore, moot. See Los Angeles v. Davis, 440 U.S. 625, 631 (1979). Respectfully submitted, PETER D. KEISLER Assistant Attorney General S/DAVID M. COHEN DAVID M. COHEN Director

OF COUNSEL WILLIAM. M. EDWARDS Assistant District Counsel United States Army Corps of Engineers Alaska District

S/DONALD E. KINNER DONALD E. KINNER Assistant Director Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 -7-

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Telephone: (202) 305-7561 Facsimile: (202) 305-7644 June 18, 2004 Attorneys for Defendant

-8-

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Certificate of Filing I hereby certify that on June 18, 2004, a copy of the foregoing Defendant's Response To Plaintiff's Motion For Summary Judgment was filed electronically. I understand that notice of

this filing will be sent to all parties by operation of the Court's electronic filing system. through the Court's system. S/DONALD E. KINNER Parties may access this filing