Riley & Ephriam Construction Co. v. United States

United States Court of Appeals for the Federal Circuit

04-5152

RILEY & EPHRIAM CONSTRUCTION COMPANY, INC.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

Steven L. Smith, Smith, Cooksey & Vickstrom, PLLC, of Charlotte, North
Carolina, argued for plaintiff-appellant.

James D. Colt, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General,
David M. Cohen, Director, and Harold D. Lester, Jr., Assistant Director. Of counsel on
the brief was Bryan O’Boyle, Senior Trial Attorney, Air Force Legal Services Agency, of
Arlington, Virginia.

Appealed from: United States Court of Federal Claims

Judge Lawrence M. Baskir
 United States Court of Appeals for the Federal Circuit

04-5152

RILEY & EPHRIAM CONSTRUCTION COMPANY, INC.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

___________________________

DECIDED: May 18, 2005
__________________________

Before NEWMAN, CLEVENGER, and RADER, Circuit Judges.

CLEVENGER, Circuit Judge.

Riley & Ephriam Construction Company, Inc. ("R&E") appeals the grant of

summary judgment in favor of the United States ("government") by the Court of Federal

Claims based on the determination that R&E's claims were untimely filed under the

Contract Disputes Act ("CDA"). Riley & Ephriam Constr. Co. v. United States, 61 Fed.

Cl. 405 (2004). Because the Court of Federal Claims erred in determining when the

contracting officer's final decision had been received by the contractor, it incorrectly

determined that the statute of limitations barred R&E's claim. We reverse the grant of

summary judgment in favor of the government and hold that R&E's claims were timely

filed.
 I

R&E entered into a contract with the government that could not be completed as

originally agreed due to unforeseen conditions at the jobsite. R&E listed a Post Office

box ("P.O. box") in Stone Mountain, Georgia, as its contact address for matters relating

to this contract. On March 8, 2000, after the parties could not agree to an adjustment of

the contract, R&E applied for an equitable adjustment in the amount of $294,097. While

the contracting officer was reviewing this request, R&E closed its corporate offices and

ran the business from a home. R&E continued to maintain the Stone Mountain P.O.

box.

The equitable adjustment was finally denied on November 27, 2001. On this

date, the contracting officer mailed the final decision in the equitable adjustment claim

via certified letter addressed to R&E's P.O. box and faxed a copy of the final decision to

the fax number on file for R&E's attorney. R&E's attorney claims to have never received

this fax and the government is unable to produce a fax transmittal sheet. The certified

letter arrived at the Post Office on November 30, 2001, at which time a postal employee

placed a notice in R&E's box that the letter could be picked up at the counter. The Post

Office placed a second notice in the P.O. box on December 19, 2001. R&E did not pick

up the letter and on December 29, 2001, the Post Office returned the certified letter

unsigned to the contracting officer. Upon receipt of the unclaimed certified letter and

the unexecuted return receipt form, the government was on notice that no authorized

person had received the certified mail.

In January of 2002, the contracting officer called the attorney to notify him that

the letter was returned and asked if the attorney would accept another copy of the final

04-5152 2
decision on behalf of R&E. On January 30, 2002, the contracting officer faxed the

attorney a message that the letter had been resent to the firm's address. Less than one

year later, on January 24, 2003, R&E filed suit in the Court of Federal Claims for

$306,039.33 in damages resulting from the additional work performed on the contract.

Before the Court of Federal Claims, the government moved for summary

judgment based on the statute of limitations time bar in the CDA that requires suit to be

filed within twelve months of the contractor's actual receipt of the contracting officer's

final decision. 41 U.S.C. § 609(a)(3) (2000). The Court of Federal Claims found that

R&E had received the final decision because both the fax sent on November 27, 2001,

and the certified letter sent on the same date were deemed actually received by the

contractor. Riley & Ephriam, 61 Fed. Cl. at 411. Because R&E filed suit on January 24,

2003, the Court of Federal Claims found that the twelve-month statute of limitations

barred the claim and granted the government's motion for summary judgment. Id. R&E

now appeals the decision of the Court of Federal Claims. We have jurisdiction over an

appeal from a final decision of the Court of Federal Claims pursuant to 28 U.S.C.

§ 1295 (2000).

II

This court reviews the grant of summary judgment de novo. Insituform Techs.,

Inc. v. CAT Contracting, Inc., 385 F.3d 1360, 1377 (Fed. Cir. 2004). Summary

judgment is appropriate when the moving party is entitled to judgment as a matter of law

and no disputes over material facts remain. Fed. Cl. R. 56(c). The moving party bears

the burden of demonstrating the absence of a genuine issue of material fact. Celotex

04-5152 3
Corp. v. Catrett, 477 U.S. 317, 322-25 (1986). All justifiable inferences should be drawn

in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

III

The burden is on the government to prove the earlier date of receipt. See, e.g.,

Pub. Serv. Cellular, Inc., ASBCA No. 52489, 00-1 BCA ¶ 30,832 (Mar. 2, 2000). The

CDA states that:

a contractor may bring an action directly on the claim in the United States
Court of Federal Claims . . . . [This] action . . . shall be filed within twelve
months from the date of the receipt by the contractor of the decision of the
contracting officer concerning the claim, and shall proceed de novo in
accordance with the rules of the appropriate court.

41 U.S.C. § 609(a)(1), (3) (2000). The CDA requires that "[t]he contracting officer shall

issue his decisions in writing, and shall mail or otherwise furnish a copy of the decision

to the contractor." § 605(a). The implementing regulations further require that the

decision is to be provided to the contractor via "certified mail, return receipt requested,

or by any other method that provides evidence of receipt." 48 C.F.R. § 33.211(b) (2004)

(emphasis added).

The Federal Circuit has interpreted receipt by the contractor to mean "actual

physical receipt of that decision by the contractor [or his representative]." Borough of

Alpine v. United States, 923 F.2d 170, 172 (Fed. Cir. 1991) (quoting Pathman Constr. v.

United States, 817 F.2d 1573, 1577 (Fed. Cir. 1987)). "[O]bjective indicia of receipt by

the contractor" must be shown to establish the date of proper delivery of the decision by

the contracting officer. See Borough of Alpine, 923 F.2d at 172. This court has found

that "[b]y linking the limitations period to receipt by the contractor, the CDA eliminates

disputes about the time of actual notice, fault and misaddressing a letter, or the internal

mail procedures of various contractors." Id. at 172.

04-5152 4
 In this case, the government has failed to produce the "evidence of receipt" by

the contractor that is required by the CDA implementing regulations. The fax of

November 27, 2001, and the letter received at the Stone Mountain Post Office on

November 30, 2001, will be addressed in turn.

A

Although some courts have held that a fax confirmation sheet produces a

rebuttable presumption of receipt, see Stevens Shipping & Terminal Co. v. M/V Japan

Rainbow II, 334 F.3d 439, 444 (5th Cir. 2003), we need not address whether a

confirmation sheet is "evidence of receipt" under the CDA because the government

cannot produce a fax confirmation sheet for the November 27, 2001, fax to R&E's

attorney. The government produced instead a fax cover sheet, phone records

indicating a 2.6-minute call to the firm fax line and a statement from the contracting

officer that the machine indicated electronically that the transmission was a success.

The Court of Federal Claims found that "the evidence is overwhelming-and undisputed-

that a fax was sent and received in [the] law office on that day." Riley & Ephriam,

61 Fed. Cl. at 409. We disagree.

R&E's attorney disputes receipt of the fax. The firm also contends that the fax

number was changed when the firm relocated. Moreover, we cannot infer receipt from

evidence of transmission. Proof of message exit from a transmitting machine cannot

serve as a proxy for proof of actual receipt of the sent message by a remote receiving

terminal. Simply put, the evidence offered by the government is not the type of

"objective indicia of receipt" that the CDA requires to begin the limitations period. The

fax cover sheet is only evidence that the fax was prepared. The phone records and

04-5152 5
contracting officer's statement indicate a fax was transmitted but do not evidence receipt

of the fax by the contractor's attorney. The Boards of Contract Appeal have similarly

found that a fax transmission sheet is insufficient to show receipt by the contractor

stating "[w]e have held that a 'successful' transmission report for a fax transmission was

not reliable evidence of receipt of the final decision where the Government did not

otherwise confirm receipt." Pub. Serv. Cellular, Inc., ASBCA No. 52,489, 00-1 BCA

¶ 30,832. Fax receipt was usually confirmed in these cases by calling the intended

recipient of the decision. See, e.g., Tyger Constr. Co., ASBCA Nos. 36,100, 36,101,

88-3 BCA ¶ 21,149 (Aug. 25, 1988). The Boards of Contract Appeal have also been

reluctant to "make the quantum leap and infer from the Government's transmission

report's statement 'Transmission OK' that the final decision was received by [the

contractor]." Pub. Serv., ASBCA No. 52,489. We correspondingly find that receipt by

the contractor cannot be inferred from the contracting officer's statement that the

machine indicated a successful transmission. In essence, the government has not

offered any evidence that the fax was actually received by the contractor's attorney.

Therefore the Court of Federal Claims erroneously measured the statute of limitations

from the date of the fax transmission.

We note the sound judgment reflected in the decisions of the Boards of Contract

Appeal that have recognized the ease and simplicity with which the government can

gain confidence that a fax transmission has been actually received by the contractor.

All the government has to do is make a simple telephone call to the contractor or its

authorized representative to affirm actual receipt of the fax. This simple step would give

the government the assurance of actual receipt that the regulation requires it to have.

04-5152 6
Indeed, the regulation's preferred method of transmission by certified mail return receipt

has the built-in confirmation of receipt that a simple telephone call after a fax

transmission would supply.

B

In the alternative, the Court of Federal Claims traced the start of the statute of

limitations to the date the certified letter was received at the Stone Mountain Post

Office. The government contends that R&E received the certified letter on the date that

it was processed at the postal facility and a notice that the letter could be picked up at

the counter was placed in R&E's P.O. box. The government asserts that "receipt

occurred when the package verifiably arrived at the address R&E had chosen and was

being held for their acceptance." As with the fax transmission, we hold that the

government has not shown objective indicia of receipt of the certified letter.

The contracting officer is obliged by 48 C.F.R. § 33.211(b) to send the final

decision via "certified mail, return receipt requested, or by any other method that

provides evidence of receipt." The certified mail receipt, Post Office form 3811, the

Domestic Return Receipt, specifically requires the receiving party to print its name, sign

the form upon receipt, and note the date of delivery. In this case, the Post Office did not

complete any portion of the certified mail receipt nor was the letter ever released from

the custody of postal employees. Instead, the Post Office returned the entire letter to

the contractor marked as undeliverable, unaccepted and unsigned by R&E, on

December 29, 2001.

Nonetheless, the Court of Federal Claims found that "[p]laintiff's officers implicitly

consented to allow Post Office employees to handle and accept mail on behalf of

04-5152 7
Plaintiff." Riley & Ephriam, 61 Fed. Cl. at 410. Although the Federal Circuit has held

that receipt by a contractor includes receipt by the contractor's representative, see

Borough of Alpine, 923 F.2d at 172-73, there is no evidence that R&E consented to

Post Office receipt of its certified mail.

The government attempts to analogize R&E's box rental to that of a customer of

a commercial mail handler or private mailbox service that has the authority to accept

mail for its customers. A private mail handler of this type was at issue in Policy Analysis

Co. v. United States, 50 Fed. Cl. 626, 628 (2001). In Policy Analysis, the boxholder had

an explicit contract with the commercial mail box company that stated: "[a]gent will place

mail received on behalf of renter in the box each weekday that mail is received from the

U.S. Postal Service." Policy Analysis, 50 Fed. Cl. at 628. The clerk in Policy Analysis

received and signed for the certified letter at issue in the case and returned the receipt

to the sender. In essence, the renter of the box deputized the clerk at the commercial

mail center to receive mail on its behalf. There is no such relationship here between the

Post Office and R&E. R&E's box was simply real estate—a place for its mail to be

deposited.

In light of the above, the case law relied on by the government, Borough of

Alpine and Policy Analysis, does not dictate finding the letter was received by the

contractor when it was in possession of the Stone Mountain Post Office. The Post

Office was not an "agent" for R&E, R&E never authorized the Post Office to sign for its

mail, and further, the letter was not signed on the return receipt by a postal employee to

indicate acceptance. The letter was simply returned undelivered to the contracting

04-5152 8
officer. Therefore, we find that the government has not shown objective evidence of

receipt by the contractor of the November 27, 2001, certified letter.

IV

Neither the fax communication nor the certified letter was received by the

contractor as required under the CDA in order to begin the statute of limitations period.

It is undisputed that R&E did receive the final decision of the contracting officer through

its attorney on January 30, 2002, when the return of the undelivered certified letter put

the government on notice that its first delivery attempt had legally failed and prompted

the government to make a lawful delivery of the contracting officer's final decision.

Because suit was filed on January 24, 2003, the Court of Federal Claims erred when it

granted summary judgment in favor of the government based on the erroneous finding

that R&E's claims were untimely filed. Accordingly, we reverse and remand for

adjudication on the merits.

REVERSE AND REMAND

04-5152 9