21 Cl. Ct. 543

ENGLE INVESTORS, An Oregon Partnership, Plaintiff, v. The UNITED STATES, Defendant.

No. 350-88C.

United States Claims Court.

Nov. 27, 1989.

As Amended Nov. 8, 1990.

Joseph A. Yazbeck, Jr., Portland, Or., for plaintiff.

David Sadoff, Washington, D.C., with who were Asst. Atty. Gen. John R. Bolton, Director David M. Cohen, Asst. Director Helene Goldberg, for defendant. William P. McGinnies, of counsel.

OPINION

LYDON, Senior Judge:

Plaintiff in this contract case, challenges a damages assessment of $583,146 against it by the United States Department of Agriculture, Forest Service (Forest Service) as a result of plaintiff's failure to complete a contract it had with the Forest Service “to cut, remove and pay” for specified quantities of timber located in the Rigdon Ranger District of Willamette National Forest in Oregon within the time period specified in the contract, as extended. Plaintiff’s failure to timely complete this contract is not an issue in this case. What *544is in issue is plaintiff’s contention that defendant failed in its duty to mitigate the damages defendant incurred in entering into a resale contract relative to the quantity of timber that plaintiff had failed “to cut, remove and pay” for in the Rigdon Ranger District.. In response to plaintiff’s complaint, defendant, in its answer, sets forth a counterclaim and a demand for judgment in the amount of $583,146 plus interest.1

Both parties have moved for summary judgment, each asserting that there are no genuine issues as to any material fact, and each asserting entitlement to judgment as a matter of law. Upon consideration of the submissions of the parties and oral argument, the court concludes that both motions for summary judgment must be denied as genuine issues of material fact are in dispute.

Facts

Plaintiff contracted with the Forest Service on April 14, 1983 to cut, remove and pay for specified timber in the Rigdon Ranger District. The Contract, No. 075469, was known as the Jagger Timber Sale Contract (Jagger Sale Contract). This Contract, as extended, was to be completed by plaintiff by June 12, 1986. However, plaintiff failed to complete the contract by June 12, 1986, and its failure to do so has not been shown to be excusable. Accordingly, plaintiff was in default on the Jagger Sale Contract.2 Plaintiff, in its complaint, does not contest the Forest Service’s termination of its right to proceed further with the Jagger Sale Contract because of its failure to cut the designated timber within the sale period specified in the Contract, as extended.3

The total sale volume of timber offered on the Jagger Sale Contract was 13,200 MBF, including per-acre material. This broke down to some 9,900 MBF of net scale timber and 171 acres of per-acre material. The total estimated contract price for this sale was $1,665,526. The downpayment required for this sale was $83,000, which was approximately five percent of the estimated sale price. Plaintiff made this downpayment. As of June 12, 1986, the contract termination date, plaintiff had removed some 2,661 MBF of net scale timber.

Subsequent to June 12, 1986, the Forest Service reappraised, readvertised and resold that portion of the Jagger Sale Contract that plaintiff failed to complete. That resale occurred on March 24, 1987, which was prior to the next operating season following plaintiff’s default of the Jagger Sale Contract. The resale is referred to as the “Jagger Resale Contract,” and is to be distinguished from the “Jagger Sale Contract.” The total volume of timber offered on the Jagger Resale Contract was 6,500 MBF, and 127 acres of per-acre material, for an estimated total of 8,846 MBF. The estimated contract price of the Jagger Resale Contract was $992,038.71. The down-payment required for the Jagger Resale Contract was $150,205.32 which was around fifteen percent of the purchase *545price.4

Following completion of the Jagger Resale Contract (No. 084396), the contracting officer, on May 9, 1988, issued a final decision assessing, pursuant to section C9.4— “Failure to Cut” Provision in the Jagger Resale Contract, damages against plaintiff in the amount of $583,146. This decision set forth “Findings”, one of which read as follows:

4. The [Jagger] sale was resold March 24, 1987 under changed conditions. Special Provisions C.4220 — Downpayment (11/85) and C4.26 — Midpoint Payment (11/85) were included in the resale contract.

The contracting officer enclosed with his decision a “Bill for Collection” demanding payment from plaintiff, as damages, of $583,146 due May 24, 1988, for failure to fully perform the Jagger Sale Contract.5

In addition to the larger downpayment required, the Jagger Resale Contract also required from the purchaser a midpoint payment of at least $273,000 for timber scaled, including required deposits. No such midpoint payment was required in the Jagger Sale Contract. The downpayment deposit was retained until the purchaser cut, removed and paid for twenty-five percent of the contract timber at which time the downpayment was released to the purchaser. The midpoint payment required plaintiff to have paid at least $273,000 for timber scaled, including required deposits by November 30, 1987. To the extent the purchaser paid for timber worth less than $273,000 by the specified date, the purchaser would have to pay an adjusted midpoint payment to make up the difference. The purpose of the higher downpayment and the midpoint payment was to protect the public interest by encouraging the prompt and orderly removal of timber. It was not to increase bidder’s costs. In fact, there was no actual midpoint payment billing on the Jagger Resale Contract.

A Forest Service official, the Assistant Timber Staff and primary contracting officer for the Willamette National Forest, responsible for, inter alia, the administration and monitoring of the Forest’s timber sale program, states in his declaration that the larger downpayment required for the Jagger Resale Contract, as well as the required midpoint payment, “could have an effect on the amount bid” for the Jagger Resale Contract. The Forest Service acknowledged these two items as “changed conditions” in the Jagger Resale Contract relative to the defaulted Jagger Sale Contract, but Forest Service policy, manifested by regulations, issued in November 1985, in effect at the time the Jagger Resale Contract was executed in March 1987 mandated their inclusion in all contracts. However, the Forest Service calculated the cost of these two items to a subsequent purchaser, based on the time value of money, and the amount so determined was deducted from any damages that might be assessed against the prior defaulted purchaser. In assessing damages against plaintiff, a deduction for the $150,205.32 downpayment was calculated based on seven percent annual interest for a period equal to one-half the contract term. Likewise, a deduction for the midpoint payment was figured using one-eighth of the contract term. By these calculations, the Forest Service reduced the damages by $15,344 to take into account any impact the higher downpayment and the midpoint payment requirement might have had in lowering the bid price on the Jagger Resale Contract.

*546In its complaint filed on June 14, 1988, plaintiff avers that defendant failed to properly mitigate the damages it incurred as a result of plaintiffs failure to cut and remove the timber specified in the Jagger Sale Contract by the termination date set forth in the Contract; as extended, in the following particulars: (1) The contract termination date in the Jagger Resale Contract was March 31, 1989. As of the termination date, June 12, 1986, of the Jagger Sale Contract, plaintiff had only cut and removed twenty-seven percent of the timber covered by the Contract (see n. 2, supra ). Yet, plaintiff stresses, the operating seasons for the Jagger Resale Contract were reduced from three operating seasons to two operating seasons. This difference, plaintiff avers, between the Jagger Sale Contract and the Jagger Resale Contract contributed to the lower purchase price on the Jagger Resale Contract;6 (2) “A down-payment of twenty-five percent of the advertised sale volume was required [on the Jagger Resale Contract] as opposed to a downpayment of five percent on the initial sale [the Jagger sale].” The twenty-five percent figure is not supported by the materials before the court. This difference in downpayment requirements constitutes, in plaintiff’s view, a significant and substantial difference between the two contracts such that the purchase price of the Jagger Resale Contract was lowered significantly. Since defendant’s damage assessment is significantly based on the difference between the purchase price of the Jagger Sale Contract and the purchase price of the Jagger Resale Contract, the Forest Service’s action in requiring a larger downpayment for the Jagger Resale Contract supports, in plaintiff’s view, the contention that defendant failed to properly mitigate damages and, thus, waived and/or forfeited any right to recover any damages from plaintiff.7

Discussion

Plaintiff maintains the Forest Service failed to mitigate damages by offering the Jagger Resale Contract under more “onerous” terms than those contained in the original Jagger Sale Contract. These more burdensome terms, plaintiff argues, discouraged bidders from vying for the Jagger Resale Contract and, thus, depressed the purchase price the Forest Service realized on the resale.

Examples of such “onerous” terms, according to the plaintiff, were the “greatly increased” cash downpayment required on the Jagger Resale Contract, the midpoint payment, and a “low” interest deduction to compensate for these “changed conditions” utilized by the Forest Service in its damage calculations. Plaintiff’s expert forester, Lucien B. Alexander (Alexander), contends by affidavit and by declaration that the large cash outlay required of the prospective purchaser as a result of the large downpayment and midpoint payment drove down the resale price below the level the Forest Service otherwise could, and should, have realized. He felt that these changed conditions limited the pool of available potential bidders. Parenthetically, it is interesting to note that twelve bids were received in response to the 1983 sale and twelve bids were received in response to the 1987 sale. Alexander believed the most *547important difference between the original contract and the resale contract was the increased downpayment requirement of the resale contract. Alexander further avers that the seven percent interest deduction calculated by the Forest Service was too low because commercial loans to purchasers were unavailable at such a favorable rate at the time. Alexander maintains that the differing terms of the Contracts — the high downpayment and midpoint payment — offer the only reasonable explanation for the low resale price the Forest Service ultimately received, because prevailing timber bid prices at the time the Forest Service resold the defaulted contract “were generally higher” than those that existed when plaintiff entered the Jagger Sale Contract.

If the contract damage determination terms had remained unchanged, Alexander posits, “it is more likely” that the Forest Service would not have incurred any damages at all and even might have registered a “net gain” on the resale, thereby mitigating any damages flowing from plaintiffs default on the original Jagger Sale Contract. By failing to mitigate these damages, plaintiff asserts, the Forest Service effectively waived or forfeited its right to collect the amount stipulated in its Bill of Collection, and plaintiff, thus, is entitled to summary judgment.

Plaintiff contends the Forest Service had a duty to mitigate the damages it incurred as a result of plaintiffs default of the Jagger Sale Contract, citing Siller Brothers, Inc. v. United States, 228 Ct.Cl. 76, 84, 655 F.2d 1039, 1044 (1981), cert. denied, 456 U.S. 925, 102 S.Ct. 1970, 72 L.Ed.2d 440 (1982). Interestingly, the Court of Claims in the Siller case found that the Forest Service had not failed in its duty to mitigate a resale contract following a default, rejecting the defaulted contractor’s contention that the Forest Service was required, as part of its duty to mitigate, to escalate various prices in its damage calculations. Id. 228 Ct.Cl. at 86-89, 655 F.2d at 1045-47.

That the Forest Service had a duty to mitigate damages is conceded in this case. Indeed, the Forest Service recognized this fact in making adjustments in its damage calculations. In mitigating its damages, plaintiff asserts, the Government may use any right or remedy provided by law or by contract, citing Rumley Shoe Mfg. Co. v. United States, 152 Ct.Cl. 166, 285 F.2d 773 (1961).8 The issue, plaintiff asserts, is whether the Forest Service’s mitigation efforts were reasonable. If not, plaintiff continues, the Forest Service must be held to have waived or forfeited its right to seek the difference between the value of the original Jagger Sale Contract and the value of the Jagger Resale Contract.9

Defendant challenges plaintiff’s two central premises. Defendant questions whether the increased downpayment, which it defends as statutorily mandated, caused the price received on the Jagger Resale Contract to be lower. Defendant also questions the validity of plaintiff’s conclusion that prices which prevailed at the time of the Jagger Resale Contract significantly exceeded those which existed when plaintiff entered into the original Jagger Sale Contract. Instead, defendant claims the price the Forest Service fetched upon resale of the defaulted contract may have *548been affected by plaintiffs own actions. By engaging in a form of “high grading,” defendant maintains, plaintiff removed low-cost “white woods” while performing only twenty-seven percent of the Contract and left behind, after defaulting on the Contract, the high-priced Douglas-fir, a practice the Forest Service alleges may have maximized plaintiffs profits on the work it did perform on the Contract but also may have affected negatively the bidding activity and, therefore, the bid price for the Jagger Resale Contract.

Defendant further asserts that plaintiff failed to show that timber prices which prevailed at the time of resale were actually higher, because plaintiff based its conclusion on timber sales data relating to Bureau of Land Management (BLM) timber sales and not on Forest Service timber sales. Defendant states that, in order to show that a higher market price for timber existed at the time of the resale than that which existed when the defaulted contract was formed, plaintiff should have based its conclusive calculations on the appraisal method utilizing Forest Service sales figures issued by the BLM. Defendant further suggests that Alexander, plaintiffs expert, misrepresented BLM sales data and misstated Forest Service sales data.

Defendant further maintains that plaintiff cannot establish a prima facie case demonstrating the Forest Service’s failure to mitigate damages on the resale, unless plaintiff employs the Forest Service’s method. Defendant claims its actions were reasonable because it used a “contractually agreed upon” method to calculate the damages and reduced plaintiff’s damages by $15,344 accordingly to compensate for any possible negative impact because of changed conditions relating to the down-payment and midpoint payment, which, although not “contractually agreed upon,” defendant avers are statutorily mandated to control speculative bidding on timber sale contracts.10

Plaintiff argues that the buy-out provisions of 16 U.S.C. § 618 (1982 & Supp. V 1987) entitled, “Timber Contract Payment Modification,” do not require the Forest Service to obtain an increased downpayment of at least ten percent on timber resale contracts, as claimed by the Government, but that the Forest Service merely chose to do so. The plaintiff further argues that the Forest Service was not authorized, in any event, to levy a midpoint payment on such contract. A reading of the legislation in question and applicable regulations do not support plaintiff’s generalized attack in this regard. The Buy-Out Act, and regulations implementing the Act, do require the Forest Service to require a higher than before downpayment and midpoint payment in all Forest Service timber contracts entered into after 1985.

Plaintiff correctly points out that the method outlined in clause C9.4 does not grant defendant the contractual right to apply a seven percent interest rate as compensation for the changed conditions, i.e., the increased downpayment and midpoint payments contained in the Jagger Resale Contract’s terms. Plaintiff also correctly notes that regulations authorizing the increased downpayment and midpoint payment resulting in the seven percent interest adjustment did not become effective until *549October 11, 1985. See 36 C.F.R. § 223.49, 50 (1988).

Plaintiff argues that because the clause in the defaulted contract is devoid of any provision for a similar interest adjustment calculation and because the regulations authorizing such a provision post-dated the defaulted contract, the Government is precluded from employing such an interest adjustment figure in calculating damages pursuant to plaintiff’s default on the Jagger Sale Contract. Even if an interest assessment were applicable, plaintiff states, the Forest Service’s seven percent figure is lower than any interest rate at which a prospective purchaser realistically could have obtained a commercial loan to subsidize the Jagger Resale Contract at the time it was entered into. Consequently, plaintiff maintains, defendant’s calculation of the damages, in any event, is of questionable accuracy.

Plaintiff concludes that utilization of the increased downpayment and midpoint payment and application of the low interest rate to compensate for these changed conditions, supports the view that defendant failed to take reasonable steps to mitigate damages flowing from plaintiff’s default on the Jagger Sale Contract. As a result of its failure, plaintiff concludes, the Government forfeited any damages it incurred as a result of plaintiff’s breach of the Jagger Sale Contract.

The court concludes that defendant was required to calculate damages in accord with the provisions (section C9.4) of the defaulted contract. This was what the parties agreed to in the event of contract termination and this is what the parties had a right to expect when the termination occurred. See Everett, supra, 206 Ct.Cl. at 254-56, 512 F.2d at 1088-89. In seeking damages, defendant must rely on the express terms of the terminated contract.

Plaintiff argues that since defendant failed to compute the damages properly, it failed to mitigate damages and, thus, waived or forfeited its right to be awarded any damages. The court does not agree. The court agrees that the Forest Service was under a duty to mitigate damages. This means, in the case at bar, that plaintiff, who breached the contract, is not to be charged with damages which the Forest Service could have avoided with reasonable effort and without undue risk or expense since such damages are not caused by plaintiff’s breach of contract.

Accepting at face value plaintiff’s contention that the Forest Service failed to mitigate damages does not mean in this case that the Forest Service cannot collect any damages.11 See 5 McBride & Wachtel, Government Contracts, § 33.60[6], at 31-81 (1984); Gregory Timber Resources, Inc., 87-3 B.C.A. (GCH) para. 20,086, 101,-681, 101,690 (1987), aff'd, 855 F.2d 841 (Fed.Cir.1988). In Alabama Shirt & Trouser Co. v. United States, 121 Ct.Cl. 313, 332 (1952), the Court of Claims, while finding that the Government failed to mitigate damages resulting from a contractor’s breach of contract, nonetheless allowed the Government to recover reduced damages because of the breach. A similar result is called for under the circumstances of this case. Finally, it is not without significance to remember that plaintiff only performed twenty-seven percent of the Jagger Sale Contract after over three years, with the Contract being terminated for failure to complete it within the time called for by the Contract, as extended. No excuse was offered for this breach. The holding asked by plaintiff, that its entire liability for its breach of contract be expunged, would be, under the circumstances, inequitable. Consolidated Air Borne Sys., Inc. v. United States, 172 Ct.Cl. 588, 601, 348 F.2d 941, 948 (1965), citing United States v. Warsaw Elevator Co., 213 F.2d 517, 519 (2d Cir. 1954).

The court determines that section C9.4 of the Jagger Sale Contract provides the correct damage starting point. Under Section *550C9.4, the current contract value plus certain enumerated costs, e.g., costs of resale and interest — minus the price of the Jagger Resale Contract provide the foundation for a damage computation. The materials before the court do not show a dispute between the parties as to the current contract value figure ($1,389,036) or the cost of resale ($2,400). What is in dispute is the reasonableness of the price of the Jagger Resale Contract ($992,038).

Reasonableness is a question of fact. See generally Astro-Space Labs, Inc. v. United States, 200 Ct.Cl. 282, 308, 470 F.2d 1003, 1017-18 (1972). Both parties provide affidavits and/or declarations that establish quite clearly that there is a dispute about a material issue of fact, i.e., the reasonableness of the resale price. A material fact is one which will make a difference in the result to be reached herein. Curtis v. United States, 144 Ct.Cl. 194, 199, 168 F.Supp. 213, 216 (1958), cert. denied, 361 U.S. 843, 80 S.Ct. 94, 4 L.Ed.2d 81 (1959). Since a genuine issue of material fact exists, summary judgment is inappropriate in this case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Adickes v. Kress, 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). See also Doehler, supra, 149 F.2d at 134-35 (summary judgment not appropriate where price in relet contract is at issue). Generally, where a resale contract contains the same terms as the defaulted contract, the price of the resale contract would be assumed to be reasonable absent any contrary evidence. However, in light of the additional conditions in the resale contract, the court cannot say, without a trial, that these conditions did not affect the price significantly. Id. at 135.

Both parties offer affidavits and/or declarations in support of their summary judgment motions. This “battle of affidavits” highlights the fact that the question of the reasonableness of the price of the Jagger Resale Contract needs the ventilation of a trial. Plaintiffs affiant, Lucien B. Alexander (Alexander), is a consulting forester with a well-known timber consulting firm in the northwest, Mason, Bruce & Girard. Defendant’s affiant, William J. Bramwell (Bramwell), is a primary contracting officer for the Willamette National Forest who has an academic and professional background in timber administration, consultation, sales and related activities.

Alexander, in his affidavit, was of the opinion that the resale purchase price should have been higher because timber prices, on average, rose significantly from June 1986, when the Jagger Sale Contract was terminated, until March 1987, when the Jagger Resale Contract was awarded. Thus, Alexander reasons, since the Jagger Resale Contract price did not reflect this general increase in timber prices, he concludes that the condition in the Jagger Resale Contract, i.e., higher downpayment in the Jagger Resale Contract than was the case in the terminated contract, rendered the resale price unreasonable. In reaching this conclusion, Alexander relied on BLM sales.12

Bramwell challenges Alexander’s use of BLM sales data because he found them not to be comparable to Forest Service sales data. He pointed out that BLM timber was sold on a lump sum basis and Forest Service timber was sold on a volume measurement basis. As a result, Bramwell states, the effect of over-run or under-run in volume estimates can have a marked effect on bidding between these two different pricing methods. Bramwell also felt there were other differences between BLM data and Forest Services data, e.g., scaling *551methods, time of year of sale, duration of sale contract, timber type and quality, etc. Bramwell felt that Alexander should have looked at sales in the Willamette National Forest since the available sales data base for sales in this Forest Service is larger and more representative of sales trends than for the BLM Eugene District Office. Bramwell analyzed the available Forest Service data and found a moderate upward trend in timber sales prices during the period 1983-1987. Bramwell also explored other general indicators of sale value, e.g., “bid premium/’ “bid ratio.” Bramwell’s bottom line was the view that the terminated Jagger Sale sold higher than would be expected whereas the Jagger Resale sold for a price one would expect. Bramwell, finally, noted that the original terminated sale contract had more lower priced wood volume than the Jagger Resale Contract. He felt that in logging the low priced wood, plaintiff maximized his net return for the portion of the sale harvested. However, in the process, he felt plaintiff decreased the bid value of the Jagger Resale Contract.

Bramwell conceded that the conditions in the Jagger Resale Contract, the higher downpayment and midpoint payment requirements, could have served to reduce the purchase price of the Jagger Resale Contract to some degree. Bramwell in his first declaration related how he computed the cost of these conditions for purposes of mitigating the final damage figure to be assessed against plaintiff. Bramwell viewed the cost of these conditions to a purchaser of the Jagger Resale Contract in terms of the time value of money as expressed in interest. In the Jagger Resale Contract, the downpayment was $150,-205.32, as compared with $83,000 on the terminated contract. Bramwell used a seven percent figure for a period equal to one-half the contract term to make a calculation as to the downpayment figure. Similarly, he used a seven percent figure for a period equal to one-eighth of the contract term for the midpoint figure. As a result of these calculations, Bramwell arrived at a figure of $15,344, which figure he used to reduce the damages plaintiff would otherwise have been assessed. As a result, plaintiff was not held accountable for the changed terms of the timber resale because the damages assessed were reduced to compensate for these changed conditions. This reduction process is not, per se, invalid. See Appeal of Atlas Mfg. Co. Inc., ASBCA No. 15177, 71-2 BCA 9026 (1971).13 The interest rate of seven percent, used by Bramwell, was the rate established by the United States Treasury Department at the time of the resale (March 1987), and was published in the Federal Register. Bramwell was of the opinion that the principal differences that impacted on the Jagger Resale price were the timber mix that remained on the areas to be logged, resulting from plaintiff’s prior selective logging practices at the time of termination, market conditions that existed when the 1984 Jagger Sale Contract was bid, and the changes *552in market conditions that existed when the 1987 Jagger Resale Contract was bid.

As indicated above, the disputed issue of genuine and material fact is whether, under all the circumstances, the purchase price of the Jagger Resale Contract was reasonable. This fact, and the various factors and aspects attendant thereto, is contested and hotly disputed in the affidavits and declarations filed by the parties. As is obvious from the above discussion, the matter is clearly not one for summary judgment. It is a matter for trial.

The parties dispute who has the burden of proof relative to the reasonableness of the timber resale contract price. It has been held that the burden of showing that the Forest Service failed to mitigate damages rests initially on plaintiff as the defaulting contractor. This is so when, inter alia, the claim is that the price of the Jagger Resale Contract was unreasonable. See 5 McBride & Wachtel, Government Contracts, § 33.60[3] at 33-70, 33-72; see also Miller v. United States, 106 Ct.Cl. 239, 249 (1946); FESC, supra, 5 Cl.Ct. at 780 (“The burden of proof will shift if the contractor establishes a prima facie case of failure to mitigate.”).14 Plaintiffs position is that since the Government asserted a counterclaim to recover the damages in question, the burden of proof on mitigation of damages must rest with it. Such is not the case. See Miller, supra, 106 Ct.Cl. at 249. See also FESC, supra, where, following default by a contractor of a timber purchase contract, the Government counterclaimed for damages and the court held plaintiff had the burden of proof relative to failure to mitigate.15

Further, plaintiff must also show that it was prejudiced in some way by the presence in the Jagger Resale Contract of the changed conditions, i.e., the higher down-payment requirement and the midpoint payment requirement. See Appeal of Skiatron Electronics & Television Corp., ASBCA No. 9513, 65-2 BCA 5053 (1965); Appeal of Aerospace Support Equipment, Inc., ASBCA No. 13579, 7101 BCA 8904 (1971). See also Doehler, supra.

One final word should be added relative to the efforts of the Forest Service to obtain a resale timber contract as a result of plaintiffs breach of the original timber sale contract. First, the Forest Service is given broad discretion in the reprocurement (resale) process. Astro, supra, 200 Ct.Cl. at 308, 470 F.2d at 1017. However, that discretion must not be abused, id. The test is whether, under all the circumstances, the Forest Service acted reasonably, id. In the case at bar there are a number of disputed facts which impinge on whether or not the Forest Service acted reasonably relative to the purchase price of the Jagger Resale Contract. Thus, it is a trial matter, and not one for summary judgment resolution.

Plaintiff’s basic argument that the court should hold that the Government must forfeit its right to all damages is most unpersuasive on the facts of this case. Generally, courts abhor a forfeiture. See United Buckingham Freight Lines v. Riss and Co., 241 F.Supp. 861, 863 (D.Col.1965); Warner v. United States, 157 Ct.Cl. 1, 5, 301 F.2d 327 (1962). Further, the fair and reasonable approach under the facts of this case, is that plaintiff should be made to pay for those damages that were incurred by *553its breach of contract, and it is acceptable to make adjustments, monetary or otherwise, in order to ensure that plaintiff only pays for those damages and no more. See Ubique Ltd. v. United States, 224 Ct.Cl. 646, 647 (1980).

Conclusion

Based on the above discussion, the court denies the summary judgment motions of both parties since there are genuine issues of material fact in dispute. Oral argument was held in this case on June 20, 1989. The court at the conclusion of oral argument advised the parties that settlement of this case might well be in the best interests of all concerned. To this end, the court advised it would withhold issuance of a decision on the motions for summary judgment for a reasonable period in order for the parties to consider settlement. It appears to the court, unfortunately, that settlement is most improbable. The parties have had ample time to consider and reach a settlement if such were to occur. A trial on damages must be held. To this end, the court directs the parties, (inter alia), to prepare, exchange and file with the court on or before January 12, 1990 pretrial proposed findings of fact and briefs, lists of exhibits to be proffered at trial, and lists of witnesses with a brief statement of their expected testimony and whether they are fact or expert witnesses. The parties are directed to communicate with each other and after discussion of the above matters, the parties are to provide the court with a schedule relative to dates when the above submissions should be filed and when and where trial is to be held. Such a schedule shall be filed with the court within thirty (30) days of the date of this opinion.

Engle Investors v. United States
21 Cl. Ct. 543

Case Details

Name
Engle Investors v. United States
Decision Date
Nov 27, 1989
Citations

21 Cl. Ct. 543

Jurisdiction
United States

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