United States District Court for the District of Columbia
February 18, 2004.
BUILDING SERVICES CO., Plaintiff,
NATIONAL RAILROAD PASSENGER CORPORATION, Defendant; NATIONAL RAILROAD PASSENGER CORPORATION, Counter-Plaintiff, v. BUILDING SERVICES CO., Counter-Defendant
The opinion of the court was delivered by: REGGIE B. WALTON, District Judge
The parties in this matter had entered into an agreement wherein the
Building Services Company ("BSC") contracted with the National Railroad
Passenger Corporation ("Amtrak") to provide cleaning services at Amtrak's
New Carrolton, Maryland station ("Station"). BSC initiated this lawsuit,
claiming, inter alia, that Amtrak breached their contact. This
matter is now before the Court on Amtrak's motion for summary judgment.
For the reasons set forth below, the Court will grant Amtrak's motion.
I. Factual Background
(A) The Contract
In June of 1999, Amtrak issued a Purchase Order to BSC that resulted in
BSC agreeing to provide cleaning services for Amtrak at its New Carrolton
station from July 1, 1999 to June 30, 2001. Statement of Material Facts
as to Which There is No Genuine Issue in Support of Motion of National
Railroad Passenger Association for Summary Judgment ("Amtrak's Stat. of
Facts") ¶ 3; Motion of National Railroad Passenger Association for
Summary Judgment ("Amtrak's Mot."), Exhibit ("Ex.") 1; Statement of
Genuine Material Facts In Dispute ("BSC's Stat. of Disp. Facts") ¶ 1.
The Purchase Order specifically included language indicating that it was
subject to the terms and conditions of an Amtrak form ("Form 69") and
four other documents that were attached to the Purchase Order.*fn1
Amtrak's Mot., Ex. 1. Paragraph 8 of Form 69 provides in pertinent part:
DEFAULT (A) Amtrak may, . . . by
written notice of default to [BSC], terminate the
whole or any part of this Order in any one of the
following circumstances: if [BSC] (1) fails to
make delivery of the Supplies*fn2 within the time
specified herein as "delivery date" or any
extension thereof; or (2) fails to perform any of
the other provisions of this Order, or (3) so
fails to make progress as to endanger performance
of this Order in accordance with its terms. At its
sole option, Amtrak may require a cure of the
failure involved rather than terminating the Order
in whole or in part. If [BSC] does not cure the
failure within the period specified by Amtrak,
then Amtrak shall have the right at that time to
terminate the whole or any part of the Order. (B)
In the event Amtrak terminates this Order in
whole or in part as provided in subsection
8(A) above, Amtrak may procure, upon such terms and
in such manner as Amtrak may deem appropriate,
Supplies similar to those so terminated and [BSC]
shall be liable to Amtrak for any excess costs for
such similar Supplies. . . .*fn3
Amtrak's Stat. of Facts ¶ 5; Amtrak's Mot., Ex. 1. In addition,
a default notice was inserted on the first page of the Purchase Order;
this notice stated:
AMTRAK MAY TERMINATE THIS PURCHASE ORDER FOR
DEFAULT AND/OR REFUSE TO ACCEPT DELIVERED MATERIAL
AND/OR SERVICES WITHOUT ANY FURTHER NOTICE IF
COMPANY FAILS TO MAKE DELIVERY OF THE ORDERED
MATERIAL AND/OR SERVICES WITHIN THE TIME SPECIFIED
IN THE PURCHASE ORDER . . .
Amtrak's Stat. of Facts ¶ 4; Amtrak's Mot., Ex. 1. The next
section of Form 69, Paragraph 9, which is entitled "Termination," permits
the Purchase Order to "be terminated or suspended in whole or in part
from time to time and at any time for the convenience of Amtrak."
Amtrak's Stat. of Facts ¶ 6; Amtrak's Mot., Ex. 1. Finally, Paragraph
19 of Form 69 provides that the Purchase Order "will be interpreted in
accordance with Section 306(d) of the Rail Passenger Service Act (Public
Law 91-518), which requires that all leases, contracts and purchase
orders entered into by [Amtrak] be governed by the laws of the District
of Columbia." Amtrak's Mot., Ex. 1.
The Purchase Order states that the services BSC was to provide for
STATION AND GENERAL SERVICES . . . MONTHLY
CLEANING OF THE NEW CARROLLTON MD. STATION,
WINDOWS, REAR WAITING ROOM, STEPS TO PLATFORM,
ESCALATORS, ELEVATORS, AND THE SURROUNDING
AREAS WHICH MUST BE CLEANED DAILY TO MAINTAIN
AN ODOR [FREE] AREA. WORK SCOPE PER ATTACHMENT "A"
PP 1 THRU 6 DATED 7-1-99 ALREADY IN YOUR
Amtrak's Mot., Ex. 1. Attachment A of the Purchase Order
specifically details the janitorial services to be performed at the
Station, including: (1) daily service of the rest rooms; (2) daily as
well as additional weekly service of waiting rooms, entrances and
corridors; (3) weekly dusting of all surfaces in the ticket office area
as well as daily cleaning of its floors, doors, partitions, and trash
cans; (4) daily cleaning of the elevators, stairs, and loading platform;
(5) daily cleansing and quarterly reconditioning treatment of outside
entrances; (6) monthly cleaning of the windows; (7) quarrying of the tile
floor; and (8) daily removal of the trash. In addition, Attachment A
states that materials necessary to complete these services are to be
furnished by BSC. Finally, Attachment A mandated the hours of the day and
the days of the week when the services would be performed. Amtrak's Mot.,
(B) Plaintiff's Performance Pursuant to the
Jamie Wilson ("Wilson"), Amtrak's Lead Clerk at the Station, was
responsible for ensuring that the New Carrolton station was properly
cleaned and maintained, and therefore "had the opportunity to closely
observe the performance of BSC under the contract on an almost daily
basis." Amtrak's Mot., Wilson Aff. ¶¶ 1-2. Wilson observed that BSC
was not performing its services properly, "leading to unclean and unsafe
conditions at the Station." Id. at ¶ 3. These observations
resulted in Wilson recording her observations and conversations with BSC
employees in a journal after noticing defects in BSC's performance, which
she attached to her
affidavit.*fn5 Id. at ¶ 4. According to her journal,
BSC employees (1) failed to show up on time for shifts and sometimes even
failed to appear for work at all, (2) used Amtrak supplies instead of
providing their own, (3) failed to clean (sweep, mop, etc.) floors of the
Station lobby, hallways, and restrooms, (4) were found sleeping during
their shifts, (5) argued with Amtrak passengers, and (6) impersonated an
Amtrak employee on at least one occasion. Amtrak's Stat. of Facts ¶¶
7-11; Amtrak's Mot., Wilson Aff. ¶¶ 4-5, Ex. A. These observations led
Wilson to conclude that "BSC repeatedly and continuously failed to
adequately perform many of its duties under its cleaning contract with
Amtrak, leading to unclean and unsafe conditions at the Station."
Amtrak's Mot., Wilson Aff. ¶ 3; Amtrak's Stat. of Facts ¶ 7.
Moreover, Amtrak alleges that Wilson informed BSC's employees and its
Chief Operating Officer, Dag Nyanfore ("Nyanfore"), through both oral and
written communications, about the problems she observed on numerous
occasions. Amtrak's Mot, Wilson Aff. ¶¶ 3, 11-12 and Aff. Ex. A, B;
Amtrak's Stat. of Facts ¶ 13. Nonetheless, Wilson failed to notice
any subsequent improvements in BSC's performance even though she was
promised that BSC would remedy the situation. Amtrak's Stat. of Facts
¶ 13; Amtrak's Mot., Wilson Aff. ¶¶ 3, 11 and Aff. Ex. B.
Additionally, Amtrak officials met with Nyanfore on May 25, 2000, to
discuss BSC's performance problems. Amtrak's Stat. of Facts ¶ 14;
Amtrak's Mot, Wilson Aff. ¶ 12. Lastly, Amtrak claims that the
cleanliness of the Station improved significantly once the new cleaning
service assumed responsibility. Amtrak's Mot., Wilson Aff. ¶ 9.
In its defense, BSC asserts that it never received notice of any
concerns about its
performance, and, if it did, the problems were corrected at that
time. BSC's Stat. of Disp. Facts ¶ 13; Memorandum of Points and
Authorities In Support of Plaintiff's Opposition ("BSC's Opp'n.") at
2-3;*fn6 Nyanfore Aff. ¶¶ 5-6, 10-11. In addition, BSC claims that
prior to making its request for an additional payment of $6,000 for the
performance of services rendered in addition to those services
specifically delineated in the Purchase Order, Wilson and another Amtrak
employee, Don Peterson ("Peterson"), praised the performance of its
employees. BSC's Stat. of Disp. Facts ¶ 7; BSC Opp'n at 3, 6;
Nyanfore Aff. ¶¶ 12-13.*fn7 Furthermore, BSC counters Wilson's
assessment of its performance with regards to the cleaning of the
Station's floors, suggesting that "the nature, and quality . . ." of
the floors caused them to "appear" dirty even though they had been
properly cleaned. BSC's Stat. of Disp. Facts ¶ 6; BSC's Opp'n., Ex.
D; Nyanfore Aff. ¶¶ 6-8. Moreover, BSC claims that the complaints
about the floors ceased after they applied a product recommended by a
professional floor consultant. Nyanfore Aff. ¶ 8. And, BSC questions
the validity of the observations contained in Wilson's journal, declaring
them contrary to the sworn statements of Nyanfore. BSC's Opp'n. at 4.
Also, BSC pointed out that although in a November 18, 1999 letter
Nyanfore acknowledged Wilson's expressed disapproval of BSC's services,
it noted that the letter indicated the condition of the floor was the
reason for its appearance. BSC's Opp'n., Ex. D.
The Court notes that BSC has failed to respond to Amtrak's contention
that BSC employees either showed up late for their shifts or failed to
appear at all. Nowhere in BSC's
filings does it address these complaints regarding its employees.
(C) Additional Work Allegedly Performed
In exchange for the services BSC was obligated to perform pursuant to
the Purchase Order, BSC contracted to receive fixed monthly payments of
$4,000. In addition, the Purchase Order provided for supplemental
compensation at the hourly rate of $7.73, with possible maximum
compensation of up to $6,000, for any services "provided by BSC that was
not listed in Attachment `A'. . . ." Amtrak's Mot. at 9, Ex. 1
(Purchase Order at 2); BSC's Stat. of Disp. Facts ¶ 3. However, the
Purchase Order specifically states that such "additional work" must be
both "requested and approved by Amtrak [employee] Ken Wiedel."
In June 2000, BSC submitted an invoice for payment of $6,000 in
addition to the monthly amount it was owed at that time. Amtrak's Stat.
of Facts ¶ 15; Amtrak's Mot, Wilson Aff. Ex. D; BSC's Opp'n. at 4-5.
BSC contends that it was entitled to the extra compensation for
"additional work" requested by Amtrak employee Wilson, whom they allege
represented Ken Wiedel at the New Carrolton station. BSC's Stat. of Disp.
Facts ¶¶ 4-5; Nyanfore Aff. ¶¶ 9, 17. However, Amtrak posits that
Wilson and Wiedel never requested or authorized that any additional work
be performed by BSC. Amtrak's Stat. of Facts ¶ 16; Amtrak's Mot.,
Wilson Aff. ¶ 15, Ex. D. Indeed, Wilson states in her affidavit, "I
never personally requested or authorized BSC to perform such work, and
did not observe BSC performing such work." Amtrak's Mot., Wilson Aff.
¶ 15, Ex. E. Furthermore, Amtrak points out that "BSC never produced
any supporting detail showing the nature of the work, the dates it was
performed, by whom, the number of hours spent, or any other supporting
information." Amtrak's Stat. of Facts ¶ 15; Amtrak's Mot., Wilson
Aff. ¶ 14, Ex. E. Because of these omissions, Amtrak refused to pay
additional $6,000. Id.; BSC's Opp'n., Ex. I.*fn8
(D) Termination of the Purchase Order
The Purchase Order between Amtrak and BSC was not scheduled to expire
until June 30, 2001. Amtrak's Mot. at 2, Ex. 1 (Purchase Order at 2);
Amtrak's Stat. of Facts ¶ 3; BSC's Stat. of Disp. Facts ¶ 1.
Nonetheless, in June of 2000, Amtrak issued a Request for Quotation
("RFQ"), which afforded companies the opportunity to bid "for a firm,
price contract for cleaning services at the Station." Amtrak's Stat. of
Facts ¶ 18; Amtrak's Mot. at 4, Wish Aff. ¶ 4, Ex. A. The "scope
of services" described in the RFQ was identical to services delineated in
Amtrak's Purchase Order with BSC. Amtrak's Stat. of Facts ¶ 19;
Amtrak's Mot., Wish Aff. ¶ 4, Ex. A.
Amtrak received a total of six bids for the cleaning contract,
including a bid from BSC, which had been permitted by Amtrak to re-submit
a bid. Amtrak's Mot., Wish Aff. ¶ 4-5. Young Cleaning Services
("Young") was the lowest bidder at $6,665 per month and consequently was
awarded the contract by Amtrak. On the other hand, BSC's bid was for
$8,569 per month, which was more than double what it had received under
the Purchase Order agreement it had previously entered into with Amtrak.
Amtrak's Stat. of Facts ¶¶ 20-22; Amtrak's Mot., Wish Aff. ¶ 5. In
July of 2000, Amtrak terminated the BSC Purchase Order, in accordance
with the default provision of paragraph 8 of Form 69. Amtrak's Mot. at 4,
Ex. 4. As a result of terminating the BSC Purchase Order, Amtrak paid
Young $2,665 more per month than it would have paid under its Purchase
Order with BSC. Therefore, over the eleven months (August 2000 to June
2001) when BSC would have performed the cleaning services pursuant to
the Purchase Order Amtrak had issued to it, Amtrak incurred
additional expenses of $29,315 over what it otherwise would have paid
BSC. Amtrak's Stat. of Facts ¶ 22; Amtrak's Mot., Wish Aff. ¶ 7.
These additional expenses are the subject of Amtrak's counterclaim.
Amtrak's Mot. at 18-19.
II. Standard of Review for Summary
Summary Judgment is generally appropriate when "the pleadings,
depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as
a matter of law." Fed.R.Civ.P. 56(c). In assessing a summary judgment
motion, the Supreme Court has explained that a trial court must look to
the substantive law of the claims at issue to determine whether a fact is
"material," Anderson v. Liberty Lobby, Inc., 477 U.S. 242
(1986), and must treat a "genuine issue" as "one whose resolution could
establish an element of a claim or defense and, therefore, affect the
outcome of the action." Sanders v. Veneman, 211 F. Supp.2d 10,
14 (D.D.C. 2002) (citing Celotex Corp. v. Catrett,
477 U.S. 317
, 322 (1986); Anderson, 477 U.S. at 248).
While it is understood that when considering a motion for summary
judgment a court must "draw all justifiable inferences in the nonmoving
partys favor and accept the nonmoving party's evidence as true,"
Greene v. Amritsar Auto Servs. Co., 206 F. Supp.2d 4, 7
(D.D.C. 2002) (citing Anderson, 477 U.S. at 255), the
non-moving party must establish more than "[t]he mere existence of a
scintilla of evidence in support of the plaintiff's position,"
Anderson, 477 U.S. at 252. To prevail on a summary judgment
motion, the moving party must demonstrate that the non-moving party
"fail[ed] to make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that party
will bear the burden of proof at trial." Celotex, 477 U.S. at
322. "Even when material facts are in dispute, however, summary
adjudication may be appropriate if, with all factual inferences drawn in
favor of the nonmovant, the movant would nonetheless be entitled to
judgment as a matter of law." Young Dental Mfg. Co. v. O3 Special
Prods., Inc., 112 F.3d 1137, 1141 (Fed. Cir. 1997) (citing
Stark v. Advanced Magnetics, Inc., 29 F.3d 1570, 1572-73 (Fed.
Cir. 1994)). The District of Columbia Circuit has stated that the
non-moving party may not rely solely on mere conclusory allegations.
Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999):
Harding v. Gray, 9 F.3d 150. 154 (D.C. Cir. 1993). Thus, "[i]f
the evidence is merely colorable . . ., or is not significantly
probative . . ., summary judgment may be granted." Anderson,
477 U.S. at 249-50 (citations omitted).
III. Legal Analysis
Amtrak seeks summary judgment based upon its assertion that BSC has not
met its burden to establish by a preponderance of the evidence any of its
three claims breach of contract, promissory estoppel, and fraud.
Additionally, Amtrak believes that it is entitled to summary judgment on
its counterclaim. The Court will address each claim separately, and, for
the reasons set forth below, will grant Amtrak summary judgment on each
of BSC's claims and on its counterclaim.
(A) BSC's Breach of Contract Claim
To prove that Amtrak breached the Purchase Order it issued to BSC, BSC
must show that either Amtrak did not have justification for terminating
the agreement or that Amtrak failed to
perform as required by the agreement.*fn9 See Dist.
Cablevision Ltd. P'ship v. Bassin, 828 A.2d 714, 729 (D.C. 2003)
(citing Fowler v. A & A Co., 262 A.2d 344, 347 (D.C. 1970)
("[t]he hornbook definition of the term `breach of contract' is `an
unjustified failure to perform all or any part of what is promised in a
contract'") (internal quotation marks and citation omitted)). Because
there exists no genuine issues of material fact regarding BSC's
performance pursuant to the Purchase Order, and as BSC has failed to show
either that Amtrak did not have justification to terminate the contract
or that Amtrak failed to perform its obligations under the agreement,
BSC's breach of contract claim cannot survive Amtrak's challenge.
(1) Amtrak Had the Right to Terminate the Contract Because BSC
Defaulted When It Failed to Provide the Services Required by the Purchase
The failure of BSC to fulfill one of its several obligations under the
Purchase Order is sufficient grounds for Amtrak to terminate the
agreement for default pursuant to the Purchase Order's terms and
conditions. Id.; Amtrak's Mot., Ex. 1 (Form 69, paragraph 8).
BSC's failure to satisfy some of the requirements of the Purchase Order
constituted a default. Id. Because "[f]actual disputes that are
irrelevant or unnecessary will not be counted" when addressing a summary
judgment motion, Anderson, 477 U.S. at 248, proof of any
undisputed default eliminates the need to resolve other disputed
transgressions and alone can serve as justification for terminating a
contract. In other words, "where the undisputed facts
demonstrate that one party is entitled to judgment as a matter of law,
summary judgment in favor of that party is entirely appropriate."
Hong v. Children's Mem'l Hosp., 993 F.2d 1257, 1263 (7th Cir.
(citing Collins v. American Optometric Ass'n,
693 F.2d 636, 639 (7th Cir. 1982)).
In this case, Amtrak terminated the Purchase Order due to the following
breaches: (1) failure of BSC employees to timely report to work or not
reporting at all; and (2) failure of BSC to provide adequate cleaning
services as required by the Purchase Order. Amtrak's Stat. of Facts ¶¶
7-9, 17; Amtrak's Mot. at 3-4, and Wilson Aff. at ¶¶ 4-5. The services
BSC was obligated to provide are clearly listed in the parties'
agreement. In addition, the days and times when the cleaning service were
to be performed were also set forth in the agreement. Ms. Wilson
telephoned BSC on numerous occasions to report that its employees had not
reported to work on time or had not reported at all. BSC has neglected to
respond to these alleged reporting deficiencies by its employees in its
opposition. This Court's Local Rule 7(b) states:
Within 11 days of the date of service or at such
other time as the court may direct, an opposing
party shall serve and file a memorandum of points
and authorities in opposition to the motion. If
such a memorandum is not filed within the
prescribed time, the court may treat the motion as
D.D.C. R. 7(b). "It is well understood in this Circuit that when a
plaintiff files an opposition to a dispositive motion and addresses only
certain arguments raised by the defendant, a court may treat those
arguments that the plaintiff failed to address as conceded." Hopkins
v. Women's Div., Gen. Bd. of Global Ministries, 284 F. Supp.2d 15,
25 (D.D.C. 2003) (Walton, J.) (citing FDIC v. Bender,
127 F.3d 58, 67-68 (D.C. Cir. 1997); Stephenson v. Cox, Civil Action No.
GO-1921, 2002 WL 31106569, at *2 (D.D.C. Sept. 23, 2002)) The District of
Columbia Circuit has stated that "the discretion to enforce . . .
[R]ule [7(b)] lies wholly with the district court," Bender, 127
F.3d at 67-68 (citing Twelve John Does v. District of Columbia,
117 F.3d 571, 577 (D.C. Cir. 1997)), and noted that it "ha[s] yet to find
that a district court's enforcement of this rule constituted an abuse of
discretion," id. (citations omitted). Here, because BSC had
opportunity to address the contention that its employees had not
been punctual and sometimes had not reported to work at all, but
nevertheless failed to respond to these allegations, the Court will treat
these claims as conceded. Standing alone, this concession is sufficient
to establish BSC's failure to comply with the contract and Amtrak's right
to terminate it.
Although the parties dispute whether other aspects of BSC's performance
served as additional justifications for terminating the contract, such as
the quality of the cleaning services rendered, these factual disputes are
no longer material or necessary to the resolution of Amtrak's motion. As
the Court in Hong noted, "[a] factual dispute does not preclude
summary judgment unless, of course, the disputed fact is outcome
determinative under the governing law." 993 F.2d at 1263 (citing
Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.), cert.
denied, 464 U.S. 918 (1983)). In Hong, the Seventh Circuit
addressed a situation in which the defendant allegedly issued the
plaintiff seven different notices detailing repeated problems with her
work performance, some of which were in dispute. 993 F.2d at 1263-64.
Affirming the district court's grant of summary judgment for the
defendant, the Court found that "[a] disagreement over the correct
version of events culminating in one of the notices
even if we view the evidence, as we must, in a light most favorable to
the plaintiff, does not qualify as a disputed issue of material fact
concerning the prima facie element of adequate job performance."
Id. The Court went on to note that "[t]he plaintiff does not
attempt to controvert the substance of the six other disciplinary notices
she received . . . rather, she altogether fails to address the bulk of
the [defendant's] evidence." Id. Similarly, BSC's denial of
Amtrak's claim that the floor was not cleaned properly is immaterial in
light of its failure to respond to other deficiencies in its performance,
each which independently permitted Amtrak to terminate the contract. As
such, the Court does not need to
concern itself with the issue of whether the Station's floor was
cleaned daily to find that Amtrak was legally permitted to terminate the
contract based upon the other conceded defaults.
Finally, despite BSC's contention that Amtrak failed to provide notice
of their dissatisfaction prior to the termination of the contract, the
Court notes that such notice was not required by the contract. Indeed,
pursuant to paragraph 8 of Form 69, Amtrak had the option of
allowing BSC a "cure period" to remedy any performance problems.*fn10
Thus, it is not necessary for the Court to determine whether BSC was made
aware of any problems with its performance prior to the termination of
(2) Amtrak Did Not Breach the Contract When It Denied BSC's
Request For Additional Payment of $6,000.
A contractual provision for possible compensation does not render its
denial an automatic breach. See UNUM Life Ins. Co. of America v.
Ward, 526 U.S. 358, 369 (1999) ("failure to comply with conditions
precedent . . . prevents an action by the defaulting party to enforce
the contract") (internal quotation marks and citation omitted). BSC
contends that it is entitled to an additional $6,000 because it performed
requested and authorized services that were not within the scope of the
written contract. BSC's Stat. of Disp. Facts ¶¶ 4-5; Nyanfore Aff.
¶¶ 9, 17. BSC asserts that the additional work requested included
"constant and continuous mopping and cleaning of the floor due to a
leaking roof [and] frequent cleaning of the lobby due to construction
taking place outside. . . ." BSC's Stat. of Disp. Facts ¶ 5.
However, as noted above, mere allegations by a party are insufficient
to defeat a summary judgment motion. Rather, BSC must "support [its]
allegations . . . with facts in the record; mere unsubstantiated
allegation[s]. . . create no `genuine issue of fact' and will not
withstand summary judgment." Harding, 9 F.3d at 154 (citing
Celotex, 477 U.S. at 322-23). BSC has not met its burden here,
having failed to provide any documentation showing that Weidel
or Wilson requested additional services from its employees or that any
additional services provided were outside the scope set forth in
Attachment A of the contract.*fn12 Moreover, Amtrak has provided a sworn
affidavit and exhibits from Wilson in which she denies ever having
requested or authorized BSC's employees to do any additional work.
Amtrak's Mot., Wilson Aff. ¶¶ 14-15, Ex. D, E. With nothing more than
BSC's unsubstantiated allegations to the contrary, this Court must accept
as true the facts as substantiated by Amtrak. As such, the Court finds
that BSC cannot establish its claim that Amtrak breached the contract by
failing to honor BSC's submission for the additional payments.
(B) BSC's Promissory Estoppel Claim
In addition to its claim for breach of contract, BSC seeks recovery
under the doctrine of promissory estoppel. Pursuant District of Columbia
law,*fn13 "[t]o establish a promissory estoppel claim, the plaintif[s]
must show (1) a promise; (2) that the promise reasonably induced reliance
on it; and (3) that the promisee relied on the promise to his or her
detriment." In re U.S. Office
Products Co. Securities Litigation, 251 F. Supp.2d 77,
97 (D.D.C. 2003) (citations omitted) (applying District of Columbia law);
see also Granfield v. Catholic University of America,
530 F.2d 1035, 1042 (D.C. Cir. 1976) (citing Restatement of Contracts, §
90, which provides that "a promise which the promisor should
reasonably expect to induce action or forbearance of a definite and
substantial character on the part of the promisee and which does induce
such action or forbearance is binding if injustice can be avoided only by
enforcement of the promise."); Willoughby v. Potomac Elec. Power
Co., No. 94-1313, 1995 U.S. Dist. LEXIS 19208, at *12 (D.D.C. Dec.
14, 1995). And, "[p]romissory estoppel is recognized in the law of the
District of Columbia as a theory allowing recovery in contract when
there may have been a failure of proof of certain elements necessary to
the formation of an express contract . . . if a refusal to
enforce a promise admittedly made would in the circumstances (usually
reliance) result in injustice." Federal Ins. Co. v. Thomas W. Perry,
Inc., 634 F. Supp. 349, 352-53 (D.D.C. 1986) (emphasis added).
Therefore, District of Columbia law presupposes that an express,
enforceable contract is absent when the doctrine of promissory estoppel
is applied. See Int'l Bus. Mach. Corp. v. Medlantic Healthcare
Group, 708 F. Supp. 417, 424 (D.D.C. 1989) (noting that "courts have
held that an integrated written contract controls as against any and all
prior inconsistent oral agreements or promises; such a contract nullifies
the effect that promissory estoppel might otherwise have.") (citing
Durkee v. Goodyear Tire & Rubber Co., 676 F. Supp. 189, 192
(W.D. Wis. 1987) ("The doctrine of promissory estoppel was adopted
because the requisites of a contract between the parties did not exist.
After all, there would be no need for the doctrine if an action for
breach or specific performance of a contract could be brought. The
rationale for the doctrine simply disappears when the parties finally
enter into a contract.")). This principle is
consistent with the positions set forth in treatises recognized by
the District of Columbia and precedent of other jurisdictions, which have
also concluded that a party cannot assert a claim for promissory estoppel
where there is an enforceable contract. See, e.g., Terry Barr Sales
Agency, Inc. v. All-Lock Co., Inc., 96 F.3d 174, 181 (6th Cir. 1996)
(holding that "where the parties have an enforceable contract and merely
dispute its terms, scope, or effect, one party cannot recover for
promissory estoppel . . ."); Walker v. KFC Corp.,
728 F.2d 1215, 1218 (9th Cir. 1984) (finding that promissory estoppel has been
deemed "inapplicable at law" where the promises alleged by the plaintiff
were "bargained for and supported by consideration"); Constar. Inc.
v. Nat'l Distribution Ctrs., Inc., 101 F. Supp.2d 319, 323 (E.D.
Pa. 2000) ("[p]romissory estoppel is applied to enforce a contract which
is not supported by consideration, in other words, where there is no
binding contract"); 8 Arthur L. Corbin, Corbin on Contracts § 8.11
(1962) ("`Promissory estoppel is not a doctrine to give a party to a
negotiated commercial bargain a second bite at the apple in the event it
fails to provide a breach of contract.' In effect, those decisions hold
that promissory estoppel cannot apply when there is a valid, written
contract."); 2 Ronald A. Anderson on the Uniform Commercial Code §
2-204:24 (3d ed. 1997) ("When consideration under traditional standards
is present, it is unnecessary to apply the concept of promissory
estoppel. The theory of promissory estoppel becomes inapplicable when a
legally sufficient contract exists. Thus, promissory estoppel will not be
applied when there is a binding contract which determines the rights of
BSC claims that Amtrak promised to pay it up to the maximum of $6,000
for the performance of additional work at the Station. Even assuming that
Amtrak requested the performance of this additional work and that BSC is
entitled to the full sum claimed,
compensation for additional work is expressly provided
for in the contract. Thus, in evaluating BSC's promissory estoppel claim,
it is unnecessary for the Court to resolve the dispute between the
parties concerning BSC's entitlement to this monetary benefit because the
parties here had a written contract, undisputedly bargained for and
supported by consideration, which covered the performance of additional
services by BSC not specifically designated in the Purchase Order.*fn14
In addition, BSC alleges that Amtrak promised that the contract would
run for a period of two years, again relying upon an explicit provision
in the Purchase Order. While the contract was scheduled to have a life of
two years at its inception, the terms and conditions of the contract
specifically authorized Amtrak to terminate the Purchase Order prior to
the expiration of the contract period if BSC committed a default.
Amtrak's Mot. Ex. 1 (Purchase Order at 1; Form 69, Paragraph 8).*fn15
Thus, BSC cannot establish that an irrevokable promise was made regarding
the duration of the parties' contract in the face of what is expressly
provided for in the contract.
This case is factually similar to the situation confronted by the
California Supreme Court
in Youngman v. Nevada Irrigation District, 449 P.2d 462
(Cal. 1969). In that case, the plaintiff accused the defendant, his
employer, of failing to keep his promise to award him a merit pay
increase and asserted a claim of promissory estoppel against his
employer. In rejecting this claim, the Youngman Court
[i]t seems clear that under these allegations that
the [defendant]'s promise, . . . that [the
plaintiff] would be afforded a raise in April of
each year, was part of the bargain under which
[the plaintiff] entered the [the defendant]'s
employ. By remaining in his position and
presumably rendering satisfactory service he
performed his part of the bargain and rendered the
consideration called for by the employment
contract. There is no occasion, therefore, to rely
upon the doctrine of promissory estoppel, which is
necessary only to supply consideration for a
promise when no actual consideration was given by
Id. at 468-69. Similarly, had BSC fulfilled its
contractual obligations, it would have been protected from wrongful
termination of the contract pursuant to District of Columbia contract
law; reliance on promissory estoppel would therefore be unnecessary.
"Promissory estoppel is not a doctrine designed to give a party . . .
a second bite at the apple in the event it fails to prove a breach of
contract." All-Tech Telecom, Inc. v. Amway Corp., 174 F.3d 862
869-70 (7th Cir. 1999) (citing Walker, 728 F.2d at 1220). Thus,
with the existence of "an express contract, [that is complete in its
formation], governing the relationship out of which the promise emerged,
there is no gap in the remedial system for promissory estoppel to fill."
Id. at 869. As BSC cannot establish the existence of a promise
made to it by Amtrak independently of those contained in the contract,
see Int'l Bus. Mach. Corp., 708 F. Supp. at 424, summary
judgment on the claim of promissory estoppel must be granted in favor of
(C) BSC's Claim For Fraud
In order to succeed on its claim of fraud, BSC must establish: "1) a
false representation [by Amtrak]; 2) concerning a material fact; 3) made
with knowledge of its falsity; 4) with intent
to deceive; and 5) resulting in detrimental reliance by the
plaintiff." Sabin v. Regardie, Regardie v. Bartow, 770 F. Supp. 5,
8 (D.D.C. 1991) (citing Barlow v. McLeod, 666 F. Supp. 222,
228 (D.D.C. 1986)); Bennett v. Kiggins, 377 A.2d 57, 59 (D.C.
1977). Because BSC cannot establish any of the required elements of
fraud, this Court must grant summary judgment to Amtrak on BSC's fraud
BSC alleges that Amtrak fraudulently "praised the cleaning work [its
employees] were performing. . . ." BSC's Stat. of Disp. Facts ¶ 7.
Specifically, BSC contends that Amtrak fraudulently misrepresented that
BSC's performance was "fine" and that its alleged reliance on those
representations caused it to incur additional costs and forgo other
business opportunities. BSC Opp'n., Ex. F. As proof that Amtrak's alleged
"praise" constituted a false statement, BSC alleges that after Amtrak
terminated the Purchase Order, it retained a majority or all of BSC's
employees at the Station to provide cleaning services. Amended Complaint
("Am. Compl.") ¶¶ 16-17, 20. However, BSC has not submitted
any documentation or other evidence confirming the alleged
retention of its employees by Amtrak, nor has it produced the alleged
praiseworthy comments it received from Amtrak.*fn17 Moreover, not only
does BSC concede in its "Answers to Interrogatories" that Amtrak did not
make any false, fraudulent or misleading oral statements, Amtrak Mot. p.
16, Ex. 3 (BSC Answers to Defendant's Interrogatories No. 9), but BSC
fails to rebut the challenge to the quality of its performance in light
of the documentation submitted by
Amtrak. In addition, BSC admitted in its "Answers to
Interrogatories" to writing and signing at least nine other business
contracts during the time period of June 2000 to May 2001, negating the
assertion that they "refrain[ed] from bidding on any contracts"
during that time. BSC's Opp'n. at 7; Amtrak's Mot. Ex. 3 (BSC's Answers
to Defendant's Interrogatories No. 4); Reply of National Railroad
Passenger Corporation in Support of Its Motion for Summary Judgment
("Amtrak's Reply") pp. 4-5. Because "allegations in the form of
conclusions on the part of the pleader as to the existence of fraud are
insufficient," Bennett, 377 A.2d at 60, the Court must grant
summary judgment in favor of Amtrak on the fraud claim, as the sole basis
for BSC's position is based on mere conclusory allegations.
Furthermore, the evidence produced by Amtrak overwhelmingly disproves
BSC's fraud allegations. Wilson Aff. ¶¶ 4-5, Ex. A. Not only does
Amtrak provide Wilson's detailed observations of BSC's performance, but
it also provides the admission by BSC that it could not identify any
fraudulent statements made by Amtrak. See Amtrak's Mot. p. 17
and Ex. 3 (BSC's Answers to Defendant's Interrogatories No. 9
"BSC cannot . . . describe an oral statement [that was false,
fraudulent, or misleading in nature]").
BSC also maintains that Amtrak fraudulently represented its reasons for
terminating the Purchase Order, allegedly using BSC's default as a
pretext for contracting with another cleaning service at a lower price.
BSC's Stat. of Disp. Facts ¶¶ 14-15; Nyanfore Aff. at ¶ 30. The
Court also finds this position unconvincing, as not only does a
preponderance of the evidence show that Amtrak legitimately found BSC in
default, but "it is undisputed that Amtrak incurred an additional expense
of almost $30,000 in order to replace BSC's services for the period of
August 2000 to June 2001." Amtrak's Mot. at 17, and Wise Aff. ¶ 7.
Although BSC did request an
increase in its monthly payments both prior to and after the RFQ
was issued, Amtrak had no obligation to grant the increase before or
during the rebidding process. See Malone v. Saxony Coop. Apartments,
Inc., 763 A.2d 725, 729 (D.C. 2000) ("[t]he failure to agree on or
even discuss an essential term of the contract may indicate that the
mutual assent required to make or modify a contract is lacking")
(internal quotation marks and citation omitted). Rather, Amtrak could
have chosen to simply deny BSC's May 25, 2000 request for an increase in
compensation and continue paying BSC pursuant to the Purchase Order
agreement. See Murray v. Himelfarb, 154 A.2d 358, 360 (D.C.
1959) (finding that "[i]f the sellers were required to pay for these
[additional] improvements the effect would be to give to the purchaser
something more than he contracted for, that is, he would receive the
property in its improved condition rather than in the condition
contracted for"). However, due to Amtrak's dissatisfaction with BSC's
performance, Amtrak opted to terminate the agreement and replace BSC with
Young to secure better quality cleaning services. On the record before
the Court, proof of pretext has not been demonstrated by BSC.
In sum, with the facts as presented to the Court, "[f]raud could only
be discerned, if at all, by means of impermissible speculation."
Bennett, 377 A.2d at 60. As such, the Court cannot permit BSC's
fraud claim to survive Amtrak's summary judgment motion.
(D) Amtrak's Counterclaim
Amtrak has filed a counterclaim to recover the excess expenses it
incurred after the termination of its Purchase Order with BSC. Having
already concluded that BSC's default was sufficient reason for Amtrak to
terminate the Purchase Order, the sole question remaining for the Court
to answer is whether Amtrak is entitled to recover the excess costs
incurred as a direct
result of BSC's breach. The language of paragraph 8(B) of Form 69
expressly supports Amtrak's counterclaim.
Paragraph 8(B) provides that "[i]n the event Amtrak terminates this
Order [based on BSC's default], Amtrak may procure . . . Supplies
similar to those so terminated and [BSC] shall be liable to Amtrak for
any excess costs for such similar Supplies." Amtrak's Stat. of Facts
¶ 5; Amtrak's Mot., Ex. 1. This clause is consistent with District of
Columbia law, which provides that "a court must apply . . . `the
amount [of damages] necessary to place the non-breaching party in the
same position he or she would have been in had the contract been
performed.'" Mashack v. Superior Mgmt. Servs., Inc.,
806 A.2d 1239, 1241 (D.C. 2002) (citing Rowan Heating-Air Conditioning Sheet
Metal v. Williams, 580 A.2d 583, 585 (D.C. 1990)). And, the
Mashack Court held that "[w]here a party fails to complete a
service which it agreed to perform under a contract, the non-breaching
party is entitled to receive the amount it costs to complete the service,
to the extent that the amount exceeds the original contract price."
Id. at 1242 n.8 (internal quotation marks and citation
omitted). BSC does not dispute that Amtrak's contract with Young
contained the same scope of work as the Purchase Order issued to it by
Amtrak. In addition, BSC does not provide any reason why the Court should
not grant Amtrak's motion for summary judgment on the counterclaim, other
than its belief that it did not default on the contract. Therefore, the
Court must grant Amtrak's motion for summary judgment on its counterclaim
and require BSC to reimburse Amtrak $29,315 for the additional expenses
it incurred as a result of BSC's default.
For the aforementioned reasons, the Court will grant Amtrak's motion
judgment on all three claims asserted in BSC's amended complaint
and also on its counterclaim for the excess costs it incurred because BSC
failed to provide services as required by the Purchase Order.