B-168032, APR 14, 1972

B-168032, APR 14, 1972

CONTRACTS - ALLEGED OVERPAYMENT - DISPUTED MEANING OF TERMS DECISION DISALLOWING THE CLAIM OF HILLS TRANSPORTATION COMPANY FOR AN AMOUNT PAID UNDER PROTEST TO THE POSTAL SERVICE AS REPAYMENT OF ALLEGED OVERPAYMENTS UNDER TWO CONTRACTS FOR THE TRANSPORTATION OF LOOSE AND CONTAINERIZED (CONEX) MAIL TO AND FROM BOTH CIVILIAN AND MILITARY CONTRACT SHIPS. THE CONTRACTING PARTIES ARE IN DISPUTE AS TO THE MEANING OF AN AMENDMENT PROVIDING FOR ADDITIONAL PAYMENT TO HILLS FOR HANDLING THE CONEX CONTAINERS. A MERE DISAGREEMENT OF THE PARTIES DOES NOT NECESSARILY RENDER THE CONTRACT AMBIGUOUS. CARTER OIL CO. V MCCASLAND, 190 F.2D 887 (1951). THE INSTANT CASE, SINCE THE PROVISION "TO ADD PAYMENT FOR HANDLING OF FULL CONEX CONTAINERS" IS CLEAR, THE WRITTEN TERMS ARE PRESUMED TO EXPRESS THE INTENTIONS OF THE PARTIES AND THE CONTRACT SHOULD BE ENFORCED WELL ESTABLISHED THAT THE GOVERNMENT HAS THE RIGHT TO RECOVER FUNDS WHICH AS WRITTEN. BRAWLEY V. UNITED STATES, 96 U.S. 168 (1877). FURTHER, IT IS ITS AGENTS HAVE WRONGFULLY, ERRONEOUSLY, OR ILLEGALLY PAID. IN VIEW OF THE FOREGOING, THE COMP. GEN. MUST CONCLUDE THAT AFTER HILLS CEASED TO PERFORM CONEX HANDLING SERVICES IN 1966 THERE WAS NO CONSIDERATION FOR THE PAYMENT OF ANY ADDITIONAL AMOUNTS AND, THEREFORE, NO BASIS EXISTS TO QUESTION THE PRIOR DENIAL OF ITS CLAIM.

TO HELLER, EHRMAN, WHITE & MCAULIFFE:

BY LETTER DATED FEBRUARY 28, 1972, CONGRESSMAN WILLIAM S. MAILLIARD TRANSMITTED A FILE CONCERNING A CLAIM BY YOUR CLIENT, HILLS TRANSPORTATION COMPANY, AGAINST THE UNITED STATES POSTAL SERVICE FOR REFUND OF $28,443.84, WHICH SUM WAS PAID UNDER PROTEST BY HILLS TO THE POSTAL SERVICE AS REPAYMENT OF ALLEGED OVERPAYMENTS UNDER TWO CONTRACTS.

THE RECORD SHOWS THAT THE SUBJECT CONTRACTS WERE AWARDED IN 1952 FOR THE TRANSPORTATION OF BOTH LOOSE AND CONTAINERIZED (CONEX) MAIL TO AND FROM BOTH CIVILIAN AND MILITARY CONTRACT SHIPS. DURING DISCUSSIONS BETWEEN HILLS AND POSTAL OFFICIALS ON FEBRUARY 20, 1972, CONCERNING THE REIMBURSEMENT OF UNPAID MAIL MESSENGER FORKLIFT HANDLING CHARGES, IT WAS PROPOSED THAT HILLS' CONTRACTS BE AMENDED TO INCLUDE CONEX HANDLING ALLOWANCES. BY AMENDMENT DATED MAY 3, 1962, THE CONTRACTS WERE AMENDED TO "ADD PAYMENT FOR HANDLING OF FULL CONEX CONTAINERS AT THE RATE OF 96[ PER CONTAINER." IN 1968 IT WAS DISCOVERED THAT A COMMERCIAL STEVEDORING FIRM HAD ASSUMED CONEX HANDLING OPERATIONS AT THE MILITARY PIERS AND HILLS HAD NOT PERFORMED THIS SERVICE SINCE APRIL 1, 1966, ALTHOUGH IT HAD CONTINUED TO RECEIVE PAYMENT THEREFOR. THE 96 CENTS ALLOWANCE FOR CONEX HANDLING WAS DELETED BY AMENDMENT DATED AUGUST 7, 1968. ALTHOUGH HILLS INITIALLY RESISTED THE POSTAL SERVICE'S DEMANDS FOR REFUND OF THE ALLEGED OVERPAYMENTS, IT FINALLY ACCEDED AND REFUNDED THE SUM OF $28,443.84 UNDER PROTEST.

BY LETTER DATED JULY 1, 1971, YOU REQUESTED THAT THE POSTAL SERVICE RECONSIDER ITS DETERMINATION THAT HILLS WAS OVERPAID AND THAT IT RETURN THE AMOUNT REFUNDED BY HILLS. THE BASIS FOR THIS REQUEST IS YOUR INTERPRETATION OF THE MEANING OF THE AMENDMENT CONCERNING THE ADDITIONAL PAYMENT TO HILLS FOR HANDLING OF CONEX CONTAINERS. YOU CONTEND THAT THE BACKGROUND AND DETAILS OF THE NEGOTIATIONS FOR THIS ALLOWANCE MAKE IT CLEAR THAT IT WAS INTENDED SOLELY TO REIMBURSE HILLS FOR ADDITIONAL COSTS RESULTING FROM DRIVER WAITING TIME INVOLVED IN LOADING AND UNLOADING THE CONEXES AND NOT TO REIMBURSE HILLS FOR ITS DRIVERS PERFORMING SUCH WORK. SINCE THE "DRIVER WAITING TIME" WAS NOT REDUCED BY THE CHANGE IN CONEX HANDLING PROCEDURES, YOU CONTEND THAT HILLS WAS ENTITLED TO THE PAYMENTS MADE.

IN REPLY TO THIS LETTER, THE POSTAL SERVICE STATED THAT THE CONEX HANDLING CHARGE ALLOWANCE WAS TO REIMBURSE HILLS FOR AVERAGED DRIVER COSTS TO "OBTAIN AND OPERATE FORKLIFT EQUIPMENT" AND DID NOT INCLUDE PROVISION FOR WAITING TIME PAYMENTS. THEREFORE, YOUR CLAIM WAS DENIED.

IT IS SETTLED THAT A WRITTEN CONTRACT IS PRESUMED TO EXPRESS THE INTENTION OF THE PARTIES TO IT AND, IF CLEAR ON ITS FACE, IT WILL BE ENFORCED AS WRITTEN. BRAWLEY V. UNITED STATES, 96 U.S. 168 (1877). ENFORCED AS WRITTEN. BARALEY V. UNITED STATES, 96 U.S. 168 (1877). WHILE THIS PRESUMPTION MAY BE REBUTTED BY A SHOWING THAT THE CONTRACT AS WRITTEN DID NOT EXPRESS THE TRUE INTENTION OF THE PARTIES, MACDOUGALD CONSTRUCTION CO. V. UNITED STATES, 122 CT. CL. 210 (1952), A MERE DISAGREEMENT IN REGARD TO THE MEANING OF THE CONTRACT IS NOT NECESSARILY INDICATIVE OF THE PRESENCE OF AN AMBIGUITY, FOR THERE MUST BE GENUINE UNCERTAINTY OF MEANING. CARTER OIL CO. V. MCCASLAND, 190 F.2D 887 (1951). ALSO, IT IS A WELL ESTABLISHED RULE OF CONTRACT LAW THAT WHEN THERE IS A WRITTEN AGREEMENT THAT SPEAKS TO THE POINT IN ISSUE, EXTRANEOUS OR PAROLE EVIDENCE MAY NOT BE USED TO VARY THE CLEAR TERMS OF THE WRITTEN AGREEMENT. CORBIN ON CONTRACTS, SECTION 573.

IN THE INSTANT CASE, WE BELIEVE THE CONTRACTUAL PROVISION TO "ADD PAYMENT FOR HANDLING OF FULL CONEX CONTAINERS" IS CLEAR AND DENOTES SOMETHING FAR DIFFERENT FROM "DRIVER WAITING TIME." APPLYING THE ABOVE PRINCIPLES TO THE CIRCUMSTANCES HERE REQUIRES, IN OUR OPINION, THE CONCLUSION THAT AFTER HILLS CEASED PERFORMANCE OF CONEX HANDLING SERVICES IN 1966 THERE WAS NO CONSIDERATION FOR THE PAYMENT OF ANY ADDITIONAL AMOUNTS. WITHOUT A COMPENSATING BENEFIT TO THE UNITED STATES, ITS AGENTS AND OFFICERS HAVE NO AUTHORITY TO DISPOSE OF MONEY OR PROPERTY OF THE UNITED STATES, TO MODIFY EXISTING CONTRACTS, OR TO SURRENDER OR WAIVE CONTRACT RIGHTS THAT HAVE VESTED IN THE GOVERNMENT. SIMPSON V. UNITED STATES, 172 U.S. 372 (1898); UNITED STATES V. AMERICAN SALES CORP. 27 F.2D 389 (1928), AFFIRMED 32 F.2D 141 (1929), CERTIORARI DENIED 280 U.S. 574 (1929); PACIFIC HARDWARE CO. V. UNITED STATES, 49 CT. CL. 327 (1914); BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 CT. CL. 584 (1934). THEREFORE, ANY PAYMENTS MADE ON OR AFTER APRIL 1, 1966, WERE UNAUTHORIZED.

IT IS WELL ESTABLISHED THAT THE GOVERNMENT HAS THE RIGHT TO RECOVER FUNDS WHICH ITS AGENTS HAVE WRONGFULLY, ERRONEOUSLY, OR ILLEGALLY PAID. THIS RIGHT EXISTS WHETHER SUCH PAYMENTS WERE MADE UNDER MISTAKE OF LAW OR FACT, WHETHER BECAUSE IN EXCESS OF AUTHORITY OR BASED UPON AN ERRONEOUS INTERPRETATION OF A CONTRACT LATER FOUND TO BE INCORRECT. SEE CHORPENNING V. UNITED STATES, 94 U.S. 397, 399 (1876); STEELE V. UNITED STATES, 113 U.S. 128, 134 (1884); UNITED STATES V. WURTS, 303 U.S. 414 (1937); UNITED STATES V. SUTTON CHEMICAL CO., 11 F.2D 24, 26 (1926).

ACCORDINGLY, WE FIND NO BASIS TO QUESTION THE DENIAL OF YOUR CLAIM BY THE POSTAL SERVICE.