             In the United States Court of Federal Claims
                                    No. 17-422
                            (Filed: February 19, 2020)
______________________________________________________________________________

COASTAL PARK LLC and
MEYER LANDAU                                                                         Plaintiffs,

v.

THE UNITED STATES OF AMERICA                                      Defendant.
______________________________________________________________________________

       Alexander Novak, Novak Juhase & Stern LLP, Cedarhurst, NY, for the Plaintiffs.

        Stephen C. Tosini, U.S. Department of Justice, Civil Division, Commercial Litigation
Branch, Joseph H. Hunt, Assistant Attorney General, Robert E. Kirshman, Jr., U.S. Department
of Justice, Director, Civil Division, Deborah A. Bynum, U.S. Department of Justice, Assistant
Director, Civil Division, Washington D.C., for Defendant.

        Keywords: RCFC Rule 56, summary judgment, contract, breach of contract, anticipatory
repudiation, time is of the essence, default, General Services Administration, Coastal Park LLC
v. United States, 143 Fed. Cl. 289, 297 (2019).

                          MEMORANDUM OPINION AND ORDER

TAPP, Judge.

        This case is submitted to the Court on the parties’ cross-motions for summary judgment.
Plaintiffs Meyer Landau and Coastal Park, LLC (collectively “Coastal Park” or “Coastal”) filed
their Motion on December 10, 2019. (Pl. Mot. for Summ. J., ECF No. 33 (“Pl. Mot.”)). The
United States filed its Response and Cross-Motion on January 7, 2020. (Def. Cross-Mot. for
Summ. J., ECF No. 36 (“Def. Mot.”)). On January 23, 2020, Coastal filed its Reply and
Response. (Pl. Resp., ECF No. 42). The United States filed its reply on February 5, 2020. (Def.
Reply, ECF No. 45).

        Plaintiffs brought this action to resolve a contractual dispute regarding the sale of Coast
Guard property. The Court previously dismissed three counts of Coastal’s Amended Complaint
“to the extent those Counts assert a claim for damages that exceeds [$310,000].” Coastal Park
LLC v. United States, 143 Fed. Cl. 289, 297 (2019). In moving for summary judgment, Coastal
now seeks a return of its $310,000 deposit, while the United States seeks to retain the same as
damages for breach of the sale contract.
       The matter is now fully briefed and ripe for decision. For the reasons set forth below, the
Court GRANTS summary judgment in favor of the United States and DENIES Plaintiffs’
motion.

                                           I.    Background

        The background of this dispute is succinctly summarized below, but additional material
facts will be set forth in the following analysis.

        a. The Invitation for Bids

        Opening September 8, 2016, the General Services Administration (“GSA”) issued an
Invitation for Bids for the sale of a Coast Guard housing complex in Elizabeth City, North
Carolina. (Def. Mot. to Dis. Appx. at 1–36, ECF 10-1 (“IFB”)). The 32.42-acre housing complex
included 72 three- and four-bedroom housing units, basketball and tennis courts, a children’s
playground, and a large gazebo. (Id.).

        Pursuant to the IFB, Coastal was required to make an initial deposit of $100,000 and,
within ten days of acceptance, plus-up the total “Earnest Money” deposit to ten percent
($310,000) of the purchase price. (Id. at Appx15, Appx19). The IFB set the closing date forty-
five days after acceptance of the bid—October 23, 2016. (Id. at Appx13). The balance of the
purchase price ($2,790,000) was due in cash on the closing date. (Id.).

         The GSA “reserve[d] the right to extend the closing date for a reasonable amount of
time.” (Id.). Extensions were to be granted solely at the GSA’s discretion. (See id. (“The
Government reserves the right to refuse [Coastal Park’s] request for extension of closing.”)). All
extensions were required to be approved by the GSA in writing. (Id. at Appx13). In exercising its
option to grant an extension, the GSA was permitted to impose additional terms and conditions.
(Id. at Appx13–14). Default or failure by Coastal Park to consummate the sale triggered the
GSA’s right to retain all deposits as damages for breach of contract. (Id. at Appx11–12).

        b. Coastal Park’s Performance Under the Contract

       On September 8, 2016, the GSA accepted Coastal Park’s $3,100,000 1 bid for the Coast
Guard property. (IFB at Appx1–36). Coastal made deposits of both the initial $100,000 and
$210,000 to bring its Earnest Money balance to $310,000. (Pl. Mot. Ex. 11, ECF No. 33-11). On
October 8, 2016, Hurricane Matthew made landfall near North Carolina. (Am. Compl. at ¶¶ 10–
11, ECF No. 7; Def. Mot. at 2). Due to concerns arising from Hurricane Matthew’s landfall,
Coastal requested—and GSA granted—an extension of the closing date from October 23 to
October 30, 2016. (Am. Compl. at ¶ 13; Pl. Mot. Ex. 8, ECF No. 33-8). At that time, the GSA
offered to extend the closing to November 14, 2016 provided Coastal deposited an additional

1
 Coastal submitted a bid of $3,100,000.01 which was accepted by GSA at $3,100,000. (IFB at Appx32, Appx34).
No explanation has been provided for this discrepancy.


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$310,000 towards the purchase price. (Pl. Mot. Ex. 8). At Coastal’s request, due to further delays
associated with Hurricane Matthew, GSA extended the closing deadline an additional day to
Monday, October 31, 2016. (Am. Compl. at ¶ 14; Pl. Mot. Ex. 11, ECF No. 33-11).

        On October 31, the GSA granted another extension at Coastal’s request until November
7, 2016 to allow Coastal to inspect the property for hurricane damage. (Am. Compl. at ¶ 15; Pl.
Mot. Ex. 9, ECF No. 33-9). The purpose of the extension was to allow Coastal to “monetize” any
damage it contended was attributable to the hurricane. (Pl. Mot. Ex. 16, ECF No. 33-16). On
November 2, 2016, Coastal hired Lookout Inspections and Albemarle Home Inspections to
assess any damage caused by Hurricane Matthew. (Am. Compl. at ¶ 17). Coastal forwarded
those inspection reports to the GSA on November 6, 2016. (Id.). The reports declined to
specifically attribute any damage to the hurricane or “monetize” damage that allegedly occurred
after acceptance of the bid. (See Pl. Mot. Ex. 10 at p. 17 (“Condition prior to [Nov. 3]
unknown”), p. 20 (“determining when the damage occurred or the extent of the damage is
beyond the scope of the inspection”)).

        On November 7, the closing date, the GSA demanded full payment of the balance owed
($2,790,000) by 11:00 AM EST on November 9, 2016. (Am. Compl. at ¶ 18). GSA warned
Coastal that absent full payment, Coastal would be in default and thereby forfeit $310,000 in
Earnest Money deposited to date. (Am. Compl. at ¶ 18; Pl. Mot Ex. 12, ECF No. 33-12). On
November 8 Coastal responded, through counsel, rejecting the GSA’s November 7 notice to
cure. (Pl. Mot. Ex. 16, ECF No. 33-16). Coastal did not tender full payment and on November
10, 2016, the GSA declared that Coastal was in breach, the contract was voided, and its deposit
forfeited. (Am. Compl. at ¶ 19; Pl. Mot. Ex. 11). On December 15, 2016, the GSA sold the
property to another bidder. (Am. Compl. at ¶ 36).

        On March 24, 2017, Coastal and Landau filed suit in this Court seeking, inter alia, return
of the $310,000 down payment. (Compl., ECF No. 1).

                                  II.   Standard of Review

       Under Rule 56 of the Rules of the United States Court of Federal Claims (RCFC),
summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” RCFC 56(a). A “genuine
dispute” exists where a reasonable factfinder “could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Material facts” are those which
might significantly alter the outcome of the case; factual disputes which are not outcome-
determinative will not preclude summary judgment. Id. The moving party bears the initial burden
of proof, but this burden may be discharged by showing the absence of evidence supporting the
opposing party’s claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

        In determining whether summary judgment is appropriate, the court should not weigh the
credibility of the evidence, but simply “determine whether there is a genuine issue for trial.”
Anderson, 477 U.S. at 249. When both parties move for summary judgment, “the court must

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evaluate each party's motion on its own merits, taking care in each instance to draw all
reasonable inferences against the party whose motion is under consideration.” Mingus
Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987). “The fact that both
parties have moved for summary judgment does not mean that the court must grant judgment as
a matter of law for one side or the other.” Id. “To the extent there is a genuine issue of material
fact, both motions must be denied.” Marriott Int'l Resorts, L.P. v. United States, 586 F.3d 962,
969 (Fed. Cir. 2009).

        Contract interpretation “begin[s] with the plain language” of the agreement. McAbee
Const. Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir. 1996). “Where contract provisions are
clear and unambiguous, they must be given their plain and ordinary meaning.” Alaska Lumber &
Pulp Co. v. Madigan, 2 F.3d 389, 392 (Fed. Cir. 1993).

                                        III.   Analysis

       The parties have filed cross-motions for summary judgment on the sole issue of whether
the United States was entitled to retain Coastal’s $310,000 deposit. The IFB makes clear that the
United States was entitled to retain Coastal’s deposit if Coastal defaulted or otherwise failed to
consummate the sale on the closing date. (IFB at Appx11–12). At the heart of this issue is
whether Coastal Park defaulted by failing to tender payment in full by November 9, or the
United States defaulted by cancelling the contract on November 10.

         Coastal argues that the United States repudiated the contract on November 10, 2016 by
declaring Coastal to be in default and cancelling the contract. (Pl. Mot. at 4, 7, 8). Coastal
submits that, because the closing date was set for November 7, any declaration of default prior to
12:00 AM on November 8 was premature. (See id. at 7). Coastal contends it was therefore
entitled to reject this declaration of default as void. (Id. at 8). Consequently, the United States’
demand that Coastal tender payment in full by 11:00 AM on November 9 was also invalid and
thus its November 10 default declaration was a breach of contract. (Id.).

        Further, Coastal argues that even if it were unable to close on November 7, the contract
provided for a daily penalty in liquidated damages. (Id. at 9). Therefore, the United States’
remedy for Coastal’s failure to close on November 7 was imposition of this daily penalty, rather
than retention of the deposit. (Id.).

        The United States counters that Coastal had demonstrated inability to obtain financing
within the contractual deadline and demanded an unsupported reduction to its bid price, conduct
which caused delays ultimately amounting to breach of the contractual closing deadlines. (Def.
Mot. at 10). Consequently, retention of the deposit and resale of the property were reasonable
steps to mitigate damages caused by Coastal’s default. (Id. at 14). In short, the United States
argues that Coastal’s failure to tender payment in full by 11:00 AM on November 9 amounted to
a default triggering GSA’s right to terminate the contract and retain the deposit.




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       a. Failure to tender payment on November 9, 2016 was a breach of the contract
          placing Coastal in default.

        “Time is of the essence in any contract containing fixed dates for performance.” DeVito
v. United States, 188 Ct. Cl. 979, 991 (1969). When a contract contains fixed dates for
performance, failure to perform within those deadlines is a condition of default. Id.; see also
Pinewood Realty Ltd. Partnership v. United States, 223 Ct. Cl. 98, 103 (1980). When a
contractual deadline elapses without performance, the party awaiting performance must either
declare default within a reasonable time or issue a cure notice “setting as reasonable but specific
time for performance on pain of default termination.” DeVito, 188 Ct. Cl. at 991–92.

      Under the General Terms of Sale, tender of the full purchase price on the closing date—
October 23, 2016—was required to consummate the sale:

       15. TENDER OF PAYMENT AND DELIVERY OF INSTRUMENT OF
       CONVEYANCE

       The closing date of the sale (the “Closing Date”) will be set by the Government
       and will be forty-five (45) calendar days after the acceptance of the Bid.

       ...

       On the closing date, the Purchaser shall tender to the Government (or to the Escrow
       Holder) the balance of the Purchase Price in the form of a cashier’s check, certified
       check, or electronic wire transfer. Upon confirmation that Purchaser’s wire
       transferred funds have been received by the Government or that Purchaser’s funds
       by check have been confirmed to the satisfaction of the Government, the
       Government shall deliver to the Purchaser the instrument, or instruments, of
       conveyance.

(IFB at Appx13). The GSA reserved its rights both “to extend the closing date for a reasonable
amount of time” and to “refuse a Purchaser’s request for extension of closing.” (Id.). The GSA
also reserved the right to “impose additional terms and conditions to grant an extension[,]” such
as setting a specific time for payment on the closing date. (Id. at Appx14).

        The GSA wielded both of these rights in its attempts to consummate the sale, exercising
the former in granting three extensions at the request of Coastal Park for specifically identified
reasons. (Pl. Mot. Ex. 11). The fourth extension was granted not pursuant to a request, but upon
written notice to Coastal that the GSA had not received the balance of the purchase price. (Pl.
Mot. Ex. 12). In this notice issued on November 7, 2016, the third-modified closing date, the
GSA warned that the remaining balance must be paid by November 9, 2016 at 11:00 AM,
“otherwise a finding of default of [sic] the contract will be determined.” (Id.).

        Rather than attempt to comply with the conditions of this forth extension, Coastal
“rejected” the United States’ final attempt to accept performance under the contract. (Pl. Mot.

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Ex. 16, ECF No. 33-16). Consequently, the GSA then exercised its right to deny further
extensions, and on November 10, 2016, notified Coastal it had “failed to consummate the
transaction” and was “in default” regarding its performance obligations. (Pl. Mot. Ex. 11 at 2).

        Payment was due on the “Closing Date,” and although this date was modified several
times, failure to tender payment in full amounted to a default by Coastal Park. Because the GSA
was contractually entitled to payment in full on the closing date, its November 7, 2016 notice of
extension and demand for payment in full did not constitute repudiation. The final extension
gave Coastal until 11:00 AM on November 9, 2016 to tender payment. When it did not comply,
the GSA was entitled to declare Coastal in default and pursue contractual remedies.

       b. Coastal’s default triggered the United States’ right to choose a contractual remedy
          to mitigate damages, including retention of Earnest Money.

       In the event of default, the United States is required to take “reasonable efforts” to
mitigate its damages. Robinson v. United States, 305 F.3d 1330, 1334 (Fed. Cir. 2002).
“[R]elative costs in time and money are primary factors to consider in assessing reasonableness.”
Id. Under the General Terms of Sale, the GSA could retain Coastal’s Earnest Money deposits to
mitigate damages in four circumstances:

       9. REVOCATION OF BID AND DEFAULT

       …

       (1) revocation of a bid after the conclusion of the bid opening, but prior to
       acceptance of the high bid by the Government, or (2) in the event of revocation of
       a bid after notice of acceptance, or (3) in the event of any default by the Purchaser
       in the performance of the contract of sale created by such acceptance, or (4) in the
       event of failure by the Purchaser to consummate the transaction, the
       Purchaser agrees that any Earnest Money and all deposits paid to the
       Government in any acceptable form, including credit card, together with any
       payments subsequently made on account, are subject to forfeit by the Purchaser
       to the Government at the option of the Government as damages for breach of
       contract, in which event the Purchaser shall be relieved from further liability.

(IFB at Appx11–12) (emphasis added). Granting an extension to delay the closing also triggered
several contractual rights and privileges under Paragraph 16:

       16. DELAYED CLOSING

       [I]f the Government grants an extension, the Purchaser may be required to pay
       either: (i) a liquidated damages assessment of $1,000.00 per day; or (ii) interest on
       the outstanding balance of the Purchase Price, whichever is greater.

       …

                                                6
       The Government may impose additional terms and conditions to grant an extension.

(Id. at Appx13) (emphasis added).

        “We must interpret the contract in a manner that gives meaning to all of its provisions
and makes sense.” McAbee Const. Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir. 1996)
(citing Hughes Communications Galaxy, Inc. v. United States, 998 F.2d 953, 958
(Fed.Cir.1993)). A harmonious reading of the permissive language in these provisions provides
the GSA with a choice of remedies if Coastal failed to consummate the sale by November 9,
2016, the final closing date. Under Paragraph 16, the GSA had the option to impose daily
penalties and further extend the closing date. Under Paragraph 9, the GSA was entitled to declare
the deposit forfeited, relieve Coastal from further liability, and pursue another purchaser.
Nothing in the contract mandated that the GSA choose one provision over the other.

        The United States argues that Coastal had demonstrated an apparent inability to obtain
the financing necessary to tender payment and had demanded extra-contractual reductions in the
accepted bid price. (Def. Mot. at 15). The Court sees no need to assess the veracity of these
concerns or whether they independently constituted breach of the contract. It is enough that the
GSA had no confidence in Coastal’s ability to consummate the transaction should another
extension be granted.

        Therefore, once Coastal failed to tender payment on November 9, 2016, the GSA’s
election to declare Coastal in default, retain deposited Earnest Money as damages, and pursue
resale of the property was reasonable.

                                     IV.    Conclusion

        Coastal Park’s failure to tender payment in full on the closing date amounted to default
on its contract with the GSA for purchase of Coast Guard property. The United States did not
repudiate the contract by sending Coastal a notice to cure by November 9, 2016 at 11:00 AM.
Under the contract, the United States was entitled to retain Coastal’s deposits of Earnest Money
and resell the property to mitigate its damages once this final deadline elapsed without
performance by Coastal.

        For the foregoing reasons, the Plaintiffs’ Motion for Summary Judgment is DENIED.
The United States’ Cross-Motion for Summary Judgement is GRANTED. Plaintiffs’ claim for
attorney’s fees is DISMISSED as moot. The clerk is directed to enter judgment for the United
States in accordance with RCFC 54(b).

       IT IS SO ORDERED.

                                                            s/ David A. Tapp
                                                            DAVID A. TAPP, Judge



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