counterclaims for breach of contract on the part of plaintiff.
The contract in question contains a dispute clause which
provides for the disposition of all disputes in accordance with
specified procedures and further provides that the parties are
to be bound by the resulting decision reached in those
The procedures outlined in the contract were originally
followed. It was then appealed. A hearing officer found
adversely to plaintiff and allowed defendant's counterclaim for
excess cost of coal purchased in October, 1966, in the amount
of $70,663.04 to replace the deficiencies in plaintiff's
account and defendant's claim for excess cost of coal purchased
in March, 1967, in the amount of $39,672.00. Defendant was
further permitted to apply unpaid invoices in the amount of
$19,389.40 to partially offset the excess cost to defendant.
The administrative procedures having been exhausted, plaintiff
then filed his complaint in this court.
The function of reviewing an administrative decision can be and
frequently is performed by the court of original jurisdiction
as well as by an appellate tribunal. The standards of review
adopted are whether or not the decision as rendered is
"arbitrary," "capricious" and "not supported by substantial
evidence." The term "substantial evidence" in particular has
become a term of art to describe the basis upon which the
administrative record is to be judged by a reviewing court.
This standard goes to the reasonableness of what the agency did
on the basis of the evidence before it, for a decision may be
supported by substantial evidence even though it could be
refuted by other evidence that was not presented to the
decisionmaking body. United States v. Carlo Bianchi & Co.,
373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652.
The limitation of the court's authority is to review the
record, and if the decision rendered is based upon and is
supported by substantial evidence and not fraudulent,
capricious, arbitrary or so grossly erroneous as to imply bad
faith, the decision rendered pursuant to the contract is
binding on the parties.
In its complaint plaintiff alleges that the administrator's
decision was arbitrary, capricious and not supported by
substantal evidence and by its amended complaint that the
dispute clause of the contract was unconscionable at the time
the contract was made, both at common law and under Sec. 2-302
of the Uniform Commercial Code, as adopted by the States of
Illinois, Tennessee and District of Columbia.
Defendant TVA's motion for summary judgment was denied. It then
renewed its motion for summary judgment, which was again
denied. The matter was heard by the court. Plaintiff was given
every opportunity to present evidence to substantiate his claim
that the decision rendered under the administrative procedures
was not in conformity with the requirements. Plaintiff totally
failed to submit any evidence to establish that the action
taken during the administrative proceeding was fraudulent,
capricious, arbitrary or not supported by substantial evidence.
There was also a total failure of any evidence to show that the
contract was unconscionable either at common law or under the
provisions of the Uniform Commercial Code.
For the foregoing reason, the Court finds that the decision
rendered under the disputes clause of the contract was proper.
That decision should be and the same is hereby affirmed.
Defendant moves to dismiss the counterclaim of defendant TVA,
which was rendered in the administrative proceedings, for the
reason that this claim was discharged in bankruptcy.
On October 15, 1969, plaintiff was adjudged a bankrupt in this
court in Bankruptcy No. BK-69-526. Defendant's claim was duly
scheduled on Schedule A-3. The discharge in bankruptcy was
entered by the Referee on February 24,1970.
The Bankruptcy Act requires that the bankrupt be given a
discharge unless the Court is satisfied that the bankrupt
committed an act which bars discharge. Shainman v. Shear's of
Affton, Inc., 387 F.2d 33 (8 Cir. 1967).
A discharge in bankruptcy was entered, which in effect
discharged the claim of TVA. That order is controlling here.
Defendant TVA's counterclaim will be and the same is hereby
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