United States District Court, Northern District of Illinois, E.D
February 9, 1982
REGIONAL TRANSPORTATION AUTHORITY, PLAINTIFF,
GRUMMAN FLXIBLE CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Regional Transportation Authority ("RTA") sues Grumman
Flxible Corporation ("Flxible") for the sale of 205 allegedly
defective buses. RTA charges the buses had to be removed from
service, causing RTA to incur otherwise unnecessary costs
of (1) storage, (2) security services and (3) leasing
replacement buses to provide public transportation during the
repair period. Flxible has moved to dismiss. For the reasons
stated in this memorandum opinion and order Flxible's motion is
Exhaustion of Administrative Remedy
Section 2.17 of the Flxible-RTA sales contract (the
Except as otherwise provided in this contract, any
dispute concerning a question of fact arising
under this contract which is not disposed of by
agreement shall be decided by the Contracting
Officer, who shall reduce his decision to writing
and mail or otherwise furnish a copy thereof to
Flxible argues RTA's complaint involves an "issue of fact
arising under the contract" so that RTA must first exhaust the
Agreement's administrative remedy before it can file a court
This case differs from the normal contract interpretation
problem of construing unique language chosen by the parties.
Here Section 2.17 (the "disputes clause") is a standard
provision employed in government contracts for at least 30
years. Many courts including the Supreme Court have examined
the scope of the disputes clause, providing this Court with
clear guidance to its proper application.
In its definitive reading of the disputes clause, United
States v. Utah Construction Co., 384 U.S. 394, 86 S.Ct. 1545,
16 L.Ed.2d 642, (1966), the Supreme Court distinguished two
types of contract-related disputes. One kind is specifically
anticipated and provided for in a contract. For example "when
the contract makes provision for equitable adjustment of
particular claims, such claims may be regarded as converted
from breach of contract claims to claims for relief under the
contract." Id. at 404 n. 6, 86 S.Ct. at 1551 n. 6. But any
claim "not redressable under specific contract adjustment
provisions" is termed a "breach of contract claim" and not
subject to the disputes clause. Id. at 404-05 n. 6, 86 S.Ct. at
1551-52 n. 6. Another court, Bethlehem Steel Corp. v. Grace
Line, Inc., 416 F.2d 1096, 1101 (D.C. Cir. 1969), has summed up
the distinction as follows:
A fact dispute is one "arising under this
contract" only when the disputed fact is capable
of complete resolution by a procedure specified in
the contract. In consequence, claims which are
adjustable under contractual provisions must be
submitted for the administrative determinations
prescribed by the contract, while claims for
breach of contract — those not adjustable in that
fashion — may be litigated in a court of competent
jurisdiction without previous resort to that
Application of that dichotomy here leads to the conclusion
that RTA's claim is within the disputes clause. Agreement Part
IV ("Warranty Provisions") affords an extensive warranty for
the complete coach (¶ 1.1.1) as well as many subsystems and
components (¶ 1.1.2). It goes on to deal at length with
Flxible's duty to repair any warranty-covered defects. For
(1) Repairs must begin within 10 working days
after Flxible receives notice of a defect (¶ 2.2).
(2) Flxible must provide spare parts and tools
at its own cost (¶ 2.2).
(3) RTA can require Flxible to remove the buses
from RTA property during the repairs (¶ 2.2).
(4) If a widespread defect ("fleet defect")
occurs Flxible must undertake a program reasonably
designed to prevent the recurrence of such a
defect (¶ 1.6.1).
There is more, but that partial listing demonstrates that the
parties anticipated the need to repair defective buses and
specifically provided for such a situation in the Agreement. In
Utah Construction terms, RTA's claim appears "redressable under
specific contract adjustment provisions."*fn2
disputes clause requires that RTA first exhaust its
administrative remedy before filing suit.
It is true that some courts have simply stayed proceedings
covered by a disputes clause, Compare, Bethlehem Steel Corp. v.
Grace Line, Inc., 416 F.2d 1096, 1109 (D.C. Cir. 1969)
(proceeding stayed), with, Patton Wrecking and Demolition Co.
v. TVA, 465 F.2d 1073, 1080 (5th Cir. 1972) (action dismissed).
But this Court finds dismissal without prejudice the more
appropriate procedure, for the administrative decision may well
moot the need for this lawsuit or at least radically alter its
contours. RTA will in no way be harmed by a dismissal without
Attorneys' Fees and Expenses
One distressing contretemps has grown out of Flxible's
motion. Its reply brief was due Friday January 15, 1982, a time
that by chance immediately followed an immobilizing snowstorm
in Washington, D.C., where Flxible's lead counsel offices.*fn4
Washington counsel was physically unable to travel to his
office to complete the brief for a timely filing.
Local counsel telephoned RTA's counsel Robert Bell, Jr.,
asking whether he would agree to a four-day extension for
filing (to Tuesday January 19). Bell twice refused (after the
initial call from a Jenner & Block associate, one of the
partners telephoned to renew the request),*fn5 forcing
Flxible's Chicago counsel to prepare and serve a notice of
motion and appear before this Court for an extension — at
which motion call Bell did not choose to appear and this Court
of course granted the extension. At this Court's suggestion
Flxible's Chicago counsel has requested attorneys' fees and
Bell continues to show the same myopic view of the matter
that caused the needless effort in the first place,
characterizing the issue as whether anyone may be forced to
stipulate to an extension. That is not the point. What is
rather involved is the responsibility of a lawyer in dealing
with his fellow lawyer. It should scarcely be necessary to
repeat what every lawyer is expected to know and live by, as
succinctly put in the Code of Professional Responsibility:
DR 7-101(a) — A lawyer shall not intentionally (1)
fail to seek the lawful objectives of his client
through reasonably available means permitted by law
and the disciplinary rules . . . however, such
"reasonably available means" do not include (A)
refusing to accede to reasonable requests of
opposing counsel which do not prejudice the rights
of his client. . . . EC 7-38 — A lawyer should be
courteous to opposing counsel and should accede to
reasonable requests regarding court proceedings,
settings, continuances, waiver of procedural
formalities, and similar matters which do not
prejudice the rights of his client.
When Bell later did show up in Court on the motion for
taxation of fees, his explanation of his conduct was that his
client would not agree to the extension, so he did not. That
explanation may or may not be accurate (from the Jenner & Block
affidavit it appears that Bell refused on the initial telephone
call, which would belie his later explanation). But in any case
the thrust of the Code is that such a decision — certainly in
the circumstances here — is for the lawyer and not for the
client at all. What is perhaps as troublesome as the origin of
the matter is that Bell's response to the motion
for fees, after having had the Code provisions called to his
attention, remained of the view that his conduct was justified.
It is a truism that a commission and a uniform may make
someone an officer, but not an officer and a gentleman.
Apparently the same may be said of a license to practice law.
All that this Court can do is to relieve Flexible of a burden
in unjustly-caused attorneys' fees and expenses that it should
not have been required to incur and should not be required to
bear. In accordance with 28 U.S.C. § 1927 the Court determines
(1) RTA's counsel Robert Bell, Jr. has
"multiplied the proceedings in [this] case
unreasonably and vexatiously."
(2) Flxible's attorneys' request for added fees
and expenses in connection with the original
motion, and fees in connection with the Court's
request, is reasonable in amount.
Robert Bell, Jr. is ordered to pay the sum of $487.50 to Jenner
& Block on or before February 15, 1982.
This action is dismissed without prejudice. RTA's counsel is
ordered to comply with the attorneys' fees section of this