After Years of Appeals, Bowers Learns the Meaning of Res Judicata - Federal Circuit
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After Years of Appeals, Bowers Learns the Meaning of Res Judicata

You only get one shot. There is no second bite at the apple.

Whatever your idiomatic cliché of choice is, the principles of res judicata and claim preclusion mean you better get it right the first time. Bowers Investment Company just learned that lesson the hard way, as they will not be able to pursue a $60,000 claim that they missed in their initial trip to the courthouse.

In 1993, the Federal Aviation Administration leased a building from Bowers Investments. Though the terms of the contract called for rent payments to be made in arrears, in practice the payments were made on the first of the month for the current month. In 2006, the parties terminated the lease. Bowers later filed a claim with the contracting officer for one month's rent and damages to the property.

The claim was denied, both by the contracting officer and the Civilian Board of Contract Appeals, because the parties’ course of conduct indicated that the rent was paid on the first of the month every month, despite the “arrears” language. The FAA’s accounting records seemed to back up that assertion.

Case closed, right? In the process of digging through the records, it was found that the FAA made large payments in the first three months of 1994. Bowers claimed that these were for buildouts of the property. The FAA claimed that the amounts included the rent. The CBCA ruled against Bowers, as it found the prospect of a business not noticing approximately $60,000 in missed rent payments to be unbelievable.

Bowers was undeterred. He then filed another claim with the contracting officer for those three months rent, plus alleged underpayments of $664 per month in rent for most of the lease, which totaled up to another $64,408. The claim was, of course, denied. He appealed to the Court of Federal Claims, who 12(b)(6)’d the case due to claim preclusion. The court’s decision highlighted Bowers’ fault in not maintaining proper accounting records and in not bringing all of his claims in front of the CBCA, which held the final word in his initial case.

Though the issue of claim preclusion is reviewed de novo by the Federal Circuit, the result was lo mismo (the same). “Claims arising out of the same contract are presumed to constitute the same claim for res judicata purposes.” Because the underpaid rent and missed rent payments were based on the same contract, Bowers only had one chance. He squandered that chance in the CBCA due to either meritless claims, or decades of sloppy accounting.

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