Vandesande v. United States

In the United States Court of Federal Claims

No. 09-258C

Filed: February 24, 2017

NOT FOR PUBLICATION

)

GLADYS S. VANDESANDE, )

)

Plaintiff, ) Rule 56; Summary Judgment; Breach of

) Contract; Res Judicata.

v. )

)

THE UNITED STATES, )

)

Defendant. )

)

Roderick V. Hannah, Attorney of Record, Roderick V. Hannah, Esq. P.A., Plantation, FL, for

plaintiff.

Douglas T. Hoffman, Trial Attorney, Allison Kidd-Miller, Assistant Director, Robert E.

Kirschman, Jr., Director, Benjamin C. Mizer, Principal Deputy Assistant Attorney General,

United States Department of Justice, Commercial Litigation Branch, Civil Division, Washington,

DC, for defendant.

MEMORANDUM OPINION AND ORDER

GRIGGSBY, Judge

I. INTRODUCTION

Plaintiff, Gladys S. VanDesande, a former letter carrier with the United States Postal

Service (“USPS”), brings this breach of contract action against the United States seeking to

recover certain monetary damages, interest and attorney’s fees pursuant to the Tucker Act, 28

U.S.C. § 1491(a)(1). See generally Compl. Specifically, plaintiff alleges in this action that the

USPS materially breached a Stipulation Agreement Regarding Damages (the “Stipulation

Agreement”) that she entered into with the USPS to resolve certain employment discrimination

and retaliation claims.

The parties have filed cross-motions for summary judgment on liability on the issue of

whether the USPS breached the Stipulation Agreement. In this regard, plaintiff argues in her

motion that the government breached the Stipulation Agreement by: (1) failing to reinstate her

with pay and later terminating plaintiff’s employment, in violation of paragraphs 1, 2, 12 and 21

of the Stipulation Agreement; (2) failing to make certain payments to address the tax

consequences of lump sum and other pay payments required under the agreement (the “Tax

Consequences Payments”), pursuant to paragraph 14 of the Stipulation Agreement; and (3)

failing to calculate and pay the correct amount of interest due to plaintiff, pursuant to paragraph

8 the Stipulation Agreement. Compl. at ¶¶ 10(b)-10(d), 16, Ex. B at ¶¶ 1-2, 8, 14, 21, 28;

Pl. Br. at 6, 8.

The government has also moved for summary judgment on liability and argues that the

USPS has not breached the Stipulation Agreement because: (1) plaintiff’s claims are barred by

the doctrine of res judicata; (2) plaintiff did not submit the required accountant-prepared tax

consequences calculations needed in order to receive the Tax Consequences Payments; (3) the

government did not have an obligation to reinstate plaintiff with pay under the terms of the

Stipulation Agreement; (4) the USPS correctly calculated and paid all interest due under the

Stipulation Agreement; and (5) plaintiff is not entitled to recover certain IRS-levied interest and

penalties, and certain attorney’s fees, under the terms of the Stipulation Agreement. Def. Mot. at

8.

For the reasons discussed below, the Court DENIES plaintiff’s motion for partial

summary judgment on liability and GRANTS-IN-PART and DENIES-IN-PART the

government’s motion for summary judgment on liability.

II. FACTUAL AND PROCEDURAL BACKGROUND1

A. Factual Background

In this breach of contract action, plaintiff, Gladys S. VanDesande, seeks to recover

certain payments, back pay and other relief that she alleges are owed under the terms of the

Stipulation Agreement that she entered into with the USPS in 2003. See generally Compl.

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The facts in this Memorandum Opinion and Order are taken from plaintiff’s complaint (“Compl. at”);

the government’s amended answer (“Am. Answer at”); plaintiff’s motion for partial summary judgment

(“Pl. Mot. at”); plaintiff’s brief in support of its motion for partial summary judgment (“Pl. Br. at”); the

government’s motion for summary judgment (“Def. Mot. at”); plaintiff’s memorandum in response to the

government’s motion for summary judgment (“Pl. Mem. at”); and the government’s reply in support of its

motion for summary judgment (“Def. Reply at”). Unless otherwise noted, the facts recited herein are

undisputed.

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Specifically, plaintiff alleges that the USPS materially breached the Stipulation Agreement by,

among other things, failing to reinstate her and make certain Tax Consequences Payments.

Compl. at ¶¶ 10(b)-10(d), 16, Ex. B at ¶¶ 1-2, 8, 14, 21, 28; Pl. Br. at 6, 8. As relief,

plaintiff seeks to recover monetary damages and certain interest and fees from the

government. Compl. at Prayer for Relief.

1. Plaintiff’s Discrimination Claims

The facts regarding plaintiff’s breach of contract claims are generally undisputed.

Plaintiff is a former letter carrier with the USPS. Pl. Mot at ¶ 1. During 1998 and 1999, the

USPS denied plaintiff work and ultimately removed plaintiff from her position as a letter carrier.

See generally Compl. at Ex. A, C; see also Def. Mot. at 2. Following her removal from the

USPS, plaintiff brought employment discrimination claims against the USPS before the Equal

Employment Opportunity Commission (the “EEOC”). Id. On January 28, 2003, the EEOC

found that the USPS had discriminated and retaliated against plaintiff in violation of the

Pregnancy Discrimination Act and Title VII of the Civil Rights Act of 1964. Compl. at Ex. A,

C; Def. Mot. at 2; Pl. Mot. at ¶ 1; Pl. Br. at 6-7; 42 U.S.C. §§ 2000e(k), 2000e-16. Before the

EEOC could address the issue of damages with respect to plaintiff’s employment discrimination

claims, plaintiff and the USPS resolved these claims by entering into the Stipulation Agreement

on June 18, 2003. Compl. at Ex. A, B; Am. Answer at ¶¶ 4, 7; Def. Mot at 2; Pl. Mot. at ¶ 1; Pl.

Br. at 6- 7.

This Stipulation Agreement provides for, among other things, certain lump sum payments

to compensate plaintiff for lost wages and lost sick and annual leave; interest payments; the Tax

Consequences Payments; and plaintiff’s voluntary resignation from the USPS. See generally

Compl. at Ex. B; see also VanDesande v. United States, 94 Fed. Cl. 624, 627 (2010). On

June 23, 2003, the EEOC entered a Final Order incorporating the Stipulation Agreement.

Compl. at ¶ 8, Ex. C.

Plaintiff did not return to work as a letter carrier after June 23, 2003, and she was placed

on “unpaid, non-duty status.” Pl. Br. at 10; see also Def. Mot. at 3. The EEOC issued a Notice

of Final Action that adopted and implemented the Stipulation Agreement on August 6, 2003.

Compl. at Ex. D.

Pursuant to the terms of the Stipulation Agreement, the USPS made approximately

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$560,000 in “lump sum back pay, damages and interest payments” to plaintiff in 2003 and 2004.

Pl. Br. at 7; Def. Mot. at 3-4, App. to Def. Mot. at DA48; Am. Answer at ¶ 10; Compl. at ¶ 10; Pl.

Mot. at Ex. A at ¶¶ 10, 15. These payments include a lump sum payment of $115,000 for

plaintiff’s agreement to voluntarily resign from the USPS. Def. Mot. at 3-4; Compl. at ¶ 10; Pl.

Mot. at Ex. A at ¶ 15.

On April 27, 2006, plaintiff obtained a tax consequences calculation from her certified

public accountant to determine the amount of her Tax Consequences Payments. Pl. Br. at 13-14;

Pl. Mot. at Ex. 5, Ex. A at ¶ 12; Def. Mot. at 5-6; Def. Reply at 8. The USPS subsequently

received this calculation. Id.

In July and November of 2006, respectively, plaintiff filed her 2003 and 2004 taxes with

the Internal Revenue Service. App. to Def. Mot. at DA123-25, DA127-28. To date, the USPS has

not paid plaintiff for the tax consequences resulting from the lump sum payments that she

received in 2003 and 2004. Pl. Br. at 14-16; Compl. at Ex. A at ¶¶ 14-16; Def Mot. at 17; Def.

Reply at 11-12.

2. The Stipulation Agreement

There are several provisions in the Stipulation Agreement that are relevant to plaintiff’s

breach of contract claims.

First, with respect to plaintiff’s claim that the USPS breached the Stipulation Agreement

by failing to reinstate her with pay, paragraph 1 of the Stipulation Agreement provides, in

relevant part, that:

The Agency hereby rescinds the Notice of Removal, dated

February 3, 1999, issued to the Complainant, Gladys S.

VanDesande, which notice shall be deemed null and void. The

Agency shall remove . . . the Notice of Removal, dated February 3,

1999, issued to the Complainant, and all related records, from all of

the Complainant’s records and files . . . The Notice of Removal,

dated February 3, 1999, shall not be cited by the Agency in any

manner, in any other case . . . involving the Complainant . . .

Compl. at Ex. B at ¶ 1. Similarly, paragraph 2 of the Stipulation Agreement also provides, in

relevant part, that:

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The Agency hereby rescinds the Notice of Removal, dated

December 21, 1999, issued to the Complainant, Gladys S.

VanDesande, which notice shall be deemed null and void. The

Agency shall remove . . . the Notice of Removal, dated December

21, 1999, issued to the Complainant, and all related records, from

all of the Complainant’s records and files . . . The Notice of

Removal, dated December 21, 1999, shall not be cited by the

Agency in any manner, in any other case . . . involving the

Complainant . . .

Compl. at Ex. B. at ¶ 2.

Paragraph 12 of the Stipulation Agreement, further provides, in relevant part, that:

The Agency shall credit to the Complainant’s pay and leave

accounts all annual leave and sick leave hours that the Complainant

would have earned had the Complainant not been denied work and

discharged from her position with the Agency, beginning

September 18, 1998 . . . The Agency shall not reduce the total

credited annual leave or sick leave hours for any maximum

carryover provisions for past leave years (1998, 1999, 2000, 2001,

2002 and 2003) . . . The Agency shall reverse the terminal leave

payment of 2001 made to Complainant and credit Complainant

with all hours paid. Any deductions of leave hours caused by the

Complainant’s use of LWOP time, if any, charged to the

Complainant after pay period 2003-15-02, until full compliance,

shall not be deducted from the total accrued leave to be paid by

virtue of this paragraph and paragraph #13 . . .

Compl. at Ex. B at ¶ 12. Lastly, paragraph 21, provides, in relevant part, that:

The Agency shall pay the Complainant a lump sum payment of one

hundred-fifteen thousand dollars ($115,000.00) to resign from her

current position as a city letter carrier with the Agency and never

reapply for employment with the Agency. The Agency shall only

deduct federal income tax, social security and medicare deductions.

No other deductions shall be made from this payment. The Agency

shall pay the full lump sum payment of one hundred-fifteen

thousand dollars ($115,000.00) to the Complainant after January 1,

2004, but no later than January 30, 2004. The Complainant agrees

to resign from the employment of the Agency only after full

compliance by the Agency of the terms of this Stipulation

Agreement, including, but not limited to all back pay and lump sum

payments required in this Stipulation Agreement.

Compl. at Ex. B at ¶ 21.

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Paragraph 14 of the Stipulation Agreement is pertinent to plaintiff’s claim that the USPS

breached this agreement by failing to make the Tax Consequences Payments. Specifically, this

provision provides, in relevant part, that:

The Agency shall pay the Complainant a lump sum payment for all

tax consequences created by all back pay and lump sum payments

required in this Stipulation Agreement; including a lump sum

payment to the Complainant to pay for the additional tax

consequences created by the lump sum tax consequences payment

required in this paragraph. The Complainant may obtain the

assistance of a certified public accountant to prepare the tax

liability calculations for the back pay and lump sum payments

required by this Stipulation Agreement.

Compl. at Ex. B at ¶ 14. Paragraph 14 also addresses the time frame within which the USPS

must make the Tax Consequences Payments and further provides, in relevant part, that:

The Agency shall pay the amount of tax liability calculated by the

Complainant’s accountant, within one hundred and eighty (180)

calendar days of service by the Complainant on the Agency’s

assigned representative (the designated representative as filed with

the EEOC on the date of this Stipulation Agreement). If the

Agency fails to pay the amount calculated by the Complainant’s

accountant within the required 180 calendar day time period, then

the Agency shall be in breach of this Stipulation Agreement, and

shall be responsible for all costs, legal fees and accountant fees

incurred by the Complainant to enforce this provision of the

Stipulation Agreement. The Agency representative will be

allowed to review and inspect all records used by the

Complainant’s accountant . . . The Agency shall pay interest to the

Complainant on all sums due for tax consequences, up to the date

of receipt, allowing 21 days for mailing, at the Federal Judgment

Rate.

Compl. at Ex. B at ¶ 14. In addition, paragraph 14 describes the process for resolving disputes

about the calculation of plaintiff’s Tax Consequences Payments and this provision provides, in

relevant part, that:

The Agency may only challenge the Complainant’s submission for

tax consequences by utilizing the services of another State of

Florida licensed certified public accountant, who shall provide a

detailed report as to the Agency’s calculations of the estimated tax

consequences, detailing each disputed amount; and serving such

analysis on the Complainant within forty five (45) days of the

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Complainant’s submission for payment of consequences. In any

disagreement on the tax consequences, the Agency shall be

required to make timely payment of the non-disputed portion of the

tax consequences payment. If the Agency disputes the amount of

tax consequences submitted by the Complainant, the unpaid

disputed amount of the tax liability consequences will be appealed

directly to the EEOC by either party. The EEOC shall apply the

tax consequences requirements imposed in this Stipulation

Agreement. The Agency further agrees to pay the Complainant for

all reasonable expenses incurred in hiring a Certified Public

Accountant to calculate the tax consequences provided for in this

Stipulation Agreement. Such payment for the Complainant’s CPA

expenses shall be payable in conjunction with the payment for tax

consequences.

Compl. at Ex. B at ¶ 14.

Lastly, with respect to plaintiff’s claim that the USPS breached the Stipulation

Agreement by improperly calculating the interest due under that agreement, paragraph 8 of the

Stipulation Agreement provides that:

The Agency shall pay interest at the Federal Judgment rate on all

back pay payments and lump sum payments listed in this

Stipulation agreement; including those payments required in

paragraphs #4, #5, #6 and #7. Interest shall be calculated using the

Federal Judgment Rate in accordance with USPS ELM, 13, June

1998; 436.6; and shall be paid for all back pay and lump sum

payments listed in this Stipulation agreement; and shall be paid

until the actual date of receipt of the payments; allowing for 21

days after the processing of the payment by the Agency’s finance

and accounting office for mailing to the Complainant; all of which

must occur within 180 days of the date of this Stipulation

Agreement.

Compl. at Ex. B at ¶ 8. In addition, plaintiff’s claim to recover attorney’s fees in this action is

governed by paragraph 28 of the Stipulation Agreement, which provides that:

Failure of the Agency to fully and completely comply with the

payment requirements of paragraphs 14, 15, and 21 of this

Stipulation Agreement, including not making payments within the

required time limits, will result in the Agency paying interest from

the date of noncompliance to the date the required payment is

made, at the federal judgment rate. Additionally, the Agency will

pay for all expenses, including attorney’s fees, for any action taken

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to enforce the failure to make full, complete and timely payments

as required in paragraphs 14, 15 and 21, if complainant prevails.

Compl. at Ex. B at ¶ 28.

3. Plaintiff’s 2005 EEOC Proceeding

During the period 2004 to 2007, plaintiff filed several claims before the USPS and the

EEOC alleging, among other things, that the USPS breached the Stipulation Agreement by failing

to make the Tax Consequences Payments. Pl. Br. at 14-16; Compl. at ¶ 10; Def. Mot. at 4, App.

to Def. Mot. at DA12, DA15, DA18; Pl. Mot. at Ex. A at ¶¶ 10-11, Ex. 3. The USPS and the

EEOC denied many of plaintiff’s claims upon the basis that plaintiff had not submitted the

appropriate tax documentation required to receive the Tax Consequences Payments. App. to

Def. Mot. at DA13-DA22, DA52-DA53; Pl. Mot. at Ex. A at ¶ 15, Ex. 4, Ex. 6; Pl. Br. at 13-15,

App. to Pl. Br. at A27-A37.

Of particular relevance to this matter, plaintiff filed an EEOC claim alleging that the USPS

violated the Stipulation Agreement by failing to pay the Tax Consequences Payments in 2005 (the

“2005 EEOC Proceeding”). App. to Pl. Br. at A29; Def. Mot. at 5, App. to Def. Mot. at DA23-

DA25, DA75-DA90. On March 30, 2006, the EEOC affirmed the USPS’s finding that the

agency had complied with the Stipulation Agreement, upon the ground that plaintiff “failed to

provide the agency with probative calculations or expert information needed to make payments

on her tax consequences.” App. to Pl. Br. at A34-A37; Def. Mot. at 5.

The parties do not dispute that the issues and parties involved in the 2005 EEOC

Proceeding are the same issues and parties that are involved in this litigation. Def. Mot. at 14; Pl.

Br. at 35-38. The parties also agree that plaintiff’s Tax Consequences Payments claim was

actually litigated before the EEOC and that, during the 2005 EEOC Proceeding, the determination

of the Tax Consequences Payments issue was necessary to the resulting EEOC judgment denying

plaintiff’s claim. Def. Mot. at 13; Pl. Br. at 35-38.

In addition, it is undisputed that the 2005 EEOC Proceeding proceeded to final judgment

upon the merits and that plaintiff’s claims in this case are based upon the same transactional set of

facts that were at issue in the 2005 EEOC Proceeding. Def. Mot. at 14-15; Pl. Br. at 35-38. It is

also undisputed that during the 2005 EEOC Proceeding, plaintiff: (1) was not represented by

counsel; (2) did not conduct an examination or cross examination of any witnesses; and (3) did

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not introduce evidence or exhibits. Pl. Mem. at 20; see also Def. Reply at 4. There is also no

dispute between the parties that there was no trial or final hearing upon the merits of plaintiff’s

claim that led to findings of facts during the 2005 EEOC Proceeding. Id.

4. Plaintiff’s 2007 EEOC Proceeding

On June 13, 2007, the USPS issued a letter stating that plaintiff had been “involuntarily

resigned . . . ‘effective immediately,’ from her employment with the Postal Service.” Pl. Mot.

at ¶ 10, Ex. A at ¶ 7; Pl. Br. at 10; Def. Mot. at 6. Thereafter, plaintiff filed another claim with

the EEOC alleging that the USPS’s decision to require plaintiff to resign was premature and in

violation of the Stipulation Agreement (the “2007 EEOC Proceeding”). Def. Mot. at 6, App. to

Def. Mot. at DA91-DA92; App. to Pl. Br. at A29.

On February 5, 2008, the EEOC denied plaintiff’s claim. Pl. Br. at 15, App. to Pl. Br. at,

A27-A33, App. to Def. Mot. at DA40-DA45. In the denial decision, the EEOC found that

plaintiff had not shown that the USPS failed to comply with the Stipulation Agreement because,

among other things, plaintiff had “not shown that she supplied the required information to enable

the agency to calculate the amount due to complainant for the tax consequences incurred in

2004.” App. to Pl. Br. at A31; see also Def. Mot. at 6, App. to Def. Mot. at DA40-DA45; Pl. Br.

at 15, App. to Pl. Br. at A27-A33.

The parties do not dispute that the issues and parties involved in the 2007 EEOC

Proceeding are the same issues and parties involved in this litigation. Def. Mot. at 14; Pl. Br. at

35-38. The parties also agree that plaintiff’s Tax Consequences Payments claim was actually

litigated, or could have been litigated, before the EEOC during the 2007 EEOC Proceeding, and

that, during the 2007 EEOC Proceeding, the determination of the Tax Consequences Payments

issue was necessary to the resulting EEOC judgment. Def. Mot. at 13; Pl. Br. at 35-38.

In addition, it is undisputed that the 2007 EEOC Proceeding continued to final judgment

upon the merits and that plaintiff’s claims in this case are based upon the same transactional set of

facts at issue in the 2007 EEOC Proceeding. Def. Mot. at 14-15; Pl. Br. at 35-38. It is also

undisputed that, during the 2007 EEOC Proceeding, plaintiff: (1) was not represented by counsel;

(2) did not conduct the examination or cross examination of any witnesses; and (3) did not

introduce evidence or exhibits. Pl. Mem. at 20; see also Def. Reply at 4. The parties also agree

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that there was no trial or final hearing upon the merits of plaintiff’s claim that led to findings of

facts. Id.

B. Procedural History

Plaintiff commenced this action on April 24, 2009. See generally Compl. After the

government successfully moved to dismiss the complaint for lack of subject-matter jurisdiction,

the Court dismissed this case upon the ground that the Stipulation Agreement is a consent decree

and, as a result, plaintiff failed to state a plausible claim for breach of contract. VanDesande v.

United States, 94 Fed. Cl. 624, 636 (2010); Pl. Br. at 17, App. to Pl. Br. at A38-A45; Def. Mot. at

6-7.

Plaintiff appealed the Court’s decision to the United States Court of Appeals for the

Federal Circuit. Pl. Notice of Appeal, dated October 15, 2010. On August 18, 2010, the Federal

Circuit reversed the Court’s decision and held that the Stipulation Agreement “is a contract for

enforcement purposes.” VanDesande v. United States, 673 F.3d 1342 (Fed. Cir. 2012). And so,

the Federal Circuit remanded the case to the Court on March 3, 2012. Id.

Thereafter, the government filed an amended answer on December 2, 2014. See

generally Am. Answer. The parties also participated in the Court’s Alternative Dispute

Resolution Program, but were unable to resolve the outstanding issues. Def. Mot. at 7.

On March 18, 2016, the Court entered a Scheduling Order for the briefing of the parties’

cross-motions for summary judgment on liability. See generally Scheduling Order, dated March

18, 2016. On August 29, 2016, the government filed its motion for summary judgment on the

issue of liability. See generally Def. Mot. Also on August 29, 2016, plaintiff filed its motion for

partial summary judgment on the issue of liability, as a well as a brief in support of its motion.

See generally Pl. Mot.; Pl. Br.

On October 31, 2016, the government filed its response to plaintiff’s motion for partial

summary judgment on the issue of liability. See generally Def. Resp. On October 31, 2016,

plaintiff also filed a memorandum of law in response to the government’s motion for summary

judgment on liability. See generally Pl. Mem.

On November 14, 2016, the government filed a reply in support of its motion for

summary judgment on liability. See generally Def. Reply. On November 14, plaintiff also filed

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a reply in support of its partial motion for summary judgment on liability. See generally Pl.

Reply.

These matters having been fully briefed, the Court addresses the parties’ pending

motions.

III. LEGAL STANDARDS

A. Jurisdiction

The United States Court of Federal Claims is a court of limited jurisdiction and

“possess[es] only that power authorized by Constitution and statute.” Kokkonen v. Guardian

Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The Tucker Act grants the Court jurisdiction

over:

[A]ny claim against the United States founded either upon the Constitution, or

any Act of Congress or any regulation of an executive department, or upon any

express or implied contract with the United States, or for liquidated or

unliquidated damages in cases not sounding in tort.

28 U.S.C. § 1491(a)(1).

The Tucker Act is, however, a jurisdictional statute; it does not create any substantive

right enforceable against the United States for money damages. Rather, the Tucker Act merely

confers jurisdiction upon the Court whenever the substantive right exists. United States v.

Testan, 424 U.S. 392, 398 (1976). And so, to pursue a substantive right against the United States

under the Tucker Act, a plaintiff must identify and plead a money-mandating constitutional

provision, statute, or regulation; an express or implied contract with the United States; or an

illegal exaction of money by the United States. Cabral v. United States, 317 Fed. Appx. 979,

981 (Fed. Cir. 2008) (citing Fisher v. United States, 402 F.3d 1167, 1173 (Fed. Cir. 2005)).

In addition, the Tucker Act grants this Court jurisdiction to consider claims based “upon

any express or implied contract with the United States.” 28 U.S.C. § 1491(a)(1). The Court does

not, however, possess jurisdiction to consider claims against the United States “based on

contracts implied in law.” United States v. Mitchell, 463 U.S. 206, 218 (1983) (citing Merritt v.

United States, 267 U.S. 338, 341 (1925)); Aboo v. United States, 86 Fed. Cl. 618, 626 (2009),

aff’d, 347 Fed. Appx. 581 (Fed. Cir. 2009). And so, to bring a valid contract claim against the

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United States in this Court, the underlying contract must be either express or implied-in-fact.

Aboo v. United States, 86 Fed. Cl. at 626-27.

To establish the existence of either an express or implied-in-fact contract with the United

States, a plaintiff must show: (1) mutuality of intent; (2) consideration; (3) lack of ambiguity in

the offer and acceptance; and (4) actual authority to bind the government in contract on the part

of the government official whose conduct is relied upon. Kam-Almaz v. United States, 682 F.3d

1364, 1368 (Fed. Cir. 2012). A government official’s actual authority to bind the United States

may be express or implied. Roy v. United States, 38 Fed. Cl. 184, 188-89 (1997), dismissed, 124

F.3d 224 (Fed. Cir. 1997). And so, “the [g]overnment, unlike private parties, cannot be bound

by the apparent authority of its agents.”2 Id. at 187. The Federal Circuit has also held “that

Tucker Act jurisdiction may be exercised in a suit alleging breach of a Title VII settlement

agreement.” Holmes v. United States, 657 F.3d 1303, 1312 (Fed. Cir. 2011) (“We do not view

Title VII’s comprehensive scheme as a bar to the exercise of [Tucker Act] jurisdiction.”).

B. RCFC 56

Pursuant to Rule 56 of the Rules of the United States Court of Federal Claims, a party is

entitled to summary judgment when 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); see Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247-48 (1986); Biery v. United States, 753 F.3d 1279, 1286 (Fed. Cir. 2014).

A dispute is “genuine” when “the evidence is such that a reasonable jury could return a verdict

for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. A fact is “material”

if it could “affect the outcome of the suit under the governing law.” Id.

2

A government official possesses express actual authority to bind the United States in contract “only

when the Constitution, a statute, or a regulation grants it to that agent in unambiguous terms.” Jumah v.

United States, 90 Fed. Cl. 603, 612 (2009) aff'd, 385 Fed. Appx. 987 (Fed. Cir. 2010) (internal citations

omitted); see also City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990). On the other

hand, a government official possesses implied actual authority to bind the United States in contract “when

the employee cannot perform his assigned tasks without such authority and when the relevant agency’s

regulations do not grant the authority to other agency employees.” SGS-92-X003 v. United States, 74 Fed.

Cl. 637, 652 (2006) (citations omitted). In addition, when a government agent does not possess express

or implied actual authority to bind the United States in contract, the government can still be bound by

contract if the contract was ratified by an official with the necessary authority. Janowsky v. United States,

133 F.3d 888, 891–92 (Fed. Cir. 1998).

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The moving party bears the burden of demonstrating the absence of any genuine issues of

material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). And so, ‘“the inferences to be

drawn from the underlying facts . . . must be viewed in the light most favorable to the party

opposing the motion.”’ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,

587-88 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

In making a summary judgment determination, the Court does not weigh the evidence

presented, but instead must “determine whether there is a genuine issue for trial.” Anderson v.

Liberty Lobby, Inc., 477 U.S. at 249; see also Am. Ins. Co. v. United States, 62 Fed. Cl. 151, 154

(2004); Agosto v. INS, 436 U.S. 748, 756 (1978) (“[A trial] court generally cannot grant

summary judgment based on its assessment of the credibility of the evidence presented . . . .”).

The Court may grant summary judgment when “the record taken as a whole could not lead a

rational trier of fact to find for the nonmoving party . . . .” Matsushita Elec. Indus. Co., Ltd., 475

U.S. at 587.

The above standard applies when the Court considers cross-motions for summary

judgment. Principal Life Ins. Co. & Subsidiaries v. United States, 116 Fed. Cl. 82, 89 (2014);

see also Estate of Hevia v. Portrio Corp., 602 F.3d 34, 40 (1st Cir. 2010). And so, when both

parties move for summary judgment, ‘“the court must 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.”’ Abbey v. United States, 99 Fed. Cl. 430, 436 (2011) (quoting

Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987)).

C. Contract Interpretation

The United States Court of Appeals for the Federal Circuit has held that “[c]ontract

interpretation is a question of law.” Barron Bancshares, Inc., v. United States, 366 F.3d 1360,

1368 (Fed. Cir. 2004); Fortec Constructors v. United States, 760 F.2d 1288, 1291 (Fed. Cir.

1985); Greenhill v. United States, 92 Fed. Cl. 385, 393 (2010) (“The interpretation of a

settlement agreement is a question of law.”); see also Harris v. Dep’t of Veterans Affairs, 142

F.3d 1463, 1467 (Fed. Cir. 1998) (“A settlement agreement is a contract, and we apply basic

contract principles unless precluded by law.”). It is also well-established that the Court’s

interpretation of a contract begins with its “plain language.” McAbee Constr., Inc. v. United

States, 97 F.3d 1431, 1435 (Fed. Cir. 1996). And so, the plain and unambiguous provisions of a

13

contract “must be given their plain and ordinary meaning and the court may not resort to

extrinsic evidence to interpret them.’” Id. (citations omitted); see also Jowett, Inc. v. United

States, 234 F.3d 1365, 1368 (Fed. Cir. 2000) (The Court gives “the words of the agreement their

ordinary meaning unless the parties mutually intended and agreed to an alternative meaning.”);

Hills Materials Co. v. Rice, 982 F.2d 514, 516 (Fed. Cir. 1992) (“Wherever possible, words of a

contract should be given their ordinary and common meaning.”) (citations omitted).

The Court also interprets the “provisions of a contract so as to make them consistent” and

so as not “to render them ineffective or superfluous.’” Abraham v. Rockwell Int’l. Corp., 326

F.3d 1242, 1251, 1254 (Fed. Cir. 2003); Fortec Constructors v. United States, 760 F.2d 1288

(Fed. Cir. 1985) (“This court must be guided by the well accepted and basic principle that an

interpretation that gives a reasonable meaning to all parts of the contract will be preferred to one

that leaves portions of the contract meaningless.”). But, in instances in which “there is a clear

conflict between” contract clauses, the Court must “determine which of the conflicting terms

controls.” Abraham v. Rockwell Int’l. Corp, 326 F.3d at 1253-54 (citations omitted). To do so,

the Court must apply the “general rules of interpretation,” which require that, “‘[w]here specific

and general terms in a contract are in conflict, those which relate to a particular matter control

over the more general language.’” Id. at 1254 (citations omitted) (emphasis existing).

The Federal Circuit has also recognized that a contract that is reasonably susceptible to

more than one interpretation is ambiguous. Hills Materials Co. v. Rice, 982 F.2d 514, 516 (Fed.

Cir. 1992) (citations omitted). Where a latent ambiguity exists in a contract, “the court will

construe the ambiguous term against the drafter of the contract when the nondrafter's

interpretation is reasonable,” under the general rule of contra proferentem. Id. (citations

omitted); see also NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)

(”To show an ambiguity it is not enough that the parties differ in their respective interpretations .

. . both interpretations must fall within the zone of reasonableness.”); HPI/GSA-3C, LLC v.

Perry, 364 F.3d 1327, 1334 (Fed. Cir. 2004) (“Before a court may enforce the general rule of

contra proferentem against the drafter of an ambiguity, the contractor’s interpretation of that

ambiguity must be reasonable.”). But, “an exception to the general rule that requires construing

ambiguities against” the drafter exists where “the ambiguities are ‘so “patent and glaring” that it

is unreasonable for a [party] not to discover and inquire about them.’” HPI/GSA-3C, LLC v.

Perry, 364 F.3d at 1334 (citations omitted). “Where an ambiguity is not sufficiently glaring to

14

trigger the patent ambiguity exception, it is deemed latent and the general rule of contra

proferentem applies.” Id. (citations omitted)

D. Res Judicata

The Federal Circuit has also recognized that “[t]he doctrine of res judicata involves the

related concepts of claim preclusion and issue preclusion.” Phillips/May Corp. v. United States,

524 F.3d 1264, 1267 (Fed. Cir. 2008). Claim preclusion bars a claim where: “(1) the parties are

identical or in privity; (2) the first suit proceeded to a final judgment on the merits; and (3) the

second claim is based on the same set of transactional facts as the first.’” Cunningham v. United

States, 748 F.3d 1172, 1179 (Fed. Cir. 2014) (quoting Ammex, Inc. v. United States, 334 F.3d

1052, 1055 (Fed. Cir. 2003)); see also Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398

(1981) (“A final judgment on the merits of an action precludes the parties or their privies from

relitigating issues that were or could have been raised in that action.”) (citations omitted). Claim

preclusion can be “applied to the final judgment of an administrative agency, such as a board of

contract appeals, that ‘is acting in a judicial capacity and resolved disputed issues of fact

properly before it which the parties have had an adequate opportunity to litigate.’” Phillips/May

Corp. v. United States, 524, F.3d at 1268 (citations omitted). But, claim preclusion is

inappropriate where “a court’s remedial authority in the first action prevented the plaintiff from

seeking the relief sought in the second action.” Cunningham v. United States, 748 F.3d at 1179.

Collateral estoppel or issue preclusion, requires that: “(1) the issues are identical to those

in a prior proceeding, (2) the issues were actually litigated, (3) the determination of the issues

was necessary to the resulting judgment, and (4) the party defending against preclusion had a full

and fair opportunity to litigate the issues.” Banner v. United States, 238 F.3d 1348, 1354 (Fed.

Cir. 2001) (citing Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1365-66 (Fed. Cir. 2000)).

To that end, the Court considers three criteria “[i]n determining whether a party has had a ‘full

and fair’ opportunity to litigate an issue . . . (1) whether there were significant procedural

limitations in the prior proceeding, (2) whether the party had an incentive to litigate fully the

issue, and (3) whether effective litigation was limited by the nature or relationship of the

parties.” Id.

Lastly, the doctrine of judicial estoppel is applied to estop a party that has “successfully

urge[d] a particular position in a legal proceeding . . . from taking a contrary position in a

15

subsequent proceeding where its interests have changed.” Buckley v. United States, 57 Fed. Cl.

328, 341 (2003) (citations omitted). Judicial estoppel is “designed to prevent the perversion of

the judicial process and, as such, is intended to protect the courts rather than the litigants.” Id.

And so, the Federal Circuit has identified three factors that should be considered when

determining whether judicial estoppel is appropriate to bar a claim: “(1) whether the ‘party’s

later position [is] “clearly inconsistent” with its earlier position’; (2) ‘whether the party has

succeeded in persuading a court to accept that party’s earlier position, so that judicial acceptance

of an inconsistent position in a later proceeding would create ‘the perception that either the first

or the second court was misled”’; and (3) ‘whether the party seeking to assert an inconsistent

position would derive an unfair advantage or impose an unfair detriment on the opposing party if

not estopped.’” In re North Am. Rubber Thread Co., v. United States, 593 F.3d 1346, 1354 (Fed

Cir. 2010) (citations omitted).

IV. LEGAL ANALYSIS

The parties have filed cross-motions for summary judgment on the question of whether

the government is liable to plaintiff for several alleged material breaches of the Stipulation

Agreement. In this regard, plaintiff argues that she is entitled to judgment in her favor as a

matter of law because: (1) the government breached paragraphs 1, 2, 12, and 21 of the Stipulation

Agreement by failing to reinstate plaintiff with pay to her position as a letter carrier after the

parties entered into the Stipulation Agreement, and by terminating plaintiff’s employment in June

2007; (2) the government breached paragraph 14 of the Stipulation Agreement by failing to make

the Tax Consequences Payments; and (3) the government breached paragraph 8 of the Stipulation

Agreement by failing to calculate and pay the correct amount of interest due on certain lump sum

payments made under the Stipulation Agreement. Pl. Br. at 19-35.

In its cross-motion, the government argues that it is not liable to plaintiff for five reasons.

First, the government argues that plaintiff’s claims are barred by the doctrine of res judicata.

Def. Mot. at 9-16. Second, the government argues that it has not breached paragraph 14 of the

Stipulation Agreement, because plaintiff did not submit an accountant-prepared calculation of her

tax consequences in order to receive the Tax Consequences Payments. Id. at 16-24. Third, the

government argues that plaintiff is not entitled to be reinstated with pay under the terms of the

Stipulation Agreement, and that any breach of that agreement was partial and, thus, does not

16

relieve plaintiff of her obligation to voluntarily resign. Id. at 24-26. In addition, the government

argues that it has correctly calculated and paid the quantum interest due to plaintiff under the

Stipulation Agreement. Id. at 26-29. Lastly, the government argues that plaintiff is not entitled to

recover any IRS-levied interest or penalties in this action because, plaintiff failed to mitigate her

damages and that plaintiff’s attorney’s fees are limited by the terms of the Stipulation Agreement.

Id. at 29-32.

For the reasons discussed below, the Court DENIES plaintiff’s motion for partial

summary judgment on liability and GRANTS-IN-PART AND DENIES IN-PART the

government’s motion for summary judgment on liability.

1. Plaintiff’s Claims Are Not Precluded By The Doctrine Of Res Judicata

As an initial matter, the Court is not persuaded by the government’s arguments that this

matter is precluded by the doctrine of res judicata. In this regard, the government puts forward

two arguments to demonstrate why plaintiff cannot pursue her claims in this litigation. First, the

government argues that plaintiff’s claim to recover the Tax Consequences Payments is barred by

issue preclusion because plaintiff previously litigated this claim before the EEOC. Def. Mot. at

9-16. In addition, the government argues that plaintiff’s remaining breach of contract claims are

barred by claim preclusion due to plaintiff’s prior litigation before the EEOC. Id. For the

reasons discussed below, the Court disagrees.

First, the undisputed material facts in this matter demonstrate that plaintiff’s claim to

recover the Tax Consequences Payments is not barred by issue preclusion, because plaintiff did

not have a full and fair opportunity to litigate this claim before the EEOC. It is well-established

that for issue preclusion to bar plaintiff’s Tax Consequences Payments claim the government

must establish four factors: (1) the issue presented here must be identical to that in a prior

proceeding; (2) that issue must have been actually litigated; (3) the determination of the issue

must have been necessary to the resulting judgment; and (4) plaintiff must have had a full and

fair opportunity to litigate the issue. Banner v. United States, 238 F.3d at 1354 (citations

omitted). With respect to the question of whether plaintiff has had a full and fair opportunity to

litigate her claim before the EEOC, the Court must also consider three additional criteria,

namely: (1) whether there were significant procedural limitations in the prior proceeding; (2)

17

whether plaintiff had an incentive to litigate fully the issue; and (3) whether effective litigation

was limited by the nature or relationship of the parties. Id.

The undisputed material facts in this case do not show that plaintiff had a full and fair

opportunity to litigate her claim before the EEOC. Rather, these facts show that important

procedural safeguards that would have aided plaintiff in the 2005 and 2007 EEOC Proceedings

were not present in those proceedings. Specifically, the government does not dispute that

plaintiff was not represented by counsel during these proceedings and that plaintiff did not

introduce documentary evidence or examine any witnesses during the 2005 and 2007 EEOC

Proceedings. Pl. Mem. at 20; see also Def. Reply at 4. It is also undisputed that the EEOC did

not conduct a trial or final hearing upon the merits of plaintiff’s claim that led to any findings of

fact. Pl. Mem. at 20; Def. Reply at 4. Given this, there can be no genuine dispute that plaintiff

encountered significant procedural limitations in pursuing her Tax Consequences Payments claim

before the EEOC.

The fact that plaintiff could have retained counsel, or presented documentary and witness

evidence during the 2005 and 2007 EEOC Proceedings does not overcome the Court’s concern

that plaintiff did not, in fact, do so during those proceedings. And so, application of issue

preclusion to bar plaintiff’s Tax Consequences Payments claim is not appropriate under the

circumstances presented here.

Because there is no dispute that the EEOC could not award the monetary damages that

plaintiff seeks in this litigation, the government has also not demonstrated that plaintiff’s

remaining claims are barred by claim preclusion. In this regard, the government argues that

plaintiff’s claims seeking reinstatement, back pay and certain interest and fees are subject to

claim preclusion, because these claims have been, or could have been, raised during the 2005 and

2007 EEOC Proceedings. Def. Mot. at 13-16. It is well-established that claim preclusion would

bar plaintiff’s claims here if: (1) the parties are identical or in privity; (2) the first suit proceeded

to a final judgment upon the merits; and (3) the second claim is based upon the same set of

transactional facts as the first. Cunningham v. United States, 748 F.3d at 1179 (quoting Ammex,

Inc. v. United States, 334 F.3d at 1055); see also Federated Dep’t Stores, Inc. v. Moitie, 452 U.S.

at 398. But, the Court may decline to bar plaintiff’s claims under a theory of claim preclusion if

18

the EEOC’s remedial authority prevented the plaintiff from seeking the relief that she seeks in

this litigation. Cunningham v. United States, 748 F.3d at 1179.

In this case, the EEOC’s regulations make clear that the commission lacks the authority

to award the monetary damages that plaintiff seeks in this litigation. See 29 C.F.R. §

1614.504(a) (“The complainant may request that the terms of settlement agreement be

specifically implemented or, alternatively, that the complainant be reinstated for further

processing from the point processing ceased.”). These regulations provide that the EEOC may

either enforce the Stipulation Agreement or reinstate plaintiff to her position with the USPS.

But, plaintiff seeks monetary damages for several alleged breaches of the Stipulation Agreement

in this litigation. Because the EEOC does not possess the authority to award plaintiff the

monetary damages that she seeks, the Court declines to apply claim preclusion to plaintiff’s

claims.3 See Cunningham v. United States, 748 F.3d at 1179.

2. Plaintiff’s Tax Consequences Payments

Claim Is Not Ripe For Disposition Under RCFC 56

While plaintiff may pursue her Tax Consequences Payments claim in this litigation, the

undisputed material facts, nonetheless, show that this claim is not ripe for disposition under

RCFC 56. In this regard, the parties have filed cross-motions for summary judgment upon the

issue of whether the USPS breached paragraph 14 of the Stipulation Agreement by failing to

make the Tax Consequences Payments. Material facts remain in dispute, however, regarding

whether plaintiff provided an accountant-prepared calculation of her tax consequences to the

appropriate official within the USPS and, if so, whether the USPS followed the dispute

resolution procedure set forth in the Stipulation Agreement to challenge plaintiff’s tax

consequences calculation. And so, for the reasons discussed below, the Court denies the parties’

cross-motions for summary judgment on this issue.

3

Plaintiff’s Tax Consequences Payments claim is also not precluded by the doctrine of judicial estoppel.

When determining whether judicial estoppel is appropriate to bar a claim, the Court considers, among

other things, whether plaintiff has successfully persuaded a court to accept an earlier position such that

judicial acceptance of an inconsistent position would suggest that one of the courts has been misled. In re

North Am. Rubber Thread Co., v. United States, 593 F.3d at 1354 (citations omitted). There is no dispute

that plaintiff did not prevail upon her Tax Consequences Payments claim the before the EEOC. Pl. Br. at

39; Def. Mot. at 5-6. And so, this claim is not barred under the doctrine of judicial estoppel.

19

a. Plaintiff Has Not Waived Her

Tax Consequences Payments Claim

As a preliminary matter, plaintiff has not waived her right to bring the Tax Consequences

Payments claim. Plaintiff would waive this claim if there is evidence of a voluntary and

intentional relinquishment of her right to receive the Tax Consequences Payments. Cherokee

Nation v. United States, 355 F.2d 945, 950 (1966) (citations omitted). Such a “‘[w]aiver requires,

(1) the existence at the time of the waiver of a right, privilege, advantage or benefit that may be

waived; (2) the actual or constructive knowledge therefor; and (3) an intention to relinquish such

right, privilege, advantage or benefit.’” Youngdale & Sons Constr. Co. v. United States, 22 Cl.

Ct. 345, 347 (1991) (quoting Matter of Garfinkle, 672 F.2d 1340, 1347 (11th Cir. 1982).

Although the government argues that plaintiff waived her Tax Consequences Payments

claim by failing to initially retain an accountant to calculate her tax consequences, the undisputed

material facts in this case show that plaintiff has repeatedly and consistently maintained−in this

litigation and before the EEOC−that she had no obligation to retain an accountant to calculate her

tax consequences. Pl. Brief at 41; Gladys S. VanDesande, EEOC Decision No. 01A2449, 2006

WL 902503 at *2 (2006). Given this, the factual record does not show that plaintiff intended to

relinquish her right to bring this claim in this litigation. And so, the Court concludes that plaintiff

has not waived the Tax Consequences Payments claim.

b. The Government Is Not Obligated To

Pay The Tax Consequences Payments Unless

Plaintiff Provides An Accountant-Prepared Calculation

Although plaintiff has not waived her Tax Consequences Payments claim, a plain reading

of the Stipulation Agreement demonstrates that the government is not obligated to make the Tax

Consequences Payments unless plaintiff provides the USPS with a calculation of her tax

consequences that has been prepared by an accountant. Compl. at Ex. B. at ¶ 14. In this regard,

paragraph 14 of the Stipulation Agreement provides that plaintiff “may obtain the assistance of a

certified public accountant” to prepare her tax consequences calculations. Id. And so, as

20

plaintiff correctly argues in her motion that the Stipulation Agreement does not require that she

retain an accountant to calculate her tax consequences.4

But, the Stipulation Agreement does clearly require that plaintiff provide tax

consequences calculations that have been prepared by an accountant in order to obligate the

government to make the Tax Consequences Payments. Specifically, paragraph 14 of the

Stipulation Agreement provides that, “[t]he agency shall pay the amount of tax liability

calculated by the [plaintiff’s] accountant . . . .” Id. (emphasis supplied). This provision also

provides that, “[i]f the [government] fails to pay the amount calculated by the [plaintiff’s]

accountant within the required 180 calendar day time period, then the [government] shall be in

breach of this Stipulation Agreement . . . .” Id. (emphasis supplied). And so, the plain and

unambiguous language in paragraph 14 demonstrates that the government is obligated to pay the

amount of plaintiff’s tax consequences only if the amount of plaintiff’s tax consequences has

been calculated by an accountant.

Paragraph 14 also makes clear that, to be in breach of the Stipulation Agreement, the

government must fail to “pay the amount calculated by the [plaintiff’s] accountant within the

required 180 calendar day time period” after service by the plaintiff on the USPS’s assigned

representative. Id. And so, the Court interprets the Stipulation Agreement to require that

plaintiff provide the USPS with tax consequences calculations that have been prepared by her

accountant before the government is obligated to pay the Tax Consequences Payments.

c. The Government Is Not Obligated

To Pay Plaintiff’s Entire Tax Liability

A plain reading of the Stipulation Agreement also demonstrates that the government is

not required to pay plaintiff’s entire tax liability due to the lump sum and back pay payments

required under the Stipulation Agreement, as plaintiff suggests. See, Compl. at Ex. B at ¶ 14. In

this regard, paragraph 14 of the Stipulation Agreement provides that the USPS shall pay a lump

sum payment for “all tax consequences” created by the lump sum and back pay payments

required under the agreement. Id. As the parties acknowledge in their cross-motions, the term

4

The Court notes, however, that the Stipulation Agreement provides that the government would pay

plaintiff’s reasonable expenses to retain an accountant. Compl. at Ex. B at ¶ 14.

21

“tax consequences” is not defined in the Stipulation Agreement. Pl. Brief at 28-31; Def. Mot. at

3, n 2.

Nonetheless, the Stipulation Agreement makes clear that the purpose of the lump sum

and back pay payments required under that agreement is to resolve the issue of damages with

respect to plaintiff’s employment discrimination and retaliation claims. See Compl. at Exhibit B

at 1. The agreement also makes clear that the lump sum and back pay payments required under

the Stipulation Agreement are intended to compensate plaintiff for lost wages and lost leave that

she would have otherwise earned during the course of her employment, but for the government’s

discriminatory actions. Id. at ¶¶ 4-7, 14.

Generally, the tax consequences of such payments are understood to be the increase in

the taxes owed because plaintiff will receive her wages and leave payments in a single, lump

sum amount, rather than in periodic payments spread out over a period of time. See Humann v.

City of Edmonds, et. al., 2015 WL 3539569, *2 (W.D. Wash. 2015) (“In general, a plaintiff that

is awarded back or front pay in a lump sum suffers adverse tax consequences that she would not

have incurred had she been paid over time.”); Eshelman v. Agere Systems, Inc., 554 F.3d 426,

442 (3d Cir. 2009) (“[A]n award to compensate a prevailing employee for her increased tax

burden as a result of a lump sum award will, in the appropriate case, help make a victim

whole.”); Tim Canney, Tax Gross-Ups: A Practical Guide To Arguing and Calculating Awards

for Adverse Tax Consequences In Discrimination Suits, 59 CATH. U. L. REV. 1111, 1120 (2010)

(“[T]he tax consequences of large backpay awards can be particularly harsh on plaintiffs.”). And

so, the purpose of an award of such lump sum pay under Title VII is to restore the economic

status quo that would have existed but for the wrongful discriminatory act. See Crossin v. United

States, 789 F. Supp. 906, 909 (N.D. Ill. 1992).

In this case, plaintiff would have received, and paid taxes on, the wages and leave that

she is being compensated for under the Stipulation Agreement during the regular course of her

employment, absent the USPS’s discriminatory actions. See Def. Mot. at 18. Given this,

relieving plaintiff of any tax liability for these payments would not restore the economic status

quo. And so, the Court construes the Stipulation Agreement to require that the government

compensate plaintiff for the additional, or increased, tax liability that she incurred in 2003 and

22

2004, due to the lump sum and back pay payments contemplated under the Stipulation

Agreement.

In addition, plaintiff’s reliance upon the Stipulation Agreement requirement that the

USPS pay the “adverse consequences” of her TSP loan distribution, to show that she may

recover her entire tax liability in this litigation, is misplaced. Pl. Brief at 30-31; Compl. at Ex. B

at ¶ 19. This provision does not specifically address the term “tax consequences which is at issue

in this case.” Compl. at Ex. B at ¶ 19. Plaintiff is on somewhat firmer ground in arguing that the

Stipulation Agreement’s requirement that the USPS pay her “adverse tax consequences” for

having received a terminal leave payment in 2001 shows that the parties would have also used

the phrase “adverse tax consequences” in paragraph 14 of the Stipulation Agreement, if they

intended to limit plaintiff’s tax consequences recovery to her increased tax liability. Pl. Brief at

30-31. But, as the government points out in its motion, the terminal leave payment is a one-time

payment that would not have the same impact on plaintiff’s tax liability as the lump sum

payments for lost wages and lost leave. Def. Resp. at 17-18. And so, the Court finds plaintiff’s

reading of the Stipulation Agreement to require the government to pay all of her tax liability with

respect to the lump sum payments for lost wages and lost leave to be at odds with the stated

purpose of the Stipulation Agreement.

c. Material Facts Are In Dispute Regarding

Whether The USPS Breached Paragraph 14

In light of the Court’s interpretation of the Stipulation Agreement, plaintiff must

demonstrate three things to establish that the government breached paragraph 14 of the

Stipulation Agreement by failing to make the Tax Consequences Payments: (1) that she provided

the USPS with tax consequences calculations that have been prepared by her accountant; (2) that

the USPS failed to pay these tax consequences within 180 calendar days of the receiving such

calculations; and (3) that the USPS did not challenge plaintiff’s tax consequences calculations in

the manner required under the Stipulation Agreement. For the reasons discussed below, material

facts remain in dispute regarding, whether plaintiff provided her tax consequences calculations to

the appropriate USPS officials and, if so, whether the USPS challenged plaintiff’s tax

consequences calculations in the manner required under the Stipulation Agreement. And so,

plaintiff has not established that the USPS breached the Stipulation Agreement at this stage in

the litigation.

23

In this regard, the Stipulation Agreement describes the process that the government must

utilize to challenge the amount of plaintiff’s tax consequences calculations and the agreement

provides, in relevant part, that:

The Agency may only challenge the Complainant’s submission for

tax consequences by utilizing the services of another State of

Florida licensed certified public accountant, who shall provide a

detailed report as to the agency’s calculations of the estimated tax

consequences, detailing each disputed amount; and serving such

analysis on the Complainant within forty five (45) days of the

Complainant’s submission for payment of consequences. In any

disagreement on the tax consequences, the Agency shall be

required to make timely payment of the non-disputed portion of the

tax consequences payment. If the Agency disputes the amount of

tax consequences submitted by the Complainant, the unpaid

disputed amount of the tax liability consequences will be appealed

directly to the EEOC by either party. The EEOC shall apply the

tax consequences requirement imposed in this Stipulation

Agreement.

Compl. at Ex. B at ¶ 14. While it is undisputed that plaintiff obtained tax consequences

calculations from her accountant in 2006, neither party has put forward sufficient facts for the

Court to determine whether the proper officials within the USPS received these calculations and,

if so, what happened afterwards. Pl. Brief at 12, 32; Def. Mot. at 5-6, 21; Def. Resp. at 15.

If the appropriate official within the USPS did receive plaintiff’s accountant-prepared tax

consequences calculation, the Stipulation Agreement requires that the government either make

the Tax Consequences Payments within 180 days, or retain its own accountant and challenge any

amount of the Tax Consequences Payments that is in dispute before the EEOC. Compl. at Ex. B

at ¶ 14. The material facts regarding whether this dispute resolution process was followed here

are not contained in the factual record currently before the Court. And so, the Court cannot

determine whether the government breached its obligation under paragraph 14 of the Stipulation

Agreement.

The Court is also unpersuaded by the government’s arguments that the USPS has been

relieved of the obligation to pay plaintiff’s tax consequences because plaintiff initially failed to

provide the USPS with tax amounts that were calculated by her accountant and because plaintiff

failed to supply the “USPS with a consistent amount of tax consequences”. Def. Mot. at 21-22;

24

Def. Reply at 11-12. The Court does not read paragraph 14 of the Stipulation Agreement to

relieve the USPS of its obligation to either pay, or challenge, the amount of plaintiff’s tax

consequences simply because plaintiff belatedly provided the USPS with her accountant-

prepared tax consequences calculations.

Indeed, the government points to no language in the Stipulation Agreement that would

extinguish the USPS’s obligation to pay the Tax Consequences Payments under these

circumstances. Def. Mot. at 21-22; Def. Reply at 11. Nor does the government identify any

language in the Stipulation Agreement that would relieve the USPS of its obligation to honor the

Tax Consequences Payments after a certain period of time has elapsed. And so, the current

factual record before the Court simply does not establish whether the government has breached

the Stipulation Agreement by failing to pay plaintiff’s Tax Consequences Payments.

3. The USPS’s Did Not Breach The Stipulation Agreement

By Declining To Reinstate Plaintiff With Pay

The factual record before the Court also demonstrates that the USPS did not breach the

Stipulation Agreement by declining to reinstate plaintiff with pay after the parties entered into

that agreement. In this regard, plaintiff argues that the Stipulation Agreement requires that the

USPS reinstate her with pay until the government fully complies with the terms of that

agreement. Pl. Brief at 8-11, 19-27.

The government counters that there is no requirement in the Stipulation Agreement for

the USPS to reinstate plaintiff with pay following the settlement of her discrimination claims.

Def. Resp. at 7-13. Rather, the government argues that the purpose of paragraphs 1 and 2 of the

Stipulation Agreement, upon which plaintiff relies to show an obligation to reinstate her with

pay, is simply to “provide a clean Federal Employment record, allowing [plaintiff] to resign in

lieu of removal.” Def. Resp. at 7. And so, the government contends that the Stipulation

Agreement neither requires, nor addresses, plaintiff’s reinstatement. See id. For the reasons

discussed below, the Court agrees.

First, a plain reading of paragraphs 1 and 2 of the Stipulation Agreement demonstrates

that these provisions do not require the USPS to reinstate plaintiff with pay. In this regard,

paragraphs 1 and 2 of the Stipulation Agreement provide, in relevant part, that:

25

The Agency hereby rescinds the Notice of Removal, dated

February 3, 1999, issued to the Complainant, Gladys S.

VanDesande, which notice shall be deemed null and void. The

Agency shall remove . . . the Notice of Removal, dated February 3,

1999, issued to the Complainant, and all related records, from all of

the Complainant’s records and files . . . The Notice of Removal,

dated February 3, 1999, shall not be cited by the Agency in any

manner, in any other case . . . involving the Complainant . . .

Compl. at Ex. B at ¶ 1. Similarly, paragraph 2 of the Stipulation Agreement provides, in relevant

part, that:

The Agency hereby rescinds the Notice of Removal, dated

December 21, 1999, issued to the Complainant, Gladys S.

VanDesande, which notice shall be deemed null and void. The

Agency shall remove . . . the Notice of Removal, dated December

21, 1999, issued to the Complainant, and all related records, from

all of the Complainant’s records and files . . . The Notice of

Removal, dated December 21, 1999, shall not be cited by the

Agency in any manner, in any other case . . . involving the

Complainant . . .

Compl. at Ex. B at ¶ 2. While the aforementioned provisions clearly require that the USPS

rescind the notices of removal placed in plaintiff’s personnel file, these provisions do not address

whether plaintiff should be reinstated to her position with pay. Id. Indeed, it is undisputed that

plaintiff returned to work in a leave without pay status after settling her discrimination claims. Pl.

Brief at 10; see also Pl. Mot. at ¶ 4; Def. Mot. at 24-25. And so, plaintiff has not established that

the Stipulation Agreement required that the USPS reinstate her with pay.

Plaintiff’s contention that the Court’s reading of the Stipulation Agreement to not require

reinstatement with pay renders other parts of the agreement superfluous is also without merit. Pl.

Brief at 23-26. In this regard, plaintiff points to paragraphs 12 and 13 of the Stipulation

Agreement which address certain sick leave and annual leave credits that the USPS is required to

make to plaintiff’s leave accounts to show that the USPS is obligated to reinstate her with pay. Id.

Specifically, plaintiff argues that the Stipulation Agreement’s requirement that the USPS credit

certain sick leave hours to plaintiff’s leave account shows that the USPS is obligated to reinstate

her with pay, because this sick leave would have no value unless plaintiff had been reinstated with

pay. Id. at 24. But, as the government explains, plaintiff’s credited sick leave remains valuable

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even if she has not been reinstated with pay, because this leave could be re-credited to plaintiff

upon her return to federal service. Def. Resp. at 11.

Plaintiff further argues that the Stipulation Agreement’s requirement that the USPS make

a lump sum payment in the amount of plaintiff’s credited annual leave “at [plaintiff’s] “current

regular pay rate” is also rendered meaningless by the Court’s reading of the Stipulation

Agreement. Pl. Brief at 23-24. But, again, the reference to plaintiff’s “current regular pay rate”

has no bearing upon plaintiff’s entitlement to reinstatement with pay. Rather, this provision

simply clarifies how the USPS should calculate the payment required under paragraph 13 of the

Stipulation Agreement.5

Indeed, at bottom, the Stipulation Agreement simply does not require, or even address, a

requirement to reinstate plaintiff with pay. And so, the Court declines to infuse this agreement

with such a requirement. See Compl. at Ex. B.

4. Material Facts Are In Dispute Regarding Whether The USPS

Breached The Stipulation Agreement By Terminating Plaintiff

Although the Court does not read the Stipulation Agreement to require that the USPS

reinstate plaintiff with pay, the Court shares plaintiff’s view that she had no obligation to

voluntarily resign under the terms of the Stipulation Agreement unless the USPS fully complied

with the agreement. In this regard, paragraph 21 of the Stipulation Agreement provides, in

relevant part, that: plaintiff “agrees to resign from the employment of the Agency only after full

compliance by the Agency of the terms of this Stipulation Agreement, including, but not limited

to all back pay and lump sum agreements required in this Stipulation Agreement.” Compl. at Ex.

B. at ¶ 21 (emphasis supplied). As discussed above, material facts remain in dispute regarding

whether the government has in fact fully complied with the terms of the Stipulation Agreement

with respect to plaintiff’s Tax Consequences Payments claim. And so, plaintiff has not

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Plaintiff’s reliance upon the Stipulation Agreement’s requirement that the USPS not deduct any of her

leave hours after February 15, 2003, due to plaintiff’s leave without pay status, is also misguided. This

provision is intended to ensure that plaintiff’s leave without pay status would not reduce the amount of

leave to be credited to her leave account. Because the Court does not construe the Stipulation Agreement

to require that the government reinstate plaintiff with pay, it would appear that if plaintiff’s only remedy

would be a return to duty in a leave without pay status if she succeeds upon her claim that the USPS

breached the Stipulation Agreement by terminating her employment in 2007.

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established that she is entitled to judgment in her favor with respect to her claim that the USPS

breached the Stipulation Agreement by improperly terminating her in 2007 at this stage in the

litigation.

5. The Government Correctly Calculated And Paid

Plaintiff’s Quantum of Interest

The undisputed material facts do show, however, that the government has correctly

calculated and paid plaintiff’s quantum of interest under the Stipulation Agreement. And so, the

government is entitled to judgment as a matter of law in its favor on this issue.

In this regard, paragraph 8 of the Stipulation Agreement requires that “[i]nterest shall be

calculated using the Federal Judgment Rate in accordance with USPS [Employee and Labor

Relations Manual], 13, June 1998; 436.6 . . . .” Compl. at Ex. B at ¶ 8. The USPS’s Employee

and Labor Relations Manual also explains that “the rate of interest is calculated based on the

Federal Judgment Rate,” which is found in Title 28, United States Code, Section 1961. USPS

ELM 13, June 1998, 436.63 available at https://about.usps.com/manuals/elm/elm13.zip; App. to

Def. Mot. at DA94-DA95.

In addition, 28 U.S.C. § 1961 provides, in part, that, “interest shall be calculated from the

date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity

Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the

week preceding the date of judgment.” 28 U.S.C. § 1961 (2000). And so, the Stipulation

Agreement requires that the USPS calculate plaintiff’s quantum interest from the date of the

entry of the judgment on plaintiff’s discrimination claims, at a rate equal to the weekly average

1-year constant maturity Treasury yield for the week preceding the date of judgment.

In this case, there is no dispute that the date of the entry of judgment with respect to

plaintiff’s discrimination claims is June 23, 2003. Def. Resp. at 19, Pl. Brief at 7. Plaintiff also

does not dispute the government’s representation that the rate equal to the weekly average 1-year

constant maturity Treasury yield for the week preceding this date of judgment was .95%. Pl.

Mem. at 42-43; Def. Resp. at DA 137. It is similarly undisputed that the USPS applied the .95%

rate to calculate and pay plaintiff’s quantum of interest. Pl. Mem. at 43; Def. Resp. at 19-20.

And so, the USPS has demonstrated that it has properly calculated and paid plaintiff’s quantum

of interest.

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6. The Stipulation Agreement Limits Plaintiff’s Attorney’s Fees

A plain reading of the Stipulation Agreement also demonstrates that this agreement limits

the attorney’s fees that plaintiff may recover in this litigation. Plaintiff’s ability to recover

attorney’s fees is limited by the language contained in paragraph 28 of the Stipulation

Agreement, which provides, in relevant part, that “the Agency will pay for all expenses,

including attorney’s fees, for any action taken to enforce the failure to make full, complete and

timely payments as required in paragraphs 14, 15, and 21, if complainant prevails.” Compl. at

Ex. B at ¶ 28. Given this, the aforementioned language makes clear that the government must

pay plaintiff’s attorney’s fees for any action taken to enforce the government’s obligation to

make the payments required under paragraphs 14, 15, and 21 of the Stipulation Agreement.

In this matter, plaintiff seeks to enforce the government’s obligation to make the

payments required under paragraph 14 of the Stipulation Agreement and she does not seek to

enforce paragraphs 15 and 21 of that agreement. Pl. Mem. at 44; Def. Mot. at 31-32. And so,

plaintiff’s ability to recover attorney’s fees in this action is limited by the terms of the Stipulation

Agreement to those attorney’s fees that are incurred to enforce the USPS’s obligation to make

the Tax Consequences Payments required under the Stipulation Agreement.

7. Plaintiff Is Not Entitled To IRS-Levied Interest

And Penalties

As a final matter, the undisputed material facts also show that the government is entitled

to summary judgment in its favor on the issue of whether plaintiff may recover certain IRS-

levied interest and penalties in this litigation. In this regard, the Stipulation Agreement makes

clear that plaintiff cannot recover the IRS-levied interest and penalties that she has incurred by

failing to timely pay her federal income taxes, because the USPS did not make the Tax

Consequences Payments. And so, the government is entitled to judgment in its favor on this

issue.

As the government points out in its motion for summary judgment, the Stipulation

Agreement, “explicitly provides for interest, and does not levy interest against the Government

IRS-levied interest and penalty amounts that accrued based upon [plaintiff’s] failure to timely

file and pay her taxes.” Def. Mot. at 29. In this regard, paragraph 28 of the Stipulation

Agreement expressly provides that the government’s failure to fully and completely comply with

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the payment requirements of the Stipulation Agreement “will result in the Agency paying

interest from the date of noncompliance to the date the required payment is made, at the federal

judgment rate.” Compl. at Ex. B at ¶ 28. And so, the agreement specifies that plaintiff’s remedy

under circumstances where the government failed to make the Tax Consequences Payments is to

recover the interest on this payment, calculated from the date of the government’s

noncompliance.

Plaintiff points to no provision in the Stipulation Agreement that would allow her to

recover IRS-levied fees and penalties because the USPS did not make the Tax Consequences

Payments. In fact, as the government also correctly observes in its motion, plaintiff had a duty to

mitigate any damages that she incurred because the USPS did not make these payments. Def.

Mot. at 29-30. Such mitigation would certainly have included the timely payment of plaintiff’s

taxes on the payments called for under the Stipulation Agreement. And so, plaintiff may not

recover the interest and penalties resulting from her failure to timely file her taxes in this

litigation.

V. CONCLUSION

In sum, the undisputed material facts in this breach of contract action demonstrate that

plaintiff’s claims are not barred by the doctrine of res judicata. The undisputed material facts

also demonstrate that the government did not breach the Stipulation Agreement by declining to

reinstate plaintiff with pay. In addition, the undisputed material facts demonstrate that the

government has correctly calculated and paid the quantum of interest due to plaintiff, that

plaintiff may not recover IRS-levied interest and penalties and that plaintiff’s attorney’s fees are

limited by the terms of the Stipulation Agreement.

There are, however, material facts in dispute regarding whether the government breached

the Stipulation Agreement by failing to pay the Tax Consequences Payments and whether the

USPS breached this agreement by terminating plaintiff’s employment in 2007.

And so, for the foregoing reasons, the Court:

1. DENIES the government’s motion for summary judgment on liability on the issue of

whether plaintiff’s claims are barred by the doctrine of res judicata;

2. DENIES the government’s motion for summary judgment on liability and DENIES

plaintiff’s motion for partial summary judgment on liability on the issue of whether

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the government breached the Stipulation Agreement by failing to pay plaintiff’s Tax

Consequences Payments;

3. GRANTS the government’s motion for summary judgment on liability and DENIES

plaintiff’s motion for partial summary judgment on liability on the issue of whether

the government breached the Stipulation Agreement by failing to reinstate plaintiff

with pay;

4. DENIES the government’s motion for summary judgment on liability and DENIES

plaintiff’s motion for partial summary judgment on liability on the issue of whether

the government breached the Stipulation Agreement by terminating plaintiff in 2007;

5. GRANTS the government’s motion for summary judgment on liability and DENIES

plaintiff’s motion for partial summary judgment on liability on the issue of whether

the government breached the Stipulation Agreement by failing to properly calculate

the quantum of interest paid to plaintiff;

6. GRANTS the government’s motion for summary judgment on liability on the issue

of whether plaintiff’s attorney’s fees are limited by the terms of the Stipulation

Agreement; and

7. GRANTS the government’s motion for summary judgment on liability on the issue

of whether plaintiff is entitled to recover certain IRS-levied fees and penalties.

It is further ORDERED that the parties shall FILE a joint status report, on or before

April 25, 2017, indicating their respective views regarding how this matter should proceed.

The Clerk shall enter judgment accordingly.

The parties shall bear their own costs.

IT IS SO ORDERED.

s/ Lydia Kay Griggsby

LYDIA KAY GRIGGSBY

Judge

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