*1 purposes of determin- amount, CO., TURNER any, if CONSTRUCTION ing appropriate INC., Plaintiff-Appellant, through can restored restitution. We government, agree not with the howev- do er, difficulty, own, prevents that this on its STATES, recovering any Defendant-Appellee. Hansens from restitu- UNITED It inherent

tion. is the nature of No. 03-5055. merger transaction, alleged more than any mismanagement merger, after the of Appeals, United States Court impossible makes it for the Hansens Federal Circuit. “any in property return interest May 2004. [they] in exchange ha[ve] received in sub- stantially good condition as when it was ” by received Restatement [them]....

(Second) § of Contracts 384. If misman- established,

agement on their may any

Hansens be accountable for di-

minishment of character value of

property directly that can be traced However, mismanagement.

their we do think

not the Hansens’ restitution may proceed solely

claim based on

consequences merger of the transaction.

CONCLUSION above,

For the reasons forth hold set we

that the Court Federal of Claims erred

ruling on summary judgment gov- that the

ernment’s breach of was total so

toas entitle the Hansens to an award damages

restitution the amount $1

million. Accordingly, judgment fa-

vor Hansens is vacated. The case is

remanded to the Court Federal Claims. remand,

On the court will conduct further

proceedings to determine whether in this

breach case was total.

If the court determines that the breach total, it will proceedings conduct on

damages opinion. consistent this with

VACATEDAND REMANDED. *2 Braude, Margu-

Herman Braude M. & lies, DC, Washington, argued plain- tiff-appellant. him on the was With brief Lewis. Michael A. Chernigoff, Attorney, Trial

Glenn I. Branch, Litigation Divi- Commercial Civil Justice, sion, Department United States DC, Washington, argued for defendant- him Rob- appellee. With on the brief were McCallum, Jr., Attorney D. ert Associate General; Cohen, Director; M. David Snee, Bryant Of G. Assistant Director. Poirier, Attorney. counsel James W. MAYER, Judge, Before Chief LINN, Judges. NEWMAN and Circuit NEWMAN, Judge. PAULINE Circuit (Turner) ap- Turner Co. Construction peals judgment of the United States Claims,1 denying Court of Federal Tur- compensation for ner’s claim for additional in performance costs incurred of a con- with the struction contract United States (DVA). Department of Affairs Veterans judgment reverse the as to entitle- We ment, proceedings. and remand for further (2002). 1. Constr. v. United 54 Fed. Cl. 388 Co.

DISCUSSION (Fed.Cir.1986) (a 807 F.2d expected contractor is to recog appeal judgments On patent nize ambiguities and to inquire Claims, plenary Court of Federal review is *3 about the work to performed). be The conclusions, given legal to the court’s parties are charged with knowledge of law findings factual are reviewed under the and fact appropriate subject matter, to the clearly erroneous standard. See Massa professional competence in Bay chusetts Transp. Auth. v. United reading and writing presumed. contracts is States, 1367, (Fed.Cir.2001); 254 F.3d 1372 See Lockheed Martin IR Imaging Sys., City States, El Centro v. United 922 of West, (Fed.Cir. Inc. 319, v. 108 F.3d 322 (Fed.Cir.1990). 816, F.2d 819 The inter 1997). pretation of contracts is reviewed as a matter of law. See Seaboard Lumber Co. The DYA and Turner entered into a States, (Fed. 1283, v. United 308 F.3d contract for construction of an addition to Cir.2002). govern Contracts between the the DVA Medical Center in Boston. While ment private subject contractors are construction was proceeding, Turner disa- to general law of contracts. See Mobil greed with the DVA engineer resident Exploration Southeast, Oil Producing & about whether the contract required cer- 604, Inc. 607, v. United 530 U.S. tain electrical panel- fire-nated 2423, (2000). 120 S.Ct. 147 L.Ed.2d 528 boards in the operating room area on the third floor of the addition. The DVA resi- dispute When a arises as to the dent engineer directed Turner to install interpretation of a contract and the con disputed materials. complied, Turner tractor’s interpretation of the contract is incurring the additional costs that are sub- reasonable, we apply the rule of contra ject of appeal. this proferentem, that ambigu The contract Turner to “Fur- ous or unclear subject terms that are nish and install wiring, systems, electrical more than interpretation one reasonable equipment and in accessories accordance against be construed party who draft specifications with the and drawings” and ed the document. United States v. Turner to comply with applicable electrical Co., (Fed.Cir. Constr. 819 F.2d codes. The government states 1987). However, the court will consider contract should be read to certain include ambiguity whether the or lack of clarity fire-rated electrical installations for the sufficiently apparent that there arose rooms, based on the contract’s obligation an on the contractor inquire requirement compliance of with electrical provision as to that before entering into codes, and that any this overrides inade- the contract. See P.R. Corp. Burke in quacy the contract specifications or er- United 277 F.3d 1355-56 government’s ror (Fed. Cir.2002) (where electrical draw- a government con ings. government states that tract contains latent ambiguity, the court contract should at pat- least be viewed as will construe the ambiguous against term ently ambiguous, placing on Turner contract, as drafter duty inquire provided during bidding process interpreta the contractor’s tion respect was reasonable and with to the drawings. the contractor erroneous relied on that interpretation when prepar states that the contract not am- bid); ing its Zinger Const. biguous, Co. v. United require- the electrical systems” therefore must specifi- contract electrical set forth ments as do not fire-rated. drawings 2-hour and electrical cations codes. applicable conflict with in- Turner states that the does for the deed detailed draw- The contract contained system, electrical as shown emergency systems for the showing the ings contract, area, specifi- but that the for the other areas operating room drawings do not in- also cations and electrical the construction. system. room areas as provided details clude the dispute system, is focused on whether and are *4 pan- and room electrical feeders operating that do aspects as to and do explicit the as should have been viewed elboards fire-rating. undisputed It is not although emergency system, of a fire-rated any description that no specifications and the contract drawing specification or electrical electricals clear that fire-rated were were as operating rooms of shows for designated disputed feeders govern- emergency system. The hospital’s panelboards. and argues designation ment that such unnecessary, referring rooms operating is Electrical The Massachusetts State Article Electrical Code 517-80 to National (MSEC) emergency requires that Code Systems Electrical for entitled “Essential and en- have equipment fire-rated Article Hospitals.” requires NEC This provisions Relevant closures. hospitals separate “emergency a have include: MSEC safety for to life system” “circuits essential Electrical 1.22A. Massachusetts State care,” patient following critical in the and generation all requires emergency Code provisions: equipment and distribution be installed 517.30(b) General. 2-hour fire-rated within dedicated rooms, equipment, closets or shafts. All (1) systems Essential electrical for ductwork, etc., conduit, alien piping, hospitals comprised of two shall be locat- emergency system shall not be systems separate capable supply- rooms, closets, or ed within these shafts ing lighting a limited amount of equipment that serves these except service, is es- power considered rooms, closets or shafts. safety sential for life and effective operation during the hospital time emergency such equipment B. All interrupt- normal electrical service breakers, transfer switch- generators, any sys- for These two ed reason. in- panel-boards, shall be boards and emergency system tems shall be in 2-hour rooms.... stalled fire-rated system. equipment and the sys- portions emergency All C. (2) system feeders, emergency shall be tem, located outside of such as limited rooms, safe- closets or shafts herein circuits essential life described 2- ty also be within and critical care. These are patient above shall enclosed safety designated hour enclosures.... the life branch of the critical branch. 1.22 states MSEC (3) system sup- shall equipment that the room feeders major equipment “emergency ply electric neces- panel-boards be deemed sary patient hospi- operating for care and basic room panels in the operation. contract, system. tal Neither the specifications,

its the drawings, nor the specify fire-rating codes for panels and electrical feed- (c) Wiring Requirements. ers. (1) Other Separation from Circuits. contrast, In drawings explicitly show safety

The life branch critical the operating room walls are fire- system shall branch However, rated. panels kept entirely independent of all feeding “PP,” designated those rooms are wiring other equipment shall designation power panels. standard boxes, raceways, not enter the same Although government argues or cabinets with each other or other designations these placed were on wiring. drawings “only wiring to show size and location, not protection requirements,” fire points out the NEC and *5 no supports argument. evidence this To provisions do not which ar- specify MSEC contrary, the drawings the same explicitly emergency system, eas are included the fire-rating show where required, is and and drawings specifica- while the panels other feeders and are designated specific emergency sys- tions are as to the (critical (emergency EP power), CP pow- tem, including which electrical circuits (life er), safety power). contrast, or LS In fire-rated, must as as the be well nature of panels feeding operating the the rooms are fireproofing to employed. the be designated (ordinary PP power panels). out points hospital also the while a Drawing As further example, 1-E37 re- require a separate emergency sys- codes to fers the feeders for the elevator control essential tem for circuits when “the normal and panels states: “PENTHOUSE interrupted electrical service is for any EMERGENCY FEEDERS SHALL reason,” require the codes do not fire- CABLE CHANGE TO MI PRIOR TO rating separate for the system. Turner THE THIRD PENETRATING FLOOR provisions states that these code relate to EMERGENCY ELECTRICAL CLOSET back-up, emergency electrical not fire-rat- 2 HR RATED WALL. PROVIDE MI CA- ing, stresses that the and neither NEC nor BLE,” desig- panels and the are elevator specifies operating the MSEC the rooms nated “Critical Power.” system as emergency or as requiring fire-rated electrical installations. designations There are numerous of fire- rating throughout drawings. the Several

The contract indeed for provides an shafts, rooms, partitions, electrical panels, emergency system, spec- and the and electrical are the closets shown on ifications/drawings show the details of the drawings operating as fire-rated. The emergency system, including portions panel room require feeders are shown the draw- fire-rated installation. The ings by requirement required and the contract to be emergen- NEC of a separate raceways cy system installed in nonflexible metal does not use of wiring system. through partitions. fire-rated for this While non-fire-rated drawings diagrams op- and for wiring MSEC fire-rated, system leg- be not place erating power panels, including it does room 1324 specified operating are not for the drawings, on the and cross-references

ends drawings fire- and designated panels, not as room indeed show these feeders legend, contain rated. transition ordi- show the from letters, room capital nary contract spec- electrical feeders. The have FIRE partitions “E” room “NO type ifications, prevail are over stated contrast, In RATING.” RESISTANCE drawings, require fire-rating do not and rooms panels elevator control panels, and disputed electrical feeders are they are housed in which do not render the applicable codes fire-rated, including specified use of MI specifications non-compliant. The Court Federal Claims found cable. reading of the contract in con- Turner’s drawings, 1 on that Note the electrical junction that of rea- with the codes was a cir- “All critical branch which states: O.R. prudent contractor. sonable See panels dedicated to cuitry should be from Co. v. 987 Blake Constr. United O.R.,” means that all (Fed.Cir.1993) 743, (determining F.2d circuitry emergency system, understanding a However, it is must be fire-rated. contractor); Firestone Tire & prudent place oper- Note 1 clear that does 195 Ct.Cl. Rubber Co. United sys- circuitry in the ating room (1971) (the court must F.2d circuitry fire- designate tem “into the of a place itself shoes ‘reasonable rated. contractor”). If prudent’ construction government states that it is error, governmental it there indeed were *6 “immaterial” that and the NEC the MSEC apparent is not from the relevant docu- require fire-ratings for operat do not ments. However, nei ing panels. room electrical that reading We conclude Turner’s specifications the contract or its ther does specifica- and on the contract reliance drawings or such materials. reasonable, drawings tions government’s position litigation government’s requirement place in drawings are error does systems fire-rated be installed additional contractor, for burden of error on change. was a material entitled no hint of error the con there is such costs recover additional incurred. Burke,

tract. P.R. 277 F.3d at 1355- See quantum. for determination of We remand (latent ambiguities charged are not 56 contractor); Maintenance, Robins Inc. AND REMANDED. REVERSED States, (Fed. 1254, 265 F.3d 1257 United Cir.2001) (“Whenever uses MAYER, dissenting. Judge, Chief contract, in a there is an specifications warranty accompanying implied that these operating panelboards Because the room errors.”) are from As specifications free part the emergency feeders were Maintenance, discussed Robins 265 system, electrical and because 1257, recovery F.3d at “The test for based protection two-hour fire-rated specifications on inaccurate is whether I system, electrical dissent. by was misled these errors.” contractor entirety in their

“Contracts are viewed given meaning imputed a rea- specifications acquainted sonably intelligent clear that contractor electrical are fire-rated circumstances, regard with the involved within 10 seconds of interruption.” As design, configured, of whether perform less labelled room panel- ance, or both.” Blake Constr. Co. v. Unit potential boards had two power, sources of 743, (Fed.Cir.1993) normal commercial electricity ed 987 F.2d and an omitted). (citations emergency generator. The “An feeders at is- interpretation sue were the alternate emergency source gives meaning which to all power to the panel- room parts of a contract is preferred to one boards. The panelboards part insignificant renders of it part were Branch,” of the “Critical as de- useless.” Id. at 746-47. As we have also 517-3, fined NEC article in that they noted, interpreted contract should be “[a] were subsystem “[a] of the emergency sys- way in such a that all parts make sense” tem consisting of ... supplying Hughes interpreted when as a whole. energy to ... receptacles selected serving Galaxy Communications v. United areas and functions patient related to (Fed.Cir.1993). 998 F.2d ” Additionally, care.... the feeders and main issue boils down to whether panelboards were also of the NEC the operating panelboards and feed- definition, of System” “Essential Electrical ers were part they because system were ... “[a] system upon based specification, designed to continuity ensure of electrical drawings, incorporated FAR provi- power areas, to designated and functions sions, and the National Electrical Code aof health care facility during disruption (“NEC”). ” so, If unambigu- the contract of normal power sources.... Finally, ously required two-hour protec- 3.2.B, Section paragraph panelboards tion for the feeders and sup- that the “Essential (Emergency) raceway plying emergency power to the operating systems ... shall be either in a rated and agree room. I ruling with the trial court’s (2) approved two hour enclosure or the ” fully the contract defined the emer- (2) raceway shall be two hour rated.... gency system op- to include the definitions, The NEC set forth as mini- *7 erating panelboards and feeders. standards, mum installation combined with specification requirements make clear together, plain language When read that the panelboards feeders and at issue 1.22, of section paragraph incorpo- were “emergency system” rating “Emergency the NEC definition of was required to be fire-rated. System,” and of section 16111 mandate panelboards receive two- upon negative The court relies infer- hour protection. Section ences deduced from the contract drawings paragraph por- 1.22.C that “all to to contrary. drawing find Because tions of emergency system ... shall 1 E37 explicit makes the statements that ... be enclosed within two hour fire rated change elevator feeders “shall to MI 517-3, enclosures.” NEC article defines prior floor,” penetrating cable the third as, “Emergency System” “A system of and that “provide Turner was to 2 HR feeders and branch circuits ... intended to feeders, rated MI cable” for the elevator supply power alternate to a num- limited negative the court draws the inference of prescribed ber functions vital to the separate feeders are not protection of life and patient safety, with systems requiring electric two- automatic power restoration of electrical protection. Examining hour fire-rated contract, however, to a broad

entire leads

er, interpretation. plausible more wiring through transition

penthouse a simply third-floor was

operating room and the conduit-and-

“special condition” size, not wiring indicated designations

wire Also, Turner protection requirements.

fire fact that been alerted

should have of MI ca drawings’ references use preclude locations did not

ble for certain because section protection

two-hour fire either MI cable explicitly stated a fire-rated enclosure would two-hour Thus, if requirement. even

satisfy the inference correct — negative were

Turner’s 1E1 and 1E37 option of the conduit-and-wire

installation two-hour fire-rated not MI cable—the

protection could still have been satisfied a installation of two-hour fire-

through the

rated enclosure. COMPANY,

E.T. HORN

Plaintiff-Appellant, *8 STATES, Defendant-Appellee.

UNITED No.

Docket 03-1363. of Appeals, Court

United States

Federal Circuit.

May 2004.