United States Court of Appeals, Fourth Circuit

972 F.
2d 339
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of

unpublished dispositions is disfavored except for establishing
res judicata, estoppel, or the law of the case and requires
service of copies of cited unpublished dispositions of the Fourth
Circuit.
GUST K. NEWBERG CONSTRUCTION COMPANY,
Plaintiff-Appellant,
v.
COUNTY OF Fairfax; Fairfax County Board of Supervisors,
Defendants-Appellees.
GUST K. NEWBERG CONSTRUCTION COMPANY,
Plaintiff-Appellant,
v.
COUNTY of Fairfax; Fairfax County Board of Supervisors,
Defendants-Appellees.
Nos. 91-1674, 91-1798.
United States Court of Appeals,

Fourth Circuit.
Argued: March 2, 1992
Decided: August 7, 1992
1
ARGUED: Daniel E. Toomey, WICKWIRE, GAVIN, P.C., Vienna, Virginia,

for Appellant. Kenneth C. Bass, III, VENABLE, BAETJER & HOWARD,
McLean, Virginia, for Appellees.
ON BRIEF: Jon M. Wickwire, Jeffrey G. Gilmore, Shannon J. Briglia, Michael

A. Gatje, WICKWIRE, GAVIN, P.C., Vienna, Virginia, for Appellant. Daniel
J. Kraftson, Michael W. Robinson, VENABLE, BAETJER & HOWARD,
McLean, Virginia, for Appellees.
Before PHILLIPS and NIEMEYER, Circuit Judges, and MURRAY, Senior

United States District Judge for the District of Maryland, sitting by designation.
MURRAY, Senior District Judge:

OPINION
4
Gust K. Newberg Construction Company ("Newberg"), the appellant in this

action, instituted this proceeding in the United States District Court for the
Eastern District of Virginia against the appellee County of Fairfax, Virginia
("the County"). Newberg's complaint stemmed from a dispute arising from its
renovation of a pollution control plant operated by the County. The district
court granted the County's motion to dismiss all claims in Newberg's original
complaint except a single fraud claim and, at the close of pre-trial discovery,
granted the County's motion for summary judgment on the fraud claim.
Newberg then appealed the district court's orders. On appeal, this Court
affirmed those orders, reversing and remanding only the district court's award
of Rule 11 sanctions. Gust K. Newberg Constr. Co. v. Fairfax, Nos. 90-2463 &
90-2513 (4th Cir. August 15, 1991).
While this appeal was pending, Newberg filed, and the district court denied, a
motion for relief from judgment pursuant to Fed. R. Civ. P. 60(b). Upon this
Court's subsequent remand of the case back to district court, Newberg filed a
motion for summary enforcement of what it considered to be the mandate
established by this Court's first opinion. That motion was also denied. Newberg
now appeals both the district court's order denying its Rule 60(b) motion as
well as its denial of the motion for summary enforcement.
I.
6
Newberg is the general contractor for a proposed Pollution Control Plant in

Lorton, Virginia. This project is owned and operated by the County. In 1983,
Newberg entered into a contract with EngineeringScience Co. ("ESCo") under
which ESCo agreed to perform engineering services as Architect/Engineer
(A/E) for the project. Special Provisions Paragraph 8.1 of this contract holds
the engineer liable for 6.5% of the final constructed value for any excess
construction costs attributable to the engineer's errors, omissions, or negligent
acts. The paragraph goes on to dictate that the determination as to whether such
costs are attributable to the engineer shall be made by the Director of Public
Works or his designee.
In 1987, Newberg experienced significant cost overruns which it attributed to

the County, ESCo, or both entities. As a result of several adverse administrative
rulings by the Department of Public Works, Newberg took the position that
interest and bias within the administrative dispute resolution process made that
process entirely ineffective. In April of 1990, while administrative appeals were

still pending, Newberg filed a multi-count lawsuit in federal court charging the
County's administrative procedures to be invalid. The district court
subsequently dismissed all but one count of the complaint (Counts I, III, IV, V)
holding that Virginia law does not require the degree of "disinterested"
administrative process Newberg sought and that the contract and the Virginia
Procurement Act clearly required exhaustion of administrative remedies.
Summary judgment was subsequently entered against Newberg's final claim,
fraudulent inducement, at the close of discovery.
II.
8
During the pendency of Newberg's first appeal to this Court, Newberg filed a
motion for relief from judgment pursuant to Fed. R. Civ. P. 60(b). In essence,
this motion was a request that the district court reconsider its original order of
dismissal in light of what Newberg termed "newly discovered facts." These
facts, Newberg alleged, demonstrated that Newberg was not afforded a hearing
before a disinterested Hearing Examiner as required by Virginia law.1 Finding
that Newberg had failed to reveal any new facts which would justify a change
in the district court's original position that "the administrative process must be
allowed to run its course before the judiciary steps in," the district court denied
Newberg's motion. We agree and hold that the district court did not abuse its
discretion in denying Newberg's motion.2
As a result of Newberg's first appeal, this Court wrote:
10 district court granted the County's Rule 12(b)(6) motion to dismiss Counts I, III,
The
IV, and V, finding that Newberg failed to exhaust its administrative remedies as
required by the Contract. We agree. It is undisputed that Article 7.4.2 of the Contract
provides that " [a] party may not institute legal proceedings until all administrative
remedies as set forth herein or as required by the ordinances or resolutions of Fairfax
County have been exhausted." The County's Purchasing Resolution also specifically
provides that "[n]o bidder, offeror, potential bidder or offeror, or contractor shall
institute any legal action until all administrative remedies available under this Article
have been exhausted and until statutory requirements have been met." Furthermore,
Virginia's Procurement Act unequivocally requires that once administrative
procedures are invoked by a contractor, they "shall be exhausted prior to instituting
legal action concerning the same procurement transaction unless the public body
agrees otherwise." Va. Code 11-70.F. (1989). Given the clear language of the
Contract, the County's Purchasing Resolution, and the Procurement Act, we find that
the district court acted properly in requiring that Newberg exhaust its administrative
remedies prior to seeking judicial intervention in this dispute.
11
Our position on this matter has not changed. By Virginia law, as well as by the
express provisions of the parties' own contract, allegations of interest and bias
within the administrative process must be first addressed and exhausted by the
administrative process before any party can seek relief by way of judicial
intervention. Accordingly, we find that the district court properly denied
Newberg's motion for relief from judgment.
III.
12
We now consider Newberg's claim that this Court's opinion of August 15, 1991
established a "mandate" capable of summary enforcement. In its previous
ruling, this Court addressed Newberg's claim that the County's administrative
remedies did not provide a hearing before a "disinterested person or panel" as
required by Virginia law. In so doing, the Court identified several facets of this
case which it found "troubling." However, after conceding that "[w]e are ...
bothered by the fact that no less than five different persons have served as
hearing officers in what is a very confused administrative process," this Court
wrote:
13
While
we specifically refrain from ruling on whether any of the hearing officers in
this case were in fact "interested" in violation of the Procurement Act's mandate, we
find that, in the future, controversy can best be avoided by appointment of new
hearing officers who (1) are not employees of the County, (2) are completely
independent of the parties, and (3) are knowledgeable of the construction business.
14
On remand, Newberg filed a motion for "summary enforcement" of the Circuit

Court's order asserting that the above-quoted language implicitly revitalizes
Counts VI and VII of the amended complaint as well as mandates that a new
hearing examiner be appointed who meets the three stated qualifications.
Determining that this language amounted to nothing more than "a suggestion,"
the district court denied the motion. Again, we affirm the district court's
reading of this unambiguous language.
15
As quoted above, this Court's previous opinion expressly avoids a

determination of whether the hearing examiners in this case were "interested."
Furthermore, the three criteria amount to nothing more than "friendly advice"
from this Court on ways the County could best avoid such disputes in the
future. If this Court had intended to declare the County's administrative dispute
resolution procedure invalid or intended to revitalize element's of Newberg's
Complaint, it would have expressly done so.
IV.
16
Accordingly, since we find no reversible error upon review of the matters urged
by the appellant, the judgment of the district court is
17
AFFIRMED.
Va. Code Ann. 11-71 (1989). Essentially, the "newly discovered facts" are
alleged as follows:
That the hearing examiner designated to hear Newberg's appeals, Mr. Kramer,
believed that if he ruled in favor of Newberg, his close personal friend, Mr. di
Zerega, would be personally liable for any damages awarded to Newberg as
well as being subject to criminal prosecution
That while Mr. Kramer was evaluating the procurement decisions of Mr. di
Zerega, Mr. di Zerega was simultaneously evaluating the propriety of
procurement decisions made within the department headed by Mr. Kramer
That Mr. Kramer refused to consider whether the above facts made him biased
or interested in the outcome of the administrative hearing process
That the Architect/Engineer retained by Fairfax County to supervise

construction had failed to comply with Virginia registration statutes
See Green v. Foley, 856 F.2d 660, 665 (4th Cir. 1988) (denial of relief under
Rule 60(b) is reviewed under the abuse of discretion standard), cert. denied,
490 U.S. 1031 (1989)

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972 F.

NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of

United States Court of Appeals,

ARGUED: Daniel E. Toomey, WICKWIRE, GAVIN, P.C., Vienna, Virginia,

ON BRIEF: Jon M. Wickwire, Jeffrey G. Gilmore, Shannon J. Briglia, Michael

Before PHILLIPS and NIEMEYER, Circuit Judges, and MURRAY, Senior

MURRAY, Senior District Judge:

Gust K. Newberg Construction Company ("Newberg"), the appellant in this

Newberg is the general contractor for a proposed Pollution Control Plant in

In 1987, Newberg experienced significant cost overruns which it attributed to

process entirely ineffective. In April of 1990, while administrative appeals were

As a result of Newberg's first appeal, this Court wrote:

On remand, Newberg filed a motion for "summary enforcement" of the Circuit

As quoted above, this Court's previous opinion expressly avoids a

That the Architect/Engineer retained by Fairfax County to supervise

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