February
12, 1993
Appeal
of
ROGER
H. ELLIOTT
Under
Lease Agreement
PSBCA
No. 3285
APPEARANCE
FOR APPELLANT:
Roger
H. Elliott
APPEARANCE
FOR RESPONDENT:
Robert
E. O'Connell, Esq.
OPINION OF THE
BOARD
Appellant,
Roger H. Elliott, a Postal Service lessor, has filed an appeal from a
Contracting Officer's final decision which denied Appellant's claim for
reimbursement of payments Appellant made to Madison County, Montana, for solid
waste charges against Appellant's property.
The appeal was submitted on the record without a hearing and is being
processed under the Board's accelerated procedure. Only entitlement is being decided.
Findings
of Fact
1. On August 14, 1981, Appellant and Respondent,
United States Postal Service, entered into a lease under which Appellant agreed
to lease a facility in Sheridan, Madison County, Montana, to Respondent for a
period of three years commencing April 1, 1982, at a monthly rental of
$660. The lease contained three two-year
renewal options at higher rental amounts (Appeal File (AF-) 1).
2. The lease provided that, ". . . the
Postal Service [sic] to be responsible for all utility service
billings." In fulfilling this
responsibility, Respondent paid for trash and garbage pick-up (AF-16).
3. The lease further provided that Respondent
would pay to the lessor as additional rent the net amount of general real
estate taxes by check made payable jointly to the lessor and the taxing
authority issuing the tax bill. It also
stated that "the lessor shall pay all assessments and fees of every kind
and nature other than general real estate taxes" (AF-1).
4. In 1982 Madison County, Montana, formed a
county-wide solid waste district for the purpose of disposal of solid
waste. In order to pay for
implementation of the program, service fees were established for both household
and commercial entities (AF-24, 27).
5. Appellant's real property tax notices from
Madison County, Montana, for the Sheridan Post Office for the years 1983-1991
all contained a line item designated "Solid Waste." The yearly amount assessed varied from $64 to
$116.60 (AF-2, 6, 8, 10, 12, 14, 17, 20, 22).
6. Each year that Appellant received the real
property tax notice he forwarded it to Respondent and requested payment of the
full amount, including the solid waste charge (AF-2, 4, 6, 12, 14, 17, 20, 22).
7. Respondent declined to reimburse Appellant
for the solid waste charge for the years 1983-1991, on the basis that the
charge was a special assessment, not part of the general real estate taxes, and
therefore Appellant's responsibility to pay as lessor. Respondent otherwise paid Appellant in full
for the general real estate taxes assessed by the tax notices (AF-3, 5, 7, 9,
11, 13, 15, 18, 21, 23).
8. A new lease for the same premises was
executed by the parties on March 7, 1990.
The lease term was to begin April 1, 1991, and end March 31,
1994. The monthly rental amount was
$825. The lease contained a clause
entitled "Reimbursement of Paid Taxes" which stated that Respondent
would reimburse the lessor, as additional rent, all general real estate taxes
levied on the property which the lessor was required to pay. The clause further provided that "[t]he
lessor must pay all assessments and fees of every kind and nature other than
general real estate taxes without reimbursement by the Postal Service;"
and "In no event will assessments, 'special assessments' or like charges
be considered general real estate taxes under the terms of this
lease." The lease stated that
Appellant would furnish as utilities "all systems and equipment as
presently installed," but Respondent agreed to continue to pay all utility
bills (AF-19). Reimbursement of
Appellant for payment of the solid waste charge on the tax bills was not an item
discussed in the lease negotiations (Declaration of Marcus K. Nielsen).
9. By letter dated February 11, 1992, to
Respondent's Contracting Officer, Appellant requested reimbursement of $946.72,
representing the total amount of solid waste fees he had paid for the years
1983-1991 (AF-24).
10. By final decision dated April 9, 1992,
the Contracting Officer denied Appellant's request based upon the language of
the "Reimbursement of Paid Taxes" clause of the March 7, 1990
lease (AF-26). This appeal followed.
Decision
Appellant
contends that he should be reimbursed for the solid waste fees since Respondent
agreed to pay for all utilities and in fact paid for garbage pick-up as a
utility cost during the terms of the leases.
Thus, reasons Appellant, Respondent likewise implicitly agreed to pay
for treatment and disposal of the garbage by the county's solid waste
district. Respondent, in opposing
Appellant's claim, argues that the solid waste charge contained on the tax
bills is a special assessment, the payment of which is Appellant's
responsibility under both leases.
Appellant,
as the party seeking entitlement, has the burden of proof in this appeal. F&B Realty, PSBCA No. 2529, 91-2
BCA ¶ 23,788. Appellant, however, has
presented no evidence in support of his argument that the solid waste treatment
and disposal charge shown on the county real property bills should be included
as a utility cost under the leases with Respondent. There are no affidavits or declarations in
this regard. There is no documentation
of lease negotiations which would support such a conclusion. In fact, a record of lease negotiations of
the 1990 lease prepared by Respondent's realty specialist lists water, sewer,
electricity, and fuel costs as Respondent's obligations but makes no mention of
solid waste costs. Appellant's argument
thus has no merit.
Moreover,
both leases provided that general real estate taxes were ultimately
Respondent's obligations. Both also made
other assessments and fees or special assessments exclusively Appellant's
obligations. The solid waste charge in
issue is more akin to a special assessment than a general real estate tax. S. S. Silberblatt Inc. v. United
States, 888 F.2d 829 (Fed. Cir. 1989); Alvin Ltd. v. United States,
816 F.2d 1562 (Fed. Cir. 1987); Appeal of S. S. Silberblatt, Inc.,
PSBCA No. 1245, 1383, 1414, 89-1 BCA ¶ 21,268; Elsie C. Fiorio, PSBCA
No. 2832, 92-1 BCA ¶ 24,398; Northwestern Mutual Life Ins. Co. v. State
Board of Equalization, 166 P.2 917, 919 (Cal. 1946); American Co. v.
City of Lakeport, 32 P.2d 622, 628 (Cal. 1934); Lechner v. City of
Billings, 797 P.2d 191, 199 (Mont. 1990); State ex rel. Malott v. Board
of County Comm'rs of Cascade County, 296 P. 1, 14 (Mont. 1931).
Appellant
has not supplied evidence such as affidavits from experts or other evidence
which would support a conclusion that the solid waste charge should be
categorized as a component of general real estate taxes and thus a lease
payment obligation of Respondent.
Accordingly, Appellant has failed to prove any basis for entitlement.
The
Contracting Officer's reliance on only the March 1990 lease in denying
Appellant's claim is of no assistance to Appellant. The leases were virtually identical in regard
to the responsibilities of the parties for payment of utilities and general
real estate taxes and special assessments.
Appellant has not proven entitlement to recover under the provisions of
either lease. The appeal is denied.
James D. Finn, Jr.
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman