December 16, 1997

Appeal of

PAOLI PLAZA INVESTMENT CORP.

Under Lease Agreement

PSBCA Nos. 3711 & 4057

 

APPEARANCE FOR APPELLANT:

Ellen B. Sheehan, Esq.

 

APPEARANCE FOR RESPONDENT:

Daniel M. Curts, Esq.

 

OPINION OF THE BOARD

Appellant, Paoli Plaza Investment Corporation, has appealed two final decisions of the contracting officer denying its claims for costs associated with repairs to a postal facility it leases to the United States Postal Service (Respondent), as well as for providing additional parking spaces for Postal Service employees.  A hearing was held in Philadelphia, Pennsylvania.  Entitlement regarding both claims is in issue but, by agreement of the parties, quantum is at issue only with respect to the value of the additional parking spaces Appellant claims it is providing.

FINDINGS OF FACT

1.  On March 25, 1965, Appellant leased to Respondent[1] the following described premises:

“. . . All that certain one story masonry building, providing approximately 9,923 sq. ft., net, inside measurements, on the first floor; together with platform area of approximately 2,100 sq. ft. net; exclusive use of macadam parking and maneuvering area of 12,346 sq. ft.; additional macadam parking area on the east side of the building of 2,440 sq. ft., additional macadam parking on the west side of the building of 1,920 sq. ft.; and common use of macadam driveway area on the east side of the building of 3,300 sq. ft.  Situate on the Northeast corner of Paoli Plaza and Greenwood Avenue (also known as Maple Avenue), in the Township of Tredyffrin, County of Chester and Commonwealth of Pennsylvania, and more particularly described on Page 1 A hereof.”  (PSBCA No. 3711 Appeal File, Tab (3711 AF) 1).

 

2. The initial term of the lease was for 15 years at an annual rental of $24,000, with five consecutive five-year renewal options each at a decreasing rental amount.  The current annual rental is $19,000.  (3711 AF, 1).

3.  The lease provided at paragraph 7, that the lessor was required to maintain the premises, including the building and any equipment or fixtures, “. . . in good repair and tenantable condition, except in case of damage arising from the act or negligence of [Respondent’s] agents or employees. . . .”  (Id.).

4.  Under paragraph 9 of the lease, the Postal Service had the right to make “. . . alterations, attach fixtures and erect additions, structures or signs in or upon the premises hereby leased (provided such alterations, additions, structures or signs shall not be detrimental or inconsistent with the rights granted to other tenants on the property or in the building, in which said premises are located); . . .”  (Id.)

PARKING SPACE CLAIM

5.  From its opening in 1965 until 1972, the Paoli Post Office operated as a sectional center performing mail processing.  During this time period the post office operated 24 hours a day with a total of approximately 110 employees evenly divided among three shifts.  (PSBCA No. 3711 Supplemental Appeal File, Tab (3711 SAF) 3, 4).

6.  In 1972, the mail processing operation was removed from the responsibilities of the Paoli Post Office, and approximately 82 employees were transferred elsewhere.  Thereafter, carriers and clerks were transferred from the neighboring Berwyn and Devon Post Offices raising the Paoli compliment back up to approximately 75 employees.   (3711 SAF, 2, 3, 4; Tr. 112).

7.  As constructed, the post office parking lot had 40 to 45 parking spaces which could be used by employees, customers, or Postal Service vehicles  (Tr. 14, 61; Appellant’s Exhibit 1).  However, because of the change in operations and the transfer of employees, there were insufficient parking spaces for Postal Service employees and customers.  Instead of 110 employees spread over three shifts (including night shifts) there now were approximately 75 employees, with their personal vehicles, working day shifts. In addition, the increase in the number of carriers caused an increase in the number of postal vehicles used in performing those routes which were parked at the post office.  (Tr. 68, 69).

8.  The post office continued to employ approximately 75 employees up to the time of the hearing.  In 1996, there were 73 employees, which included 36 carriers.  (3711 SAF 2).

9.  In a 1972 agreement with the National Association of Letter Carriers, Branch 4317, the Postal Service agreed to provide 26 parking spaces at the Paoli Post Office for letter carriers. Eight spaces were to be located on each of the east and west sides of the post office and 10 spaces were to be provided by Appellant in one of its lots as long as they were available.  In the event the 10 spaces provided by Appellant became unavailable, the agreement required that the other 16 post office spaces would remain for letter carrier use.  (3711 SAF, 1).

10.  Appellant was not a party to the agreement with the Letter Carriers.  However, at the time of the agreement, Appellant orally agreed with Respondent’s postmaster to voluntarily provide ten spaces on its property, at another location, on an indefinite basis.  In 1986, Appellant took the ten parking spaces back.  (Tr. 63, 64, 73)

11.  In 1993, Respondent constructed a handicap access ramp on the east side of the post office (Tr. 17).  The east side of the post office parking area is part of a larger lot that also serves other tenants of the Paoli shopping center.  At this time, 1993, none of the post office’s parking spaces were designated for customer parking for the approximately 500 customers who used the post office on a daily basis.  (3711 AF, 8; Tr. 12, 13, 83; Appellant’s Exhibit 1).

12.  Beginning in 1993, Appellant began complaining to Respondent about the lack of parking spaces for Postal Service customers and that Postal Service customers were parking in spaces intended for other tenants and their customers.  At a July 14, 1993 meeting with Respondent, Appellant offered to lease to Respondent five parking spaces at $50.00 each per month.  (3711 AF, 2-6 ).

13.  In a letter dated November 24, 1993, Respondent informed Appellant that it would designate a total of seven spaces for customer parking, including one space for handicapped parking.  This was to be accomplished by relining the twelve parking spaces on the east side of the building to reduce each space from a 10 foot to an 8 foot width, thereby increasing to fourteen the total number of spaces on that side of the post office.  At the same time, Respondent attempted to obtain an increase in the number of street parking spaces with 15 minute parking limits.  In both cases, however, these changes were not approved by local government officials.  (3711 AF, 9, 12, 17).

14.  There are currently five spaces designated for post office customer parking, with one of these spaces restricted to handicapped parking.  These spaces are on the east side of the post office and abut the handicap ramp.  Construction of the ramp had the effect of shortening the spaces that abut the ramp.  As a consequence, cars parked in these spaces stick out further into the shared driveway than cars parked in spaces which do not abut the handicap ramp. The vehicles that protrude into the driveway caused only minor interference with access to the remaining postal and non-postal portions of the parking lot. (Tr. 26-29, 89, 90, 106).

15.  On November 9, 1994, Appellant filed what it called a “Notice of Appeal” asserting that Respondent had breached the lease by reducing the number of customer parking spaces, thereby causing customers to use spaces of other tenants; and by failing to pay the repair costs asserted in its June 24, 1994 claim (see Finding No. 24, infra).  This notice of appeal was docketed as PSBCA No. 3711.  In its Complaint in PSBCA No. 3711, Appellant claimed $30,000 for five years use of ten spaces at $50.00 per month.  (3711 AF, 19; Complaint).

MISCELLANEOUS REPAIRS

16.  On June 24, 1994, Appellant submitted a claim in the amount of $9,238.57 for snow removal and miscellaneous repairs it had made to the post office.  The largest item was for repairs carried out by Appellant to the air conditioning unit of the facility.  The air conditioning repair claim consisted of two components.  Appellant sought $800.00 for replacement of “air handles” and sealing a grill in the ceiling.  The second repair item, in the amount of $3,400.00 was for installing new controls, wiring and a thermostat.  In addition to the air conditioning work, Appellant sought reimbursement for the following items:

(a)  Resetting an electric breaker[2];

(b)  Bathroom repairs (including repairing a hole in the door, replacing urinals pulled from the wall and unclogging urinals stopped up with paper towels;

(c)  Replacing parking lot grate;

(d)  Ballast and electric switch replacement;

(e)  Striping parking lot, including painting handicap space.

(f)  Snow removal.  (3711 AF, 16, 18).

 

17.  By letter dated October 10, 1996, Appellant revised its claim to include additional items.  Specifically, Appellant filed additional repair claim items as follows:

(a)  Additional HVAC repairs;

(b)  Resetting circuit breaker;

(c)  Replacing urinal flushometers (on two separate occasions);

(d)  Repair of roof damage.  (PSBCA No. 4057 Appeal File Tabs (4057 AF) 1, 2).

 

Air Conditioning Repairs

            18.  The air conditioning equipment at the post office was the original equipment installed in 1965 (with the exception of the cooling tower, which was replaced in 1981).  This type of air conditioning equipment has a normal life expectancy of 20 to 25 years.  The equipment was in a condition consistent with its age.  Accordingly, the cooling capacity of the equipment was, most likely, less than its original capacity.  (4057 AF, 3).  On hot days, Respondent kept the post office rear doors open because the air conditioning system did not adequately cool the building  (Tr. 131, 161).

19.  During the term of the lease, Respondent installed new “time-of-day” thermostatic controls on the air conditioning unit.  Respondent made no other modifications to the air conditioning equipment at the post office.  (Tr. 79, 117, 119, 132, 140).

Replacing Parking Lot Storm Drainage Grate

20.  In 1992, Appellant repaired, but did not replace the parking lot storm drainage grate.  At the time of this repair, the grate that was originally installed in 1965 was still in place.  However, the grate was damaged shortly after being repaired in 1992, and had to be replaced by Appellant in 1993.  (AF 3711,16; AF 4057, 1; Tr. 40, 41, 50).

Bathroom Repairs

(Door Repairs, Unclogging Urinals, Repairing Urinals)

21.  Appellant also made repairs to the employee bathrooms and their fixtures as a result of damage by Respondent’s employees  (Tr. 107-109).  A Postal Service employee punched a hole in the bathroom door, which was repaired by Appellant (Tr. 78, 107), and a urinal was replaced after it was pulled off the wall.  (Tr. 48, 106).  On another occasion, Appellant unclogged the urinal drains in the bathroom because Respondent’s employees stuffed paper towels down the drains (Tr. 49, 107).  Flushometers were replaced by Appellant after they were negligently damaged by Postal Service employees (Tr. 107).

Ballast and Electric Switch Replacement

22.  Appellant had to replace a ballast and an electric switch on the furnace which was damaged - apparently because it was struck with a heavy object by one of Respondent’s employees  (Tr. 50).

Striping Parking Lot and Painting Handicap Spot

23.  At the request of Respondent, Appellant painted a handicapped parking spot in the post office parking lot.  At the same time, although not requested by Respondent to do so, Appellant painted lines for the parking spaces in the post office lot.  (Tr. 51, 80).

Snow Removal

24.  Although not requested to do so by Respondent, on occasion Appellant would remove snow from the post office areas while Appellant was removing snow from its own lot (Tr. 52; 3711 AF, 14).  Respondent, however, typically hired its own contractors to perform this task (Tr. 71, 80, 110, 144).

Roof Repairs

25.  Appellant replaced the roof on the post office in 1995.  However, leaks were found in the replaced roof almost immediately thereafter.  (Tr. 111, 145, 146).  After a heavy snow fall in January of 1996, Respondent had workmen remove snow from the roof (Tr. 145, 146).  Roof repair work was again accomplished in March of 1996, at which time “gouges” were found in the roof  (Tr. 56; AF 4057, 1).

26.  By final decision dated November 21, 1996, the contracting officer addressed each of the miscellaneous repair claims made by Appellant in its letters of June 24, 1994, and October 10, 1996.  In this final decision the contracting officer acknowledged responsibility for “tripping” a breaker on an electric panel on two separate occasions, clogging a bathroom drain and painting the lines for a handicap parking spot, but otherwise denied the claims.  (4057 AF, 2).  Appellant filed a timely appeal of this consolidated final decision.  

DECISION

Appellant argues that Respondent breached the lease agreement by failing to pay for the damage to the post office caused by the negligent acts of its employees; by failing to pay for snow removal and line painting; and by allowing its employees and customers to use Appellant’s parking spaces.

Respondent argues that its liability to Appellant is governed by the terms of the lease.  Respondent concedes it is responsible for reimbursing Appellant for damage to the post office caused by its employees and for having Appellant paint a handicap parking space, but denies any further liability.

PARKING SPACE CLAIM

Appellant seeks $20,800.00[3] under this claim item, representing eight parking spaces at $50.00 per month from 1993 to 1997.  Appellant argues that by reducing the number of parking spaces available for Postal customers and by shortening the length of those same spaces (by constructing a handicapped ramp), Respondent violated paragraph 9 of the lease by making alterations to its leased property which were detrimental to other tenants where the leased premises are located.

Respondent argues that the lease is silent with respect to customer parking.  Respondent further argues that, to the extent there is any merit to Appellant’s claim, it is barred by laches since the actions Appellant complains of began in 1972.

Respondent is correct in noting that the rights and remedies of the parties to this dispute are governed by the terms of the lease they entered into in 1965.  Nothing in this lease governed how many customer parking spaces had to be made available, nor did it dictate where Respondent’s employees should park.  Although Respondent attempted, in 1993, to increase the number of parking spaces available for customer parking (Finding of Fact No. (FOF) 13) this undertaking did not impose an obligation on Respondent, when its efforts failed, to lease more parking spaces from Appellant.

Similarly, Respondent’s decision in 1972 to dedicate sixteen post office parking spaces for employee parking (thereby decreasing the number of spaces available for customer parking), did not entitle Appellant to recover any greater amount under the terms of the lease.  It simply was a decision of the lessee, having exclusive use of the leased premises, which included the parking areas, to use those premises as it considered appropriate.  At the time this action was taken, Appellant gave no indication it considered the action to be detrimental to its rights.  The passage of time (over twenty years), apparently exacerbated parking problems in the neighborhood.  However, this change in circumstances did not create liability on the part of Respondent to now retroactively pay Appellant to lease additional parking spaces.

Finally, Appellant has failed to demonstrate that Respondent’s installation of a handicap access ramp (thereby shortening the spaces abutting the ramp) has caused more than a minor interference with parking or using the adjacent driveway.  More importantly, however, Appellant has failed to establish that it incurred any monetary losses as a result of the installation of this ramp.  Accordingly, Appellant’s claim for $20,800 in parking space use is denied.

MISCELLANEOUS REPAIRS

Air Conditioning Equipment Repairs

Appellant alleges that Respondent cut a hole and removed “air handlers” from the HVAC system.  Appellant further alleges that Respondent disconnected the controls of the HVAC system and improperly kept the post office doors open, thereby causing the system to run excessively.  Respondent denies removing air handlers or cutting a hole in the system.  Respondent acknowledges replacing the thermostats on the system and opening the post office doors on hot days but disputes that any repairs to the system were the result of the act or negligence of Respondent’s employees.

Under the terms of the lease, Appellant was responsible for maintaining the premises, except for damage resulting from the acts or negligence of Respondent’s employees  (FOF 3).  The air conditioning equipment is the original equipment, installed in 1965.  It has exceeded its normal life by over ten years.  (FOF 18). Appellant has failed to establish that any expense it incurred in repairing the air conditioning equipment was the result of an act or negligence on the part of Respondent’s employees and not simply the result of an aging system in need of repair or replacement.  Although Appellant alleged that “air handlers” were removed from the air conditioning units by Respondent’s employees and that a grill was cut into the unit, it failed to prove that these alleged actions ever occurred.  (FOF 19).  Accordingly, this claim for air conditioning equipment repair costs is denied.

Replacing Parking Lot Storm Drainage Grate

Appellant repaired the parking lot grate in 1992.  In 1993, Appellant had to replace the parking lot grate.  (FOF 20).  Appellant failed to submit any proof, however, to show that the need for the repairs was other than the result of ordinary wear and tear occurring over the 27 years since the parking lot was initially constructed.  Although Appellant submitted photographs showing vehicles parked on the grate, there was no evidence to suggest that this action by Respondent was negligent.  Respondent was simply putting the parking lot to the use for which it was intended.  Accordingly, Respondent is not liable for the cost of this repair.

Bathroom Repairs

(Door Repairs, Unclogging Urinals, Repairing Urinals)

Appellant has made numerous claims for miscellaneous repairs to the bathrooms used by Respondent’s employees at the Paoli Post Office to include repairing a door, replacing a urinal, unclogging urinals and replacing flushometers. Each of these items needing repair or replacement was the result of the acts of  Respondent’s employees and not simply ordinary wear and tear.  (FOF 21).  Respondent is, therefore, liable for the costs associated with this claim item.

Ballast and Electric Switch Replacement

Appellant replaced a ballast and electric switch after it was found to have been damaged.  This damage was not the result of ordinary wear and tear, but appeared to be the result of an intentional act or negligence by the occupants of the leased premises.  (FOF 22).  Accordingly, this condition is not within Appellant’s maintenance responsibilities under the lease.  The cost of this repair is, therefore, the responsibility of Respondent.

Striping Parking Lot and Painting Handicap Spot

Respondent requested Appellant to paint the handicap parking spot and acknowledges responsibility for the cost of this effort.  However, Respondent did not request that Appellant paint lines in the parking lot.  (FOF 23).  Since Appellant painted lines in the parking lot without being requested by Respondent to do so, it was acting as a volunteer and is not entitled to be reimbursed under the terms of the lease.  See Knight Architects Engineers Planners, Inc., PSBCA No.3474, 94-3 BCA ¶ 27,178; Jowett, Inc., ASBCA No. 47,364 94-3 BCA ¶ 27110; E.D. Conto, PSBCA No. 962, 1982 WL 8937, April 20, 1982.  Accordingly, this claim is sustained to the extent that Respondent is liable for the cost of painting the handicap space and is otherwise denied.

Snow Removal

Respondent typically hired its own contractors to perform snow removal from the parking lots.  On occasion, however, Appellant would remove the snow from Respondent’s leased areas while performing its own snow removal.  Respondent never requested Appellant to perform this snow removal.  (FOF 24).  Again, to the extent Appellant removed snow from Respondent’s leased area, it was acting as a volunteer and is not entitled to be reimbursed under the terms of the lease. See Knight Architects Engineers Planners, Inc., PSBCA No.3474, 94-3 BCA ¶ 27,178; Jowett, Inc., ASBCA No. 47,364 94-3 BCA ¶ 27110; E.D. Conto, PSBCA No. 962, 1982 WL 8937, April 20, 1982.

Roof Repairs

This claim for reimbursement is premised on the argument that roof repair work was necessary because Respondent caused gouges in the roof when it allegedly took a snow blower on the roof to remove snow during the winter of 1996.  This argument fails for a number of reasons.  The evidence is in conflict as to whether Postal Service employees took a snow blower on the roof to clear snow.  Nevertheless, even if this were true, Appellant failed to prove that this act caused the gouges found in the roof, or even that the gouges were the cause of the leaks that necessitated the repairs performed by Appellant.

More important, however, is the fact that the roof leaked from the time it was replaced by Appellant in 1995  (FOF 25).  Appellant failed to establish that the repair work it performed in March 1996, would not have been necessary, in any event, simply to repair this pre-existing leaking condition.  This claim is, therefore, denied.

CONCLUSION

Accordingly, these appeals are sustained to the extent that Respondent is liable to Appellant for the cost of carrying out bathroom repairs; replacing the ballast and electric switch on the furnace; and painting a handicap spot.  The appeals are otherwise denied.

William K. Mahn

Administrative Judge

Board Member

 

I concur:

James A. Cohen

Administrative Judge

Chairman

 

I concur:

David I. Brochstein

Administrative Judge

Vice Chairman


[1]  Respondent was then the Post Office Department.  Pursuant to the Postal Reorganization Act, P.L. 91-375, 84 Stat. 719 (1970), all the functions, powers, and duties of the Post Office Department were transferred to the United States Postal Service and the Post Office Department was abolished.

[2]  On at least two occasions Appellant incurred the cost of calling an electrician to switch on a circuit breaker as a consequence of Respondent’s employees switching off the breaker (Tr. 48; AF 4057, 2).  Respondent conceded liability for the cost to reset the breakers in its final decision (see Finding 26).  Accordingly, this claim need not be addressed further.

[3]  Appellant initially claimed $30,000 for this item (See Finding of Fact No. 14), but, in its brief, reduced the amount claimed to $20,800.