Appeal of J. LEONARD SPODEK d/b/a ALABAMA POSTAL HOLDINGS

May 13, 1997

Appeal of

J. LEONARD SPODEK d/b/a ALABAMA POSTAL HOLDINGS

LEASE AGREEMENTS

PSBCA No. 3964

APPEARANCE FOR APPELLANT:

J. Leonard Spodek

APPEARANCE FOR RESPONDENT:

Gary Shapiro, Esq.

OPINION OF THE BOARD

Appellant, J. Leonard Spodek, d/b/a Alabama Postal Holdings, has appealed the decision of the contracting officer denying his claim for the cost of restoring a facility he leased to the United States Postal Service in Samson, Alabama. This appeal is being decided on the record in accordance with 39 C.F.R. §955.12.

FINDINGS OF FACT

1. Respondent, the United States Postal Service, entered into a lease with Appellant’s predecessor-in-interest on October 5, 1987, for a postal facility in Samson, Alabama. The lease had a five year term extending to October 4, 1992, and a rental rate of $906.37 per month. (Supplemental Appeal File, BCA 3964^{^[1]}, (SAF 3964) Tab 10).

2. Paragraph 5 of the lease provided:

“Alterations. The Postal Service may make alterations, attach fixtures or signs and erect structures in or upon the premises, all of which shall be the property of the Postal Service and, if the Lessor requests, by notice in writing, within 30 days before termination of the Lease, the Postal Service will repair promptly or provide the Lessor payment in lieu thereof for any damage caused by its removal of such property.” (SAF 3964, Tab 10).

3. Appellant purchased the Samson Post Office facility on August 6, 1991, and notified Respondent of this fact on September 12, 1991 (SAF 3932 & 3964, Tab 16).

4. On September 8, 1992, Respondent notified Appellant that it was terminating the lease effective October 10, 1992 (SAF 3964, Tab 11). Respondent vacated the facility in late September 1992 (SAF 3932 & 3964, Tab 7).

5. At the time of vacating the facility, Respondent hired a contractor to clean the building. After cleaning, the building was in very good condition and thoroughly clean. Although a service counter had been removed by Respondent, the wall and floor around the counter area were in good condition and without any damage resulting from removing the counter. The parking lot was in very good to excellent condition and had no cracks, depressions or other damage. (SAF 3932 & 3964, Tabs 2, 3, 4, 7).

6. At the time of vacating the facility, Respondent removed the post office boxes. After the boxes were removed, the wall resembled a built-in bookshelf, but lacking the shelves. A hardwood paneled wall, which had been constructed by Respondent during its occupancy, was also left in the facility. The cost to remove this wall would have been $150.00 to $200.00. However, the value of the wall exceeded the cost of removal. (SAF 3932 & 3964. Tabs 2, 3, 7). Leaving the paneled wall in place increased the market value of the building (SAF 3932 & 3964, Tab 11).

7. On October 29, 1992, Appellant sent a letter to the contracting officer stating that “under paragraph 5 of the expired lease, please provide payment for any alterations made by the United States Postal Service. . . ” (Appeal File 3932, Vol 2 (AF 2), Tab 9).

8. By letter dated December 31, 1992, the contracting officer advised Appellant that Respondent had no liability for restoration, and invited Appellant to present evidence of damage other than ordinary wear and tear (AF 2, Tab 9).

9. On July 12, 1994, Appellant sent a letter to the contracting officer identifying four items for which Appellant sought damages or restoration by the Postal Service. Specifically, Appellant alleged damage to the parking lot, damage related to removal of the counter (Finding No. 5), the necessity to remove paneling surrounding the area where there previously was a box section and the need to remove paneling from the wall paneled by the Postal Service during its occupancy (Finding No. 6). This letter did not specify the amount of damages related to the requested items of restoration. (AF 2, Tab 6).

10. By letter dated August 11, 1995, Appellant notified the contracting officer that he considered his letter of October 29, 1992, to be a timely restoration notice and demanded compensation in lieu of restoration (AF 1, Tab 9).

11. On October 3, 1995, the contracting officer issued a final decision denying Appellant’s request for compensation on the Samson facility because Appellant had failed to submit the claim in a timely fashion. The letter informed Appellant it was the “final decision” of the contracting officer regarding Appellant’s claim for restoration or compensation in lieu of restoration and further informed Appellant of his appeal rights. (AF 2, Tab 5) It was received by Appellant on October 9, 1995 (AF 1, Tab 34).

12. By letter dated November 16, 1995, to the contracting officer, Appellant again requested Respondent to pay for restoration damages on the Samson facility. Appellant acknowledged that Paragraph 5 of the lease required notice to the Postal Service 30 days prior to lease termination. However, Appellant argued that the Postal Service was nevertheless responsible for damage done to the property, excluding normal wear and tear. Appellant requested Respondent to either repair or reimburse for the cost of repairs to the property. Appellant further stated that, damages to the Samson facility were “. . . in excess of ten thousand dollars ($10,000), however, I am willing to settle this matter for that sum.” (AF 2, Tab 4).

13. By letter dated December 7, 1995, the contracting officer responded to this latest letter from Appellant and again stated that the request for restoration was untimely. The letter concluded by stating that the contracting officer’s letter of October 3, 1995, “stands as my final decision in this matter.” (AF 2, Tab 3).

14. On February 9, 1996, Appellant filed an appeal with the contracting officer of his December 7, 1995 letter to Appellant (AF 2, Tab 2).

DECISION

Respondent argues that this appeal should be dismissed for lack of jurisdiction because Appellant failed to submit a claim in a “sum certain” to the contracting officer. Respondent further argues that, if jurisdiction is found to exist, the appeal should nevertheless be denied because Appellant failed to notify Respondent of its restoration obligation at least thirty days prior to lease termination, as required by the lease. With respect to the substantive issues, Respondent argues that there is no evidence of any additions to the property that require restoration and no evidence of damage to the property as a whole, other than ordinary wear and tear. Although afforded the opportunity to do so, Appellant did not submit any evidence or make any arguments in this record submission.

Appellant’s letter of November 16, 1995, to the contracting officer is a written demand, seeking as a matter of right a “sum certain,” i.e., $10,000 (Finding of Fact No. (FOF) 12), and therefore, constitutes a proper claim under the Contract Disputes Act of 1978. See, e.g., Contract Cleaning and Maintenance v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987); Tecom, Inc. v. United States, 732 F.2d 935, 936-37 (Fed. Cir. 1984). The fact that Appellant also states that he believes that his damages were in excess of $10,000 does not lessen the certainty of the amount Appellant seeks.^{^[2]}

The contracting officer responded to Appellant’s November 16 letter with a letter of December 7, 1995, in which he informed Appellant that he stood by his prior October 3, 1995, final decision on the issue, in which he denied Appellant’s claim for restoration damages to the Samson facility. Appellant thereafter timely filed an appeal of the contracting officer’s December 7, 1995 decision. (FOF 13, 14). Thus, although Appellant had not perfected his claim for money damages at the time of the October 3, 1995 final decision, the claim was perfected prior to the contracting officer’s December 7 reiteration of his final decision.

We need not decide whether Appellant’s restoration claim was timely submitted, since Appellant’s claim fails for a total lack of proof. Simply stated,

Appellant offered nothing to support this claim^{^[3]}. The evidence provided by Respondent supports the finding that there was no damage to the facility at the time Respondent vacated the facility, other than ordinary wear and tear. (FOF 5, 6). The single addition left by Respondent, the paneled wall, would have cost $150.00 to $200.00 to remove. However, leaving this hardwood paneled wall in place enhances the value of the building and this enhanced value more than offsets the cost of removal. (FOF 6). The measure of damages for failure to restore at the termination of a lease is the cost of restoration or the diminution in the market value of the property caused by the lessee’s nonperformance, whichever is less. If the fair market value of the property is greater in its unrestored condition than it would be if restored in accordance with the lease, the landlord has suffered no damage. Dodge Street Building Corp. v. United States, 341 F.2d 641, 644 (Ct. Cl. 1965); see also, Adelaide Bloomfield Management Co., GSBCA No. 13125, 95-2 BCA ¶27,685, at

^{^[1]} The issues regarding the cost of restoring the Samson, Alabama Post Office were originally raised by Appellant in PSBCA No. 3932. Upon Respondent’s motion, the Samson Alabama Post Office issues were separated from PSBCA No. 3932 and docketed as PSBCA No. 3964. However, some of the documents in the record are contained in the appeal file of PSBCA No. 3932 and others are contained in a combined supplemental appeal file for both PSBCA Nos. 3932 and 3964.

^{^[2]} Respondent cites Corbett Technology Company, Inc., ASBCA No. 47742, 95-1 BCA ¶ 27,587 and Metric Construction Co., Inc. v. United States, 14 Cl. Ct. 177 (1988), for the proposition that Appellant’s letter of November 16 does not satisfy the criteria of demanding a “sum certain.” These cases are inapposite. In both of these cases the contractors claimed “in excess of,” or “in an amount exceeding” a specified sum, but without the further caveat that they would settle for a specific sum, as Appellant has done herein. Lacking a specified sum being claimed, the board and court dismissed the appeals.

^{^[3]} Appellant had no personal knowledge of damage to the facility since he had never visited the Samson Post Office. Appellant claimed he obtained the information upon which he based his claim of damages from a contractor he had hired to inspect the facility as well as on his observation of photographs of the facility. (SAF 12).