November 5, 1997
Appeal of
NATIONWIDE POSTAL MANAGEMENT
LEASE AGREEMENT
PSBCA No. 3988
APPEARANCE FOR APPELLANT:
J. Leonard Spodek
APPEARANCE FOR RESPONDENT:
Robert P. Faust, Esq.
OPINION OF THE BOARD
Appellant, Nationwide Postal Management, has appealed the decision of the contracting officer denying its claim of $256.32 for allegedly improper deductions from rent owed by Respondent, the United States Postal Service, to Appellant. The parties have elected to submit their cases on the record in accordance with 39 C.F.R. §955.12. Only entitlement is at issue in this appeal.
FINDINGS OF FACT
1. On August 1, 1965, Appellant’s predecessor-in-interest leased property in San Antonio, Texas, to Respondent[1] for use as the Cresthaven Station Post Office. The initial term was for twenty years, with six five-year options, three of which have been exercised. (Appeal File Tab (AF) A1).
2. Appellant purchased the property in 1992 (AF A3; Declaration of Arthur Jimenez).
3. In accordance with Paragraph 6 of the lease, Lessor agreed to “. . . furnish, maintain and service air conditioning equipment according to requirements, including necessary refrigerants and filters” (AF A1).
4. In April of 1995, a dispute arose between Appellant and an air conditioning repair contractor over the amount Appellant owed for air conditioning repair work performed by the contractor at the Cresthaven Station. (Declaration of Randy Chollar; Appellant’s Complaint).
5. On May 21, 1996, Respondent’s contracting officer informed Appellant that, “in order to keep a harmonious relationship with the contractor,” it had paid the repair contractor $56.32, representing $55.80 allegedly unpaid by Appellant, plus $.52 interest. Respondent requested reimbursement from Appellant. (AF B12).
6. Appellant disputed any obligation to repay Respondent $56.32 and, on June 11, 1996, Respondent deducted that amount from the June 1996 rental payment it owed Appellant under the lease (AF B13, B14).
7. On June 12, 1996, Appellant filed a claim for $256.32, seeking repayment of the $56.32, plus $200.00 in “administrative costs” (AF B15).
8. On July 27,1996, the repair contractor assigned to Respondent “all right, title and interest in and to any and all claims, causes of actions, debts, accounts receivable or obligations owed to it . . .” by Appellant under the invoice for the air conditioning work performed by the repair contractor at the Cresthaven Post Office (AF D2).
9. By final decision dated July 31, 1996, the contracting officer denied Appellant’s claim on the basis that the repair contractor had assigned the debt of $56.32 to Respondent and further finding that the claim of $200.00 in administrative costs represented non-recoverable costs incurred in presenting a claim (AF B17).
10. By letter dated August 27, 1996, Appellant filed a timely appeal of the contracting officer’s decision (AF B18).
DECISION
Appellant argues, very simply, that nothing in the lease gave the contracting officer the authority to intercede in a contract dispute between Appellant and its contractor. Appellant further argues that, on the merits of its dispute with its contractor, it was correct in not paying the disputed amount. Respondent argues that Appellant was responsible under the lease for maintaining the air conditioning and received the full benefit of the work by the repair contractor, and, therefore, is legally and equitably obligated to reimburse Respondent for the money Respondent paid. Respondent further argues that, since the repair contractor assigned the debt to Respondent, Appellant is legally obligated to repay the debt to Respondent.
We disagree with Respondent. Respondent had no obligation under the lease to make the payment. This is not a case where the lessor fails to make repairs under the lease and the Postal Service had the work done. In paying what Respondent considered to be a debt owed by Appellant, Respondent was acting without contract authority and as a volunteer. As such, Respondent has no right under its contract with Appellant to recover the money it paid to the air conditioning repair contractor. See JGB Enterprises, Inc., ASBCA No. 49493, 96-2 BCA ¶ 28,498; See also, Knight Architects Engineers Planners, Inc., PSBCA No. 3474, 94-3 BCA ¶ 27,178; Jowett, Inc., ASBCA No. 47,364, 94-3 BCA ¶ 27,110.
This conclusion is not affected by the assignment of the claim that Respondent later obtained from the air conditioning repair contractor. The assignment of this claim did not create a contractual relationship between Appellant and Respondent that is necessary to create jurisdiction for this Board to adjudicate the claim. See 41 U.S.C. §602. Whether Respondent, as assignee of a claim from the air conditioning contractor, can recover from Appellant is a question that depends on the terms of the contract between Appellant and the air conditioning contractor, a contract to which Respondent is not a party. The assignment to Respondent was of the air conditioning contractor’s interest in its claim against Appellant -- it did not make Respondent a party to the contract giving rise to the claim. Therefore, notwithstanding the assignment, this Board lacks jurisdiction to decide the merits of the dispute between Appellant and the air conditioning contractor hired by Appellant, upon which Respondent’s right to recover as assignee depends. See, e.g., Jaynes Corp., ASBCA No. 48163, 95-2 BCA ¶ 27,636 (no jurisdiction where executive agency not a party to the contract).
As to Appellant’s claim for $200 in “administrative costs”, Appellant bears the burden of proving entitlement. In order to prove entitlement, even where quantum is not at issue, Appellant must show that some damage has been done, or some cost incurred. See Port-A-Built, PSBCA No. 3134, 94-2 BCA ¶ 26,694. Appellant has failed, however, to submit any proof of incurring $200 in administrative costs. Therefore, Appellant may not recover such costs[2].
Accordingly, this appeal is sustained to the extent that Appellant may recover the $56.32 withheld from its rental payment, but is 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] Since there is no evidence concerning the nature of the administrative costs claimed by Appellant, the Board need not address the question whether such costs, even if shown, would be recoverable as a cost of performance (See The Estate of George S. Rutman, PSBCA Nos. 3697 & 3705, 97-2 BCA ¶ 29,115), or precluded as a cost of prosecuting a claim against the Postal Service (See Alta Construction Co., PSBCA Nos. 1463 & 2929, 96-1 BCA ¶ 27,961).