B-172244, DEC 21, 1971

B-172244, DEC 21, 1971

CIVILIAN EMPLOYEE - SALE OF RESIDENCE DECISION SUSTAINING PRIOR DENIAL OF A CLAIM BY E. KENNETH MCFARLAND FOR REIMBURSEMENT OF EXPENSES INCURRED UPON THE SALE OF A RESIDENCE INCIDENT TO A CHANGE OF OFFICIAL STATION. IN SPITE OF THE ADDITIONAL INFORMATION SUPPLIED BY CLAIMANT, THERE REMAINS SOME DOUBT AS TO WHETHER TITLE HAD VESTED IN MR. MCFARLAND PRIOR TO HIS TRANSFER. FURTHER, THE EXPENSES CLAIMED DO NOT APPEAR TO BE PROPERLY REIMBURSABLE UNDER APPLICABLE REGULATIONS.

TO MR. C. H. LUCAS:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 14, 1971, REFERENCE 375, WITH ENCLOSURES, WHICH REFERS TO OUR DECISION B-172244, JUNE 3, 1971, IN WHICH WE DISALLOWED THE CLAIM OF E. KENNETH MCFARLAND FOR REIMBURSEMENT OF EXPENSES INCURRED UPON THE SALE OF A RESIDENCE INCIDENT TO A CHANGE OF OFFICIAL STATION. YOU FORWARD ADDITIONAL EVIDENCE WHICH HAS BEEN SUBMITTED TO YOU BY MR. MCFARLAND IN SUPPORT OF HIS CLAIM AND REQUEST A DECISION AS TO THE PROPRIETY OF NOW MAKING PAYMENT ON THE VOUCHER IN THE AMOUNT OF $391.20.

THE RECORD INDICATES THAT MR. MCFARLAND TRANSFERRED FROM OGDEN, UTAH, TO OAKES, NORTH DAKOTA, EFFECTIVE JUNE 1, 1969. HE SIGNED THE EMPLOYMENT AGREEMENT ON APRIL 7, 1969, AND ON MAY 16, 1969, ENTERED INTO A SALES AGREEMENT WITH HIS SON, LARRY K. MCFARLAND, TO SELL TO HIM A RESIDENCE AT 2544 VAN BUREN AVENUE, OGDEN, UTAH. THE HOUSE HAD ORIGINALLY BEEN OWNED BY MR. MCFARLAND'S PARENTS WHO, PRIOR TO THEIR DEATH, HAD BEEN RECEIVING STATE WELFARE WHICH HAD CAUSED A LIEN TO BE PLACED ON THE PROPERTY. AGREEMENT WITH THE UTAH STATE WELFARE DEPARTMENT IN JANUARY 1964, MR. MCFARLAND AGREED TO PAY THE AMOUNT OF THE LIEN, PLUS INTEREST, AND RESIDED IN THE HOUSE UNTIL IT WAS SOLD IN 1969. HE IS SEEKING REIMBURSEMENT IN THE AMOUNT OF $391.20, REPRESENTING LEGAL AND RELATED COSTS IN SELLING THE RESIDENCE. AT THE TIME OF THE SALE, TITLE TO THE PROPERTY WAS TRANSFERRED FROM WILLIAM GRANT MCFARLAND, AS EXECUTOR OF THE ESTATE OF DIANA B. MCFARLAND, TO THE PURCHASER, LARRY K. MCFARLAND.

IN THE CITED DECISION, WE POINTED OUT THAT UNDER THE PROVISIONS OF SECTION 4.1C, OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969, A TRANSFERRED EMPLOYEE IS ENTITLED TO BE REIMBURSED FOR CERTAIN EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF HIS RESIDENCE, PROVIDED THAT THE TITLE TO THE RESIDENCE IS IN HIS NAME, HIS NAME JOINTLY WITH ONE OR MORE MEMBERS OF HIS IMMEDIATE FAMILY, OR SOLELY IN THE NAME OF ONE OR MORE MEMBERS OF HIS IMMEDIATE FAMILY. BROTHERS AND SISTERS ARE NOT WITHIN THE DEFINITION OF "IMMEDIATE FAMILY." WE DISALLOWED THE CLAIM BECAUSE AT THE TIME OF THE SALE TITLE TO THE PROPERTY WAS TRANSFERRED DIRECTLY FROM THE EXECUTOR OF THE ESTATE TO THE PURCHASER AND THERE WAS NO BASIS FOR FINDING THAT THE TITLE TO THE PROPERTY WAS IN MR. MCFARLAND'S NAME OR IN THE NAME OF A MEMBER OF HIS IMMEDIATE FAMILY. MR. MCFARLAND HAS SUBMITTED ADDITIONAL EVIDENCE TO SUPPORT HIS CLAIM THAT HE HELD TITLE TO THE PROPERTY AT THE TIME OF THE SALE, NAMELY, A STATEMENT FROM WILLIAM GRANT MCFARLAND, THE EXECUTOR OF THE ESTATE, AND A QUITCLAIM DEED WHICH IS PURPORTED TO HAVE TRANSFERRED THE TITLE TO THE PROPERTY FROM THE ESTATE OF E. KENNETH MCFARLAND ON JANUARY 3, 1964.

ALTHOUGH MR. MCFARLAND HAD AGREED TO PAY THE STATE OF UTAH THE AMOUNT OF THE LIEN ON THE PROPERTY AND HAD RESIDED IN THE HOUSE FOR A NUMBER OF YEARS, THE FACT THAT AT THE TIME OF THE SALE IN 1969 THE TITLE WAS TRANSFERRED DIRECTLY FROM THE ESTATE TO THE PURCHASER RAISES THE PRESUMPTION THAT TITLE TO THE PROPERTY WAS NOT "IN THE NAME OF THE EMPLOYEE" AS REQUIRED BY SECTION 4.1C OF CIRCULAR NO. A-56. THE STATEMENT BY THE EXECUTOR OF THE ESTATE AND THE QUITCLAIM DEED INDICATE THAT TITLE PASSED TO MR. MCFARLAND IN 1964. THE DEED DATED JANUARY 3, 1964, SHOWS THAT IT WAS WITNESSED BY A NOTARY PUBLIC WHOSE COMMISSION EXPIRES JANUARY 31, 1975. WE DO NOT UNDERSTAND WHY SUCH DATE SHOULD APPEAR THEREON SINCE NOTARIES PUBLIC IN UTAH HAVE A TERM OF 4 YEARS. THE ATTORNEY'S FEE, FOR WHICH REIMBURSEMENT IS CLAIMED, COVERS CHARGES FOR TITLE INSURANCE, TITLE CLEARANCE, LIEN RELEASE, AND TERMINATION OF JOINT TENANCY. UNDER SUCH CIRCUMSTANCES WE BELIEVE THERE IS SOME DOUBT THAT TITLE HAD VESTED IN MR. MCFARLAND PRIOR TO HIS TRANSFER.

IRRESPECTIVE OF WHETHER TITLE MAY HAVE VESTED IN MR. MCFARLAND PRIOR TO HIS TRANSFER, THE EXPENSES HE CLAIMS DO NOT APPEAR TO BE REIMBURSABLE. THE ATTORNEY'S FEE INDICATES IT COVERS NORMAL LEGAL EXPENSES TO TRANSFER TITLE FROM PREVIOUS OWNERS TO MR. MCFARLAND AND ARE NOT SUCH EXPENSES AS WOULD HAVE BEEN INCURRED BY A PURCHASER FROM HIM. THE STATEMENT OF COSTS REQUIRED BY REGULATION Z (ISSUED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM PURSUANT TO THE TRUTH IN LENDING ACT) CLEARLY SHOWS THE REMAINING ITEMS AS FINANCE CHARGES OR COSTS OF THE BORROWER.

IN VIEW OF THE ABOVE, OUR PRIOR DECISION MUST BE SUSTAINED. THE VOUCHER AND SUPPORTING PAPERS ARE RETURNED HEREWITH, AND NO PART OF THE VOUCHER MAY BE CERTIFIED FOR PAYMENT.