B-151452, JUL. 19, 1963

B-151452, JUL. 19, 1963

TO MR. MILTON E. CANTER, ATTORNEY AT LAW:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 23, 1963, REQUESTING REVIEW OF SETTLEMENT DATED MARCH 20, 1963, WHICH DISALLOWED YOUR CLAIM FOR ADDITIONAL RENTAL ON THE ETHELHURST BUILDING, 1025 15TH STREET, N.W., WASHINGTON, D.C., LEASED TO THE GOVERNMENT UNDER LEASE NO. GS-03-B-4440, ENTERED INTO ON APRIL 8, 1959, BY THE PUBLIC BUILDINGS SERVICE, GENERAL SERVICES ADMINISTRATION, WITH MISS HENRIETTA HART FOR A TERM BEGINNING MAY 16, 1959, AND ENDING MAY 15, 1962, SUBJECT TO RENEWAL FROM YEAR TO YEAR AT THE GOVERNMENT'S OPTION FOR A PERIOD NOT TO EXTEND BEYOND MAY 15, 1964.

THE AGREED UPON ANNUAL RENTAL WAS $90,000 PAYABLE IN MONTHLY INSTALLMENTS WHICH GENERALLY WERE TO BE PAID AT THE END OF A CALENDAR MONTH. AS A PART OF THE RENTAL CONSIDERATION THE LESSOR AGREED TO FURNISH VARIOUS SERVICES AS SPECIFIED IN PARAGRAPH 6 OF THE LEASE DURING NORMAL DAYTIME WORKING HOURS, FIVE DAYS PER WEEK. THE LEASE WAS AMENDED BY SUPPLEMENTAL AGREEMENT DATED SEPTEMBER 1, 1960, TO PROVIDE FOR THE FURNISHING OF SERVICE SEVEN DAYS PER WEEK UNTIL 9 P.M., AND FOR PAYMENT OF AN ADDITIONAL ANNUAL RENTAL OF $6,999.96 AS TO WHICH THE MONTHLY INSTALLMENT WOULD AMOUNT TO $583.33. THE SUPPLEMENTAL AGREEMENT WAS CANCELED EFFECTIVE AS OF THE CLOSE OF BUSINESS AUGUST 31, 1961. THE GENERAL SERVICES ADMINISTRATION HAD BEEN ADVISED THAT THE PROPOSED NEW TENANT, FOREIGN CLAIMS SETTLEMENT COMMISSION, WOULD HAVE NO OVERTIME USE REQUIREMENT.

ON OCTOBER 17, 1961, YOU ADVISED THE GENERAL SERVICES ADMINISTRATION THAT TITLE TO THE PROPERTY UNDER LEASE HAD BEEN ACQUIRED BY YOU AND TWO OTHER INDIVIDUALS. BY LETTER DATED NOVEMBER 27, 1962, TO OUR OFFICE, YOU CONTENDED THAT THE BUILDING HAD BEEN USED CONSTANTLY FOR OVERTIME WORK AND REQUESTED THAT ADDITIONAL RENTAL BE PAID AT THE RATE OF $583.33 PER MONTH FOR THE INCIDENTAL OVERTIME BUILDING SERVICE.

THE SETTLEMENT WHICH DENIED YOUR CLAIM SETS FORTH THAT THE FOREIGN CLAIMS SETTLEMENT COMMISSION HAD REPORTED THAT SINCE SEPTEMBER 25, 1961, THERE HAD BEEN ONLY 164 HOURS OF APPROVED OVERTIME ALLOWANCES TO EMPLOYEES OF THAT AGENCY, AND THAT 120 HOURS OF THE APPROVED OVERTIME ALLOWANCES INVOLVED WORK WHICH WAS PERFORMED DURING THE FIRST TWO WEEKS OF OCTOBER 1961, PRIOR TO THE TIME THAT YOU BECAME A PART OWNER OF THE BUILDING. THE BALANCE OF THE APPROVED OVERTIME WORK (44 HOURS), REPORTEDLY WAS PERFORMED AT THE END OF THE FISCAL YEAR (JUNE 1962). THE SETTLEMENT ALSO REFERRED TO AN ADMINISTRATIVE REPORT THAT THE GUARD RECORDS FOR THE ETHELHURST BUILDING SHOW THAT FROM NOVEMBER 13, 1961, THROUGH NOVEMBER 30, 1962, THE LESSOR'S CLEANING WORKERS AND MECHANICS CONSTITUTED THE BULK OF THE OVERTIME TRAFFIC IN THE BUILDING.

IT WAS SUGGESTED IN YOUR LETTER OF APRIL 23, 1963, THAT AN INDEPENDENT REVIEW OF THE GUARD BOOK ENTIRES WOULD SHOW MORE THAN1,000 HOURS OF OVERTIME USE OF THE BUILDING BY THE GOVERNMENT, INCLUDING OVERTIME USE BY EMPLOYEES WHO MAY HAVE BEEN GRANTED COMPENSATORY LEAVE INSTEAD OF BEING PAID FOR OVERTIME SERVICES. YOU REQUESTED A HEARING ON THE MATTER AND YOU WERE ADVISED BY TELEPHONE ON MAY 14, 1963, THAT COPIES OF THE PERTINENT GUARD BOOK RECORDS FAILED TO SHOW ANY CONSIDERABLE NUMBER OF ENTRIES INVOLVING GOVERNMENT EMPLOYEES.

YOU DID NOT PROPOSE TO SUBMIT ADDITIONAL EVIDENCE BUT SUGGESTED THAT ANY OVERTIME USE OF THE BUILDING, NO MATTER HOW LIMITED, WOULD ENTITLE YOU TO ADDITIONAL RENTAL AT THE RATE SPECIFIED IN THE CANCELED SUPPLEMENTAL AGREEMENT. HOWEVER, IT IS OUR OPINION THAT PAYMENT FOR THE OVERTIME USE OF THE BUILDING WOULD NOT BE WARRANTED EXCEPT ON A QUANTUM MERUIT BASIS. THE AVAILABLE EVIDENCE DOES NOT SUPPORT A CONCLUSION THAT THE OVERTIME USE APPROXIMATED AT ANY TIME THE EXTENT OF OVERTIME USE CONTEMPLATED WHEN THE CANCELED SUPPLEMENTAL AGREEMENT WAS ENTERED INTO, AND WE BELIEVE THAT THE FACTS OF THE CASE ARE SUCH AS TO INDICATE THAT NO MORE THAN THE SUM OF $1,166.66 SHOULD BE ALLOWED AS A FAIR AND REASONABLE SETTLEMENT FOR OVERTIME BUILDING SERVICE FURNISHED DURING THE PERIOD OCTOBER 1961 THROUGH NOVEMBER 1962. THAT AMOUNT IS EQUIVALENT TO TWO MONTHS OF ADDITIONAL RENTAL PAYABLE UNDER THE TERMS OF THE CANCELED SUPPLEMENTAL AGREEMENT WHICH WAS PREDICATED UPON A BELIEF THAT A CONSIDERABLE AMOUNT OF OVERTIME BUILDING SERVICE CONSISTING OF SEVERAL HOURS EACH DAY NORMALLY WOULD BE REQUIRED BY THE TENANT.

THE PROPOSED SETTLEMENT FIGURE TAKES INTO CONSIDERATION THE LIMITED AMOUNT OF APPROVED OVERTIME WORK PERFORMED DURING THE MONTH OF OCTOBER 1961, SINCE RENT WAS PAYABLE IN ARREARS AND IT IS A GENERAL RULE THAT, AS BETWEEN PERSONS OWNING LEASED PROPERTY AT DIFFERENT TIMES, THE OWNER AT THE TIME THE RENT BECOMES DUE IS ENTITLED TO THE RENT. 52 C.J.S. 320.

ACCORDINGLY, INSTRUCTIONS ARE BEING ISSUED TODAY DIRECTING THAT THE SUM OF $1,166.66 BE CERTIFIED FOR PAYMENT TO THE PRESENT OWNERS OF THE BUILDING AS IN FULL AND FINAL SETTLEMENT FOR ALL OVERTIME BUILDING SERVICE FURNISHED DURING THE PERIOD OCTOBER 1961 THROUGH NOVEMBER 1962.