B-164091, AUG. 6, 1968

B-164091: Aug 6, 1968

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JEAN PAUL BERNIER: REFERENCE IS MADE TO YOUR LETTERS DATED APRIL 19. GOOD WILL. 121.43 WHICH WERE ALLEGED TO HAVE BEEN INCURRED IN CONNECTION WITH THE TERMINATION OF LEASES BY THE GENERAL SERVICES ADMINISTRATION (GSA). WE HAVE BEEN ADVISED BY GSA THAT THE UNITED STATES ACQUIRED TITLE TO NO. 937 IN FEE SIMPLE ABSOLUTE AS A RESULT OF A CONDEMNATION PROCEEDING FILING JULY 3. THE PROPERTY WAS OWNED BY RICHARD P. THE FIRST FLOOR WAS LEASED TO B AND B INDUSTRIAL CATERING CO. THE RECORD SHOWS THAT THERE WAS SOME INFORMAL NEGOTIATION BETWEEN YOU AND GSA CONCERNING A LEASE. THE NEGOTIATIONS WERE UNFRUITFUL AND IT IS REPORTED THAT PALMA. A GSA INVITATION FOR COMPETITIVE BIDS TO LEASE NO. 937 WAS ISSUED APRIL 24.

B-164091, AUG. 6, 1968

TO MR. JEAN PAUL BERNIER:

REFERENCE IS MADE TO YOUR LETTERS DATED APRIL 19, 1968, WITH ENCLOSURES, AND JULY 10, 1968, ASSERTING A CLAIM AGAINST THE GOVERNMENT FOR DAMAGES (LOSS OF BUSINESS, GOOD WILL, ETC.), AMOUNTING TO $98,121.43 WHICH WERE ALLEGED TO HAVE BEEN INCURRED IN CONNECTION WITH THE TERMINATION OF LEASES BY THE GENERAL SERVICES ADMINISTRATION (GSA).

YOUR CLAIM ARISES OUT OF THE GOVERNMENT'S ACTIONS IN REGARD TO TWO PROPERTIES AT THE SITE OF THE PROPOSED FEDERAL BUREAU OF INVESTIGATION BUILDING IN WASHINGTON, D.C., DESCRIBED AS 937 PENNSYLVANIA AVENUE, N.W. (NO. 937), AND 945 PENNSYLVANIA (NO. 945).

WE HAVE BEEN ADVISED BY GSA THAT THE UNITED STATES ACQUIRED TITLE TO NO. 937 IN FEE SIMPLE ABSOLUTE AS A RESULT OF A CONDEMNATION PROCEEDING FILING JULY 3, 1963. AT THE TIME OF THE TAKING, THE PROPERTY WAS OWNED BY RICHARD P. COPE, SUBSTITUTED TRUSTEE. THE FIRST FLOOR WAS LEASED TO B AND B INDUSTRIAL CATERING CO., WHICH SUBLET TO PALMA, INC., T/A TEN PENN, JR., RESTAURANT. AFTER THE UNITED STATES ACQUIRED TITLE TO THE PROPERTY, NEITHER THE FORMER OWNER NOR B AND B INDUSTRIAL CATERING EXPRESSED ANY INTEREST IN LEASING THE PREMISES. HOWEVER, AS PRESIDENT OF PALMA, INC., YOU EXPRESSED AN INTEREST IN LEASING THE PROPERTY, AND THE RECORD SHOWS THAT THERE WAS SOME INFORMAL NEGOTIATION BETWEEN YOU AND GSA CONCERNING A LEASE. HOWEVER, THE NEGOTIATIONS WERE UNFRUITFUL AND IT IS REPORTED THAT PALMA, INC., T/A TEN PENN JR., VACATED NO. 937 AS OF SEPTEMBER 1, 1963.

A GSA INVITATION FOR COMPETITIVE BIDS TO LEASE NO. 937 WAS ISSUED APRIL 24, 1964, AND THE BID OPENING WAS MAY 12, 1964. THEREAFTER, A LEASE OF THE PREMISES WAS MADE TO VINCENT J. PICCOLO, T/A AAA NOVELTY COMPANY, FOR A MONTHLY RENTAL OF $201, EFFECTIVE JUNE 15, 1964. THE LEASE COULD BE TERMINATED BY EITHER PARTY UPON 30 DAYS PRIOR WRITTEN NOTICE. MR. PICCOLO TERMINATED HIS TENANCY EFFECTIVE MARCH 15, 1965. A LEASE OF THE PREMISES WAS THEN NEGOTIATED WITH YOU, AS PRESIDENT OF ROXTON, INC., AT A MONTHLY RENTAL OF $225. THIS LEASE, NO. GS-03-B (OL) 9180, WAS EFFECTIVE APRIL 8, 1965, FOR A 1-YEAR TERM; HOWEVER, EITHER PARTY COULD TERMINATE THE LEASE,"BY GIVING WRITTEN NOTICE THIRTY DAYS IN ADVANCE OF THE TERMINATION DATE SPECIFIED IN SAID WRITTEN NOTICE.'

BY LETTER DATED APRIL 19, 1966, FROM GSA, YOU WERE ADVISED THAT YOU COULD REMAIN IN OCCUPANCY OF NO. 937 AS A HOLDOVER TENANT ON A MONTH TO-MONTH BASIS FOR A PERIOD ENDING NOT LATER THAN SEPTEMBER 30, 1966. YOU WERE ALSO ADVISED BY GSA THAT THE "RENTAL AND ALL OTHER CONDITIONS AND COVENANTS OF YOUR LEASE WOULD REMAIN THE SAME.' IN A GSA LETTER DATED MAY 25, 1966, YOU WERE OFFERED AN EXTENSION OF THE TERM OF THE LEASE UNTIL MAY 31, 1967. THIS LETTER ALSO SPECIFICALLY PROVIDED THAT THE RENTAL AND ALL THE OTHER CONDITIONS OF THE LEASE WOULD REMAIN THE SAME. YOU DID NOT SIGN AND RETURN A COPY OF THE LETTER AS WAS REQUESTED IN THE LAST PARAGRAPH THEREOF. UNDER DATE OF JULY 25, 1966, A LETTER IDENTICAL IN CONTENT WITH THE MAY 25, 1966, LETTER WAS MAILED TO YOU, A COPY OF WHICH YOU SIGNED AND RETURNED. BY LETTER OF NOVEMBER 30, 1966, YOU WERE ADVISED BY GSA THAT YOU MUST VACATE THE PREMISES NOT LATER THAN JANUARY 31, 1967. THIS NOTICE WAS GIVEN IN ACCORDANCE WITH PARAGRAPH 4 OF LEASE NO. GS-03-B (OL) 9180. THAT PARAGRAPH PROVIDED:

"EITHER PARTY MAY TERMINATE THIS LEASE BY GIVING WRITTEN NOTICE THIRTY DAYS IN ADVANCE OF THE TERMINATION DATE SPECIFIED IN SAID WRITTEN NOTICE. THE LESSEE SPECIFICALLY AGREES TO VACATE THE PREMISES ON THE EFFECTIVE DATE OF ANY SUCH TERMINATION NOTICE AND WAIVES ANY DEMAND FOR POSSESSION OTHER THAN SUCH NOTICE. NOTICES TO THE LESSEE MAY BE SERVED IN PERSON OR BY MAIL AT THE ADDRESS OF THE PREMISES UNDER THIS LEASE. THE LESSOR MAY TERMINATE THIS LEASE IMMEDIATELY WITHOUT NOTICE AND BE ENTITLED TO ENTRY AND POSSESSION OF THE LEASED PREMISES FORTHWITH UPON NON-PAYMENT OF THE RENT OR FAILURE OF THE LESSEE TO COMPLY WITH ANY PROVISION OF THIS LEASE.'

ON DECEMBER 23, 1966, YOU WERE AGAIN ADVISED BY GSA THAT IT WOULD NOT BE NECESSARY FOR YOU TO VACATE THE PREMISES UNTIL MARCH 31, 1967. THE GSA FILES SHOW THAT THE PREMISES WERE VACATED BY MARCH 31, 1967.

FROM THE RECORD, IT APPEARS THAT DURING THE ENTIRE PERIOD THE PREMISES AT NO. 937 WERE OCCUPIED BY YOUR COMPANY (ROXTON, INC.), THE TENANCY COULD HAVE BEEN TERMINATED BY EITHER PARTY UPON 30 DAYS WRITTEN NOTICE. THAT RIGHT WAS EXERCISED BY GSA UNDER THE TERMS OF PARAGRAPH 4 OF THE LEASE AND, FOR THAT REASON, NO OBLIGATION TO RESPOND IN DAMAGES COULD BE LEGALLY IMPOSED ON THE GOVERNMENT. IN BRAND V CHICAGO HOUSING AUTHORITY, 120 F.2D 786, 788, IT WAS HELD:

"* * * ANY PROPERTY RIGHT ACQUIRED BY THE PLAINTIFFS WAS CIRCUMSCRIBED BY THE TERMS AND CONDITIONS UPON WHICH IT WAS FOUNDED. TRUE, AS TENANTS, THEY ACQUIRED THE RIGHT OF POSSESSION, BUT THIS RIGHT WAS LIMITED BY THE TERMS OF THE LEASE BY WHICH SUCH RIGHT WAS OBTAINED. BY EXPRESS PROVISION THEREOF, EITHER PARTY WAS ENTITLED TO CANCELLATION ON FIFTEEN DAYS NOTICE TO THE OWNER. IT IS OUR OPINION THAT THIS PROVISION, WITH REFERENCE TO THE TERMINATION OF THE TENANCY IS VALID AND BINDING UPON PLAINTIFFS IN THE SAME MANNER AS THOUGH THE LESSOR HAD BEEN A PRIVATE PERSON RATHER THAN A GOVERNMENTAL AGENCY. AS WAS SAID IN LYNCH V UNITED STATES, 292 U.S. 571, 579, 54 S.CT. 840, 843, 78 L.ED. 1434: -* * * WHEN THE UNITED STATES ENTERS INTO CONTRACT RELATIONS, ITS RIGHTS AND DUTIES THEREIN ARE GOVERNED GENERALLY BY THE LAW APPLICABLE TO CONTRACTS BETWEEN PRIVATE INDIVIDUALS.

THE GOVERNMENT ACQUIRED TITLE TO NO. 945 IN FEE SIMPLE ABSOLUTE AS A RESULT OF A CONDEMNATION PROCEEDING FILED ON AUGUST 21, 1963. AT THE TIME OF TAKING, THE PROPERTY WAS OWNED BY THE ATLAS INVESTMENT CORPORATION. THE FIRST FLOOR AND BASEMENT WERE LEASED TO YOUR COMPANY, ROXTON, INC. GSA NEGOTIATED A LEASE WITH YOU FOR THESE PREMISES FOR A TERM BEGINNING ON SEPTEMBER 1, 1963, AND ENDING ON DECEMBER 31, 1964. THIS LEASE, NO. GS-03 -B (OL) 9077, COULD BE TERMINATED BY EITHER PARTY BY GIVING WRITTEN NOTICE 30 DAYS IN ADVANCE OF THE TERMINATION DATE. A NEW LEASE, GS-03-B-9146, WAS NEGOTIATED WITH YOU FOR THE SAME PREMISES FOR A TERM BEGINNING ON JANUARY 1, 1965, AND ENDING DECEMBER 31, 1965. THIS LEASE WAS EXTENDED TO MAY 31, 1966, AND THEN TO MAY 31, 1967; HOWEVER, EITHER PARTY COULD STILL TERMINATE THE LEASE BY GIVING 30 DAYS ADVANCE WRITTEN NOTICE. BY LETTER DATED NOVEMBER 30, 1966, YOU WERE ADVISED BY GSA THAT THE PREMISES AT NO. 945 WERE TO BE VACATED BY JANUARY 31, 1967. THIS NOTICE WAS GIVEN PURSUANT TO PARAGRAPH 4 OF THE LEASE, SUPRA. YOU WERE THEN ADVISED BY LETTER DATED DECEMBER 23, 1966, THAT IT WOULD NOT BE NECESSARY TO VACATE THE PREMISES AT NO. 945 UNTIL MARCH 31, 1967.

IN YOUR LETTER OF APRIL 19, 1968, YOU STATE THAT "DURING DISCUSSIONS GSA ASSURED (BOTH VERBALLY AND BY ABOVE-MENTIONED LETTERS) THAT WE COULD OPERATE UNTIL THE END OF MAY 1967. BASED ON THIS A DECISION WAS MADE NOT TO CLOSE DURING THE FALL OF 1966, KNOWING WINTER LOSSES COULD BE RECOUPED BY THE SPRING TOURIST TRADE * * *.' IN THIS REGARD, IT IS REPORTED BY GSA THAT IT HAS BEEN UNABLE TO LOCATE ANY OFFICIAL NOW OR FORMERLY WITH GSA WHO RECALLS GIVING ANY SUCH VERBAL ASSURANCE AND THAT HAD SUCH ASSURANCE BEEN GIVEN, IT WOULD STILL HAVE BEEN SUBJECT TO THE 30-DAY TERMINATION CLAUSE CONTAINED IN THE LEASE IN THE EVENT A CHANGE IN CIRCUMSTANCES MADE EARLIER TERMINATION NECESSARY. HOWEVER, EVEN ASSUMING THAT SUCH ASSURANCE WAS MADE, IT IS A WELL-ESTABLISHED RULE OF CONTRACT LAW THAT WHEN THERE IS A WRITTEN AGREEMENT THAT SPEAKS TO THE POINT IN ISSUE AND A PAROL STATEMENT CONTROVERTING THE WRITING, THE WRITING WILL ALWAYS TAKE PRECEDENCE. SEE CORBIN ON CONTRACTS, SECTION 573; JOSEPH V MAHONEY CORPORATION, 367 S.W. 2D 213; SECTION 2-202, UNIFORM COMMERCIAL CODE.

WITH REGARD TO YOUR REQUEST FOR RELIEF ON AN EQUITABLE BASIS, IT IS ESTABLISHED THAT A MERE LOSS UNDER A CONTRACT DOES NOT AFFORD EVEN AN EQUITABLE BASIS FOR RELIEF. SEE 19 COMP. GEN. 560, AND THE COURT CASES CITED THEREIN. APART FROM THAT, THE AUTHORITY OF OUR OFFICE UNDER SECTION 236, REVISED STATUTES, AS AMENDED BY SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF 1921, 31 U.S.C. 71, DOES NOT EXTEND TO CLAIMS BASED SOLELY ON EQUITABLE OR MORAL OBLIGATION.

UPON REVIEW OF THE RECORD, WE FIND NO LEGAL BASIS TO ALLOW ANY PART OF YOUR CLAIM, ESPECIALLY SINCE THE LOSSES IDENTIFIED IN YOUR LETTER OF APRIL 19, 1968, RELATED TO THE BUSINESS RISK YOU UNDERTOOK IN LEASING THE PREMISES WHICH WERE SUBJECT TO EARLY DEMOLITION AND REMOVAL.