B-164902, AUGUST 9, 1968, 48 COMP. GEN. 71

B-164902: Aug 9, 1968

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OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - "SETTLEMENT DATE" LIMITATIONS ON PROPERTY TRANSACTIONS - WHAT CONSTITUTES LITIGATION THE FACT THAT THE ULTIMATE SALE OF THE RESIDENCE OF A TRANSFERRED EMPLOYEE WAS DELAYED MORE THAN 1 YEAR AFTER THE DATE OF ENTRANCE ON DUTY AT HIS NEW OFFICIAL STATION. CROWLEY IS SAID TO HAVE ENTERED UPON DUTY AT HIS NEW OFFICIAL STATION ON NOVEMBER 14. THE EXPENSES FOR WHICH REIMBURSEMENT IS CLAIMED WERE INCURRED IN THE SALE OF MR. CROWLEY'S RESIDENCE AT HIS OLD OFFICIAL STATION AND THE RECORD SHOWS THAT THE REAL ESTATE TRANSACTION WAS . EXCEPT WHEN THE PERIOD IS ADMINISTRATIVELY EXTENDED BECAUSE SETTLEMENT IS DELAYED BY LITIGATION. THE BASIC QUESTION PRESENTED BY YOUR LETTER IS WHETHER THE CIRCUMSTANCES WHICH APPARENTLY CAUSED A DELAY IN THE ULTIMATE SALE BY MR.

B-164902, AUGUST 9, 1968, 48 COMP. GEN. 71

OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - "SETTLEMENT DATE" LIMITATIONS ON PROPERTY TRANSACTIONS - WHAT CONSTITUTES LITIGATION THE FACT THAT THE ULTIMATE SALE OF THE RESIDENCE OF A TRANSFERRED EMPLOYEE WAS DELAYED MORE THAN 1 YEAR AFTER THE DATE OF ENTRANCE ON DUTY AT HIS NEW OFFICIAL STATION, AS LIMITED BY SECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 ON REAL ESTATE TRANSACTIONS, BY REASON OF THE BREACH OF AN ESCROW AGREEMENT TANTAMOUNT TO A CONTRACT SALE AND THE CONTINUED POSSESSION OF THE PROPERTY BY THE DEFAULTER DOES NOT ENTITLE THE EMPLOYEE UNDER THE "LITIGATION" EXCEPTION PROVIDED IN SECTION 4.1D TO THE 1-YEAR SETTLEMENT REQUIREMENT, TO REIMBURSEMENT FOR THE EXPENSES INCURRED IN SELLING HIS RESIDENCE, THE DELAY IN DISPOSING OF THE RESIDENCE NOT STEMMING FROM A SUIT AT LAW WITHIN THE CONTEMPLATION OF THE BUDGET CIRCULAR.

TO MAURICE F. ROW, UNITED STATES DEPARTMENT OF JUSTICE, AUGUST 9, 1968:

YOUR LETTER OF JULY 19, 1968, ENCLOSED A VOUCHER FOR $3,529.17 IN FAVOR OF MR. THEODORE P. CROWLEY, COVERING EXPENSES INCURRED BY HIM IN THE SALE OF HIS RESIDENCE IN LOS ANGELES, CALIFORNIA, FOLLOWING THE TRANSFER OF HIS OFFICIAL STATION FROM LOS ANGELES TO PHOENIX, ARIZONA, IN NOVEMBER 1966, AS AN EMPLOYEE OF THE FEDERAL BUREAU OF INVESTIGATION. YOU ASK OUR DECISION WHETHER IN THE LIGHT OF THE FACTS SURROUNDING THE CASE THE VOUCHER MAY BE CERTIFIED FOR PAYMENT.

MR. CROWLEY IS SAID TO HAVE ENTERED UPON DUTY AT HIS NEW OFFICIAL STATION ON NOVEMBER 14, 1966. THE EXPENSES FOR WHICH REIMBURSEMENT IS CLAIMED WERE INCURRED IN THE SALE OF MR. CROWLEY'S RESIDENCE AT HIS OLD OFFICIAL STATION AND THE RECORD SHOWS THAT THE REAL ESTATE TRANSACTION WAS ,SETTLED" ON MAY 15, 1968, MORE THAN 1 YEAR AFTER THE DATE OF ENTRANCE ON DUTY AT THE NEW OFFICIAL STATION, AS LIMITED BY SECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, EXCEPT WHEN THE PERIOD IS ADMINISTRATIVELY EXTENDED BECAUSE SETTLEMENT IS DELAYED BY LITIGATION.

THE BASIC QUESTION PRESENTED BY YOUR LETTER IS WHETHER THE CIRCUMSTANCES WHICH APPARENTLY CAUSED A DELAY IN THE ULTIMATE SALE BY MR. CROWLEY OF HIS RESIDENCE IN LOS ANGELES STEMMED FROM ,LITIGATION" AS THAT TERM IS USED IN THE BUDGET CIRCULAR.

THE RECORD DISCLOSES THAT IN NOVEMBER 1966 MR. CROWLEY INCURRED SUBSTANTIAL EXPENSES FOR NEWSPAPER ADVERTISING OF HIS RESIDENCE FOR SALE. ON NOVEMBER 21, 1966, HE LISTED HIS RESIDENCE WITH THE SAN FERNANDO VALLEY BOARD OF REALTORS, INC., THROUGH JENNIE STABILE REALTY, A MEMBER, FOR SALE. ON FEBRUARY 10, 1967, HE EXECUTED AN ESCROW AGREEMENT TANTAMOUNT TO A CONTRACT OF SALE WITH CASEY L. JONES AND CONNIE ANN JONES, NAMED AS BUYERS, WHICH AGREEMENT WAS TO BE CLOSED OR SETTLED ON OR BEFORE JUNE 10, 1967. BY INSTRUCTIONS DATED JUNE 28, 1967, OF JENNIE STABILE REALTY, THE ESCROW WAS CANCELED.

THEREAFTER THE RESIDENCE PROPERTY WAS LISTED FOR SALE WITH SEVERAL REALTY BROKERS BUT WAS ULTIMATELY CONTRACTED TO BE SOLD THROUGH THE BROKER, WHITE HOUSE PROPERTIES, ON APRIL 13, 1968, TO HERBERT K. WUNDERLICH. THE SALE WAS CLOSED OR SETTLED ON MAY 15, 1968.

WE NOTE FROM MR. CROWLEY'S STATEMENT IN THE FILE THAT HE AUTHORIZED THE FIRST PROSPECTIVE BUYER, MR. JONES, TO OCCUPY THE PREMISES BEING SOLD AT SOME DATE PRIOR TO THE DATE OF SETTLEMENT, THAT ON JUNE 9, 1967, HE WAS INFORMED OF BANKRUPTCY OF MR. JONES AND THAT APPARENTLY MR. CROWLEY WAS UNABLE TO OBTAIN POSSESSION OF THE RESIDENCE UNTIL JULY 8, 1967. THEREAFTER, NOTWITHSTANDING MR. CROWLEY'S APPARENT DILIGENT EFFORTS TO DISPOSE OF THE PROPERTY HE WAS UNSUCCESSFUL UNTIL THE SALE TO THE WUNDERLICHS ON MAY 15, 1968.

MR. CROWLEY URGES THAT SINCE HE COULD HAVE SUED THE JONESES ON THE BREACH OR DEFAULT OF THE AGREEMENT, PRESUMABLY IN AN ACTION IN THE NATURE OF SPECIFIC PERFORMANCE, AND, APPARENTLY, THAT BECAUSE THE SALE OF HIS RESIDENCE WAS DELAYED FURTHER, AT LEAST UNTIL AFTER JULY 8, 1967, BECAUSE OF THE DEFAULT OR BREACH AND THE POSSESSION OF THE PROPERTY BY THE DEFAULTER, THAT WE SHOULD VIEW HIS CASE AS FALLING WITHIN THE PURVIEW OF THE SINGLE EXCEPTION TO THE 1-YEAR LIMIT ESTABLISHED BY BUREAU OF THE BUDGET CIRCULAR NO. A-56 AND FIND THAT SETTLEMENT IN THE SALE OF HIS RESIDENCE NECESSARILY WAS DELAYED BECAUSE OF LITIGATION.

ON SEVERAL OCCASIONS WE HAVE FOUND IT NECESSARY TO CONSTRUE THE TERM "LITIGATION" AS USED IN SECTION 4.1D OF THE CIRCULAR. AS DEFINED IN BLACK'S LAW DICTIONARY, FOURTH EDITION, WEST PUBLISHING CO., 1951, THE TERM "LITIGATION" MEANS A CONTEST IN A COURT OF JUSTICE FOR THE PURPOSE OF ENFORCING A RIGHT; A JUDICIAL CONTEST; A JUDICIAL CONTROVERSY; A SUIT AT LAW. IN OUR DECISION OF MAY 20, 1968, B-163955, CITED IN YOUR LETTER, WE SAID THAT THE TERM WAS GIVEN ITS USUAL MEANING, I.E., ACTION BEFORE A COURT. IN B-163700, MAY 6, 1968, ALSO CITED BY YOU, WE AGREED WITH AN ADMINISTRATIVE DETERMINATION THAT DELAYS IN SETTLEMENT NOT STEMMING FROM A SUIT AT LAW COULD NOT BE VIEWED AS LITIGATION WITHIN THE MEANING OF THE BUDGET CIRCULAR.

WE CANNOT SAY ON THE FACTS OF MR. CROWLEY'S CASE THAT SETTLEMENT WAS DELAYED BECAUSE OF LITIGATION.

THEREFORE, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY NOT BE CERTIFIED FOR PAYMENT.