B-165067, SEPT. 20, 1968

B-165067: Sep 20, 1968

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WAS PRIVATELY OWNED UNDER A MORTGAGE INSURED BY THE FEDERAL HOUSING ADMINISTRATION. THE DEPARTMENT OF THE NAVY HAD DECLINED TO REIMBURSE MOFFITT CONSTRUCTION COMPANY BECAUSE AT THE TIME OF THE REPAIRS TITLE TO THE PROPERTY WAS IN THE FEDERAL GOVERNMENT. YOU RAISE THE QUESTION WHETHER YOUR DEPARTMENT SHOULD MAKE PAYMENT INASMUCH AS THE DEPARTMENT OF THE NAVY CAUSED THE LOSS AND THE PROPERTY WAS IN PRIVATE OWNERSHIP AT THE TIME OF THE DAMAGE. THE DECISIONS OF OUR OFFICE HAVE HELD THAT GENERALLY A FEDERAL AGENCY CANNOT OBLIGATE ITS APPROPRIATIONS FOR REPAIR OF DAMAGE IT HAS CAUSED TO PROPERTY OF ANOTHER FEDERAL AGENCY. 10 COMP. WE FIND NO REASON FOR APPLYING THIS RULE TO THE PRESENT CASE WHERE DAMAGE TO PROPERTY PRIVATELY OWNED WAS CAUSED BY THE FEDERAL GOVERNMENT BEFORE CONVEYANCE OF THE PROPERTY TO THE UNITED STATES.

B-165067, SEPT. 20, 1968

TO MR. LESTER H. THOMPSON:

YOUR LETTER OF AUGUST 12, 1968, REQUESTS OUR DECISION AS TO WHETHER THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SHOULD PAY MOFFITT CONSTRUCTION COMPANY OF HAMPTON, VIRGINIA, THE SUM OF $1,132.64 FOR ITS REPAIR OF A HOUSE DAMAGED ON JUNE 20, 1966, BY THE CRASH OF AN AIRCRAFT OF THE DEPARTMENT OF THE NAVY.

YOU STATE THAT WHEN THE CRASH AND DAMAGE OCCURRED, THE HOUSE, LOCATED AT 412 MARION ROAD, HAMPTON, VIRGINIA, WAS PRIVATELY OWNED UNDER A MORTGAGE INSURED BY THE FEDERAL HOUSING ADMINISTRATION. HOWEVER, AT THE TIME MOFFITT CONSTRUCTION COMPANY BEGAN ITS REPAIR WORK ON OR ABOUT NOVEMBER 30, 1966, THE HOUSE HAD BEEN CONVEYED TO THE FEDERAL GOVERNMENT ON NOVEMBER 9, 1966, AFTER FORECLOSURE BY THE MORTGAGEE AGAINST THE PRIVATE OWNERS. THE MORTGAGEE TRANSFERRED THE PROPERTY IN EXCHANGE FOR BENEFITS UNDER ITS MORTGAGE INSURANCE CONTRACT WITH THE FEDERAL HOUSING ADMINISTRATION. MOFFITT CONSTRUCTION COMPANY HAS MADE CLAIM FOR PAYMENT UPON BOTH THE FEDERAL HOUSING ADMINISTRATION AND THE DEPARTMENT OF THE NAVY. THE DEPARTMENT OF THE NAVY HAD DECLINED TO REIMBURSE MOFFITT CONSTRUCTION COMPANY BECAUSE AT THE TIME OF THE REPAIRS TITLE TO THE PROPERTY WAS IN THE FEDERAL GOVERNMENT, AND THIS OFFICE HAS RULED THAT A FEDERAL AGENCY WHICH DAMAGED PROPERTY OF ANOTHER FEDERAL AGENCY MAY NOT COMPENSATE FOR THE LOSS.

YOU RAISE THE QUESTION WHETHER YOUR DEPARTMENT SHOULD MAKE PAYMENT INASMUCH AS THE DEPARTMENT OF THE NAVY CAUSED THE LOSS AND THE PROPERTY WAS IN PRIVATE OWNERSHIP AT THE TIME OF THE DAMAGE.

THE DECISIONS OF OUR OFFICE HAVE HELD THAT GENERALLY A FEDERAL AGENCY CANNOT OBLIGATE ITS APPROPRIATIONS FOR REPAIR OF DAMAGE IT HAS CAUSED TO PROPERTY OF ANOTHER FEDERAL AGENCY. 10 COMP. GEN. 288. HOWEVER, WE FIND NO REASON FOR APPLYING THIS RULE TO THE PRESENT CASE WHERE DAMAGE TO PROPERTY PRIVATELY OWNED WAS CAUSED BY THE FEDERAL GOVERNMENT BEFORE CONVEYANCE OF THE PROPERTY TO THE UNITED STATES. IN THESE CIRCUMSTANCES THE FEDERAL AGENCY CAUSING THE LOSS MAY OBLIGATE ITS APPROPRIATIONS, IF OTHERWISE AVAILABLE, FOR RESTORATION OF THE PROPERTY.

THEREFORE, IT APPEARS THE DEPARTMENT OF THE NAVY IS THE PROPER AGENCY TO PAY MOFFITT CONSTRUCTION COMPANY, AND YOU SHOULD NOT CERTIFY THE VOUCHER FOR PAYMENT. THE OFFICE OF THE JUDGE ADVOCATE GENERAL, DEPARTMENT OF THE NAVY, LITIGATION AND CLAIMS DIVISION, HAS INFORMALLY ADVISED IT WILL UNDERTAKE SETTLEMENT OF THE CLAIM IN ACCORDANCE WITH THIS DECISION, A COPY OF WHICH WE ARE FORWARDING TO THAT OFFICE.

WE ARE RETAINING THE VOUCHER ATTACHED TO YOUR LETTER OF AUGUST 12, 1968. YOUR OTHER ATTACHMENTS TO THIS LETTER ARE ENCLOSED HEREWITH.