B-172911, JUN 21, 1971

B-172911, JUN 21, 1971

CIVILIAN EMPLOYEE - REAL ESTATE EXPENSES - ONE YEAR PERIOD AFFIRMING CLAIMS DIVISION SETTLEMENT WHICH DISALLOWED CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED IN THE SALE OF CLAIMANT'S RESIDENCE AT HIS FORMER DUTY STATION IN CONNECTION WITH AN OFFICIAL CHANGE OF STATION. THE REGULATION EFFECTIVE DURING THE PERIOD HERE INVOLVED, OMB CIRCULAR NO. A-56 PROVIDES AT SECTION 4.1(D) THAT IN ORDER TO ALLOW REIMBURSEMENT, THE SETTLEMENT DATE MUST BE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTS FOR DUTY AT THE NEW OFFICIAL STATION. THERE IS NOTHING IN THE "AGREEMENT FOR SALE" EXECUTED WITHIN THE ONE YEAR PERIOD TO SUPPORT A CONCLUSION THAT IT WAS OTHER THAN AN AGREEMENT TO TRANSFER TITLE AT A FUTURE DATE, WHICH WAS OUTSIDE THE ONE YEAR PERIOD.

TO MR. RUSSELL SCARPELLI:

THIS REFERS TO LETTER OF FEBRUARY 16, 1971, FROM YOUR ATTORNEY, MR. JAMES J. LIGI, REQUESTING RECONSIDERATION OF OUR CLAIMS DIVISION SETTLEMENT OF JANUARY 28, 1970, WHICH DISALLOWED REIMBURSEMENT OF EXPENSES INCURRED FOR THE SALE OF YOUR RESIDENCE AT YOUR FORMER DUTY STATION IN CONNECTION WITH AN OFFICIAL CHANGE OF STATION. THE BASIS FOR THAT DISALLOWANCE WAS THE FACT THAT THE SETTLEMENT DATE OF THE SALES TRANSACTION OCCURRED LATER THAN ONE YEAR AFTER THE DATE ON WHICH YOU REPORTED FOR DUTY AT YOUR NEW OFFICIAL STATION.

THE RECORD SHOWS THAT YOU TRANSFERRED FROM GREEN RIDGE, PENNSYLVANIA, TO TOBYHANNA, PENNSYLVANIA, AND REPORTED FOR DUTY AT YOUR NEW OFFICIAL STATION ON AUGUST 29, 1966. IT IS INDICATED IN YOUR LETTER OF NOVEMBER 20, 1968, THAT FROM SEPTEMBER 6, 1966, TO JUNE 30, 1967, YOUR GREEN RIDGE RESIDENCE WAS UNDER OPTION TO BE SOLD, BUT THAT THE OPTION WAS NOT EXERCISED DUE TO THE INABILITY OF THE OPTION-HOLDER TO OBTAIN THE NECESSARY FUNDS. ON JUNE 30, 1967, THE PROPERTY WAS AGAIN PLACED ON THE MARKET. THE RECORD SHOWS THAT ON JULY 7, 1967, AN "AGREEMENT FOR THE SALE OF REAL ESTATE" WAS SIGNED BY THE BUYERS AND THAT ON JULY 31, 1967, AN FHA COMMITMENT FOR MORTGAGE WAS MADE. THE "STATEMENT OF SETTLEMENT" INDICATES THAT SETTLEMENT OCCURRED ON SEPTEMBER 15, 1967.

THE REGULATIONS EFFECTIVE DURING THE PERIOD HERE INVOLVED GOVERNING PAYMENT OF TRAVEL AND TRANSPORTATION EXPENSES OF CIVILIAN OFFICERS AND EMPLOYEES OF THE UNITED STATES, OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, AS AMENDED OCTOBER 12, 1966, PROVIDED AT SECTION 4.1 THAT:

"TO THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT WILL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION; PURCHASE OF ONE DWELLING AT HIS NEW OFFICIAL STATION; OR THE SETTLEMENT OF AN UNEXPIRED LEASE AT HIS PLACE OF RESIDENCE AT THE OLD OFFICIAL STATION; PROVIDED THAT:

"(D) THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION." THE QUOTED REGULATION WAS ISSUED PURSUANT TO PUBLIC LAW 89-516, 80 STAT. 323, APPROVED JULY 21, 1966, AND IS, THEREFORE, STATUTORY IN NATURE.

EXCEPTION IS TAKEN BY YOUR ATTORNEY TO THE CONCLUSION OF OUR CLAIMS DIVISION THAT, FOR PURPOSES OF THE ABOVE REGULATION, SETTLEMENT OCCURRED ON SEPTEMBER 7, 1967. IN THIS CONNECTION HE CITES OUR DECISION 46 COMP. GEN. 677 (1967) IN WHICH WE HELD THAT UNDER THE PARTICULAR FACTS PRESENTED THE DATE OF EXECUTION OF THE "CONTRACT FOR DEED" WAS THE SETTLEMENT DATE CONTEMPLATED BY THE REGULATION. THEREIN WE STATED THAT THE TERM "SETTLEMENT DATE" HAS NO DEFINITE OR FIXED MEANING.

YOUR ATTORNEY POINTS OUT UNDER PENNSYLVANIA LAW THAT UPON EXECUTION OF A VALID ENFORCEABLE CONTRACT FOR THE SALE OF REAL ESTATE, AS WAS EXECUTED BY THE PURCHASERS OF YOUR RESIDENCE ON JULY 7, 1967, THE PURCHASER BECOMES THE HOLDER OF EQUITABLE TITLE TO THE PROPERTY, WHILE THE SELLER BECOMES THE HOLDER OF LEGAL TITLE AS TRUSTEE FOR THE PURCHASER. HE ADDS THAT INASMUCH AS THE COMMITMENT FOR AN FHA MORTGAGE, UPON WHICH THE "AGREEMENT FOR SALE" WAS CONDITIONED, WAS OBTAINED ON JULY 31, 1967, FOR ALL PRACTICAL AND LEGAL PURPOSES THE PROPERTY WAS SOLD AS OF JULY 31, 1967, AND THAT UNDER OUR DECISION IN 46 COMP. GEN. 677 (1967) SETTLEMENT OCCURRED ON THAT DATE.

WE HAVE RECOGNIZED THAT UNUSUAL TRANSACTIONS MAY ARISE TO WHICH THE TERM "SETTLEMENT DATE" CANNOT BE APPLIED WITH A FIXED MEANING. IN THE "CONTRACT FOR DEED" SITUATION PRESENTED IN 46 COMP. GEN. 677 (1967) WE FOUND THAT INASMUCH AS NO SEPARATE "SETTLEMENT DATE" WAS INVOLVED IN THE PURCHASE BECAUSE THE TRANSACTION WAS CONSUMMATED AT THE TIME THE "CONTRACT FOR DEED" WAS SIGNED, SETTLEMENT, AS THAT TERM IS USED IN THE APPLICABLE REGULATION, OCCURRED AT THE TIME OF SIGNING OF THE CONTRACT.

IN YOUR CASE, THE "AGREEMENT FOR SALE" REFERS REPEATEDLY TO THE "TIME OF SETTLEMENT." AS USED THEREIN, SETTLEMENT DID NOT OCCUR UNTIL SEPTEMBER 15, 1967.

IN CIRCULAR NO. A-56, SECTION 4.1D, AS HEREINBEFORE QUOTED, THE TERM "SETTLEMENT" WHICH IS REQUIRED TO BE MADE WITHIN ONE YEAR AFTER THE EMPLOYEE REPORTS FOR DUTY, REFERS TO THE CLOSING OF A REAL ESTATE TRANSACTION BY THE PAYMENT OF THE CONTRACT PRICE CONSIDERATION, THE TRANSFER OR CONVEYANCE OF TITLE BY DEED OR OTHERWISE, AND THE EXECUTION OF SUCH DOCUMENTS AS CREATE OR EVIDENCE THE LIENS SECURED BY THE REAL ESTATE CONVEYED. THE CIRCULAR CONTEMPLATES THE USUAL, NORMAL, AND CUSTOMARY SETTLEMENT TRANSACTION BY WHICH A PURCHASER ACQUIRES TITLE TO IMPROVED REAL ESTATE TO BE USED AS HIS RESIDENCE.

WE HAVE EXAMINED THE "AGREEMENT FOR SALE OF REAL ESTATE" EXECUTED ON JULY 7, 1967, BETWEEN YOU AND THE PURCHASERS OF YOUR FORMER RESIDENCE AND FIND NOTHING IN THE LANGUAGE OF THAT DOCUMENT TO SUPPORT A CONCLUSION THAT IT WAS OTHER THAN AN AGREEMENT TO TRANSFER TITLE AT SOME FUTURE DATE. IT IS EVIDENT THAT "SETTLEMENT" AS IS CONTEMPLATED BY THE REGULATION OCCURRED ONLY AT THE FINAL CLOSING OF THE TRANSACTION ON SEPTEMBER 15, 1967.

IN LIGHT OF THE ABOVE, WE MUST AFFIRM THE DISALLOWANCE OF YOUR CLAIM FOR REIMBURSEMENT OF COSTS ASSOCIATED WITH THE SALE OF YOUR FORMER RESIDENCE.