B-174964, SEP 21, 1972

B-174964: Sep 21, 1972

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LEGAL SERVICES INCIDENT TO THE PURCHASE OF A RESIDENCE WHICH ARE PURELY ADVISORY OR ARE DUPLICATIVE OF OTHER SERVICES AND THUS. ARE NOT NECESSARY TO THE ACQUISITION OF A GOOD AND VALID TITLE. ARE NOT REIMBURSABLE UNDER OMB CIRCULAR NO. THE RECORD INDICATES THAT THE SUBJECT COSTS WERE INCURRED INCIDENT TO A PERMANENT CHANGE OF STATION FROM VALENTINE. THE COSTS WERE ITEMIZED BY THE LAW FIRM OF MCCANN. THIS FIRM WAS RETAINED BY THE EMPLOYEE TO REPRESENT HIM AS INDIVIDUAL PURCHASER OF THE RESIDENCE IN CORNWALL. THE AMOUNT $262.50 WAS DISALLOWED BECAUSE AUTHORIZING OFFICIALS CONSIDERED THAT IT REPRESENTED PURELY ADVISORY SERVICES AS WELL AS SERVICES ALREADY PERFORMED BY THE MORTGAGEE'S ATTORNEY.

B-174964, SEP 21, 1972

CIVILIAN PERSONNEL - REAL ESTATE PURCHASES - ATTORNEY'S FEES DECISION DENYING CERTIFICATION OF THE RECLAIM VOUCHER SUBMITTED BY GORDON E. BECKETT FOR ATTORNEYS FEES IN CONNECTION WITH THE PURCHASE OF A RESIDENCE INCIDENT TO A PERMANENT CHANGE OF STATION FROM VALENTINE, NEB., TO NEW WINDSOR, N.Y. LEGAL SERVICES INCIDENT TO THE PURCHASE OF A RESIDENCE WHICH ARE PURELY ADVISORY OR ARE DUPLICATIVE OF OTHER SERVICES AND THUS, ARE NOT NECESSARY TO THE ACQUISITION OF A GOOD AND VALID TITLE, ARE NOT REIMBURSABLE UNDER OMB CIRCULAR NO. A-56, SECTIONS 4.2G OR 4.2C, EVEN THOUGH IT MAY BE CUSTOMARY IN THAT AREA FOR A PURCHASER TO BE REPRESENTED BY HIS OWN ATTORNEY.

TO MR. SAMUEL BENJAMIN:

THIS REFERS TO YOUR LETTER OF JANUARY 14, 1972, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION ON THE RECLAIM VOUCHER OF MR. GORDON E. BECKETT WHICH REPRESENTS ATTORNEY FEES IN THE AMOUNT OF $262.50.

THE RECORD INDICATES THAT THE SUBJECT COSTS WERE INCURRED INCIDENT TO A PERMANENT CHANGE OF STATION FROM VALENTINE, NEBRASKA, TO NEW WINDSOR, NEW YORK, AND THE EMPLOYEE'S PURCHASE OF A RESIDENCE IN CORNWALL, NEW YORK. THE COSTS WERE ITEMIZED BY THE LAW FIRM OF MCCANN, AHERN & SOMMERS FOR SERVICES RENDERED FOR MR. BECKETT AS FOLLOWS: "REVIEW AND EXECUTION OF CONTRACT; REVIEW OF TITLE; REVIEW OF DEED AND MORTGAGE INSTRUMENTS; REPRESENTATION AT CLOSING; CERTIFICATION OF TITLE." THIS FIRM WAS RETAINED BY THE EMPLOYEE TO REPRESENT HIM AS INDIVIDUAL PURCHASER OF THE RESIDENCE IN CORNWALL. THE AMOUNT $262.50 WAS DISALLOWED BECAUSE AUTHORIZING OFFICIALS CONSIDERED THAT IT REPRESENTED PURELY ADVISORY SERVICES AS WELL AS SERVICES ALREADY PERFORMED BY THE MORTGAGEE'S ATTORNEY.

PAYMENT ON THE ORIGINAL VOUCHER INCLUDED REIMBURSEMENT FOR LEGAL COSTS BILLED DIRECTLY TO THE EMPLOYEE BY THE LAW FIRM OF BROWNING AND STRADAR WHICH REPRESENTED ONLY THE MORTGAGEE IN THE SUBJECT TRANSACTION. THE RECEIPTED BILL FROM BROWNING AND STRADAR REPORTED LEGAL SERVICES RENDERED AS FOLLOWS:

EXAMINATION OF TITLE AND SERVICES $172.50

PREPARATION OF V.A. MORTGAGE PAPERS

AND EXTENTION AND CONSOLIDATION PAPERS 110.00

TOTAL ALLOWED $282.50

YOUR ENCLOSURES INCLUDE A LETTER FROM THE MORTGAGEE'S ATTORNEY (BROWNING AND STRADAR) DATED OCTOBER 28, 1971, WHICH STATES THAT THE ABOVE BILL REPRESENTED FEES "PAID BY YOU (MR. BECKETT) AT THE TIME OF CLOSING *** FOR SERVICES RENDERED TO NEWBURGH SAVINGS BANK AS MORTGAGEE ***." THE LETTER CONTINUES BY STATING THAT IF THEIR LEGAL SERVICES HAD BEEN RENDERED TO THE EMPLOYEE THEN THE CHARGE FOR EXAMINATION OF TITLE AND "SERVICES" WOULD HAVE BEEN $435 RATHER THAN $172.50. THE $110 CHARGE FOR DRAFTING OF DOCUMENTS WOULD HAVE APPARENTLY REMAINED CONSTANT AND WOULD BE ALLOWABLE IN ANY EVENT UNDER EITHER SECTION 4.2G OR 4.2C OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969. IN THAT CONNECTION, WE UNDERSTAND THAT THE FEE CHARGED BY THE MORTGAGEE'S (BANK'S) ATTORNEY WOULD HAVE BEEN THE SAME EVEN IF MR. BECKETT HAD NOT UTILIZED THE SERVICES OF AN ATTORNEY.

A COMPARISON OF THE CHARGES ASSESSED BY THE TWO SETS OF ATTORNEYS REVEALS THAT THE SERVICES PERFORMED BY MR. BECKETT'S ATTORNEY WERE INCLUDED IN THE SERVICES PERFORMED BY THE ATTORNEYS FOR THE BANK AND THUS WERE NOT NECESSARY EXCEPT AS A MATTER OF PREFERENCE BY THE PURCHASER. MOREOVER, SOME OF THE CHARGES APPEAR TO INCLUDE ADVISORY SERVICES. WE HAVE CONSISTENTLY HELD THAT LEGAL SERVICES OF A PURELY ADVISORY NATURE ARE NOT REIMBURSABLE. MOREOVER, OUR VIEW IS THAT THE LAW AND REGULATIONS DO NOT CONTEMPLATE ALLOWANCE OF LEGAL FEES WHICH ARE DUPLICATIVE IN NATURE AND THUS NOT NECESSARY TO THE ACQUISITION OF A GOOD AND VALID TITLE. THIS IS SO REGARDLESS OF THE FACT THAT IT MAY BE CUSTOMARY IN THE AREA FOR A PURCHASER TO BE REPRESENTED BY HIS OWN ATTORNEY.

IN VIEW OF THE FOREGOING, THE VOUCHER, WITH ACCOMPANYING PAPERS, IS RETURNED HEREWITH AND MAY NOT BE CERTIFIED FOR PAYMENT.