B-175328, SEP 21, 1972

B-175328: Sep 21, 1972

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REIMBURSEMENT OF ATTORNEY'S FEES IN CONNECTION WITH REAL ESTATE TRANSACTIONS IS PERMITTED UNDER OMB CIRCULAR NO. SEVERAL OF THE SERVICES FOR WHICH CLAIMANT SEEKS REIMBURSEMENT ARE DUPLICATIVE OF THOSE FOR WHICH REIMBURSEMENT HAS ALREADY BEEN MADE. O'HARE: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 15. YOU WERE AUTHORIZED A CHANGE OF OFFICIAL DUTY STATION FROM ROCHESTER. A CHARGE OF $350 WAS ASSESSED BY THIS ATTORNEY IN CONNECTION WITH THE SERVICES HE RENDERED WITH RESPECT TO SUCH PURCHASE. IT WAS STATED THAT YOU WERE NOT ENTITLED TO REIMBURSEMENT FOR THE $350 ATTORNEY'S FEES CLAIMED SINCE THE LEGAL SERVICES INVOLVED WERE DEEMED TO BE OF AN ADVISORY NATURE AND THUS NOT REIMBURSABLE UNDER SECTION 4.2C.

B-175328, SEP 21, 1972

CIVILIAN PERSONNEL - REAL ESTATE PURCHASES - ATTORNEY'S FEES DECISION SUSTAINING DENIAL OF THE CLAIM OF THOMAS F. O'HARE FOR THE COST OF LEGAL SERVICES RENDERED ON THE PURCHASE OF A RESIDENCE INCIDENT TO A CHANGE OF OFFICIAL STATION. REIMBURSEMENT OF ATTORNEY'S FEES IN CONNECTION WITH REAL ESTATE TRANSACTIONS IS PERMITTED UNDER OMB CIRCULAR NO. A-56, SECTION 4.2C ONLY FOR THOSE SPECIFIC LEGAL SERVICES DESCRIBED THEREIN. ALSO, SEVERAL OF THE SERVICES FOR WHICH CLAIMANT SEEKS REIMBURSEMENT ARE DUPLICATIVE OF THOSE FOR WHICH REIMBURSEMENT HAS ALREADY BEEN MADE. ACCORDINGLY, THE CLAIM MUST BE DENIED.

TO MR. THOMAS F. O'HARE:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 15, 1972, APPEALING THE ACTION OF OUR CLAIMS DIVISION IN DENYING YOUR CLAIM FOR $350 REPRESENTING THE COST OF LEGAL SERVICES PROCURED INCIDENT TO THE PURCHASE OF A RESIDENCE UNDER THE CIRCUMSTANCES HEREINAFTER DESCRIBED.

THE RECORD INDICATES THAT IN CONNECTION WITH YOUR EMPLOYMENT WITH THE DEPARTMENT OF TREASURY, INTERNAL REVENUE SERVICE, YOU WERE AUTHORIZED A CHANGE OF OFFICIAL DUTY STATION FROM ROCHESTER, NEW YORK, TO BUFFALO, NEW YORK. INCIDENT TO THE PURCHASE OF A NEW HOME ADJACENT TO BUFFALO YOU ENGAGED THE SERVICES OF MR. EDWARD M. SHEEHAN, ATTORNEY AT LAW. A CHARGE OF $350 WAS ASSESSED BY THIS ATTORNEY IN CONNECTION WITH THE SERVICES HE RENDERED WITH RESPECT TO SUCH PURCHASE. IN THE DENIAL OF YOUR CLAIM, IT WAS STATED THAT YOU WERE NOT ENTITLED TO REIMBURSEMENT FOR THE $350 ATTORNEY'S FEES CLAIMED SINCE THE LEGAL SERVICES INVOLVED WERE DEEMED TO BE OF AN ADVISORY NATURE AND THUS NOT REIMBURSABLE UNDER SECTION 4.2C, OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969.

IN YOUR LETTER OF FEBRUARY 15, 1972, YOU HAVE TAKEN EXCEPTION TO THE DETERMINATION REGARDING THE NATURE OF LEGAL SERVICES PERFORMED BY YOUR ATTORNEY. YOU HAVE ASSERTED THAT OF THOSE SERVICES PERFORMED ONLY ONE ASPECT CAN TRULY BE SAID TO RELATE TO COUNSELING ACTIVITIES.

IN SUPPORT OF YOUR CLAIM THERE HAS BEEN PLACED IN THE RECORD A STATEMENT BY MR. SHEEHAN DATED DECEMBER 2, 1970, DETAILING THE ACTIVITIES HE UNDERTOOK IN YOUR BEHALF FOR WHICH HE CHARGED A FEE OF $350. THESE SERVICES WERE AS FOLLOWS:

"1. AN EXAMINATION OF THE TAX AND TITLE SEARCH MADE BY MONROE ABSTRACT & TITLE CORPORATION (SEARCH NO. 453841), THE TITLE RUNDOWN CONSISTING OF 69 SETOUTS.

"2. AFFIDAVIT REQUIRED THAT A UNITED STATES TAX LIEN AGAINST ONE J. L. STEWART WAS NOT AGAINST THE OWNER OF THE SUBJECT PREMISES.

"3. DISCHARGE OF MORTGAGE REQUIRED. MORTGAGE IN THE SUM OF $15,000.00, HELD BY LIBERTY NATIONAL BANK AND TRUST COMPANY - LIBER 6599 OF MORTGAGES, PAGE 185.

"4. REPORT OF RESTRICTIONS SET FORTH IN LIBER 3138 OF DEEDS AT PAGE 563.

"5. CERTIFICATION THAT JOSEPH W. STEWART AND ROSEMARY V. STEWART WERE THE OWNERS IN FEE OF THE SUBJECT PREMISES. SEE LIBER 7585 OF DEEDS AT PAGE 533, SUBJECT TO LIBERTY BANK MORTGAGE.

"6. OBTAINED CLOSING STATEMENT FROM DAVIS AND BAUM, ATTORNEYS FOR SELLERS, MR. AND MRS. STEWART.

"7. OBTAINED FROM LITTLE & BURT, ATTORNEYS FOR BUFFALO SAVINGS BANK, THE DEDUCTIBLE ITEMS FROM THE NEW MORTGAGE.

"8. ATTENDED THE MEETING AT THE LAW OFFICES OF LITTLE & BURT, ATTORNEYS FOR THE BANK, AT THE TIME OF THE SIGNING OF THE BOND AND MORTGAGE, EXAMINING ALL DOCUMENTS AND STATEMENT OF ITEMS OF EXPENSE.

"9.ATTENDED AT THE CLOSING OF THE SALE CONTRACT IN THE ERIE COUNTY CLERK'S OFFICE, EXAMINING THE DEED AT THE TIME OF RECORDING, THE AFFIDAVIT, THE DISCHARGE OF MORTGAGE AND THE PURCHASE MONEY MORTGAGE; AND DETERMINING THE AMOUNT BEING PAID BY THE PURCHASERS FROM PERSONAL FUNDS."

SUBSECTION 4.2C OF OMB CIRCULAR NO. A-56 PROVIDES FOR REIMBURSEMENT OF SPECIFIED TYPES OF LEGAL SERVICES PERFORMED INCIDENT TO THE PURCHASE AND SALE OF HOUSES NECESSITATED BY TRANSFER IN THE INTEREST OF THE GOVERNMENT. THESE INCLUDE:

"*** COSTS OF (1) SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES FOR A TITLE OPINION, OR (2) WHERE CUSTOMARILY FURNISHED BY THE SELLER, THE COST OF A TITLE INSURANCE POLICY; COSTS OF PREPARING CONVEYANCES, OTHER INSTRUMENTS, AND CONTRACTS, RELATED NOTARY FEES AND RECORDING FEES; COSTS OF MAKING SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES; AND SIMILAR EXPENSES. COSTS OF LITIGATION ARE NOT REIMBURSABLE."

IT HAS BEEN CONSISTENTLY HELD BY THIS OFFICE THAT THE PURPOSE OF SUBSECTION 4.2C IS NOT THAT OF AUTHORIZING REIMBURSEMENT OF FEES OF ATTORNEYS RETAINED TO COUNSEL AND REPRESENT EMPLOYEES IN CONNECTION WITH REAL ESTATE TRANSACTIONS. RATHER, THE REGULATION AUTHORIZES REIMBURSEMENT FOR THE EXPENSE OF THE SPECIFIC LEGAL SERVICES DESCRIBED WITHOUT REGARD TO WHETHER THEY ARE PERFORMED BY ATTORNEYS, BROKERS, TITLE COMPANIES, OR OTHER. B-162858, DECEMBER 5, 1967, COPY ENCLOSED.

IN CASES IN WHICH AN ATTORNEY'S FEE STATED IN A LUMP-SUM AMOUNT INCLUDES CHARGES BOTH FOR SERVICES FOR WHICH PAYMENT IS ALLOWED BY SUBSECTION 4.2C AND FOR OTHERS NOT ALLOWED, IT IS NECESSARY TO STATE SEPARATELY THE PORTIONS OF THE FEE ALLOCABLE TO REIMBURSABLE ITEMS BEFORE PAYMENT MAY BE MADE FOR ANY PART OF IT. B-169227, MARCH 31, 1970, AND B-167985, OCTOBER 15, 1969, COPIES ENCLOSED. YOUR ATTORNEY HAS NOT FURNISHED A BREAKDOWN OF THE CHARGES HE ASSESSED FOR EACH OF THE SERVICES DESCRIBED IN HIS LETTER OF DECEMBER 2, 1970.

MOREOVER, WE HAVE MADE A COMPARISON OF THE SERVICES OF YOUR ATTORNEY (MR. SHEEHAN) AND THE SERVICES OF ATTORNEYS FOR THE BANK (LITTLE AND BURT) FOR WHICH YOU HAVE BEEN REIMBURSED. THE COMPARISON REVEALS THAT A DUPLICATION OF CERTAIN SERVICES OCCURRED WHICH WERE NOT NECESSARY TO OBTAIN A GOOD TITLE TO THE PROPERTY IN QUESTION. IN THE CIRCUMSTANCES THE FACT THAT IT MAY BE CUSTOMARY FOR A PURCHASER TO UTILIZE THE SERVICES OF HIS OWN ATTORNEY IN SUCH A TRANSACTION IS NOT CONTROLLING.

IN PARTICULAR, BY LETTER DATED DECEMBER 3, 1970, LITTLE AND BURT STATED THAT THEIR SERVICES ENTAILED "*** EXAMINING TITLE AND CERTIFYING ITS MORTGAGABILITY TO BUFFALO SAVING BANK, PREPARATION OF THE VARIOUS MORTGAGE PAPERS AND THE FORMAL CLOSING WHICH INCLUDED THE EXECUTION OF THESE PAPERS, AND THE RECORDATION OF THE MORTGAGE IN THE OFFICE OF THE ERIE COUNTY CLERK." IT APPEARS THAT EITHER A DUPLICATION HAS OCCURRED WITH REGARD TO ITEMS 1-5 PERFORMED BY MR. SHEEHAN, OR ELSE THE SERVICES WERE SUCH THAT THEY SHOULD HAVE BEEN PERFORMED BY THE ATTORNEYS FOR THE MORTGAGEE. ALSO, WITH RESPECT TO ITEM 2 OF MR. SHEEHAN'S LISTING WE NOTE THAT YOU WERE ALLOWED A $10 ABSTRACT FEE FOR A SPECIAL SEARCH TO ESTABLISH THAT A TAX LIEN IN THE NAME OF A PERSON SIMILAR TO THE SELLER WAS NOT ONE AND THE SAME. WE DO NOT UNDERSTAND WHY MR. SHEEHAN FELT IT NECESSARY TO EXECUTE AN AFFIDAVIT IN REGARD THERETO.

CONCERNING ITEMS 6 THROUGH 9 LISTED BY MR. SHEEHAN, IT IS OUR VIEW THAT ITEMS 8 AND 9 ARE OF A PURELY ADVISORY NATURE AND AS SUCH ARE NOT REIMBURSABLE. AS TO ITEMS 6 AND 7, IT IS OUR POSITION THAT SUCH INFORMATION OR STATEMENTS WOULD HAVE BEEN PROVIDED TO YOU AT SETTLEMENT OR COULD HAVE READILY BEEN OBTAINED BY YOU. IN ANY EVENT, THEY ARE NOT WITHIN THE SCOPE OF REIMBURSEABLE SERVICES ENUMERATED BY SECTION 4.2C OF CIRCULAR NO. A-56, QUOTED ABOVE.

IN VIEW OF THE FOREGOING, THE ACTION OF OUR CLAIMS DIVISION IN DENYING YOUR CLAIM FOR REIMBURSEMENT OF ANY PART OF THE FEE OF $350 IS SUSTAINED.