B-175381, APR 25, 1972

B-175381: Apr 25, 1972

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A-56 AUTHORIZES REIMBURSEMENT OF EXPENSES INCURRED FOR SETTLING AN UNEXPIRED LEASE WHERE SUCH EXPENSES WERE NOT INCURRED THROUGH THE EMPLOYEE'S NEGLIGENCE. IN THE PRESENT CIRCUMSTANCES THE ATTORNEY'S FEE WAS REASONABLE AND IN THE BEST INTERESTS OF THE GOVERNMENT. SINCE THERE IS NO PROVISION IN THE LEASE FOR PAYMENT OF A CHARGE FOR SUBLEASING AND THERE IS NOTHING IN THE RECORD TO INDICATE THAT SUCH CHARGE WAS IN FACT PAID. IT IS NOT REIMBURSABLE. TRAVEL ORDERS WERE ISSUED AUTHORIZING A CHANGE OF STATION. RODENBERGER WAS CHARGED A SUBLEASE FEE OF $75. THERE IS NOTHING IN THE TRANSFER CLAUSE SECTION OF THE LEASE AUTHORIZING SUCH FEE. IT IS STATED THAT THIS FEE WOULD BE DEDUCTED FROM THE SECURITY DEPOSIT TO BE REFUNDED UPON TERMINATION OF THE LEASE (OCTOBER 31.

B-175381, APR 25, 1972

CIVILIAN EMPLOYEE - LEASE TERMINATION EXPENSES - REIMBURSEMENT CONCERNING THE ENTITLEMENT OF WILLIAM D. RODENBERGER TO LEASE TERMINATION EXPENSES INCIDENT TO A TRANSFER OF STATION FROM BALTIMORE, MD., TO KANSAS CITY, KANS., AS AN EMPLOYEE OF THE HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE. SECTION 4.2F OF OMB CIRCULAR NO. A-56 AUTHORIZES REIMBURSEMENT OF EXPENSES INCURRED FOR SETTLING AN UNEXPIRED LEASE WHERE SUCH EXPENSES WERE NOT INCURRED THROUGH THE EMPLOYEE'S NEGLIGENCE. IN THE INSTANT CASE, MR. RODENBERGER HAS JUSTIFIED HIS ACTIONS AND REIMBURSEMENT OF THE 1-MONTH'S RENT CLAIMED MAY BE ALLOWED. ALTHOUGH SECTION 4.2F DOES NOT PROVIDE FOR REIMBURSEMENT OF LEGAL FEES, IN THE PRESENT CIRCUMSTANCES THE ATTORNEY'S FEE WAS REASONABLE AND IN THE BEST INTERESTS OF THE GOVERNMENT. HOWEVER, SINCE THERE IS NO PROVISION IN THE LEASE FOR PAYMENT OF A CHARGE FOR SUBLEASING AND THERE IS NOTHING IN THE RECORD TO INDICATE THAT SUCH CHARGE WAS IN FACT PAID, IT IS NOT REIMBURSABLE. THE ENCLOSED VOUCHER MAY BE CERTIFIED FOR PAYMENT IN ACCORDANCE WITH THE FOREGOING.

TO MR. STANLEY H. SOLOMON:

THIS REFERS TO YOUR LETTER OF FEBRUARY 29, 1972, WITH ENCLOSURES, REQUESTING A DECISION WHETHER THE ENCLOSED VOUCHER IN THE AMOUNT OF $250.70 IN FAVOR OF MR. WILLIAM D. RODENBERGER, AN EMPLOYEE OF YOUR AGENCY, MAY BE CERTIFIED FOR PAYMENT.

THE VOUCHER COVERS LEASE TERMINATION EXPENSES INCIDENT TO A TRANSFER OF STATION FROM BALTIMORE, MARYLAND, TO KANSAS CITY, KANSAS. THE $250.70 INCLUDES $28.70, ATTORNEY'S FEE; $75, SUBLEASE FEE; AND $147, 1 MONTH'S RENT. MR. RODENBERGER HAD SIGNED A 2-YEAR LEASE EFFECTIVE NOVEMBER 1, 1969, FOR AN APARTMENT IN THE VICINITY OF HIS OLD STATION. ON DECEMBER 4, 1970, TRAVEL ORDERS WERE ISSUED AUTHORIZING A CHANGE OF STATION. MR. RODENBERGER'S ORIGINAL LEASE DATED SEPTEMBER 9, 1969, PROVIDED THAT THE TENANT MAY SUBLEASE WITH THE WRITTEN CONSENT OF THE LESSOR AND ALSO PROVIDED IN THE EVENT OF THE LESSOR AGREEING TO A SUBRENTING, THE REGULAR MONTHLY INSTALLMENT OF RENT AS THEY ACCRUE SHALL BE PAID BY THE SUBTENANT, OR IF HE DEFAULTS, BY THE TENANT. WHILE MR. RODENBERGER WAS CHARGED A SUBLEASE FEE OF $75, THERE IS NOTHING IN THE TRANSFER CLAUSE SECTION OF THE LEASE AUTHORIZING SUCH FEE. IT IS STATED THAT THIS FEE WOULD BE DEDUCTED FROM THE SECURITY DEPOSIT TO BE REFUNDED UPON TERMINATION OF THE LEASE (OCTOBER 31, 1971).

ON JANUARY 29, 1971, AFTER MR. RODENBERGER HAD OBTAINED THE CONSENT OF THE LESSOR TO SUBLET HIS APARTMENT, HE SIGNED A LEASE WITH THE SUBTENANTS (MR. AND MRS. ROBERT GRAY) FOR THE REMAINING TERM OF HIS LEASE (FROM FEBRUARY 1, 1971, THROUGH OCTOBER 31, 1971). THERE IS NO EVIDENCE TO SHOW THAT THE GRAYS PAID ANYTHING BEFORE OR AFTER MOVING INTO THE APARTMENT AND THEY WERE EVICTED FOR NONPAYMENT OF RENT. MR. RODENBERGER WAS HELD RESPONSIBLE FOR FEBRUARY, MARCH, APRIL AND MAY RENT (TOTAL OF $588) PLUS $100 FOR PAINTING. A SECURITY DEPOSIT OF $147 WAS DEDUCTED LEAVING A BALANCE DUE OF $541. IT IS YOUR OPINION THAT MR. RODENBERGER'S ACTION IN SUBLEASING HIS APARTMENT WAS IN THE INTEREST OF THE GOVERNMENT AND WAS DONE IN A TIMELY MANNER.

WHILE MR. RODENBERGER IS CLAIMING REIMBURSEMENT FOR $75, SUBLEASE FEE; $147, FORFEITED SECURITY DEPOSIT; AND $28.70, ATTORNEY'S FEE, THE RECORD CONTAINS EVIDENCE ONLY OF PAYMENT OF THE SECURITY DEPOSIT (SUCH DEPOSIT HAVING BEEN APPLIED TO THE FEBRUARY RENT) AND ATTORNEY'S FEE.

THE FOLLOWING QUESTIONS ARE SUBMITTED:

"1. CAN THE RENT FOR THE MONTHS OF FEBRUARY THROUGH MAY BE PAID SINCE THE SUB-LEASE WAS SIGNED AFTER THE EFFECTIVE DATE OF THE TRANSFER?

"2. IS THE SUB-LEASE FEE (BROKER FEE) OF $75.00, WHICH DOES NOT APPEAR IN THE RENTAL AGREEMENT, A PROPER ITEM FOR REIMBURSEMENT?

"3. IF THE FIRST AND SECOND QUESTIONS ARE ANSWERED IN THE AFFIRMATIVE, WILL THE LEGAL SERVICES AND LITIGATION COSTS BE REIMBURSABLE ITEMS IN THIS INSTANCE?"

UNDER SECTION 4.2F, OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A 56, REVISED JUNE 26, 1969, AN EMPLOYEE, UPON TRANSFER TO A NEW DUTY STATION, IS ENTITLED TO REIMBURSEMENT OF EXPENSES INCURRED FOR SETTLING AN UNEXPIRED LEASE WHEN:

" *** APPLICABLE LAWS OR THE TERMS OF THE LEASE PROVIDE FOR PAYMENT OF SETTLEMENT EXPENSES, (2) SUCH EXPENSES CANNOT BE AVOIDED BY SUBLEASE OR OTHER ARRANGEMENT, (3) THE EMPLOYEE HAS NOT CONTRIBUTED TO THE EXPENSE BY FAILING TO GIVE APPROPRIATE LEASE TERMINATION NOTICE PROMPTLY AFTER HE HAS DEFINITE KNOWLEDGE OF THE PROPOSED TRANSFER ***."

A COPY OF THE LEASE COVERING THE PREMISES IN QUESTION AND CONTAINED IN THE FILE DOES NOT REQUIRE A MONETARY SECURITY DEPOSIT. HOWEVER, THE FILE INDICATES THAT SUCH A DEPOSIT WAS MADE AND IT WAS SET OFF TO PAY THE RENT FOR THE MONTH OF FEBRUARY 1971. UNDER THE PROVISIONS OF THE LEASE THE TENANT, MR. RODENBERGER, WAS LIABLE FOR ANY DEFAULT OF RENT BY THE ACTION IN SUBLEASING HIS APARTMENT WAS IN THE INTEREST OF THE GOVERNMENT AND WAS DONE IN A TIMELY MANNER.

WHILE MR. RODENBERGER IS CLAIMING REIMBURSEMENT FOR $75, SUBLEASE FEE; $147, FORFEITED SECURITY DEPOSIT; AND $28.70, ATTORNEY'S FEE, THE RECORD CONTAINS EVIDENCE ONLY OF PAYMENT OF THE SECURITY DEPOSIT (SUCH DEPOSIT HAVING BEEN APPLIED TO THE FEBRUARY RENT) AND ATTORNEY'S FEE.

THE FOLLOWING QUESTIONS ARE SUBMITTED:

"1. CAN THE RENT FOR THE MONTHS OF FEBRUARY THROUGH MAY BE PAID SINCE THE SUB-LEASE WAS SIGNED AFTER THE EFFECTIVE DATE OF THE TRANSFER?

"2.IS THE SUB-LEASE FEE (BROKER FEE) OF $75.00, WHICH DOES NOT APPEAR IN THE RENTAL AGREEMENT, A PROPER ITEM FOR REIMBURSEMENT?

"3. IF THE FIRST AND SECOND QUESTIONS ARE ANSWERED IN THE AFFIRMATIVE, WILL THE LEGAL SERVICES AND LITIGATION COSTS BE REIMBURSABLE ITEMS IN THIS INSTANCE?"

UNDER SECTION 4.2F, OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A 56, REVISED JUNE 26, 1969, AN EMPLOYEE, UPON TRANSFER TO A NEW DUTY STATION, IS ENTITLED TO REIMBURSEMENT OF EXPENSES INCURRED FOR SETTLING AN UNEXPIRED LEASE WHEN:

" *** APPLICABLE LAWS OR THE TERMS OF THE LEASE PROVIDE FOR PAYMENT OF SETTLEMENT EXPENSES, (2) SUCH EXPENSES CANNOT BE AVOIDED BY SUBLEASE OR OTHER ARRANGEMENT, (3) THE EMPLOYEE HAS NOT CONTRIBUTED TO THE EXPENSE BY FAILING TO GIVE APPROPRIATE LEASE TERMINATION NOTICE PROMPTLY AFTER HE HAS DEFINITE KNOWLEDGE OF THE PROPOSED TRANSFER *** ."

A COPY OF THE LEASE COVERING THE PREMISES IN QUESTION AND CONTAINED IN THE FILE DOES NOT REQUIRE A MONETARY SECURITY DEPOSIT. HOWEVER, THE FILE INDICATES THAT SUCH A DEPOSIT WAS MADE AND IT WAS SET OFF TO PAY THE RENT FOR THE MONTH OF FEBRUARY 1971. UNDER THE PROVISIONS OF THE LEASE THE TENANT, MR. RODENBERGER, WAS LIABLE FOR ANY DEFAULT OF RENT BY THE SUBTENANT. UNDER SECTION 4.2F, CITED ABOVE, THE EMPLOYEE IS ENTITLED TO LEASE TERMINATION EXPENSES INCURRED UNDER CERTAIN CONDITIONS. SINCE MR. RODENBERGER COMPLIED WITH SUCH CONDITIONS AND PAID THE RENT FOR THE MONTH OF FEBRUARY 1971, HE IS ENTITLED TO REIMBURSEMENT OF $147. AS FOR THE MONTHS OF MARCH THROUGH MAY 1971, THERE IS NOTHING OF RECORD TO SHOW THAT MR. RODENBERGER INCURRED ANY EXPENSES FOR RENT. THEREFORE, HE IS NOT ENTITLED TO REIMBURSEMENT FOR THE MONTHS OF MARCH THROUGH MAY 1971. YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY.

AS TO REIMBURSEMENT OF THE $75 CHARGE FOR THE SUBLEASING, THERE IS NO PROVISION IN THE LEASE FOR PAYMENT OF SUCH CHARGE AND THERE IS NOTHING OF RECORD TO SHOW THAT THIS EXPENSE HAS BEEN PAID BY THE EMPLOYEE. ACCORDINGLY, YOUR SECOND QUESTION IS ANSWERED IN THE NEGATIVE.

IN ATTEMPTING TO TERMINATE THE LIABILITY IN THE GROSS AMOUNT OF $688 ASSESSED BY THE LESSOR, MR. RODENBERGER ENGAGED THE SERVICES OF AN ATTORNEY FOR WHICH HE PAID A FEE OF $28.70. A PRIMARY QUESTION FOR CONSIDERATION IS WHETHER THE REQUIREMENT IN SECTION 4.2F, CITED ABOVE, THAT "THE TERMS OF THE LEASE PROVIDE FOR PAYMENT OF SETTLEMENT EXPENSES," IS SATISFIED. WHILE MR. RODENBERGER'S LEASE DOES NOT EXPLICITLY PROVIDE FOR PAYMENT OF THESE EXPENSES, IT DOES PROVIDE THAT THE TENANT WAIVES THE BENEFIT OF ALL EXEMPTION LAWS AND WILL PAY AN ADDITIONAL 30 PERCENT AS A COLLECTION CHARGE IN CASE OF DEFAULT IN PAYMENTS, AND THE LESSOR PLACING THE ACCOUNT IN AN ATTORNEY'S HANDS FOR COLLECTION BY SUIT AT LAW OR OTHERWISE. THE RECORD SHOWS THAT IN THIS CASE THE LESSOR CHOSE TO TREAT THE LEASE AS STILL IN EXISTENCE AND ENGAGED AN ATTORNEY TO COLLECT RENT FOR THE REMAINING MONTHS OF THE LEASE. THEREFORE, MR. RODENBERGER HAD THE RESPONSIBILITY OF REDUCING HIS LIABILITY BY WHATEVER MEANS AVAILABLE. HIS OWN ATTORNEY ATTEMPTED TO SETTLE THE MATTER WITHOUT SUCCESS AND HAS ADVISED THAT NO EFFORT SHOULD BE MADE TO DEFEND ANY SUIT BROUGHT IN THE MATTER. APPARENTLY, THE EMPLOYEE UNDERSTANDS FROM HIS ATTORNEY THAT ANY OUT-OF-STATE JUDGMENT WILL BE DIFFICULT AND EXPENSIVE TO COLLECT. IN THE CIRCUMSTANCES IN THIS CASE, PARTICULARLY THE FACT THAT THE GOVERNMENT HAD A POTENTIAL LIABILITY FOR SEVERAL MONTHS' RENT, THE ATTORNEY'S FEE OF $28.70 MAY BE ALLOWED. CONCERNING LITIGATION EXPENSES THERE ARE NO PROVISIONS MADE IN SECTION 4.2F OF CIRCULAR NO. A-56 FOR REIMBURSEMENT OF SUCH EXPENSES INCIDENT TO THE SETTLEMENT OF AN UNEXPIRED LEASE. YOUR THIRD QUESTION IS ANSWERED ACCORDINGLY.

THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE CERTIFIED FOR PAYMENT ONLY IN THE AMOUNT OF $175.70.