B-183037, MAR 21, 1975

B-183037: Mar 21, 1975

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LEGAL FEE FOR EXAMINING TITLE INSURANCE IS ADVISORY AND THEREFORE NOT REIMBURSABLE UNDER FPMR 101-7. SECTION 2-6.2C (MAY 1973) AND LEGAL FEE FOR ATTENDANCE AT CLOSING IS NOT REIMBURSABLE UNDER SECTION 2-6.2C SINCE EMPLOYEE'S WIFE ATTENDED CLOSING IN HIS STEAD AND THERE IS NO INDICATION THAT SERVICES REQUIRED TO BE PERFORMED BY AN ATTORNEY WERE NEEDED AT THE CLOSING. COX - FEE FOR LEGAL SERVICES: THIS ACTION IS A RECONSIDERATION OF SETTLEMENT CERTIFICATE Z-2561383 OF DECEMBER 12. COX WAS REIMBURSED $120 FOR CERTIFICATION OF TITLE AND PREPARATION OF MORTGAGE PAPERS. THE $150 WHICH WAS DISALLOWED COVERED EXAMINATION OF TITLE INSURANCE AND ATTENDANCE AT CLOSING. COX MAINTAINS THAT THE LEGAL FEE WOULD HAVE BEEN $270 OR 1 PERCENT OF THE MORTGAGE REGARDLESS OF THE NATURE OF THE LEGAL SERVICES RENDERED.

B-183037, MAR 21, 1975

1. PAYMENT OF A FLAT FEE FOR LEGAL SERVICES BASED ON A PERCENTAGE OF THE MORTGAGE MAY NOT PROPERLY BE REIMBURSED AS A LEGAL EXPENSE OF RELOCATION DUE TO A PERMANENT CHANGE OF DUTY STATION; ONLY THOSE EXPENSES ENUMERATED IN FPMR 101-7, SECTION 2-6.2C (MAY 1973) MAY BE REIMBURSED. 2. LEGAL FEE FOR EXAMINING TITLE INSURANCE IS ADVISORY AND THEREFORE NOT REIMBURSABLE UNDER FPMR 101-7, SECTION 2-6.2C (MAY 1973) AND LEGAL FEE FOR ATTENDANCE AT CLOSING IS NOT REIMBURSABLE UNDER SECTION 2-6.2C SINCE EMPLOYEE'S WIFE ATTENDED CLOSING IN HIS STEAD AND THERE IS NO INDICATION THAT SERVICES REQUIRED TO BE PERFORMED BY AN ATTORNEY WERE NEEDED AT THE CLOSING.

JOHN R. COX - FEE FOR LEGAL SERVICES:

THIS ACTION IS A RECONSIDERATION OF SETTLEMENT CERTIFICATE Z-2561383 OF DECEMBER 12, 1974, BY THE TRANSPORTATION AND CLAIMS DIVISION OF THE UNITED STATES GENERAL ACCOUNTING OFFICE DISALLOWING THE CLAIM OF MR. JOHN R. COX FOR $150 LEGAL FEES INCURRED IN CONNECTION WITH THE PURCHASE OF A RESIDENCE IN GUILDERLAND, NEW YORK, INCIDENT TO HIS PERMANENT CHANGE OF DUTY STATION AS AN EMPLOYEE OF THE INTERNAL REVENUE SERVICE (IRS), DEPARTMENT OF THE TREASURY. OF THE LEGAL FEES CLAIMED MR. COX WAS REIMBURSED $120 FOR CERTIFICATION OF TITLE AND PREPARATION OF MORTGAGE PAPERS. THE $150 WHICH WAS DISALLOWED COVERED EXAMINATION OF TITLE INSURANCE AND ATTENDANCE AT CLOSING. MR. COX MAINTAINS THAT THE LEGAL FEE WOULD HAVE BEEN $270 OR 1 PERCENT OF THE MORTGAGE REGARDLESS OF THE NATURE OF THE LEGAL SERVICES RENDERED. IN ADDITION, HE REFERS TO A LETTER OF JULY 11, 1974, IN WHICH HE ALLEGED THAT HE WAS MISLED BY THE IRS REQUEST FOR AN ITEMIZED BREAKDOWN OF LEGAL EXPENSES IN THAT THERE WAS NO INDICATION THAT SOME OF THE ITEMS WERE NONREIMBURSABLE. ACCORDINGLY, THE ITEMIZED BREAKDOWN WAS PREPARED BY THE ATTORNEY'S OFFICE ACCORDING TO MR. COX'S INSTRUCTIONS THAT IT WAS IMMATERIAL AS TO HOW THE FEE WAS BROKEN DOWN. MR.COX NOW OFFERS TO OBTAIN A STATEMENT FROM HIS ATTORNEY AS TO "WHAT THE BILL WOULD HAVE BEEN IF THE ONLY SERVICES RENDERED WERE THOSE WHICH THE GOVERNMENT WOULD CONSIDER REIMBURSABLE."

LEGAL FEES ARE REIMBURSABLE ONLY TO THE EXTENT ALLOWED BY SECTION 2 6.2C OF THE FEDERAL TRAVEL REGULATIONS, FPMR 101-7 (MAY 1973), WHICH PROVIDES AS FOLLOWS:

"C. LEGAL AND RELATED EXPENSES. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES, THE FOLLOWING EXPENSES ARE REIMBURSABLE WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL STATION OR IF CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE: 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 AND 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."

IN INTERPRETING THIS SECTION, IT HAS BEEN HELD THAT THE ENTIRE FEE WHICH AN EMPLOYEE PAYS TO RETAIN AN ATTORNEY TO REPRESENT AND COUNSEL HIM IN CONNECTION WITH A REAL ESTATE TRANSACTION MAY NOT BE REIMBURSED UNDER THE ABOVE-QUOTED SECTION. ONLY THOSE PARTS OF AN ATTORNEY'S FEES WHICH REPRESENT SERVICES OF THE TYPES ENUMERATED IN THE REGULATION ARE REIMBURSABLE. B-180752, JUNE 12, 1974; B-172055, MAY 28, 1971; B 169621, JUNE 25, 1970. IN B-172055, MAY 28, 1971, THIS OFFICE REFUSED TO ALLOW PAYMENT OF AN ATTORNEY'S FEE WHICH WAS BASED ON A "SCHEDULES OF FEES" ESTABLISHED BY A STATE ORGANIZATION. IN THAT CASE THE FEE ALSO REPRESENTED A PERCENTAGE OF THE MORTGAGE. AN ITEMIZATION WAS REQUIRED AND ONLY THOSE ITEMS ENUMERATED IN SECTION 2-6.2C OF THE FEDERAL TRAVEL REGULATIONS COULD BE REIMBURSED. SEE ALSO 54 COMP. GEN. 67 (1974). ACCORDINGLY, IN THIS CASE, THE ENTIRE FEE OF $270 REPRESENTING 1 PERCENT OF THE MORTGAGE IS NOT REIMBURSABLE. ONLY THOSE CHARGES IN THE ITEMIZATION PROVIDED BY MR. COX REPRESENTING REIMBURSABLE ITEMS UNDER SECTION 2-6.2C MAY BE PAID. IN THIS REGARD, THERE IS NO EVIDENCE IN THE RECORD THAT THE ITEMIZATION SUBMITTED WAS ERRONEOUS, NOTWITHSTANDING MR. COX'S INSTRUCTION TO HIS ATTORNEY THAT IT DOES NOT MATTER HOW THE FEE IS BROKEN DOWN.

WITH REGARD TO THE NONALLOWANCE OF PAYMENT OF $100 FOR EXAMINING TITLE INSURANCE, IT SHOULD BE NOTED THAT IN B-161891, AUGUST 21, 1967, THE OFFICE FOUND SUCH A LEGAL SERVICE TO BE ADVISORY IN NATURE AND THEREFORE NOT REIMBURSABLE UNDER THE REGULATION. THE CHARGE FOR ATTENDANCE AT THE CLOSING IS SIMILARLY NONREIMBURSABLE SINCE, ALTHOUGH MR. COX WAS ABSENT, HIS WIFE WAS PRESENT AT THE CLOSING AND THERE IS NO INDICATION IN THE RECORD THAT SERVICES WERE REQUIRED AT THE CLOSING WHICH ARE NORMALLY REQUIRED TO BE PERFORMED BY AN ATTORNEY. B-175424, FEBRUARY 8, 1973.

ACCORDINGLY, IN THE LIGHT OF THE FOREGOING, THIS APPEAL IS DENIED.