B-205511, JUN 8, 1982

B-205511, JUN 8, 1982

DIGEST: WHERE IT IS CUSTOMARY IN AREA OF TRANSFERRED EMPLOYEE'S NEW RESIDENCE FOR PURCHASER TO PAY HIS OWN AS WELL AS MORTGAGEE'S ATTORNEY, EMPLOYEE MAY BE REIMBURSED FEE PAID FOR SERVICES OF HIS OWN ATTORNEY TO THE EXTENT FEE DOES NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN AREA OF RESIDENCE. REIMBURSEMENT IS NOT PRECLUDED BY FACT THAT ATTORNEY WAS NOT LICENSED TO PRACTICE LAW IN STATE WHERE REAL ESTATE TRANSACTION TOOK PLACE SINCE COURTS OF THAT STATE WILL ENFORCE FEE AGREEMENT WITH OUT-OF-STATE ATTORNEY UNDER SIMILAR CIRCUMSTANCES.

BERNARD N. LOWENBRAUN:

MR. BERNARD N. LOWENBRAUN, THROUGH HIS ATTORNEY, APPEALED SETTLEMENT CERTIFICATE NO. Z-2824756, ISSUED JULY 27, 1981, WHICH DISALLOWED HIS CLAIM IN THE AMOUNT OF $700 FOR ATTORNEY FEES FOR ADVISORY LEGAL SERVICES. THAT DISALLOWANCE WAS BASED, IN PART, ON THE AGENCY'S DETERMINATION THAT THE FEE AS WAS NOT REASONABLE INASMUCH AS HE HAD BEEN REIMBURSED FOR FEES OF THE MORTGAGEE'S ATTORNEY. WE FIND THAT MR. LOWENBRAUN IS ENTITLED TO REIMBURSEMENT OF THE FEE PAID FOR ADVISORY LEGAL SERVICES NOT TO EXCEED THE CUSTOMARY CHARGE FOR SIMILAR LEGAL SERVICES IN THE AREA OF HIS RESIDENCE.

THE RECORD SHOWS THAT MR. LOWENBRAUN, AN EMPLOYEE OF THE FEDERAL AVIATION ADMINISTRATION (FAA), WAS TRANSFERRED FROM BAYSIDE, NEW JERSEY, TO WEST PALM BEACH, FLORIDA. IN CONNECTION WITH THE PURCHASE OF A RESIDENCE AT HIS NEW DUTY STATION MR. LOWENBRAUN WAS REIMBURSED $210 FOR ATTORNEY FEES CHARGED BY THE MORTGAGEE, CHASE FEDERAL SAVINGS AND LOAN. MR. LOWENBRAUN ALSO RETAINED PERSONAL COUNSEL FROM HIS OLD DUTY STATION TO REPRESENT HIS INTERESTS IN THE REAL ESTATE TRANSACTION. THE FAA DENIED HIS CLAIM FOR REIMBURSEMENT OF THE $700 FEE PAID TO THAT ATTORNEY. SUBSEQUENTLY, MR. LOWENBRAUN FILED A CLAIM WITH THE GENERAL ACCOUNTING OFFICE FOR REIMBURSEMENT OF THE ATTORNEY FEE. IN RESPONSE TO A REQUEST FOR INFORMATION FROM CLAIMS GROUP, THE FAA INDICATED THAT MR. LOWENBRAUN HAD BEEN REIMBURSED ALL NECESSARY LEGAL FEES AND THAT IN LIGHT OF THE $210 CHARGE BY THE MORTGAGEE'S ATTORNEY, THE CHARGE FOR $700 WAS UNREASONABLE. THE FAA ALSO QUESTIONED WHETHER THE EMPLOYEE WAS PRUDENT IN ENGAGING THE SERVICES OF AN OUT-OF-STATE ATTORNEY. BASED ON THE STATEMENT BY THE FAA, THE CLAIMS GROUP, AS NOTED EARLIER, DENIED MR. LOWENBRAUN'S CLAIM IN ITS ACTION OF JULY 27, 1981.

REIMBURSEMENT OF THE LEGAL EXPENSES OF TRANSFERRED EMPLOYEES IN CONNECTION WITH THE SALE OR PURCHASE OF A RESIDENCE IS AUTHORIZED BY 5 U.S.C. SEC. 5724AA)(4) (1976). IMPLEMENTING REGULATIONS, FOUND AT PARA. 2 -6.2C OF THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7), PROVIDE FOR REIMBURSEMENT OF FEES FOR LEGAL SERVICES 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. THE COST OF OBTAINING NECESSARY AND REASONABLE LEGAL SERVICES INCIDENT TO THE PURCHASE OR SALE OF RESIDENTIAL HOUSING MAY BE REIMBURSED TO THE EXTENT THEY ARE WITHIN THE CUSTOMARY RANGE OF CHARGES FOR SUCH SERVICES IN THE LOCALITY. MATTER OF LAY, 56 COMP.GEN. 561 (1977). THE PRIMARY CONSIDERATION IN DETERMINING WHETHER CERTAIN LEGAL SERVICES MAY BE REIMBURSED UNDER THE FEDERAL TRAVEL REGULATIONS IS WHETHER IT IS CUSTOMARY TO OBTAIN SERVICES IN THE LOCALITY OF THE RESIDENCE TRANSACTION. THUS, WHERE IT IS THE LOCAL CUSTOM FOR THE PURCHASER TO BE REPRESENTED BY HIS OWN ATTORNEY, AS WELL AS TO PAY FOR THE LEGAL SERVICES RENDERED BY THE LENDING INSTITUTION'S (MORTGAGEE'S) ATTORNEY, LEGAL EXPENSES FOR SERVICES BY BOTH ATTORNEYS ARE REIMBURSABLE PROVIDED THE FEES ARE WITHIN THE CUSTOMARY RANGE OF CHARGES FOR SUCH SERVICES IN THE LOCALITY. MATTER OF OUELLET, B-191792, SEPTEMBER 25, 1978. IN THIS REGARD WE NOTE THAT IT IS CUSTOMARY IN SOUTH FLORIDA, WHERE MR. LOWENBRAUN WAS TRANSFERRED, FOR THE PURCHASER TO PAY HIS OWN ATTORNEY'S FEE AS WELL AS THAT OF THE MORTGAGEE'S ATTORNEY. MATTER OF FISHER, B-197504, MAY 5, 1980. ACCORDINGLY, MR. LOWENBRAUN MAY BE REIMBURSED FOR ADVISORY LEGAL SERVICES OF HIS PERSONAL ATTORNEY TO THE EXTENT THE FEE CHARGED IS CUSTOMARY FOR THE LOCALITY OF HIS RESIDENCE.

THE FAA SUGGESTS THAT IT MAY HAVE BEEN IMPRUDENT FOR MR. LOWENBRAUN TO OBTAIN THE SERVICES OF AN OUT-OF-STATE ATTORNEY AND RAISES A QUESTION AS TO WHETHER THE FEE CHARGED BY THAT PARTICULAR ATTORNEY, WHO IS LICENSED TO PRACTICE LAW IN NEW YORK, MAY BE REIMBURSED IN CONNECTION WITH THE FLORIDA REAL ESTATE TRANSACTION. WE HAVE RECOGNIZED THAT THERE IS NO PROHIBITION AS SUCH TO REIMBURSEMENT OF THE FEE CHARGED BY AN ATTORNEY IN CONNECTION WITH THE PURCHASE OR SALE OF A RESIDENCE LOCATED OTHER THAN IN THE STATE WHERE HE IS LICENSED TO PRACTICE LAW. MATTER OF BACA, B-183102, JUNE 9, 1976. THE FEE MAY BE REIMBURSED TO THE EXTENT IT DOES NOT EXCEED AMOUNTS CUSTOMARILY CHARGED BY LOCAL ATTORNEYS PROVIDING SERVICES IN CONNECTION WITH SIMILAR TRANSACTIONS AND PROVIDED IT REPRESENTS A LEGAL OBLIGATION OWED BY THE EMPLOYEE. IN THIS LATTER REGARD, WE NOTE THAT UNDER CIRCUMSTANCES NOT UNLIKE MR. LOWENBRAUN'S THE FLORIDA COURTS WILL ENFORCE A FEE AGREEMENT INVOLVING AN ATTORNEY WHO IS NOT LICENSED TO PRACTICE IN THE STATE OF FLORIDA. LAMB V. JONES, 202 SO.2D 810 (FLA.APP.1967); CERT. DENIED, 210 SO.2D 867 (FLA. 1968).

THE REMAINING ISSUE IS WHETHER THE $700 AMOUNT CLAIMED BY MR. LOWENBRAUN IS WITHIN THE CUSTOMARY RANGE OF CHARGES FOR ATTORNEY FEES IN THAT AREA AS REQUIRED BY FTR PARA. 2-6.2C. THE MATTER IS RETURNED TO THE AGENCY FOR DETERMINATION UNDER FTR PARA. 2-6.3C USING GUIDELINES PROVIDED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. MR. LOWENBRAUN MAY BE REIMBURSED FOR ALL OR THAT PORTION OF THE FEE WHICH IS WITHIN THE CUSTOMARY RANGE OF FEES CHARGED IN SOUTH FLORIDA FOR ADVISORY LEGAL SERVICES IN CONNECTION WITH THE PURCHASE OF A HOUSE IN THE SAME PRICE RANGE.