B-209952-OM, JAN 21, 1983

B-209952-OM, JAN 21, 1983

SUBJECT: SPARTAN PROPERTIES, INC. AND JAMES THOMAS - DAMAGES TO REAL PROPERTY (CLAIM NOS. Z-2834072 AND Z-2834073) - B-209952-O.M.

ACTING DIRECTOR, AFMD:

THIS IS IN RESPONSE TO A REQUEST FROM THE CHIEF, PAYMENT BRANCH, AFMD, FOR INSTRUCTIONS ON DISPOSITION OF THE CLAIMS OF SPARTAN PROPERTIES, INC. AND JAMES THOMAS FOR DAMAGES TO REAL PROPERTY LOCATED IN FORT LAUDERDALE, FLORIDA, AND FOR LOST RENTAL RECEIPTS. THE PROPERTY, TO WHICH BOTH PARTIES CLAIM OWNERSHIP, IS A SEVEN-ROOM, SINGLE FAMILY HOUSE LEASED TO THE ARMY CORPS OF ENGINEERS (COE) FOR THE RESIDENTIAL USE OF AN ARMY RECRUITER AND HIS FAMILY. THE DAMAGES WERE CAUSED BY VANDALISM AFTER THE RECRUITER MOVED OUT. FOR THE REASONS STATED BELOW, THE CLAIM SHOULD BE DENIED.

BY LEASE NO. DACA17-5-79-12, DATED JULY 17, 1979, COE LEASED THE RESIDENCE IN QUESTION FROM JAMES THOMAS (LESSOR) FOR THE PERIOD JULY 1, 1979 TO JUNE 30, 1980. THE LEASE WAS RENEWABLE WITHOUT FURTHER NOTICE UNTIL JUNE 30, 1984, SUBJECT TO TERMINATION BY THE GOVERNMENT AFTER GIVING 30-DAYS' WRITTEN NOTICE. IN ADDITION, THE LESSOR COULD TERMINATE BY GIVING AT LEAST 60-DAYS' WRITTEN NOTICE AFTER THE FIRST YEAR'S OCCUPANCY.

ON MARCH 24, 1980, THE MIAMI DISTRICT RECRUITING COMMAND REQUESTED THAT COE TERMINATE THE LEASE. COE STATES THAT A NOTICE TO THIS EFFECT WAS SENT TO THE LESSOR, JAMES THOMAS, BY CERTIFIED MAIL ON MARCH 27, GIVING AN EFFECTIVE TERMINATION DATE OF APRIL 28, 1980. THE LESSOR DENIES RECEIVING THIS NOTICE. HOWEVER, COE STATES THAT IT HAS IN ITS POSSESSION A CERTIFIED MAIL RETURN RECEIPT, NO. 288848, DATED APRIL 1, 1980, ALTHOUGH IT WAS UNSIGNED BY JAMES THOMAS, OR BY ANY ONE ELSE ON HIS BEHALF. ALTHOUGH THE NOTICE IN QUESTION STATED THAT THE LEASE WOULD TERMINATE ON APRIL 28, 1980, IT DID NOT INDICATE THAT THE HOUSE WOULD BE IMMEDIATELY VACATED.

THE ARMY RECRUITER BEGAN MOVING OUT ON MARCH 28. COE STATES THAT THE RECRUITER REPEATEDLY TRIED TO CONTACT THE LESSOR IN ORDER TO SURRENDER THE KEYS, BUT WAS UNABLE TO DO SO. COE ALSO STATES THAT DURING THE MOVING PROCESS, THE RECRUITER CONTACTED THE LESSOR'S OSTENSIBLE COMMON LAW WIFE AND INFORMED HER THAT THE HOUSE WAS BEING VACATED. ON APRIL 13, THE RECRUITER WAS FINALLY ABLE TO SURRENDER THE KEYS TO THE LESSOR WHO THEN INSPECTED THE PROPERTY AND FOUND EXTENSIVE DAMAGE AND THEFT OF APPLIANCES. THE ALLEGATIONS OF DAMAGE AND THE FACT OF THE VACANCY ARE SUBSTANTIATED BY THE BROWARD COUNTY, FLORIDA, SHERIFF'S DEPARTMENT REPORT. THE LESSOR ALLEGES NEGLIGENCE AND BREACH OF THE LEASE ON THE PART OF THE GOVERNMENT, AND CLAIMS DAMAGES IN THE AMOUNT OF $15,800.00. COE HAS ESTIMATED THAT ACTUAL DAMAGES WERE $15,491.31, BASED UPON THE 1978 PUBLICATION OF THE NATIONAL CONSTRUCTION ESTIMATOR, NOW INCREASED BY AN INFLATION FACTOR OF 1.25, WHICH BRINGS THE DAMAGES TO $19,364.13. COUNSEL FOR THE LESSOR HAS INDICATED THAT A SETTLEMENT IN THE ORIGINAL AMOUNT OF $15,800.00 WILL BE ACCEPTABLE.

IN ADDITION, A SECOND CLAIM OF $14,182.40 HAS BEEN FILED BY SPARTAN PROPERTIES, INC., CONSISTING OF $11,632.40 FOR DAMAGES AND $2,550.00 FOR LOSS OF SIX MONTHS' RENTAL. BEFORE ADDRESSING THE MERITS OF THE CLAIM, WE MUST FIRST ESTABLISH THE PROPER CLAIMANT.

THE RECORD INDICATES THAT THE LESSOR CONVEYED THE PROPERTY IN QUESTION TO SPARTAN PROPERTIES BY QUITCLAIM DEED ON APRIL 3, 1979, PRIOR TO THE EXECUTION OF THE LEASE WITH COE. SPARTAN STATES THAT THE LESSOR WAS FACED WITH FORECLOSURE BY HIS FIRST MORTGAGEE, AND THAT SPARTAN ADVANCED $10,000.00 TO THE LESSOR WITH A 1-YEAR REDEMPTION PERIOD. SPARTAN STATES THAT AS THE LESSOR FAILED TO REPAY THE AMOUNT WHEN DUE, TITLE TO THE PROPERTY IS NOW WITH SPARTAN PROPERTIES AS THE TRUE OWNER. COUNSEL FOR THE LESSOR, ON THE OTHER HAND, URGES THAT THE QUITCLAIM DEED WAS IN EFFECT A MORTGAGE, THAT THE PROPERTY HAS NOT BEEN FORECLOSED, AND THAT TITLE REMAINS WITH THE LESSOR.

IN GENERAL, IT HAS BEEN LONG AND CONSISTENTLY HELD THAT THE LAW OF THE SITUS OF REAL PROPERTY APPLIES TO ANY DETERMINATION OF THE REQUISITES AND VALIDITY OF CONVEYANCES AND MORTGAGES. 15A C.J.S. SEC. 13 (1967) (CUM.SUPP. 1982). THEREFORE, THE PERTINENT LAWS OF THE STATE OF FLORIDA SHOULD APPLY IN THIS CASE. SECTION 697.01(1) OF THE FLORIDA STATUTES ANNOTATED (WEST PUB. CO. 1980) STATES THAT ANY CONVEYANCE WHICH SECURES THE REPAYMENT OF MONEY IS TO BE LIBERALLY CONSTRUED AS A MORTGAGE. FURTHER, SECTION 697.02, ID., STATES THAT AS FLORIDA IS A "LIEN THEORY" STATE, A FORECLOSURE MERELY REINFORCES THAT LIEN. FINALLY, SECTION 702.01, ID., STATES THAT ALL MORTGAGES SHALL BE "FORECLOSED IN CHANCERY ***"; THAT IS, BY JUDICIAL PROCESS. THERE IS NOTHING IN THE RECORD WHICH INDICATES THAT THE PROPERTY IN QUESTION HAS BEEN DEFEASED FROM THE LESSOR BY FORECLOSURE AND TITLE THERETO ABSOLUTELY VESTED IN SPARTAN PROPERTIES. WITHOUT MORE, AND EVEN IN THE PRESENCE OF A COPY OF THE QUITCLAIM DEED FROM THE LESSOR TO SPARTAN PROPERTIES, THIS OFFICE MUST CONCLUDE THAT THE LESSOR REMAINS THE TRUE OWNER, AND IS THE ONLY PROPER CLAIMANT IN THIS MATTER.

HOWEVER, THE LESSOR'S CLAIM SHOULD BE DENIED ON THE MERITS. PROVISION FOUR OF THE LEASE EXECUTED BETWEEN THE LESSOR AND THE GOVERNMENT PROVIDED FOR A 30-DAY NOTICE OF TERMINATION, AS MENTIONED ABOVE. THIS OFFICE FINDS THAT A NOTICE OF TERMINATION WAS SENT AND, AT LEAST, CONSTRUCTIVELY RECEIVED BY THE LESSOR, AS EVIDENCED BY THE RETURN RECEIPT IN COE'S POSSESSION. THEREFORE, WE FIND THAT THE GOVERNMENT PROPERLY DISCHARGED ITS DUTY OF NOTICE UNDER PROVISION FOUR. ALTHOUGH AS A MATTER OF COMITY IT MIGHT HAVE BEEN ADVISABLE FOR THE NOTICE TO HAVE INDICATED THAT VACANCY OF THE PREMISES WOULD BE IMMEDIATE, WE SEE NO LEGAL OBLIGATION WHICH WOULD HAVE MANDATED SUCH AN INDICATION. ALSO, BECAUSE THE COMMON LAW WIFE WAS APPARENTLY NOTIFIED THAT THE TENANT WAS MOVING OUT, THERE IS AT LEAST AN INFERENCE OF ACTUAL KNOWLEDGE ON THE PART OF THE LESSOR.

PROVISION TWELVE OF THE LEASE EXEMPTED THE GOVERNMENT FROM LIABILITY FOR "CIRCUMSTANCES OVER WHICH THE GOVERNMENT HAS NO CONTROL." WE HELD IN 49 COMP.GEN. 532 (B-165157, MARCH 5, 1970) THAT THE GOVERNMENT WAS EXCUSED FROM LIABILITY FOR DAMAGE CAUSED BY "ACTS OF A STRANGER." WE SEE LITTLE DIFFERENCE BETWEEN THE TWO CASES. THE GOVERNMENT HAD NO CONTROL OVER THE ACT OF VANDALISM. NOTHING IN THE RECORD INDICATES THAT THE RECRUITER VACATED IN A NEGLIGENT FASHION BY FAILING TO LOCK AND SECURE ALL DOORS AND WINDOWS. FURTHER, THE RECRUITER MADE GOOD FAITH EFFORTS TO GIVE NOTICE THAT HE WAS IMMEDIATELY VACATING AND TO SURRENDER THE KEYS. FINALLY, WE CANNOT FIND THAT THE VACANCY WAS THE PROXIMATE CAUSE OF THE VANDALISM, WHICH MIGHT WELL HAVE OCCURRED DURING THE PERIOD OF ACTUAL OCCUPANCY, I.E., WHEN THE HOUSE WAS EMPTY DURING WORKING HOURS OR DURING VACATIONS. THUS, AS THERE IS NOTHING WHICH WOULD ESTABLISH THAT THE VANDALISM WOULD NOT HAVE HAPPENED "BUT FOR" THE VACANCY, THE CLAIM SHOULD BE DENIED.