In the United States Court of Federal Claims

No. 16-113C

Filed: July 9, 2021

FOR PUBLICATION

WESTDALE NORTHWEST CENTER, 

LP,

Plaintiff,

v.

UNITED STATES,

Defendant.

Jennifer A. Gehrt, Barbee & Gehrt, LLP, Dallas, TX, for the plaintiff.

Michael D. Austin and Mariana Acevedo, Commercial Litigation Branch, Civil Division, U.S. 

Department of Justice, Washington, D.C., Helen Kerns, General Services Administration, of 

counsel, for the defendant.

TRIAL OPINION

HERTLING, Judge

The parties in this contract dispute seek review of a property-tax provision in a lease for 

office space. The plaintiff, Westdale Northwest Center, LP (“Westdale”), leases office space at 

an office building it owns in San Antonio, Texas, to the defendant, the United States, acting 

through the General Services Administration (“GSA”). The subject lease was negotiated and 

signed by GSA and a previous owner of the building, Griffin Partners, Inc. (“Griffin Partners”), 

from which Westdale subsequently acquired the building.

Several years into the lease, following a GSA audit, a disagreement arose regarding the 

proper interpretation of a lease clause related to annual real-estate taxes. The original 

contracting parties established a fixed tax base for the building. This tax base was incorporated 

into a formula to be reflected in the lease to ensure that for each annual payment of the owner’s 

real-estate taxes GSA would only pay taxes proportional to the share of the building it occupied. 

The formula was intended to adjust GSA’s payment to the lessor depending on whether the 

building’s real-estate taxes that year exceeded or fell below the established tax base. The parties 

to this litigation agree that the tax base written into the lease—$133,045—does not accomplish 

the parties’ goal.

The parties disagree as to the implications of the incorrect figure. Westdale petitions this 

Court to enforce the contract as written because the plain language of the tax-adjustment clause 

CORRECTED
2

is unambiguous. The defendant asserts the defense of mutual mistake in contract formation, 

arguing that the former lessor and GSA were incorrect in their belief that the tax-adjustment 

clause as written would accomplish the goal of ensuring that GSA pays only its proportional 

share of the building’s real-estate taxes each year. The defendant seeks reformation of the 

contract to accomplish the original intent of the parties. 

The Court held a three-day trial from January 25 to January 27, 2021, to take testimony 

regarding the understanding and intent of the former lessor and GSA at the time of contract 

formation. 

Based on the testimony and evidence before it, the Court determines that the taxadjustment clause as written was the product of a mutual mistake by GSA and the former lessor. 

The Court finds that contract reformation is the appropriate remedy. Accordingly, the Court 

reforms the lease to reflect the parties’ agreed-upon methodology for calculating the tax base for 

the purposes of determining GSA’s yearly real-estate tax payment owed to Westdale under the 

terms of the lease.

I. FACTS

1

The Court sets forth findings of fact as required by Rule 52(a)(1) of the Rules of the 

Court of Federal Claims (“RCFC”). In making its factual findings, the Court relies on the 

testimony elicited at trial and the documentary evidence submitted by the parties. The Court 

heard testimony from six witnesses. The plaintiff called three witnesses: Mr. Jeff Allen, 

executive vice president for Westdale, the current lessor; Ms. Rhonda Thompson, the director of 

commercial-asset management and leasing for Westdale; and Ms. Kelli Williamson, a 

commercial financial analyst for Westdale. The defendant called Ms. Kelly Winn, the real-estate 

broker for GSA. Both parties called Mr. Lee Moreland, executive vice president in charge of 

asset management for the former lessor, Griffin Partners, and Ms. Tracy Harter, the GSA 

contracting officer for the lease at issue. In addition to testimony, the Court considered the 

parties’ Joint Stipulation of Facts, the five exhibits submitted by the plaintiff, the four exhibits

from the defendant, and the 80 joint exhibits in evidence. The Court found all witnesses to be 

credible.

A. The 2004 Lease Between GSA and SAOP

The property at issue is an office building known as Northwest Center, located at 7550 IH 

10 West in San Antonio, Texas (“building” or “property”). (Jt. Stip. ¶ 3.) On June 3, 2004, GSA 

agreed to a lease (“2004 lease”) with SAOP Northwest Center, L.P. (“SAOP”) to secure office 

1

In its factfinding, the Court cites the parties’ Joint Stipulation of Facts (“Jt. Stip.”) (ECF 

114), the transcript of testimony elicited during trial (“Tr.”) (ECF 131-133), and the plaintiff’s 

(“PX”), defendant’s (“DX”), and joint (“JX”) exhibits admitted into evidence at trial. Citations 

to exhibits are to the appropriate abbreviation followed by the exhibit and page number or 

paragraph number: (e.g., DX 1 at 2; Jt. Stip. ¶ 7).
3

space. (Id.; JX 39.) At that time, SAOP owned the Northwest Center. (Tr. 128 (Moreland).) 

SAOP was a single-asset entity of Griffin Partners, a commercial real-estate investment and 

management company.2 (Id.; Tr. 44-46 (Allen).) The space leased by GSA under the 2004 

Lease served as offices for the Administrative Office of the United States Courts in San Antonio. 

(JX 39 at 3.)

GSA issued a Solicitation for Offers (“SFO”) as part of its acquisition of office space. 

The 2004 lease incorporated all terms and conditions of GSA’s SFO. (JX 39 at 2.) Section 3.4 

of the SFO was titled “Tax Adjustment (Sep 2000).” (Id. at 14.) Paragraph B of section 3.4

initially provided as part of the printed form: “Base year taxes as referred to in this paragraph are 

1) the real estate taxes for the first 12-month period coincident with full assessment or 2) may be 

an amount negotiated by the parties that reflects an agreed upon base for a fully assessed value of 

the property.” (Id.)

The printed phrase “coincident with full assessment or” was struck out of paragraph B by 

hand and initialed by two representatives. (Id.) That phrase was replaced by new text typed 

above paragraph B. (Id.) As amended, paragraph B provided: “Base year taxes as referred to in 

this paragraph are 1) the real estate taxes for the 12-month period 1998, which were $413,020.00 

or $1.71 per rentable square foot 2) may be an amount negotiated by the parties that reflects an 

agreed upon base for a fully assessed value of the property.” (Id. (emphasis added).) Thus, the 

lessor and GSA selected a prior tax year to serve as the real-estate tax base and deviated from the 

original text of the SFO. The $413,020 in real-estate taxes assessed against the property in 1998 

was lower than the $525,153.66 in taxes assessed against the property in 2004, the year the 

parties agreed to the lease.

3

 (JX 78 at 2.)

B. The 2009 Solicitation for Offers, Response, and Attachments

Due to the pending expiration of the 2004 lease, GSA issued SFO 8TX3135 on August 

19, 2009, seeking office space “for Federal Public Defender and Administrative Office of the 

United States Courts in San Antonio, Texas.” (JX 1B at 1.) The SFO identified a ten-year lease 

term with “five (5) years firm term.” (Id. at 5.) The SFO permitted GSA to terminate the lease 

in whole or in part with written notice after the fifth year. (Id.) The SFO required offerors to 

submit offers by December 31, 2009, (id.), though the deadline was extended to January 15, 

2010, (JX 1D).

2 The Court at times refers to SAOP and Griffin Partners interchangeably as “owners” of the 

building, although only SAOP held legal title to the building. No significance is intended by the 

choice of terminology.

3 For the purposes of this litigation, there are no disputes regarding the payment of real-estate 

taxes under the 2004 lease. Information pertaining to the 2004 lease is included to contextualize 

the tax-adjustment clause of the parties’ 2010 lease at issue in this case.
4

SAOP submitted an offer in response to the SFO on January 15, 2010. (Jt. Stip. ¶ 5.) 

Pursuant to paragraph 3.0 of the 2009 SFO, SAOP submitted its bid package to Ms. Kelly Winn, 

a broker with Studley, Inc. and the authorized real-estate broker for GSA, and Ms. Daphne 

Hadley, the GSA contracting officer for the lease. (DX 4 at 15.)

Paragraph 3.4 of the SFO required each offeror to submit to the contracting officer, as 

part of its offer, seven different forms. (JX 1B at 15-16.) These forms included GSA Form 1364 

(“Proposal to Lease Space”) and GSA Form 1217 (“Lessor’s Annual Cost Statement”). (Id.)

1. GSA Form 1364: Proposal to Lease Space

As part of SAOP’s offer, it submitted GSA Form 1364. (DX 2.)

4

 The SFO specified that 

both pages of GSA Form 1364 had to be completed and specifically noted that offerors should 

indicate the total lease rate per square foot, “clearly itemizing . . . the total building shell rental.” 

(JX 1B at 15.) The SFO further noted that “[t]his building shell rental rate shall include, but not 

limited to [sic], property financing (exclusive of Tenant Improvements), insurance, taxes, 

management, profit, etc., for the building.” (Id. (emphasis added).)

On SAOP’s submitted Form 1364, it described the property as a 25-year-old building of 

241,404 rentable square feet (“rsf”). (DX 2 at 1.) Line 16 of Form 1364 was titled “SHELL 

RENT (including current real estate taxes. Refer to Line 28 on GSA Form 1217).” (Id.) SAOP 

identified the shell rent on line 16 as $14.32, the amortized cost per rentable square foot. (Id.) 

On line 27 of the form, SAOP identified the “current year taxes” as “2009” and wrote 

“$691,942.” (Id. at 2.) SAOP checked a box indicating that the 2009 taxes were “based on the 

fully assessed value.” (Id.)

2. GSA Form 1217: Lessor’s Annual Cost Statement

SAOP also submitted GSA Form 1217 (“Lessor’s Annual Cost Statement”) with its offer,

as required by the SFO. (DX 1; JX 1B at 15-16.) Form 1217 was divided into two main 

sections. Section I, comprised of Lines 5 through 27, referred to the “Estimated Annual Cost of 

Services & Utilities Furnished by Lessor as Part of Rental Consideration.” (DX 1 at 1-2.) 

Section II, which included lines 28 through 33, referred to the “Estimated Annual Cost of 

Ownership Exclusive of Capital Charges.” (Id. at 2.) For each section, column (a) represented 

costs for the entire building, and column (b) represented costs pertaining to the area leased by 

4 The version of DX 2 the defendant initially provided was dated January 12, 2010. Because 

the exhibit omitted a portion of the page likely due to a photocopying error, the Court permitted 

the defendant to re-submit DX 2. The defendant submitted a new version of DX 2, but the 

revised version was dated March 22, 2010, and includes minor deviations from the prior version 

of DX 2 and handwritten notations apparently due to “clarifications with the offeror.” (DX 2 at 1 

(revised).) The new DX 2 lists, for example, a larger percent of government occupancy. Ms. 

Winn testified that the handwritten additions to DX 2 (revised) reflect her negotiations with the 

lessor. (Tr. 424 (Winn).) The Court admitted the revised DX 2 into evidence. (Id. at 425.)
5

GSA. (Id. at 1.) At the time SAOP submitted Form 1217, its bid proposed that GSA lease an 

area of 43,119 rsf. (Id.) Line 28 of Form 1217 was titled “REAL ESTATE TAXES.” (Id. at 2.) 

On line 28, in column (a), SAOP listed the lessor’s annual cost for real estate taxes as $726,629. 

(Id.) On line 28(b), which referred specifically to the area leased by the government, SAOP 

identified the real-estate taxes as $129,788.19.5 (Id.) Line 28 of Form 1217 thus provided the 

following information:

SECTION II - ESTIMATED ANNUAL COST OF OWNERSHIP EXCLUSIVE OF CAPITAL 

CHARGES

LESSOR’S ANNUAL COST FOR:

ENTIRE BUILDING (a) GOV’T-LEASED AREA (b)

28. REAL ESTATE TAXES $ 726,629 $ 129,788.19

(Id. (reformatting for clarity; column (c) omitted).)

C. Original Lease

GSA awarded the 2010 lease (“original lease”) to SAOP. (Jt. Stip. ¶ 6.) On October 19, 

2010, SAOP and GSA agreed to U.S. Government Lease for Real Property No. GS-07B-16737. 

(Id.) The lease between the parties was a standard government form lease that was prepared by 

GSA. (JX 1B at 13.) SAOP drafted no part of the lease. (Tr. 134 (Moreland).)

Under the original lease, GSA occupied 44,201 rsf of office and related space in the 

building. (Jt. Stip. ¶ 6.) For months 1 through 60 of the lease term, the annual rent was 

$1,087,786.61, at the rate of $90,648.88 per month. (Id. ¶ 7.) For months 61 through 120, the 

annual rent was $1,060,824.00, at the rate of $88,402.00 per month. (Id.) At the outset of the 

original lease, GSA occupied 18.309894 percent of the building. (Id. ¶ 8.) The original lease 

permitted GSA to “terminate this lease in whole or in part at any time on or after the fifth (5th) 

year by giving at least 120 days’ notice in writing to the Lessor.” (JX 1A at 2.)

1. Incorporated Documents and Integration

Paragraph 7 of the original lease specified that the lease incorporated five documents: (1) 

the SFO, including two amendments; (2) GSA Form 3517, entitled “General Clauses”; (3) GSA 

Form 3518, entitled “Representations and Certifications”; (4) “Exhibit A—Base Plan”; and (5) 

5 At the time SAOP submitted Form 1217 in January 2010, SAOP estimated GSA’s building 

occupancy to be 43,119 rsf. SAOP and GSA later agreed to a slightly larger leased area of 

44,201 rsf. (DX 1 at 2; JX 1A.) The estimated real-estate taxes on Form 1217 were thus 

calculated using a smaller square-footage of occupancy than is reflected in the final lease.
6

“Exhibit B—Legal Description.” (Id.) The original lease did not specify that it incorporated any 

other documents. (See JX 1A.)

The General Clauses form, incorporated into the original lease, included General Clause 

552.270-27, an integration clause:

This Lease, upon execution, contains the entire agreement of the 

parties and no prior written or oral agreement, express or implied, 

shall be admissible to contradict the provisions of the Lease.

(JX 1E at 5.) The original lease was therefore a fully integrated agreement.

Between execution of the original lease in 2010 and July 2013, GSA and SAOP executed 

12 supplemental lease agreements amending the lease. (Jt. Stip. ¶ 10.)

2. Tax-Adjustment Provisions

The original lease contained provisions intended to determine the amount of property tax 

GSA would pay relative to its occupancy in the building. Paragraph 15 of the original lease

provided in full:

In accordance with the SFO Paragraph 4.2 entitled “Tax 

Adjustment,” this lease is subject to real estate tax adjustment. The 

base amount is established as $133,045.00. The percentage of 

occupancy is 18.309894%.

(JX 1A at 3.)

6

 Paragraph 15 is the “tax-adjustment clause” primarily at issue in this dispute.

The SFO, which was incorporated into and referenced in paragraph 15 of the original 

lease, provided definitions and specific instructions for calculating the tax base. Paragraph 4.2 of 

the SFO identified the paragraph’s purpose:

4.2 Tax Adjustment (AUG 2008)

A. Purpose:

This paragraph provides for adjustment in the rent (“Tax 

Adjustment”) to account for increases or decreases in Real Estate 

Taxes for the Property after the establishment of the Real Estate Tax 

6 The figure $133,045 differs slightly from the $129,788.19 listed in GSA Form 1217. This 

difference is due to an increase in the amount of rentable square feet GSA leased. (See Tr. 437-

39 (Winn).) When SAOP submitted Form 1217, it proposed a rentable area of 43,119 rsf. The 

parties later agreed that GSA would lease slightly more space, and the final agreement reflected 

in the lease was 44,201 rsf, a difference of 1,082 square feet. (Id.; JX 1A.)
7

Base, as those terms are defined herein. Tax Adjustments shall be 

calculated in accordance with this Clause.

(JX 1B at 19.)

Paragraph 4.2 also identified definitions relevant to tax adjustment:

B. Definitions:

The following definitions apply to the use of capitalized terms 

within this paragraph: . . . .

2. “Real Estate Taxes” are those taxes that are levied upon the 

owners of real property by a Taxing Authority (as hereinafter 

defined) of a State or local Government on an ad valorem basis . . . .

5. “Tax Abatement” is an authorized reduction in the Lessor’s 

liability for Real Estate Taxes below that determined by applying 

the generally applicable Real Estate Tax rate to the Fully Assessed 

(as hereinafter defined) valuation of the Property.

6. “Unadjusted Real Estate Taxes” are the full amount of Real Estate 

Taxes that would be assessed for the Property for one full Tax Year 

without regard to the Lessor’s entitlement to any Tax Abatements 

(except if such Tax Abatement came into effect after the date of 

award of the Lease) . . . .

9. “Percentage of Occupancy” refers to that portion of the Property 

exclusively occupied or used by the Government pursuant to the 

Lease. For buildings, the Percentage of Occupancy is determined 

by calculating the ratio of the rentable square feet occupied by the 

Government pursuant to the Lease to the total rentable square feet 

in the building . . . .

(Id. at 19-20.)

Clause 7 of paragraph 4.2, defining “Real Estate Tax Base,” identified the methodology 

for selecting a real-estate tax base:

7. “Real Estate Tax Base” is the Unadjusted Real Estate Taxes for 

the first full Tax Year following the commencement of the Lease 

term. If the Real Estate Taxes for that Tax Year are not based upon 

a Full Assessment of the Property, then the Real Estate Tax Base 

shall be the Unadjusted Real Estate Taxes for the Property for the 

first full Tax Year for which the Real Estate Taxes are based upon a 

Full Assessment. Such first full Tax Year may be hereinafter 

referred to as the “Tax Base Year.” Alternatively, the Real Estate 

Tax Base may be an amount negotiated by the parties that reflects 

an agreed upon base for a Fully Assessed value of the property.
8

(Id. at 20 (emphasis added).) Clause 7 thus established that the real-estate tax base would be the 

unadjusted real-estate taxes assessed for the first year following commencement of the lease or, 

alternatively, would be based on an amount the parties negotiated.

Part C of paragraph 4.2 explained that property taxes would be adjusted to ensure GSA 

pays only its proportional share of taxes:

C. Adjustment for Changes in Real Estate Taxes:

1. After the Property is Fully Assessed, the Government shall pay 

its share of any increases and shall receive its share of any decreases 

in the Real Estate Taxes for the Property, such share of increases or 

decreases to be referred to herein as “Tax Adjustment.” 

(Id.)

Paragraph 4.2C(1) further specified the methodology for calculating GSA’s proportionate 

tax payment:

The amount of the Tax Adjustment shall be determined by 

multiplying the Government’s Percentage of Occupancy by the 

difference between the current year Unadjusted Real Estate Taxes 

and the Real Estate Tax Base, less the portion of such difference not 

paid due to a Tax Abatement (except if a Tax Abatement comes into 

effect after the date of award of the Lease). If a Tax Abatement 

comes into effect after the date of award of the Lease, the amount of 

the Tax Adjustment shall be determined by multiplying the 

Government’s Percentage of Occupancy by the difference between 

the current year Unadjusted Real Estate Taxes and the Real Estate 

Tax Base.

(Id.) Paragraph 4.2 was a “standard section” in GSA leases. (Tr. 433 (Winn).)

Pursuant to the lease, GSA would pay this tax adjustment “in a single annual lump sum 

payment to the Lessor,” and if the adjustment “results in a credit owed to the Government, the 

Government may elect to receive payment in the form of a rental credit or lump sum payment.” 

(Id.)

The overall effect of the real-estate tax provisions was to (1) establish a default and 

alternative method for selecting the tax base; (2) ensure GSA pays only its share of the building’s 

real-estate taxes based on the percentage of the building it occupies; and (3) identify the 

appropriate formula to effectuate the tax adjustment.
9

D. Negotiation of the Tax Base

1. Relevant Tax History

The Northwest Center is in Bexar County, Texas, which assesses the real-estate taxes on 

the building. (Tr. 49 (Allen); JX 79.) Property taxes for a given tax year are payable by January 

31 of the following year. (Tr. 32 (Allen).) For the 2009 tax year, the year immediately 

preceding negotiation of the original lease, SAOP was assessed $691,942 in unadjusted realestate taxes.7

 (DX 2 at 1.) For the 2010 tax year, SAOP ultimately paid Bexar County a total of 

$573,292.86 in real-estate taxes. (JX 66 at 4; JX 67.) For the 2011 tax year, SAOP paid a total 

of $527,585.91 in real-estate taxes. (JX 66 at 4; JX 67.) For the 2012 tax year, the first year of 

taxes after the start of the original lease, SAOP paid $541,020.95 in real-estate taxes. (JX 78 at 

2.)

2. Lessor’s Understanding of the Tax Base

Griffin Partners, the asset- and property-management company that owned SAOP, 

authorized Mr. Lee Moreland, its senior vice president for asset management, to “sign and 

negotiate on behalf of Griffin Partners/SAOP Northwest Center, LP” the original lease. (JX 33.) 

Mr. Moreland was “the point person in terms of negotiations on behalf of the building owner” 

and negotiated with GSA the terms of original lease. (Tr. 130 (Moreland).)

Mr. Moreland submitted Forms 1364 and 1217, as required by the SFO, on behalf of 

SAOP in January 2010. (Id. at 176, 180.) His employees prepared the forms under his 

supervision, and he approved them. (Id. at 181.) Mr. Moreland’s initials appear on each page of 

SAOP’s bid package, including GSA Forms 1364 and 1217, as required, and he signed the last 

page of both forms. (DX4; DX 1 at 2; DX 2 at 2.)

Mr. Moreland described GSA Form 1217 as “an estimate that was requested of the 

annual costs of the building.” (Tr. 184.) He testified that line 28(a) on Form 1217, which listed 

the figure $726,629, constituted the “estimated real estate tax expense for the building.” (Id. at 

185.) Regarding the origin of the $726,629 figure on line 28(a) of Form 1217, Mr. Moreland 

testified that it came from one of two places: “It would either have been . . . the budget . . . the 

year in which [Form 1217] was submitted, which was in January of 2010, or it was based on the 

year end, December 31, 2009.” (Id. at 186.)

Mr. Moreland explained that his “assumption for the reason” he listed the estimated 

figure of $726,629 in line 28(a) of Form 1217 “was that it was to establish the estimated

[expenses] for the building as part of the offer.” (Id.) Mr. Moreland testified that he did not 

intend for the estimated costs listed on Form 1217 to be reflected in the lease, stating that it 

“would not have been my intent with the submission of this package.” (Id.) He stated that his 

only intent with the submission of Form 1217 was to “provide the then current estimate of 

7 The unadjusted real-estate taxes are often challenged, and the final real-estate taxes paid on 

the building do not reflect the initial, unadjusted assessment, as will become evident below.
10

operating expenses for the building,” for the purpose of “completing the SFO as requested by the 

GSA.” (Id.) The $726,629 figure of Form 1217 “represents an estimate of what [he] thought 

that the county would send [SAOP] as a tax bill,” though “subject to the protest procedures for 

assessed values.” (Id. at 188.)

Mr. Moreland neither agreed to nor negotiated a $726,629 or $133,045 tax base during 

his discussions with GSA leading to the original lease. (Id. at 138, 205.) He testified that the 

$133,045 figure in paragraph 15 was wrong. (Id. at 189.) He agreed that the figure “was a 

mistake,” noting that “the $133,045 was not in keeping with my assumption for setting the base 

year.” (Id. at 199.) Ultimately, when asked whether he would “have recommended to SAOP 

that it adopt a $726,629 . . . real estate tax base for the new lease,” Mr. Moreland testified “no.” 

(Id. at 146.)

Instead, he intended “to have the tax base be the actual taxes for the year in which the 

lease commenced.” (Id. at 139.) He testified that he maintained his intention to use the first-year 

taxes as the tax base throughout the course of negotiations with GSA. (Id.) Given that the lease 

term began in January 2012, Mr. Moreland testified that he would have intended to use the actual 

taxes paid in tax year 2012, subject to any subsequent reduction by Bexar County, as the tax base 

for paragraph 15 of the lease. (Id. at 205-06, 209-10.)

3. GSA’s Understanding of the Tax Base

Ms. Kelly Winn, a real-estate broker for Studley, Inc., served as GSA’s representative 

and broker for the procurement that led to the original lease. (Tr. 415 (Winn).) Ms. Winn had 

extensive experience with public-sector leases. (Id. at 408.) She testified as to the government’s 

intent in formulating the tax-adjustment clause.

Ms. Winn explained that in public-sector leasing, the lessor and the government negotiate 

using the government’s form. (Id. at 410.) As set forth in paragraph 3.4 of the SFO, offerors 

were required to submit GSA Forms 1217 and 1364 with their offer in response to the SFO. (Id.

at 422-23.) Ms. Winn explained that the “building shell rental rate” referenced in paragraph 

3.4(A)(2)(c) of the SFO is comprised of two components. “One is outlined in Section 1.11 of the 

solicitation for offers, it’s the physical components of the space. And then the second 

component is a monetary component that is taken from another form, 1217, which includes real 

estate taxes . . . .” (Id. at 423.) Ms. Winn confirmed that Forms 1217 and 1364 “are not attached 

to the lease. These documents make up the business terms for the lease.” (Id. at 426.) Forms 

1217 and 1364 are “the base for the business points of the lease that’s negotiated.” (Id. at 431.)

Ms. Winn explained that line 28 of GSA Form 1217 depicted the lessor’s annual 

operating costs for real-estate taxes. She noted that column (a), which showed a figure of 

$726,629, represented “the real estate taxes for the entire building,” and that column (b), listing 

the figure $129,788.19, referred to “the proportionate share of the real estate taxes for the 

government.” (Id. at 429.) She further explained that “the real estate taxes would have matched 

up with a real estate tax statement from Bexar County. So . . . it would be either an estimate 

based on what they had received from the county or it would be the actual just depending on 
11

when it was submitted.” (Id.) In this case, Ms. Winn identified the figures at line 28 as the 

estimated costs. (Id.)

GSA maintains that it already pays real-estate taxes as part of its shell rent. (Id. at 423.)

Ms. Winn explained that the shell rental rate “does include the real estate taxes for the building.” 

(Id.) The formula referenced in paragraph 15 of the lease is intended to adjust the proportional 

amount GSA pays when taxes assessed against the building are either more or less than the 

established tax base. (Id. at 434.) Ms. Winn explained that essentially, “the tax base is a 

reference point pursuant to which the taxes are adjusted.” (Id.) The tax-adjustment provision 

seeks to modify what GSA has already paid in its shell rent, and GSA’s annual tax payment 

“could go up, [or] could go down” beyond what had already been paid in the shell rent 

depending on whether the yearly assessment by the county falls above or below the established 

tax base. (Id.)

Regarding the establishment of a real-estate tax base, Ms. Winn testified that, for all GSA 

leases, there generally are “two ways that the real estate base could be determined. It can be 

determined based on after the first year of occupancy, when the government has taken possession 

of the space, or it can be a determined amount based on -- if I’m a tenant in the building, what 

the current real estate taxes are.” (Id. at 435.) For the tax base at issue in this case, she 

explained: “In this lease, it was a determined amount because we were currently a tenant in the 

building. So there was a basis for understanding what the real estate taxes were.” (Id.)

Ms. Winn identified the $726,629 figure from line 28 of GSA Form 1217 as the correct 

determined amount for the building. Id. at 436. When asked whether $133,045 was the tax base 

as determined and used in paragraph 4.2, she testified “no . . . it should be the real estate taxes 

for the entire building, $726,629.” (Id. at 440.) She did not know how the $133,045 figure 

ended up in paragraph 15 of the lease. (Id. at 442.) She testified, as did Mr. Moreland, that the 

$133,045 number “is a mistake.” (Id. at 439.)

Ms. Harter, the GSA contracting officer, testified at trial that the proper formula for 

calculating GSA’s proportional share of property taxes is to “take the tax assessment for that 

year, subtract the tax or the base that’s already in our shell rent, and then you take that figure and 

multiply it by our percentage occupancy, and that is . . . the government’s obligation.” (Tr. 355 

(Harter).) She also explained that the tax base of paragraph 15 was incorrect: “it should have 

been, instead of the $133,045, in paragraph 15, it should have been the $726,629, because that is 

the base tax amount for the premises, for the entire building.” (Id. at 357.)

E. Tax Payment under Original Lease Between SAOP and GSA

The first tax year after the original lease commenced was tax year 2012. For tax year 

2012, SAOP paid $541,020.95 in property taxes to Bexar County for the entire building. (JX 78 

at 2.)

Because the real-estate tax base in paragraph 15 of the lease was written as $133,045 and 

the taxes assessed exceeded $133,045, SAOP determined that it required additional payment 

from GSA. In a letter dated January 29, 2013, SAOP notified GSA that it was responsible for an 
12

additional $37,348.98, representing one-half of the government’s pro rata share of the 2012 

taxes. (JX 40 at 6.)

Ms. Harter approved payment of SAOP’s bill for a further contribution by GSA to cover 

the building’s 2012 property tax. (JX 41; Tr. 339 (Harter).) She testified that SAOP submitted 

to GSA with its payment request a worksheet, tax statement, and proof of payment that GSA 

used to complete an independent tax escalation analysis worksheet. (Tr. at 340.) Ms. Harter 

relied on this worksheet to approve payment of SAOP’s tax bill and testified that she did not 

consult the lease to approve the request. (Id. at 339-40.) GSA therefore issued to SAOP a 

payment of $37,348.16, representing GSA’s portion of a “split payment,” on March 1, 2013.8 

(JX 41.)

F. Westdale’s Purchase of the Northwest Center

Westdale purchased the Northwest Center from SAOP in 2013. Prior to closing on the 

purchase, on March 24, 2013, Ms. Harter sent Westdale a letter on behalf of GSA pertaining to 

the lease. The letter confirmed that “1. Lease GS-07B-16737 is currently in full force and effect. 

2. No rental has been paid in advance under the leases. 3. No notices of default have been issued 

by the Contracting Officer.” (JX 35 at 1.) The letter based its statements “on a reasonably 

diligent review of the Contracting Officer’s lease files as of the date of issuance of this letter.” 

(Id.)

In addition to the letter from GSA, SAOP provided to Westdale, at the time of closing on 

May 21, 2013, a partial seller-estoppel certificate related to its lease of space to GSA. (JX 36.) 

The estoppel certificate confirmed that pursuant to the Agreement of Purchase and Sale of March 

5, 2013, between Westdale and SAOP, “the owner of the Property and the landlord’s interest in 

the Lease [SAOP], intends to sell, transfer, assign and convey such Property, and the landlord’s 

interest in all tenant leases with respect to such property.” (Id. at 1.) The estoppel certificate 

also confirmed that “Tenant is currently obligated to pay fixed or base rent under the Lease in the 

annual amount of $1,046,237.67” in monthly installments. (Id.) It established that there were 

“no concession, bonuses, free months’ rental, rebates or other matters affecting the rental for 

Tenant which Tenant has not received” and that “[t]o the best of Seller’s knowledge, there are no 

events or conditions existing which, with or without notice or the lapse of time, or both, could 

constitute a monetary or other default of the landlord or tenant under the Lease . . . .” (Id.)

Mr. Allen, Westdale’s executive vice president, negotiated the purchase of Northwest 

Center and completed the due diligence. (Tr. at 35 (Allen).) He testified that he relied on GSA’s 

representation that its lease was in full force and effect. (Id. at 40.) He maintained that the 

government’s estoppel certificate is “critical” because the new lessor had not “had any 

relationship with the tenants” prior to purchase. (Id.) He received similar representations from 

the seller, Griffin Partners. (Id. at 41; JX 36.) Mr. Allen had been involved with prior 

8 The difference between SAOP’s request of $37,348.98 and GSA’s payment of $37,348.16 

reflects a rounding issue that the plaintiff does not dispute.
13

acquisitions from Griffin Partners in Houston. (Tr. 34-35.) He noted that the seller’s estoppel 

certificate serves to confirm that there are “no outstanding issues that a buyer would need to be 

aware [of].” (Id. at 38.)

Because the contracting parties to the original lease, SAOP and GSA, were unaware of 

the alleged mistake in paragraph 15, Westdale did not know prior to the purchase that there was 

any mistake written into the terms of the lease. (Id. at 53.) The amount of GSA’s rental

payments aligned with the market rate for office space in San Antonio. (Tr. 140-41 (Moreland).)

Mr. Allen explained that Westdale’s intention in buying the Northwest Center related to 

potential rental income from tenants in the building. In buying an office building, Mr. Allen 

testified, the buyer is “buying an income stream. . . . [B]asically how our industry values the 

building is based on the income stream that you anticipate receiving over typically a three to 

five-year period, or longer in our case.” (Tr. 36 (Allen).) He explained that GSA’s occupancy

“represented 20 percent of the building. There’s no way we were buying the building that didn’t 

include this rental stream. No way, no how.” (Id. at 98-99.)

Mr. Allen testified that the government’s reading of the lease as intending other than a 

$133,045 tax base “reduces the rental rate [Westdale] otherwise anticipated receiving.” (Id. at 

77.) The withholding of rent payments by GSA to account for the mistake in the tax base 

reflected in the original lease creates “a reduction in the cash flow that we anticipated. You 

know, we bought a number of leases in place, the GSA lease was one of many leases that we 

bought at this property, and we have not received the income that we projected based on the clear 

reading of the lease that we anticipated to receive.” (Id. at 77-78.) Therefore, Mr. Allen 

maintained that Westdale is not receiving the benefit of its bargain under the lease that it 

assumed with the government “based on [Westdale’s] clear reading of the lease document.” (Id.

at 77.)

On May 21, 2013, by a special warranty deed executed by SAOP, Westdale took title to 

the real property and improvements. (Jt. Stip. ¶ 12.) All lease files for each tenant in the 

building were transferred to Westdale at the time of purchase. (Tr. 135 (Moreland).)

After closing on the property, Westdale, SAOP, and GSA entered into Lease Agreement 

No. 13, effective July 16, 2013. (JX 14; Jt. Stip. ¶ 13.) This agreement memorialized 

Westdale’s assumption of all obligations and liabilities of SAOP under the original lease, as 

amended, and Westdale became the lessor for the remainder of the term of the original lease:

Westdale Northwest Center, LP, Lessor, hereby assumes all the 

incomplete obligations of Lease GS-07B-16737 as amended, and 

agrees to perform same in accordance with the terms, conditions, 

and provisions thereof from and after July 16, 2013. Lessor further 

assumes all obligations and liabilities of and all claims and demands 

arising under Lease GS-07B-16737 against [SAOP] and ratifies and 

confirms all actions heretofore taken by [SAOP] with respect to the 

contract with the same force and effect as if the actions had been 

taken by [Westdale]. Nothing contained herein shall be construed 
14

as releasing [SAOP] from [SAOP’s] obligations under the terms of 

the lease.

(JX 14 at 1.)

Paragraph 6 of Lease Agreement No. 13 discharged any further payment obligation by 

GSA to SAOP:

Notwithstanding the foregoing, all payments heretofore made by the 

Government to [SAOP] and all other actions hereto taken by the 

Government pursuant to its obligations under the contract shall be 

deemed to have discharged the Government’s obligations under the 

contract to the extent of the amounts so paid or reimbursed or such 

actions taken.

(Id.)

G. Contract Performance Under Lease Between Westdale and GSA

1. Tax Year 2013

On July 5, 2014, Westdale sent GSA a letter pertaining to taxes owed for tax year 2013. 

Westdale notified GSA that it owed $86,446.84, representing GSA’s pro rata share in excess of 

the established real-estate tax base of the 2013 real-estate taxes assessed against the building. 

(Jt. Stip. ¶ 15.) Westdale submitted with its letter a worksheet, tax statement, and proof of 

payment. In response to Westdale’s letter, Ms. Harter’s supervisor at GSA, Mr. Ed Perez, 

approved payment of the 2013 real-estate taxes as determined by the tax-adjustment clause of the 

lease. (JX 43; Tr. 340-41 (Harter).) GSA paid the sum of $86,446.34, a difference of $.50 from 

Westdale’s request that the parties do not dispute. (JX 43.)

2. Government Audit

On November 4, 2014, GSA provided notice to Westdale by letter that GSA had 

conducted an audit of the lease and the rental payments it had made. (JX 58.) GSA’s “review of 

the lease and rental payments revealed that [Westdale had] been overpaid in the amount of 

$79,027.78.” (Id. at 1.) The letter notified Westdale that the overpayment would be deducted 

from shell rent payments for two months until repaid in full. (Id.)

GSA’s audit pertained to tax-adjustment payments due under the lease for 2012 and from 

January 1 to May 20, 2013. (Jt. Stip. ¶ 16.) A “rate sheet” used in the audit, titled “Yearly 

Stepped Rent Levelizer” was attached to GSA’s November 4 letter and included a handwritten 

notation at the top providing that this document was “not part of their lease.” (JX 58 at 7.)

GSA’s November 4, 2014 letter was the first indication Westdale received that GSA 

believed it had overpaid property taxes under the lease, including when the Northwest Center 

had been under SAOP’s ownership. (Tr. 61 (Allen).) On November 5, 2014, Westdale 

responded via letter to GSA’s claims and contended that GSA had been correctly invoiced 
15

according to the tax adjustment provision in the lease. (JX 59.) Westdale explained that 

“according to Paragraph 15 of the lease, the base amount is $133,045.00 with a percentage of 

occupancy of 18.309894% . . . . Based on the attached invoices, it is the Landlord’s opinion that 

it has correctly invoiced the Government per the terms of the lease.” (Id.)

By letter dated November 7, 2014, GSA notified Westdale that its audit also concluded 

that Westdale had been overpaid in the amount of $13,630.21 for property taxes due from May 

21 to December 31, 2013. (Jt. Stip. ¶ 18.)

On January 16, 2015, GSA issued a letter to Griffin Partners, the former asset 

management company, demanding the return of $79,027.78, asserting an erroneous overpayment 

made under the terms of the original lease. GSA deducted this amount from payments of rent 

and other charges due to Westdale. (Jt. Stip. ¶ 19.)

3. Occupancy Increase

On February 16, 2015, Westdale and GSA executed Lease Amendment No. 17, effective 

retroactively from December 18, 2014, documenting GSA’s acceptance of 3,417 additional rsf of 

recently constructed expansion space. (Jt. Stip. ¶ 20; JX 18 at 1.) The new space increased the 

space GSA occupied to 47,618 rsf or 19.725357 percent of the building. (Jt. Stip. ¶ 21; JX 18 at 

1.) For the purposes of this dispute, GSA’s occupancy remains 19.725357 percent to date. 9 (Jt. 

Stip. ¶ 21.)

Paragraph D of Lease Amendment No. 17 provided that “Paragraph 15 of the Lease is 

hereby amended as follows. . . . 15. In accordance with the SFO Paragraph 4.2 entitled ‘Tax 

Adjustment,’ this lease is subject to real estate tax adjustment. The base amount is established as 

$133,045.00. The percentage of occupancy is 19.725357% [47,618 RSF/241,405 RSF].” (JX 18 

at 2 (brackets in original).) Ms. Harter testified that the retention of the figure $133,045 in 

paragraph D of Lease Amendment No. 17 was another mistake. (Tr. 390 (Harter).)

4. 2014 Tax Year

On March 31, 2015, Westdale notified GSA via email that GSA was responsible for 

paying its pro rata share of the 2014 real-estate taxes assessed against the property above the 

established base-year amount. (Jt. Stip. ¶ 22.) Westdale invoiced GSA $105,341.85. (Id.) On 

June 27, 2015, GSA notified Westdale that GSA had overpaid its share of 2014 real estate taxes 

by $27,391.00. GSA notified Westdale of its intention to deduct that amount from future rental 

9 GSA later increased its occupancy to 23.277479 percent of the building through Lease 

Amendment No. 19, effective March 1, 2017, but the additional space leased by GSA is subject 

to its own separate property-tax base. (Jt. Stip. ¶ 21; JX 20.) Paragraph 5 of the lease 

amendment provides: “The Base Cost of Services for the expansion area in 2017 is established at 

$8.30 per rental sq. ft. The Tax Base for the Expansion Area is included in the shell rent and 

shall be the taxes for 2017.” (JX 20 at 3.) The newly occupied space thus used the first year of 

taxes under the lease amendment for the tax base.
16

payments. (Id. at ¶ 23.) In August 2015, GSA withheld $27,391.00 from its rent payment. (Id.

at ¶ 24.)

On August 28, 2015, Ms. Harter sent Westdale a letter on behalf of GSA in response to 

Westdale’s claim, explaining the erroneous tax base:

I have conducted a thorough examination of the lease and tax audit 

documents, along with the Lessor’s Annual Cost Statement which 

was submitted with the Lessor’s offer for the succeeding lease, and 

tax records for the building. In doing so, I have determined the lease 

language itself does not correctly represent the intention of the 

established real estate tax base as it relates to real estate adjustments. 

Paragraph 15 of the SF2 and Lease Amendment (LA) No. 17 do 

state the base amount is established as $133,045.00 which I believe 

is intended to be the tax base for the Government occupied

percentage of the building only, not the entire building.

(JX 26 at 4 (emphasis in original).) Due to a subsequent reduction by Bexar County of 

Westdale’s total property-tax obligations, Westdale received a refund of $56,145.16, reducing 

the amount Westdale claims is due for 2014 taxes to $95,061.73. (Jt. Stip. ¶ 24.)

Ms. Harter attached Lease Amendment No. 18 to her August 2015 letter “to clarify the 

intention of the $133,045.00 tax base.” (JX 26 at 5, 11.) Lease Amendment No. 18 sought to 

replace the tax base of $133,045 written into paragraph 15 of the lease with $726,629. (Id.) 

Westdale did not sign Lease Amendment No. 18.

5. Subsequent Tax Years10

For the 2015 tax year, Westdale invoiced GSA for $130,672.02, representing GSA’s 

proportional share of real-estate taxes. (Jt. Stip. ¶ 25; JX 47.) GSA prepared a tax escalation 

worksheet and determined it owed $23,870.61. (JX 49.) It paid the sum of $23,870.61, leaving 

$106,801.41 of the amount Westdale had invoiced. (Jt. Stip. ¶ 25.) Westdale later received a

reduction in real-estate taxes owed to Bexar County, resulting in a refund to Westdale of 

$59,647.11 for the 2015 tax year. (Id.) This reduction decreased the total 2015 taxes allegedly 

owed by GSA from $130,672.02 to $118,906.41 and decreases the amount Westdale alleges to 

be still due from GSA from $106,801.41 to $95,035.80.

For the 2016 tax year, Westdale invoiced GSA for $127,913.93. (Id. ¶ 28; JX 51.) Of 

the total amount invoiced, GSA paid $21,112.52, leaving $106,801.41 as an alleged remaining 

balance. (Jt. Stip. ¶ 28; JX 52; JX 53.) Due to a subsequent tax reduction by Bexar County, 

10 The Court has reached slightly different mathematical calculations in determining the 

amounts the plaintiff alleges to be due from GSA. These discrepancies are a matter of a few 

cents. For the purposes of this opinion, the Court adopts the amount due as alleged by the 

plaintiff and as is reflected in the parties’ joint stipulation of facts.
17

Westdale received a $30,991.27 refund on its 2016 taxes. This reduction decreased the total 

2016 taxes allegedly due from GSA from $127,913.13 to $121,800.78 and decreases the amount 

Westdale alleges to be still due from GSA from $106,801.41 to $100,688.26. (Jt. Stip. ¶ 28.)

For the 2017 tax year, Westdale invoiced GSA for $133,365.35. (JX 54 at 3.) GSA paid 

$26,563.96 of that total, leaving $106,801.39 that Westdale alleges is still due. (Jt. Stip. ¶ 30; JX 

54A; JX 54B.) Westdale again received a refund of its 2017 taxes, decreasing the taxes allegedly 

due from GSA from $133,365.35 to $127,808.93, and decreasing the amount Westdale now 

alleges to be still due from GSA from $106,801.41 to $101,244.97.

For the 2018 tax year, Westdale invoiced GSA for $132,988.83. (Jt. Stip. ¶ 32.) GSA 

paid $54,861.85, leaving $78,126.78 alleged to be due to Westdale. (Id.) A subsequent 

reduction by Bexar County to the assessed value of the building resulted in a refund of 

$21,564.46 of the taxes Westdale paid for the 2018 tax year. (Id.) This reduction decreases the

total 2018 taxes allegedly due from GSA from $132,988.83 to $128,735.17 and decreases the 

amount Westdale alleges to be still due from GSA from $78,126.78 to $73,873.32.

For the 2019 tax year, Westdale invoiced GSA for $129,990.55. (Jt. Stip. ¶ 34.) GSA

paid the sum of $22,581.42 and was due a credit in the amount of $607.74 relating to its 

expansion space on the ninth floor of the building, leaving the sum of $107,409.13 alleged to be 

due to Westdale. (Id.) A subsequent reduction by Bexar County to the assessed value of the

building resulted in a refund of $27,014.34 of the taxes Westdale paid for the 2019 tax year. 

(Id.) This reduction decreases the 2019 taxes allegedly due from GSA from $129,990.55 to 

$124,661.88 and decreases the amount Westdale now alleges to be still due from GSA from 

$107,409.13 to $101,472.72.

For the 2020 tax year, Westdale was assessed $788,235.87 in property taxes by Bexar 

County. (JX 80.)

In sum, Westdale asserts that its damages are based on the alleged unpaid taxes:

Tax Year Westdale Billed GSA GSA Paid Allegedly Due to Westdale (Adjusted)

2014 $ 105,341.85 $ 0 $ 95,061.73

2015 130,672.02 23,870.61 95,035.80

2016 127,913.93 21,112.52 100,688.26

2017 133,365.35 26,563.96 101,244.97

2018 132,988.83 54,861.85 73,873.32

2019 129,990.55 23,189.16 101,472.72

UNPAID TAXES: $567,376.80

(ECF 139 at 28.)
18

H. Certified Claims

Westdale has presented four claims to Ms. Harter, GSA’s contracting officer, for 

payment of sums it views as due under the plain text of the lease.11 (Jt. Stip. ¶¶ 27-38.)

On July 10, 2015, Westdale presented its first certified claim to Ms. Harter for 

$197,828.56, representing rent and tax adjustments allegedy due to date. (Id. ¶ 26.) Westdale 

requested a final decision. (Id.) On October 27, 2015, Ms. Harter issued a final decision 

denying Westdale’s claim.12 (Id. at ¶ 27.)

On December 20, 2017, Westdale presented a second certified claim to the contracting 

officer. (Id. ¶ 31.) Westdale sought declaratory relief related to construction and breach of the 

lease and equitable adjustment. Westdale requested a final decision. The contracting officer 

denied Westdale’s second certified claim in a final decision on February 8, 2018. (Id. ¶ 33.)

On October 22, 2019, Westdale presented its third certified claim for sums it alleges are 

due under the terms of the lease for tax years 2014 through 2018. (Id. ¶ 35.) The contracting 

officer issued a final decision on November 14, 2019, denying the third certified claim. (Id. ¶ 

36.)

On November 17, 2020, Westdale presented its fourth certified claim to the contracting 

officer for sums it views as due for tax year 2019. (Id. ¶ 37.) On November 23, 2020, the 

contracting officer denied the fourth certified claim in a final decision. (Id. ¶ 38.)

11 In its second certified claim presented to the contracting officer, Westdale sought 

enforcement of the lease as written or, “[i]n the alternative, an equitable adjustment or 

reformation of paragraph 15 of the Lease to reflect that the real estate tax base for real estate 

taxes is the actual real estate taxes paid for tax year 2012 on the ‘Property.’” (JX 27 at 4.) 

Westdale’s second, third, and fourth certified claims before the contracting officer also 

incorporated by reference the complaint in this lawsuit and included the complaint as an 

attachment. Like the certified claims, the complaint sought, in the alternative, reformation of 

paragraph 15 of the lease. (JX 27 at 1; JX 29 at 1; JX 31 at 1.) The plaintiff thus raised the issue 

of reformation in its claims before the contracting officer and requested and received a final 

decision on these claims. See M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 

1327-29 (Fed. Cir. 2010) (premising the Court of Federal Claims’ jurisdiction over a CDA case 

on whether the claim was timely, provided notice of the basis and amount of the claim, and was 

subject to a contracting officer’s final decision).

12 Although the contracting officer denied the majority of Westdale’s claim, GSA determined 

it did owe Westdale $28.42 based on its audit of its rental payments under the lease. (JX 26 at 

1.)
19

I. Procedural History

The plaintiff filed a five-count complaint on January 27, 2016.13 (ECF 1.) The defendant 

filed a motion to dismiss in lieu of an answer on May 4, 2016. (ECF 9.) The defendant’s initial

motion to dismiss was denied on January 11, 2017. (ECF 28.) The parties then attempted

alternative dispute resolution, but that proved unfruitful. After the completion of discovery, the 

defendant moved for summary judgment and the plaintiff cross-moved for partial summary 

judgment. Those motions were denied on May 1, 2019. In rejecting both parties’ motions, 

Senior Judge Smith found that “genuine issues of material fact remain regarding the intent of the 

parties at the time of contracting.” (ECF 62.) The case was transferred to the undersigned in 

June 2019. With leave of the Court, the plaintiff thereafter filed an amended four-count 

complaint. (ECF 70.) Count IV of the plaintiff’s first amended complaint realleged a claim for 

reformation in the event a mutual mistake was found. (Id. ¶ 53.) The defendant’s answer to the 

first amended complaint raised mutual mistake as an affirmative defense. (ECF 77.)

The Court held a three-day trial in this case in Washington, DC, from January 25 through

January 27, 2021.14 The parties filed post-trial briefs and submitted proposed findings of fact 

and conclusions of law. The Court heard closing argument on April 30, 2021.

II. JURISDICTION

The Tucker Act grants the Court of Federal Claims jurisdiction “to render judgment upon 

any claim against the United States founded either upon the Constitution, or any Act of Congress 

or any regulation of an executive department, or upon any express or implied contract with the 

United States, or for liquidated or unliquidated damages in cases not sounding in tort.”

28 U.S.C. § 1491(a)(1). This court thus has jurisdiction over claims for breach of contract 

founded upon an express contract with the United States. Hercules Inc. v. United States, 

516 U.S. 417, 422 (1996) (noting that the Tucker Act confers upon this court jurisdiction to hear 

cases founded upon express contracts with the United States).

13 Count V of the plaintiff’s complaint is pleaded in the alternative. Under Count V, the 

plaintiff alleged that if the court were to determine that the tax-adjustment clause “is the result of 

a mutual mistake or scrivener’s error, [Westdale] seeks an equitable adjustment or reformation of 

the lease to replace the $133,045.00 amount with the actual tax base as evidence [sic] by the 

amount of tax assessed for 2012.” (ECF 1 ¶ 39.) The defendant also raised a claim of mutual 

mistake in its motion for summary judgment in response to Count V. (ECF 55 at 1 n.1.)

14 At the start of the trial, the Court denied the plaintiff’s motion in limine seeking a finding 

that the lease provisions at issue are unambiguous and the exclusion of any evidence related to 

mutual mistake or the Anti-Deficiency Act. (ECF 124.) The Court permitted the exclusion of 

information pertaining to the parties’ efforts at alternative dispute resolution. (Id.) The Court 

denied the plaintiff’s motion to strike the testimony of Ms. Kelly Winn. (ECF 125.)
20

The Tucker Act also grants this court jurisdiction over claims arising under section 

7104(b)(1) of the Contract Disputes Act (“CDA”), 41 U.S.C. § 7100 et seq. 28 U.S.C. 

§ 1491(a)(2). The CDA provides this court with jurisdiction over contract disputes. 41 U.S.C. 

§ 7104(b)(1) (“[A] contractor may bring an action directly on the claim in the United States 

Court of Federal Claims, notwithstanding any contract provision, regulation, or rule of law to the 

contrary.”); § 7101(7) (“The term ‘contractor’ means a party to a Federal Government contract 

other than the Federal Government.”).15

Although the CDA expressly provides that contracts for “the procurement of . . . real 

property in being” fall outside its applicability, the “act of entering into a lease” does not fall 

within that exclusion. CanPro Inv. Ltd. v. United States, 120 Fed. Cl. 17, 21 (2015) (citing 

Forman v. United States, 767 F.2d 875, 879 (Fed. Cir. 1985)). The CDA therefore provides this 

court with jurisdiction over disputes related to leaseholds.16 Id. (citing Forman, 767 F.2d at 

879). The court’s “authority to adjudicate CDA leasehold disputes encompasses the authority to 

grant nonmonetary relief in appropriate circumstances.” Id.

To present a claim under the CDA, a contractor must satisfy two requirements. First, the 

contractor must present a timely written claim to the contracting officer for a decision. 41 U.S.C. 

§ 7103(a); Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1264-65 (Fed. Cir. 1999)

(noting additionally that the contractor must “specifically assert entitlement to the relief 

sought”). Second, the contracting officer must issue a final decision. Id. at 1267.

The lease at issue in this case specifically provides that it is subject to the CDA. (JX 1E

at 19.) The claims pertain to a newly created leasehold interest, and the plaintiff has satisfied the

two CDA requirements. Westdale presented four certified written claims to the contracting 

officer and all four were denied by the contracting officer in final decisions. Accordingly, the 

Court has jurisdiction over Westdale’s claims under the Tucker Act and the CDA.

15 The Court’s power to reform a contract extends to cases arising under the CDA. See, e.g., 

Roseburg Lumber Co. v. Madigan, 978 F.2d 660, 665 (Fed. Cir. 1992) (considering reformation 

in a case governed by the CDA); Lakeshore Eng’g Servs., Inc. v. United States, 110 Fed. Cl. 230 

(2013), aff’d, 748 F.3d 1341 (Fed. Cir. 2014) (same).

16 The Federal Circuit has distinguished between leaseholds that are newly created and those 

acquired by other means, noting that only newly created leaseholds fall within the CDA’s 

purview. Forman, 767 F.2d at 879 (“‘Acquisition of’ a lease is not the same thing as ‘entering 

into’ a lease. . . . A leasehold does not exist until a lease is entered into, and by entering into a 

lease the Government does not acquire a pre-existing interest in the land; it establishes a new

one. Thus, the . . . language excluding contracts to procure ‘real property in being’ fails to apply 

to newly-created lease agreements, and they fall within the purview of that statute and of the 

corresponding provisions of the Contract Disputes Act.”).
21

III. DISCUSSION17

The Court is tasked with interpreting the tax-adjustment provision of the lease. “Leases 

are normally considered within the realm of contracts.” Forman, 767 F.2d at 879 n.4. The lease 

is thus subject to general principles of contract interpretation as equally applicable to the federal

government as they are to a private party. Mobil Oil Expl. & Producing Se., Inc. v. United 

States, 530 U.S. 604, 607 (2000) (“‘When the United States enters into contract relations, its 

rights and duties therein are governed generally by the law applicable to contracts between 

private individuals.’” (quoting United States v. Winstar Corp., 518 U.S. 839, 895 (1996) 

(plurality opinion)). While “federal law, rather than state law, governs the interpretation of 

leases with the United States government,” when federal law is not dispositive “courts should 

look to ‘general property and contract law principles as they are embodied in state law

pronouncements.’” See California Oregon Broad., Inc. v. United States, 74 Fed. Cl. 394, 399 

(citing Prudential Ins. Co. of Am. v. United States, 801 F.2d 1295, 1298 (Fed. Cir. 1986) and 

quoting Ginsburg v. Austin, 968 F.2d 1198, 1200 (Fed. Cir. 1992)).

The interpretation of a contract is a matter of law. Ragard v. United States, 439 F.3d 

1378, 1380 (Fed. Cir. 2006), cert. denied, 549 U.S. 819 (2006). A court begins its legal analysis 

with the contract’s text, first examining “the plain meaning of its express terms.” Barron 

Bancshares, Inc. v. United States, 366 F.3d 1360, 1375 (Fed. Cir. 2004) (citing Textron Def. Sys. 

v. Widnall, 143 F.3d 1465, 1468 (Fed. Cir. 1998)).

Two doctrines of interpretation guide the Court’s initial analysis. First, under the “plain 

meaning” rule, “[i]f the terms of a contract are clear and unambiguous, they must be given their 

plain meaning—extrinsic evidence is inadmissible to interpret them.” Id. (citing McAbee 

Constr., Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir. 1996)). A contract provision is 

ambiguous only “if susceptible to more than one reasonable meaning.” Id. at 1375-76 (citing 

Edward R. Marden Corp. v. United States, 803 F.2d 701, 705 (Fed. Cir. 1986)). Second, under 

the parol evidence rule, if the parties have adopted a written text as an expression of their final 

understanding of the agreement between them, a court may not consider extrinsic evidence to 

add or otherwise modify the terms of the written agreement. Id. at 1375.

Under these doctrines, if a court finds a contract to be unambiguous, the plain meaning 

and parol evidence rules bar consideration of evidence outside the four corners of the contract 

and require the Court to enforce the contract as written. See Coast Fed. Bank, FSB v. United 

States, 323 F.3d 1035, 1040-41 (Fed. Cir. 2003) (en banc) (“When the contractual language is 

unambiguous on its face, our inquiry ends and the plain language of the [a]greement controls.”). 

If a contract’s terms are ambiguous, a court is afforded latitude in interpreting the

contract and may consider extrinsic evidence to assist in understanding and interpreting the 

agreement. See TEG-Paradigm Env’t, Inc. v. United States, 465 F.3d 1329, 1338 (Fed. Cir. 

17 The Court’s discussion includes further findings of fact as well as legal conclusions based 

on the facts as found.
22

2006) (“When a provision in a contract is susceptible to more than one reasonable interpretation, 

it is ambiguous, and we may then resort to extrinsic evidence to resolve the ambiguity.” (internal 

citation omitted)).

Additionally, the parol evidence rule may be overcome by evidence of “‘fraud, duress, 

mutual mistake, or something of the kind.’” Nicholson v. United States, 29 Fed. Cl. 180, 193 

(1993) (quoting Williston & Lord, A Treatise on the Law of Contracts § 631 (3d ed. 1961)). In 

these circumstances, courts may find that even an unambiguous contract will not be enforced as 

written. A finding of unilateral or mutual mistake, for example, permits a court to consider 

evidence outside the text of the parties’ agreement.

Accordingly, the Court first considers whether the terms of paragraph 15 of the lease are 

ambiguous. Finding that the terms are unambiguous, the Court next determines whether the 

parties committed a mutual mistake in drafting the lease and, if so, whether reformation of the 

lease to conform to the intent of the original contracting parties is appropriate.

A. Ambiguity

The Court begins its analysis by considering whether the tax-adjustment provision in

paragraph 15 of the lease is ambiguous.

1. Parties’ Arguments

Westdale argues that “none of the provisions in the Lease relating to real estate tax 

adjustment are ambiguous.” (ECF 139 at 31.) The plain text of the lease establishes in 

paragraph 15 a tax base of $133,045. (JX 1A at 3.) That figure is not ambiguous—the lease 

establishes a specific tax base, and the number $133,045 is subject to but a single interpretation. 

The government was tasked with preparing a lease that incorporated the agreement of the parties

and drafted the original lease. (JX 1B at 13.) Westdale argues that, based on the plain text of the 

lease, the Court should find the lease to be unambiguous and, under the parol evidence rule, 

should exclude all evidence outside the four corners of the lease and the documents it 

incorporates.

GSA argues that the lease must be reformed because the terms are ambiguous. It argues 

that the law of the case establishes ambiguity. In denying the parties’ cross-motions for 

summary judgment, Senior Judge Smith held that “genuine issues of fact remain regarding the 

intent of the parties at the time of contracting.” (ECF 62.) According to the defendant, this 

earlier conclusion establishes that the lease is ambiguous. The defendant also cites two general 

principles of contract interpretation to argue that the lease is ambiguous.

First, the defendant points to the law of patent ambiguity. “‘[A] contract is subject to a 

patent ambiguity if it contains facially inconsistent provisions that would place a reasonable 

contractor on notice and prompt the contractor to rectify the inconsistency by inquiring of the 

appropriate parties.’” Input/Output Tech., Inc. v. United States, 44 Fed. Cl. 65, 72 (1997)

(quoting Nielsen-Gillingham Builders, J.V. v. United States, 43 Fed. Cl. 5, 11 (1999)). “When a 

federal government contract contains a patent ambiguity[,] that is, one which is so plain or 
23

glaring that it is unreasonable for a contractor not to discover and inquire about it, the patent 

ambiguity doctrine imposes a duty on the contractor to inquire about the true meaning of the 

ambiguity before submitting a bid [, and] a failure to do so results in the ambiguity being 

construed against the contractor.” 13 A.L.R. Fed. 2d 261 (2006). The defendant thus argues that 

the Court should construe the lease against Griffin Partners and, by extension, Westdale, for 

failure to discover the patent ambiguity.

Second, the defendant raises the issue of latent ambiguity. A contract may be considered 

latently ambiguous if it is “‘reasonably susceptible of more than one interpretation.’” Hills 

Materials Co. v. Rice, 982 F.2d 514, 516 (Fed. Cir. 1992) (quoting Edward R. Marden Corp., 

803 F.2d at 705). “An ambiguity exists where the terms of the contract ‘could suggest more than 

one meaning when viewed objectively by a reasonably intelligent person who has examined the 

context of the entire integrated agreement and who is cognizant of the customs, practice, usages 

and terminology as generally understood in the particular trade or business.”’ Law Debenture 

Trust Co. of New York v. Maverick Tube Corp., 595 F.3d 458, 466 (2d Cir. 2009) (quoting Int’l

Multifoods Corp. v. Com. Union Ins.Co., 309 F.3d 76, 83 (2d Cir. 2002)).

2. The Lease is Unambiguous

Paragraph 15 of the lease is unambiguous as written. The law of the case does not 

establish ambiguity in the lease. In denying the parties’ cross-motions for summary judgment,

Senior Judge Smith entered a short order in which he noted that “genuine issues of material fact 

remain regarding the intent of the parties at the time of contracting.” (ECF 62.) That order 

includes no findings about the merits of the case or the ambiguity of the lease’s tax-adjustment 

provision. The law of the case doctrine “comes into play only with respect to issues previously 

determined.” Quern v. Jordan, 440 U.S. 332, 347 n.18 (1979) (citation omitted). While Senior 

Judge Smith’s finding may be read to suggest that the court would entertain testimony outside 

the four corners of the lease to determine the parties’ intent, the defendant reads too much into 

the order denying summary judgment. Indeed, implicit in the denial of summary judgment is the 

need for additional evidence to ascertain whether the parties had committed a mutual mistake, 

which is an exception to the parol evidence rule that does not require the contract to be 

ambiguous. No explicit finding of ambiguity was made in this case, and the Court therefore 

rejects the defendant’s argument that the law of the case precludes a finding that the lease is 

unambiguous.

The tax base is not the subject of patent ambiguity. The defendant’s effort to shift blame 

to the plaintiff through the patent-ambiguity doctrine fails in the face of at least three errors the 

defendant itself made.

First, GSA drafted the lease incorrectly by including an erroneous tax base. If the Court 

were to find the contract ambiguous, the duty would remain with GSA, as the drafter, to have 

included an accurate tax base in paragraph 15. See HPI/GSA 3C, LLC v. Perry, 364 F.3d 1327, 

1334 (Fed. Cir. 2004) (“The general rule is contra proferentem, which requires ambiguities in a 

document to be resolved against the drafter.” (citing Hills Materials Co., 982 F.2d at 516)). In 

this case, a properly drafted paragraph 15 would have reflected either a negotiated amount or the

actual real-estate taxes paid by the lessor for the first tax year after the commencement of the 
24

lease. (JX 1B at 19.) While the plaintiff did not notice the incorrect tax base before executing 

the lease, SAOP is less blame-worthy for its careless proofreading than GSA, as the drafter. The 

plaintiff itself, of course, was not involved in the drafting of the lease and can bear no 

responsibility for the erroneously drafted provision.

Second, GSA paid both SAOP in 2012 and Westdale in 2013 according to the terms of 

the lease as written. (JX 41 & 43.) GSA had the opportunity to discover the alleged patent 

ambiguity in calculating its yearly tax payment to the lessor, but it did not for at least the first 

two years of the lease.

Third, GSA increased its percentage of occupancy in the building yet failed to adjust 

paragraph 15 of the lease to correct the tax base, repeating its error in Lease Amendment No. 17. 

(JX 18; Tr. 390 (Harter).)

These three instances in which GSA did not discover the alleged ambiguity show that the 

erroneous term in the lease was not so “glaring” or obvious that the lessor should have caught it; 

GSA itself failed to do so on at least three occasions. The Court will not fault the lessor for the 

error GSA made in multiple instances that could have been caught through accurate drafting and 

careful proofreading.

The defendant’s argument that the lease is latently ambiguous is also without merit. The 

figure $133,045 written into paragraph 15 of the lease is not “reasonably susceptible of more 

than one interpretation.” Hill Materials, 982 F.2d at 516. The figure itself requires no 

interpretation; it establishes a clear tax base and is incorporated into a formula for adjusting 

GSA’s yearly real-estate tax payment beyond what is already paid in the shell rent. The parties 

do not dispute the proper methodology for calculating the annual tax payment. What is in 

dispute is solely the tax base, and that number, though evidently wrong, may be interpreted in 

only one manner.

The Court finds that paragraph 15 of the lease, setting a tax base for purposes of adjusting 

GSA’s yearly real-estate tax payment, is unambiguous. In most instances, “[i]f the terms of a 

contract are clear and unambiguous, they must be given their plain meaning—extrinsic evidence 

is inadmissible to interpret them.” Barron Bancshares, 366 F.3d at 1375; 11 Williston on 

Contracts § 33:42 (4th ed. 2021) (“If there is no ambiguity in the agreement itself, the answer 

must be found from the terms of the instrument alone.”).

Any further inquiry into the parties’ intent would therefore normally be barred by the 

finding that the contract is unambiguous. In this instance, however, GSA has raised the issue of 

mutual mistake. If a party seeks reformation based on an alleged mistake, the parol evidence 

rule does not apply. 11 Williston on Contracts § 33:2 (4th ed. 2021). Under this exception, the 

Court may consider extrinsic evidence even when faced with a binding, unambiguous written 

contract to correct the parties’ mistake. Id.

The Court next considers whether the $133,045 tax base written into paragraph 15 of the 

lease was the product of a mutual mistake by the parties.
25

B. Mutual Mistake18

Rather than alleging a unilateral mistake, the defendant seeks reformation of the lease due 

to mutual mistake. (ECF 137 at 20.) The Court considers first whether the facts of this case 

support a finding of mutual mistake. Finding that the erroneous tax base written into paragraph 

15 of the lease is the product of mutual mistake, the Court then considers whether reformation 

for mutual mistake is an appropriate remedy.

1. Evidence of Mistake

The Restatement (Second) of Contracts § 155, titled “When Mistake of Both Parties as to 

Written Expression Justifies Reformation,” explains when a court may reform a contract due to 

mutual mistake:

Where a writing that evidences or embodies an agreement in whole 

or in part fails to express the agreement because of a mistake of both 

parties as to the contents or effect of the writing, the court may at 

the request of a party reform the writing to express the agreement, 

except to the extent that rights of third parties such as good faith 

purchasers for value will be unfairly affected.

Restatement (Second) of Contracts § 155. Several requirements arise from the decisions 

reflected by the Restatement’s summary of the rule governing mutual mistake.

First, as is obvious, the parties must have committed a mistake. Here, multiple witnesses 

testified at trial that the $133,045 figure written into paragraph 15 of the lease was a mistake. 

(See Tr. 189 (Moreland), 357 (Harter), & 439 (Winn).) The evidence establishes that the tax 

base set forth in the lease was not a figure either contracting party intended.

Second, for the court to reform an instrument due to mutual mistake, the parties must 

have reached an agreement on the issue for which reformation is sought that was not reflected in 

the final written document. “[R]eformation is available when the parties, having reached an 

agreement and having then attempted to reduce it to writing, fail to express it correctly in the 

writing. . . . For the rule stated in this Section to be invoked, therefore, there must have been 

some agreement between the parties prior to the writing.” Restatement (Second) of Contracts 

§ 155 cmt. a. Prior agreement is central to a finding of mutual mistake: “‘[reformation] is a 

remedy the purpose of which is to make a mistaken writing conform to antecedent expressions 

on which the parties agreed.’” Atlas Corp. v. United States, 895 F.2d 745, 750 (Fed. Cir. 1990), 

cert. denied, 498 U.S. 811 (1990) (quoting 3 Corbin on Contracts § 614 at 723 (1960)). Because 

of this requirement of prior agreement, reformation is available only when the party seeking the 

reformation can show that the non-moving party “would have agreed to the contract if worded in 

18 The plaintiff argues that any relief pursuant to the doctrine of unilateral mistake is 

unavailable to GSA. Because the defendant has not claimed a unilateral mistake, the Court does 

not consider the question of unilateral mistake.
26

accordance with the [moving party’s] intention.” Fraass Surgical Mfg. Co., Inc. v. United 

States, 571 F.2d 34, 37 (Ct. Cl. 1978).

The parties in this case came to an agreement prior to signing the lease regarding the 

methodology for adjusting the yearly real-estate taxesto be paid by GSA. The parties agreed 

that GSA would pay a portion of its real-estate taxes in its monthly shell rent. The parties also 

agreed to adjust GSA’s real-estate tax payments based on whether the amount the lessor paid in 

real-estate taxes in any given year fell above or below an established tax base. Most importantly, 

the parties agreed that the tax base would be one of two numbers. Paragraph 4.2 of the SFO, 

referenced in paragraph 15 of the lease, defined the “Real Estate Tax Base” as “the Unadjusted 

Real Estate Taxes for the first full Tax Year following the commencement of the Lease term,” or 

“[a]lternatively, the Real Estate Tax Base may be an amount negotiated by the parties that 

reflects an agreed upon base for a Fully Assessed value of the property.” (JX 1B at 19.) Thus, 

paragraph 4.2 established a tax base of either an amount negotiated by the parties or the 

unadjusted real-estate taxes paid by the lessor for the entire building for the tax year in which the 

lease began (“first-year taxes”).

The methodology described in paragraph 4.2 of the SFO demonstrates that the parties 

agreed on how to compute a tax base even if not on the precise tax base itself; in essence, the 

parties reached a shared understanding on the methodology behind selecting a tax base and 

narrowed the range of possible tax bases to two discrete options. The parties’ agreement to use 

either a negotiated amount or the first-year taxes was not, however, reflected in the lease, 

because the figure $133,045 does not correspond to either agreed-upon source for the tax base. 

The parties mistakenly failed to write into paragraph 15 a tax base that conformed to their chosen 

methodology.

Ultimately, a court looks to the “objective circumstances surrounding execution of the 

contract,” not subjective intent, to ascertain whether the parties held a belief not in accord with 

the facts. 27 Williston on Contracts § 70.13 (4th ed.). Regardless of each party’s subjective 

intent, the parties in this case established objective criteria for establishing the tax base, but the 

criteria were not used in writing the tax base into the lease. The parties were thus mutually 

mistaken in each of their respective beliefs that the lease they signed—containing a $133,045 tax 

base—would accomplish their shared goal of ensuring GSA pays only its proportional share of 

the building’s real-estate taxes.

2. Good-Faith Purchaser

Westdale argues that the lease cannot be reformed against a good-faith purchaser for 

value. It argues that “there was no evidence at trial that Westdale was anything other than a 

good faith purchaser for value, with no notice of any ‘mistake’ affecting the considerations to be 

paid under the Lease,” and that “[t]he reformation the Government requests” is thus “not 

available against Westdale.” (ECF 138 at 18.)

A good-faith (or “bona fide”) purchaser “is one who purchases legal title to property in 

good faith for valuable consideration, without notice of any other claim of interest in the 

property.” Rhone Poulenc Agro, S.A. v. DeKalb Genetics Corp., 284 F.3d 1323, 1329 (Fed. Cir. 
27

2002) (citations omitted), cert denied sub nom. Monsanto Co. v. Bayer CropScience, S.A., 

593 U.S. 957 (2003); see also Boon v. Chiles, 35 U.S. (10 Pet.) 177, 210 (1836) (explaining that 

an innocent purchaser “has put himself in peril by purchasing a title, and paying a valuable 

consideration, without notice of any defect in it, or adverse claim to it”).

Westdale meets the definition of a good-faith purchaser for value. Westdale purchased 

Northwest Center in 2013 by special warranty deed. Jt. Stip. ¶ 12. Westdale’s purchase included 

the leases in the building. Id. ¶ 13. Westdale bought the building intending to obtain an incomestream from the commercial-office leases in place and was unaware of any dispute over the realestate tax base or the impact of an erroneous tax base on the income-stream it had purchased. Tr. 

36, 53, 98-99 (Allen). Indeed, as noted above, at the time Westdale acquired the Northwest 

Center, not even GSA was aware of the error in paragraph 15 of the lease, so there was no 

current dispute of which Westdale could have been aware. Westdale therefore took title to the 

Northwest Center as a good-faith purchaser without notice of any defect in the lease.

The law limits a court’s ability to reform a contract due to mutual mistake: a contract may 

be reformed for mutual mistake “except to the extent that rights of third parties such as good 

faith purchasers for value will be unfairly affected.” Restatement (Second) of Contracts § 155. 

Comment f to the Restatement elaborates that “[t]he claim of a mistaken party to reformation, 

being equitable in its origin, is subject to the rights of good faith purchasers for value and other 

third parties who have similarly relied on the finality of a consensual transaction in which they 

have acquired an interest in property.” Id. at cmt. f. The protection of the good-faith-purchaser 

doctrine extends not only to the purchase of property but to a purchaser who is assigned leases as 

part of its purchase. See Nash Finch Co. v. Rubloff Hastings, LLC, 341 F.3d 846, 850 (8th Cir. 

2003) (refusing to reform a lease against a good-faith purchaser despite the mutual mistake of the 

original parties to the lease because the purchaser “was unaware of the mistake contained in the 

leases and was therefore a bona-fide purchaser of the leasehold interest”).

The rights of a good-faith purchaser for value are often the concern of state property 

law.19 In this case, the Northwest Center is in Texas. Texas law establishes that while “‘[e]quity 

will grant relief by way of reformation if the circumstances otherwise warrant an exercise of its 

power,’” there is no entitlement “‘to equitable relief against a bona fide purchaser . . . and [the 

party seeking reformation] has the burden of showing that [the alleged bona-fide purchaser] does 

not enjoy that status.’” Newport Oil Co. v. Lamb, 352 S.W.2d 861, 863 (Tex. App. 1962) 

(quoting Miles v. Martin, 321 S.W.2d 62, 67 (Tex. 1959)). Texas law requires that the good19 While federal law governs the interpretation of leases with the federal government, courts 

may also consider state law for general property- and contract-law principles. See California 

Oregon Broad., Inc., 74 Fed. Cl. at 399 (noting that while “federal law, rather than state law, 

governs the interpretation of leases with the United States government,” when federal law is not 

dispositive “courts should look to ‘general property and contract law principles as they are 

embodied in state law pronouncements’” (citing Prudential Ins. Co. of Am. v. United States, 

801 F.2d 1295, 1298 (Fed. Cir. 1986) and quoting Ginsburg v. Austin, 968 F.2d 1198, 1200 (Fed. 

Cir. 1992))).
28

faith purchaser receive a warranty deed, as opposed to an instrument such as a quitclaim deed, 

and that the purchaser lack notice of the mutual mistake prior to purchase to avoid reformation of 

the contract. See Miles, 321 S.W.2d at 68-69. Other jurisdictions impose similar notice 

requirements on good-faith purchasers to avoid reformation. See, e.g., United States v. LaRosa, 

765 F.2d 693, 697 (7th Cir. 1985) (citing Boon v. Chiles, 35 U.S. (10 Pet.) at 210) (“The courts 

have held that if a purchaser has actual notice of particular facts which are sufficient to put a 

reasonably prudent person on duty of inquiry, then the purchaser will be charged with the 

knowledge that such inquiry, reasonably prosecuted, would have revealed.”).

Although Westdale meets the definition of a good-faith purchaser, the Court finds that 

Westdale’s status as a good-faith purchaser does not preclude reformation in this case. The 

good-faith purchaser exception applies only insofar as the rights of a purchaser are “unfairly 

affected.” Restatement (Second) of Contracts § 155. While Westdale’s anticipated incomestream would be reduced were the Court to establish a tax base greater than $133,045, the 

reduction in income alone is not ipso facto unfair. Westdale would, as the government argues, 

receive a windfall if GSA paid more than its proportional share of the building’s taxes because 

its shell rent was calculated using the estimate of $726,629 for the real-estate taxes. To reform 

the contract to establish a more reasonable tax base certainly will adversely affect Westdale’s 

income under the lease, but the Court’s efforts to arrive at an equitable outcome should not 

impose an unfair or undue burden on either party. A failure to reform the lease would impose 

undue hardship on the defendant, and Westdale has not presented sufficient evidence for the 

Court to conclude that any reformation of the lease would be so unfair as to bar such relief

entirely.

Because the Court has concluded that a mutual mistake occurred and that the good-faith 

purchaser doctrine does not bar reformation so long as the Court’s intended reformation does not 

unduly burden the plaintiff, the Court next considers whether and how the lease may be reformed 

due to mutual mistake. 

3. Reformation for Mutual Mistake

Contract reformation due to mutual mistake is a matter of equity.20 “The purpose of 

proving a mistake is to correct what has become an erroneous situation. Equity will act to bring 

20 The plaintiff in its briefing makes an “unclean hands” argument, asserting that the 

government has “unclean hands” in (1) using the lessor’s real-estate tax estimate on GSA Form 

1217 in paragraph 15 without disclosing that the estimate would become the tax base; (2) failing 

to read the lease before certifying to Westdale that the lease was in full force and effect and 

approving payment; (3) failing to issue a final decision before withholding rent payments; and 

(4) failing to conduct appropriate due diligence in denying Westdale’s certified claims. (ECF 

138 at 19-21.)
29

an erroneous writing into conformity with the true agreement. The equitable maxim—equity 

regards that as done which ought to be done—deals generously to correct mistakes.” 

27 Williston on Contracts § 70:17 (4th ed. 2021).

This court’s general equitable power is traditionally quite limited. See, e.g., Nicholson, 

29 Fed. Cl. at 185 (“This Court . . . does not have general equitable jurisdiction in matters of 

contracts.” (emphasis in original)). Reformation for mutual mistake is an exception to this 

general limitation. The Federal Circuit has established that this court may reform a contract for 

mutual mistake. See, e.g., Am. Emps. Ins. Co. v. United States, 812 F.2d 700, 705 (Fed. Cir. 

1987) (“Reformation is . . . available as an equitable remedy when the parties to a contract have 

made a mutual mistake of fact.” (citation omitted)).

In National Australia Bank, the Federal Circuit explained the relevant four-part test for 

reforming a contract due to mutual mistake:

Reformation of a written agreement on the ground of mutual mistake 

is an extraordinary remedy, and is available only upon presentation 

of satisfactory proof of four elements:

(1) the parties to the contract were mistaken in their belief regarding

a fact;

(2) that mistaken belief constituted a basic assumption underlying 

the contract;

(3) the mistake had a material effect on the bargain; and

(4) the contract did not put the risk of the mistake on the party 

seeking reformation.

Nat. Australia Bank v. United States, 452 F.3d 1321, 1330 (Fed. Cir. 2006) (citing Atlas, 

895 F.2d at 750); accord Bank of Guam v. United States, 578 F.3d 1318 (Fed. Cir. 2009) (setting 

out same four-part test), cert. denied, 561 U.S. 1006 (2010); Lakeshore Eng’g Servs., Inc. v. 

United States, 110 Fed. Cl. 230 (2013), aff’d, 748 F.3d 1341 (Fed. Cir. 2014) (same).

The equitable doctrine of “unclean hands” prevents reformation in favor of a party that has 

acted improperly, i.e., with “unclean hands.” In this case, however, the doctrine would not 

impose a bar on the Court’s use of its equitable power to reform the lease. A finding of “unclean 

hands” requires unconscionable conduct, and “a plaintiff is required to show that the defendant 

has engaged in particularly egregious conduct which would change the equities significantly in 

plaintiff’s favor.” Sedarevic v. Advanced Med. Optics, Inc., 532 F.3d 1352, 1361 (Fed. Cir. 

2008) (internal quotation omitted). The plaintiff has not made such a showing here. GSA may 

have been inept in failing to exercise care in drafting the lease and in issuing erroneous payments 

according to its terms, but the lease reflects a mistake, not a knowing or reckless effort by GSA 

to injure any party.
30

The standard of review for assessing whether reformation is appropriate is clear and 

convincing evidence. Nat. Australia Bank, 452 F.3d at 1329. “[R]eformation will not be 

granted, unless the proof of mistake be ‘of the clearest and most satisfactory character.’” 

Philippine Sugar Ests. Dev. Co. v. Gov’t of Philippine Islands, 247 U.S. 385, 391 (1918) 

(quoting Snell v. Atlantic Fire & Marine Ins. Co., 98 U.S. 85, 89 (1878)). “Reformation of a 

written contract is an ‘extraordinary remedy.’ . . . It is generally only available on a showing by 

clear and convincing evidence that the intent of the parties is not expressed by the written 

instrument, which is to say that the parties both made the same mistake of fact.” Woodies 

Holdings, L.L.C. v. United States, 143 Fed. Cl. 485, 496 (2019) (quoting Nat. Australia Bank, 

452 F.3d at 1329).

The mutual mistake made by the parties satisfies the four factors of the test in National 

Australia Bank. Regarding the first prong, GSA and Griffin Partners “were mistaken in their 

belief” that they were signing an agreement with a tax base that would accurately adjust GSA’s 

yearly tax payment to ensure GSA pays only its proportional share of the building’s real-estate 

taxes. Nat. Australia Bank, 452 F.3d at 1329. Regarding the second prong, that mistaken belief 

regarding the tax base “constituted a basic assumption underlying the contract.” Id. Third, the 

mistaken figure of $133,045 in paragraph 15 “had a material effect on the bargain.” Id. The tax 

base of $133,045 written into the lease is significantly lower than what the lessor pays in annual 

real-estate taxes for the building, yet GSA pays real-estate taxes as part of its shell rent based on 

a tax estimate of $726,629. The difference between the two figures results in substantially 

higher payments to the lessor by GSA than either party intended.

The fourth factor requires that the “contract did not put the risk of the mistake on the 

party seeking reformation.” Nat. Australia Bank, 452 F.3d at 1329; see also Roseburg Lumber 

Co., 978 F.2d at 668-69. The Court finds that GSA satisfies this factor, as well. “A party bears 

the risk of mistake when 1) the risk is allocated to it by agreement of the parties; 2) it is aware, at 

the time the contract is made, that it has only limited knowledge with respect to the facts to 

which the mistake relates, but treats its limited knowledge as sufficient; or 3) the risk is allocated 

to it by the court on the ground that it is reasonable in the circumstances to do so.” Northrop 

Grumman Corp. v. United States, 47 Fed. Cl. 20, 55 (2000).

The lease between SAOP and GSA did not place the risk of mistake on GSA. No 

agreement between the parties allocating the risk of a mistake to GSA is reflected in the text of 

the lease. Additionally, GSA had substantial knowledge of the lease’s contents and cannot be 

said to have “limited knowledge” with respect to the relevant facts: the lease was a form lease of 

which SFO Paragraph 4.2 was a standard provision, and GSA drafted its terms. GSA did not 

enter its negotiations with Griffin Partners with such limited knowledge of the facts that its 

ignorance merits imputing some of the risk to the defendant. GSA’s agents knew the terms of 

the lease and had familiarity with the tax-adjustment clause but mistakenly included an incorrect 

tax base in paragraph 15 when it drafted the lease.

As set forth by the test in Northrop Grumman, a court may also allocate risk “on the 

ground that it is reasonable in the circumstances to do so.” Id. The Court finds that this case 

does not present such circumstances. Courts have been inclined to allocate risk in a handful of 

specific scenarios. For example, a court may allocate risk to a contractor when a fixed-price 
31

contract is involved. See id. at 55-56 (citing cases noting that “fixed-price contracts shift the risk 

to the contractor”). Similarly, a court may find a land-sale contract allocates risk to a buyer 

when the property is sold “as is.” See, e.g., Knieper v. United States, 38 Fed. Cl. 128, 140 (1997) 

(citing Morris v. United States, 33 Fed. Cl. 733 (1995)).

The doctrine of contra proferentem may also present an instance in which a court may

allocate risk to the drafter of a contract.21 Yet contra proferentem does not apply to the case 

before the Court. First, the rule “is applied only where there is a genuine ambiguity and where, 

after examining the entire contract, the relation of the parties and the circumstances under which 

they executed the contract, the ambiguity remains unresolved.” Gardiner, Kamya & Assocs, 

P.C. v. Jackson, 467 F.3d 1348, 1352 (Fed. Cir. 2006) (internal quotation omitted). The Court 

has already found the tax-adjustment clause of the lease to be unambiguous. Second, the rule is 

intended to serve as a last resort and is inapplicable if “the intention of the parties . . . otherwise 

appears.” Id. (citation omitted). Here, paragraph 4.2 provides evidence of the parties’ intent to 

use either a negotiated amount or the first-year taxes as the tax base; there is no need to construe 

the lease against GSA as a last-resort.

Finally, GSA’s failure to draft the lease correctly or to proofread it with care does not 

necessarily present appropriate circumstances under which the Court would allocate risk to GSA. 

See Fraass Surgical, 571 F.2d at 37-38 (noting that “failure to read a contract before signing it 

does not necessarily foreclose reformation”). Indeed, Griffin Partners also failed to read the 

lease and catch the mistake in paragraph 15.

There are no explicit agreements allocating the risk of a mistake to GSA and no other 

grounds that would make it reasonable for the Court to find that the risk of mistake remained 

with GSA. GSA has satisfied the four-part test for seeking reformation of an agreement due to 

mutual mistake according to National Australia Bank.

Because the Court has found that the parties made a mutual mistake in establishing an 

erroneous tax base in paragraph 15 of the lease, and because the four-part test for reformation in 

National Australia Bank is met under the facts of this case, reformation of the lease is the 

appropriate and equitable remedy.

C. Court’s Reformation

The Court must determine an appropriate tax base to insert into paragraph 15 of the lease 

to replace the $133,045 tax base that was the product of mutual mistake between the original 

contracting parties. Reformation serves to remedy “mistakes in expression, as in the case of . . . 

the inclusion of a term not agreed upon or the incorrect reduction of a term to writing.” Gen. 

Dynamics Corp. v. United States, 47 Fed. Cl. 514, 529 (2000) (citing E. Allan Farnsworth, 

Contracts, Sec. 7.5 at 468 (1982)). “‘The purpose and function of the reformation of a contract is 

21 Contra proferentem is a doctrine of interpretation that “requires ambiguities in a contract 

to be resolved against the drafter.” HPI/GSA 3C, LLC, 364 F.3d at 1334.
32

to make it reflect the true agreement of the parties on which there was a meeting of the minds.’” 

Atlas, 895 F.2d at 750 (quoting Am. President Lines v. United States, 821 F.2d 1571, 1582 (Fed. 

Cir. 1987)).

The parties dispute the appropriate reformation. The defendant asserts that the “figure in 

paragraph 15, $133,045, should have been $726,629.” (ECF 137 at 22, citing Tr. 440 (Winn).) 

The defendant therefore argues that “this Court should reform paragraph 15’s real estate tax base 

to reflect $726,629. No other reformation is needed. Such a reformation accomplishes the intent 

of the parties.” (Id. at 22-23.) Westdale disputes that reformation is warranted, arguing that the 

lease is unambiguous and asserting the good-faith-purchaser defense to reformation. In the event 

that the Court concludes that reformation is appropriate, however, Westdale argues that “the 

Lease itself establishes the tax base as the first lease year (i.e., the real estate taxes due for either 

the 2012 tax year or for the period of January 11, 2012 - January 10, 2013).” (ECF 138 at 22.) 

Westdale also argues that because it was not privy to the original lease and did not negotiate or 

draft the lease’s terms, it would be prejudiced if the tax base were reformed to $726,629. The 

defendant responds that it already pays real-estate taxes pursuant to the $726,629 tax estimate for 

the building derived from GSA Form 1217 and that the $541,020.95 figure Westdale proposes 

“would fail to fairly adjust the amount of taxes GSA pays annually.” (ECF 137 at 23.)

The Court finds that the most equitable result would be to reform paragraph 15 of the 

lease to substitute for the erroneous tax base in paragraph 15 of the lease a tax base that reflects 

the agreement the parties actually came to: if the lease did not reflect a negotiated amount for the 

tax base, then the tax base would be the amount of real-estate taxes levied for the first tax year 

after the lease began.

Paragraph 4.2 of the SFO, referenced in paragraph 15 of the lease, defined the “Real 

Estate Tax Base” as “the Unadjusted Real Estate Taxes for the first full Tax Year following the 

commencement of the Lease term,” or “[a]lternatively, the Real Estate Tax Base may be an 

amount negotiated by the parties that reflects an agreed upon base for a Fully Assessed value of 

the property.” (JX 1B at 19.)

The evidence establishes that the parties did not negotiate a specific real-estate tax base. 

Mr. Moreland agreed with the statement that he “didn’t negotiate [the $133,045 figure]” and that 

the figure “was just . . . in the document that GSA provided.” (Tr. 138, 205 (Moreland).) Ms. 

Winn’s testimony did not contradict Mr. Moreland’s assertion, which stands uncontradicted. 

(See Tr. 402-51 (Winn).) The Court finds Mr. Moreland’s uncontradicted testimony regarding 

the lack of negotiation to be credible and consistent with the evidence.

Paragraph 4.2 of the SFO, which the defendant itself prepared and included as a term in 

the lease, instructs that if the parties do not negotiate the tax base, the default rule is that the realestate tax base will be the unadjusted first-year taxes following the commencement of the lease 

term. In this case, the first tax year after the commencement of the lease on January 11, 2012, 

was tax year 2012. Bexar County assessed SAOP $541,020.95 in 2012. (JX 78.) The plaintiff’s 

argument that the first-year taxes should form the real-estate tax base is premised upon a 

methodology to which both GSA and the former lessor agreed and is based on the default tax 

base established by the lease should the parties not negotiate a different tax base.
33

In considering whether Westdale’s rights would be unfairly affected by the Court’s 

chosen reformation, the Court notes the relevant burden on each party.

The injury to GSA from the adoption of a tax base of $541,020.95 is the imposition of 

covering more than its share of the building’s real-estate taxes. The Court recognizes that 

establishing a tax base below $726,629, the figure used to calculate the portion of real-estate 

taxes the government pays as part of its shell rent, imposes on the defendant the responsibility to 

pay more than its pro rata share of real-estate taxes on the building. If Griffin Partners had not 

sold the building to Westdale and had it remained the owner and current lessor, the Court would 

not hesitate to rule for the government and reform the contract to reflect a tax base of $726,629. 

As between the original contracting parties, using the $726,629 figure as the tax base produces 

the most equitable outcome to ensure GSA pays only its pro rata share of the building’s annual 

real-estate taxes. That result would also reflect that both GSA and Griffin Partners were each in 

a position to have been able to discover and avoid the mistake in the lease at the time they agreed 

to its terms.

That is not the case before the Court. Griffin Partners sold the building and its leases to 

Westdale, which acquired the GSA lease without knowledge of any defects or mistakes in that 

document. Westdale purchased the building with the understanding that it would receive a 

particular income-stream. Due to the mutual mistake made by the original contracting parties, 

Westdale is not receiving the full benefit of the bargain from its purchase, despite reliance on 

estoppel certificates received from both GSA and SAOP and knowledge that GSA had initially 

paid real-estate taxes according to the express terms of paragraph 15 of the lease. As between 

GSA and Westdale, only GSA had the opportunity to catch and fix the error before Westdale, an 

innocent third party, purchased the property in reliance on the income-stream the building 

generated. To reform the contract to reflect the $726,629 estimate used to calculate GSA’s shell 

rent would unduly burden Westdale, an innocent third-party, good-faith purchaser. In contrast, 

the harm of reforming the contract to reflect the $541,020.95 figure is less onerous on the 

plaintiff and reduces the windfall Westdale would receive if GSA paid according to the express 

terms of the lease.

Reformation “‘is a remedy the purpose of which is to make a mistaken writing conform 

to antecedent expressions on which the parties agreed.’” Atlas Corp., 895 F.2d at 750 (quoting 3 

Corbin on Contracts § 614 at 723 (1960)). This prior-agreement element requires that the party 

seeking reformation show that the non-moving party “would have agreed to the contract if 

worded in accordance with the [moving party’s] intention.” Fraass Surgical Mfg., 571 F.2d at 

37. The Court cannot speculate as to what Westdale would have agreed to had it been in the 

shoes of Griffin Partners at the time of contracting. Westdale may well have assented to the use 

of either a negotiated amount or the first-year taxes, which were the standard criteria included in 

GSA’s form SFO. Regardless, the parties agree that the lease itself provides for tax adjustment 

and that “the Government shall pay its share of any increases and shall receive its share of any 

decreases in the Real Estate Taxes for the Property.” Jt. Stip. ¶ 9. Westdale has thus

acknowledged that under the lease GSA is meant to pay only its pro rata share of the real-estate 

taxes. Adhering to the methodology established by paragraph 4.2 reflects the intent of Mr. 

Moreland, the agent of SAOP who negotiated the original lease, to establish the first-year taxes 

as the tax base. Reformation is thus in line with the aim that Westdale already accepted. The 
34

Court’s reformation of the lease to reflect the $541,020.95 figure also aligns with the reformation 

Westdale itself proposed if the Court found reformation warranted.

Accordingly, the Court reforms the contract to substitute a tax base of $541,020.95 for 

the tax base of $133,045 written into paragraph 15 of the lease. The reformed tax base is 

calculated based on the real-estate taxes for the first year of the lease, as the original contracting 

parties agreed to in their incorporation of paragraph 4.2 of the SFO into the lease. No other 

reformation is needed to remedy the mutual mistake of an erroneous tax base or to produce an 

equitable result.

IV. CONCLUSION

The issue in this case involves a single figure: a real-estate tax base written into a lease as 

“$133,045.” Although the figure itself is not on its face ambiguous, several witnesses testified 

that the tax base as written is a mistake. The Court finds that this mistake was mutual, made by 

both GSA and the former lessor. The Court finds reformation of the lease to be necessary due to 

mutual mistake and reforms the lease to reflect a tax base of $541,020.95, the taxes assessed for 

the building for the first year after the lease began. This reformed tax base acknowledges the 

prior agreement between the original contracting parties to use either a negotiated tax base or the 

first-year taxes, and also acknowledges the aim of the tax-adjustment clause, which was to 

ensure GSA pays only its proportional share of the building’s real-estate taxes. It also 

accommodates Westdale’s status as a good-faith purchaser for value.

Paragraph 15 of the lease between GSA and Westdale, reflected at JX 1A at 3, is 

REFORMED to substitute a tax base of $541,020.95 for the incorrect figure of $133,045. 22

The Court will issue a separate order in accordance with this memorandum opinion to

establish a schedule for further proceedings.

s/ Richard A. Hertling

Richard A. Hertling

Judge

22 As noted above, the Court has detected minor inaccuracies in the plaintiff’s calculation of 

the amount allegedly due from GSA. Due to these deviations from the Court’s own calculations, 

the Court in a separate order directs the parties to confer and propose to the Court the correct 

amount of damages due to the plaintiff under the newly supplied tax base.