Case Name: THE REVIEW COMPANY v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1970-05-15
Citations: 192 Ct. Cl. 259
Docket Number: No. 429-65
Parties: THE REVIEW COMPANY v. THE UNITED STATES
Judges: Before CoweN, Chief Judge, Laramore, Durfee, Davis, ColliNS, SkeltoN and Nichols, Judges.
Reporter: United States Court of Claims Reports
Volume: 192
Pages: 259–272

Head Matter:
425 F. 2d 1227
THE REVIEW COMPANY v. THE UNITED STATES
[No. 429-65.
Decided May 15, 1970]
Harold L. Winston, attorney of record, for plaintiff.
James E. Glubh, with whom was Assistant Attorney General BMro Kaslvma, for defendant.
Before CoweN, Chief Judge, Laramore, Durfee, Davis, ColliNS, SkeltoN and Nichols, Judges.

Opinion:
Per Curiam:
This case was referred to Trial Commissioner Louis Spector with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 57 (a) [since September 1, 1969, Rule 134(b)]. Tbe commissioner bas done so in an opinion and report filed on July 7,1969. Exceptions to tbe commissioner's opinion, findings of fact and recommended conclusion of law were filed by plaintiff and tbe case bas been submitted to tbe court on oral argument of counsel and tbe briefs of tbe parties. Since tbe court agrees witb tbe commissioner's opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby adopts tbe same as tbe basis for its judgment in this case. Therefore, plaintiff is not entitled to recover and tbe petition is dismissed.
OPINION OP COMMISSIONER
Spector, Commissioner: This is an action to recover the sum of $17,522. It is characterized by plaintiff in an earlier cross-motion for summary judgment as a suit "for the use and occupation of real property owned by the plaintiff to the virtual exclusion of the plaintiff therefrom in such a manner as to work an undue and severe hardship on plaintiff and unjust enrichment to defendant, amounting to an implied agreement to pay rent and entitling plaintiff to just compensation under the Fifth Amendment to the Constitution of the United States."
Defendant's motion for summary judgment, and the aforementioned cross-motion were denied by this court May 18, 1968, and the case remanded to the trial commissioner "for trial or other further proceedings." Following a pretrial conference, the case was tried in New York City on October 21, 1968, and the material facts developed at that trial are set forth in appropriate detail in the findings of fact. They aré summarized here solely to provide narrative support for this opinion.
Prior to July 17, 1961, defendant owned an 18-acre tract of land in Nassau and Queens Counties, New York, on which were located essentially three large industrial buildings, connected by covered passageways. They are 'hereinafter referred to as Buildings Nos. 4, 5 and 6. From July 1, 1958 until June 30, 1961, the General Bronze Corporation occupied the entire property under lease from defendant, for the purpose of performing a defense production contract. The plant was in actual operation at least through May 1961, and General Bronze employed a substantial quantity of machinery and other personalty owned by the United States Air Force, along with its own equipment and personalty, in the performance of the aforementioned contract.
At some unspecified time prior to April 10,1961, General Bronze decided not to renew its lease following its scheduled expiration on June 30, 1961, and defendant acting through the General Services Administration issued an invitation soliciting bids for the purchase or lease of the property. Plaintiff's bid to purchase in the amount of $600,000 was dated and opened April 10,1961. After further negotiations, plaintiff increased its bid to $650,000 by letter of April 27, 1961, and the latter bid was accepted May 17, 1961.
The above described invitation, bid and acceptance constitute the entire agreement of sale between the parties, as specifically provided in the invitation, which further provided that "[n]o oral statements or representations made by, for, or ostensibly on behalf of either party shall be a part of such contract There is, in any event, no evidence of any oral statement or representation offered as varying the written agreement.
Section B, paragraph 9, of the Invitation for bids, is the contract provision around which this lawsuit revolves. It provides:
9. In the event Government-owned items of personal property or equipment not included in the Invitation are located on the premises, the General Services Administration reserves the right to remove the same or to 'hold sales thereof, at the location, together with the right of ingress and egress therefor, for a period of 120 days after closing of title. Any such removal or in-place sale will be conducted in such a manner as to cause the least possible interference with the successful bidder's use and occupancy of the premises.
Plaintiff, in effect, seeks to recover on either of two theories, as follows:
(1) That the Government breached its covenant that "such removal or in-place sale will be conducted in such a manner as to cause the least possible interference with the successful bidder's use and occupancy of the premises."
(2) That, in any event, the Government had a common-law or implied obligation to pay plaintiff the reasonable rental value of the premises, for the period July 17 (the date of closing of title) to August 25,1961 (the date by which all of defendant's property had been removed).
In other words, the plaintiff charges that even though removal of all Government-owned personal property and equipment was effected within only 39 of the 120 days reserved in the contract for that purpose, either the taking of any time at all after closing of title, or the maimer in Which the "removal or in-place sale" was conducted, constituted more than "the least possible interference" with plaintiff's use and occupancy of the premises.
There is no basis for this theory of relief in the record. The phrase "least possible interference," although stated in superlatives, must be read, as all such phrases are read, against the background facts in this particular case, and it must be measured against the concept of what was reasonable in these circumstances.
When plaintiff submitted a bid for 'the purchase of the property, and examined the premises as the invitation required, the plant was in actual operation under a lease to General Bronze, a lease not due to expire until June 30, 1961. It was occupied with literally thousands of individual items of personalty and equipment. The invitation which was part of the contract of sale, reserved a right to remove that property or to hold sales thereof, with right of ingress and egress, for a period of 120 days after the closing of title. Since closing actually occurred on July 17, 1961, the Government's reserved right therefore extended until the middle of November 1961. Complete removal of the Government's property by August 26, 1961, considered solely from the standpoint of time consumed, could hardly be deemed a violation of the promise to cause the "least possible interference" with plaintiff's use and occupancy. The latter's insistence that the premises should have been cleared on or prior to the date of closing is entirely without foundation, and it treats the reservation of a period of 120 days thereafter in paragraph 9 of the Invitation above quoted, as if it did not exist.
Nor was the Trimmer of removal or in-place sale, a violation of the promise to cause the "least possible interference." Assuming that the time factor, and the manner of removal, are somewhat interrelated, it is necessary to observe at the outset that the process of disposing of Government-owned equipment and other personalty is governed by law and regulation, and that it involves interdepartmental clearances, public sale in response to invitation for bids, donation to public and parochial schools of items not sold, and the usual volume of paperwork.
In this case, unusual steps were taken to. assure that these procedures caused the least possible interference. Some of the procedures were initiated by the Government and its lessee General Bronze as early as February 1961, by the completion of inventory forms. The forms set forth a description of each item, its cost and condition, and a declaration that it was surplus to the needs of General Bronze.
The forms then had to be processed through an Air Force quality control representative, who had to visit the plant, inspect the equipment for proper working condition, and determine its possible usefulness on other Air Force projects. Next, everything had to be catalogued and "screened"- for possible use by other agencies within the Department of Defense, a process which often- takes up to 90 days. Only then could shipping instructions be issued. Whenever feasible, papers were hand-carried and the telephone was employed rather than the mails, in order to expedite the removal procedures.
Four days before closing of title (by July 13, 1961), all equipment owned by defendant had been removed from Buildings Nos. 5 and 6, and these buildings were available for use and occupancy by plaintiff on the date of closing. There remained in Building No. 4 on the date of closing about 5.0 pieces of heavy machinery, some weighing as much as 90 tons. Smaller items, such as desks and chairs, were also collected and stored in Building No. 4 on that date.
Concentration of all remaining property in Building No. 4 was a sound procedure because the heavy equipment was already there, and because it was the only building equipped with an office and telephone. These facilities were essential to the proper protection and disposition of the property by sale, donation, or otherwise. Sale of smaller items in response to an invitation for bids was completed on July 24, 1961, and removal by purchasers was required by July 28, 1961.
Moving of the heavy equipment required preparation by an expert rigging contractor, and the successful bidder began its work early in June. 1961. In accordance with specifications, each machine was disassembled, cleaned, sprayed with preservative, and shrouded. Large and heavy parts were placed on. wooden platforms or skids, and related smaller parts were wrapped, boxed and attacked to the skids. After the skids were placed on trailers, they had to be blocked to prevent shifting and damage in transit. All of this was a time-consuming and delicate task, and the testimony indicates that it would consume, with necessary Air Force inspection, from 15 to 21 work days to prepare a 90-ton machine for transport.
Plaintiff's witnesses testified that, when Building No. 4 was cleared, property was then moved through the passageway to Building No, 5, through that building, through the passageway to Building No. 6 and then loaded from a platform serving Building No. 6, thus depriving plaintiff of the use of any of the buildings until Building No. 4 had been emptied. But a clear preponderance of the evidence indicates otherwise. Building No. 4 was a hangar-type structure, and trucks could be and were driven directly through its large doors, the property loaded directly thereon, and directly removed, without disturbing Buildings Nos. 5 and 6.
On this issue of "least possible interference," and not for the purpose of demonstrating damages, if any, plaintiff was permitted to introduce evidence relating to alleged frustration of its special plans for the property. A witness testified that there existed but a single meter for each utility serving all three buildings, making it impossible for plaintiff to find 'an industrial lessee for less than the entire premises. But at the date of trial, approximately six separate lessees were occupying various parts of the premises simultaneously, indicating that the meter problem was not insurmountable. Moreover, on September 11,1961, plaintiff did rent a portion of the premises to General Motors Corporation under a lease providing that the lessee "shall pay for its consumption of electricity and water on a metered basis." When it is remembered that the defendant had reserved the right to remove its property or to hold sales thereof, with the right of ingress and egress, for a period of 120 days or until mid-November 1961, plaintiff could hardly have formulated reliable plans to lease the premises prior thereto, although it actually did.
In summary, Buildings Nos. 5 and 6 were available to plaintiff on the day of closing, and the remaining Building No. 4 was made available 39 days thereafter. On the basis of these facts, and the manner of removal above described, it is found that defendant caused the least possible interference with plaintiff's use and occupancy of the premises.
This conclusion and the foregoing facts also negate plaintiff's second theory that there was created an implied obligation on the part of defendant to pay rent from and after the date of closing. There is no mention of rent in defendant's express reservation of a right in the contract to remove its property for a period of 120 days after closing. Nor can such an obligation be reasonably implied from the wording selected, nor the circumstances which 'actually transpired.
For all of the foregoing reasons, it is concluded that plaintiff is not entitled to recover and that its petition should be dismissed.
FINDINGS or Fact
1. Prior to July 17, 1961, defendant was the owner of an 18.15-acre tract of land in Nassau and Queens Counties, State of New York. There are located thereon a number of hangar-type, industrial buildings known as Nos. 3, 3A, 4, 5 and 6. Buildings Nos. 3, 3A and 4 are actually joined together as one building and will be hereinafter referred to as "Building No. 4." Building No. 4 contains about 100,000 square feet, while Nos. 5 and 6 contain about 25,000 and 31,000 square feet, respectively. The three buildings are located in a row, about 150 feet apart, and are connected by covered passageways about 14 feet wide and 15 feet high.
2. From July 1,1958, until June 30,1961, General Bronze Corporation occupied the property under lease from defendant for the purpose of performing a defense production contract with defendant. The plant was in actual operation at least through May 1961.
3. In order to perform its contract General Bronze had on the leased property in addition to its own equipment, substantial amounts of machinery and other personalty which belonged to the United States Air Force. The total comprised thousands of pieces.
4. At some unspecified time prior to April 10,1961, General Bronze decided not to renew its lease after its scheduled expiration on June 30,1961. Defendant, through its General Services Administration, thereupon issued an invitation soliciting bids for the purchase or lease of the property.
5. In response to defendant's invitation for bids, plaintiff, a partnership consisting of Jack Steinhaus, Aaron L. Giten-stein and Kermit Gitenstein, submitted a bid dated and opened April 10, 1961, in the amount of $600,000.
6. After further negotiations, plaintiff increased its bid to $650,000 by letter dated April 27,1961. The increased bid was accepted on May 17,1961.
7. Section A of the Invitation for bids (Instructions to Bidders) requires in paragraph 5 that each bid must be accompanied by a 10 percent deposit subject to forfeiture should the successful bidder fail to consummate the transaction within 60 days of notification of acceptance.
8. Accordingly, the transaction was consummated by conveyance of title of the property to plaintiff on July 17,1961.
9. Section B (General Terms and Conditions for Sale or Lease) of the Invitation for bids, contains the following paragraph:
9. In the event Government-owned items of personal property or equipment not included in the Invitation are located on the premises, the General Services Administration reserves the right to remove the same or to hold sales thereof, at the location, together with the right of ingress and egress therefor, for a period of 120 days after closing of title. Any such removal or in-place sale will be conducted in such a manner as to cause the least possible interference with the successful bidder's use and occupancy of the premises.
This Section B of the Invitation for bids (General Terms and Conditions for Sale or Lease) also states in paragraph 5 that:
The foregoing Invitation, with all instructions, terms and conditions set forth herein, and the Bid, when accepted by the Government, shall constitute an agreement for sale or lease between the successful bidder and the Government. Such agreement shall constitute the whole contract, to be succeeded only by the formal instruments of conveyance or lease, unless modified in writing and signed by both, parties. No oral statements or representations made by, for, or ostensibly on behalf of either party shall be a part of such contract .
10. Section A of the Invitation for bids (Instructions to Bidders) provides as follows:
. *
2. All bids submitted shall be deemed to have been made with full knowledge of all the terms, conditions, and requirements herein contained.
3. The premises are now subject to inspection by prospective bidders. You are urged to inspect the property before submitting your bid.
11. The process of disposing of Government-owned equipment and other personalty is governed by law and regulation, involves interdepartmental clearances, public sale in response to invitations for bids, donation to public and parochial schools of items not sold, and a considerable amount of paper work. Some of these procedures were initiated as early as February 1961 when General Bronze began the process of completing Government-supplied inventory forms for the Air Force machinery and equipment on the premises. These forms included a description, the cost and condition of each item, and a declaration that they were surplus to the needs of General Bronze.
12. The forms were then hand-carried to a representative of the New York Air Procurement District, U.S. Air Force, who was stationed at the General Bronze plant. His responsibilities included processing the forms through the New York District Office. Instead of forwarding the inventory forms by mail as was customary, the representative in this case would generally telephone the district office to secure further processing. It included examination of the items by a quality control representative, who would come to the plant to inspect them for proper working condition, and to determine the feasibility of their further use on some other Air Force project.
13. After inspection, papers relating to a particular item were transmitted to the Property Disposal Officer of the Procurement District, who in turn forwarded them to a "screening activity." This activity catalogued the equipment for check by other Air Force installations, and by the Army anil Navy, to ascertain whether the item could be used elsewhere in the Department of Defense. The papers for the bulk of the Air Force equipment which had been used by General Bronze, were forwarded to the disposal officer in the latter part of May 1961.
14. Until completion of this screening process, which often takes up to 90 days for materials of the type here involved, shipping instructions for ultimate disposal of the Air Force property could not issue. Defendant expedited the screening process by such means as increased reliance on telephone rather than mail communication.
15. By July 13, 1961, 4 days before conveyance of title of the real property to plaintiff, all equipment owned by defendant had been removed from Buildings Nos. 5 and 6. There remained at the date of closing about 50 pieces of heavy machinery in Building No. 4, including items weighing as much as 90 tons. Smaller items owned by defendant, such as desks and chairs, were also stored in Building No. 4 at the date of closing. The smaller items were assembled in Building No. 4 because it was the only one equipped with an office and telephone needed for proper protection and disposition of such equipment, and because the larger items described above were already there.
16. An employee of General Bronze remained at the site after that firm vacated the premises and was in charge of preparing equipment, other than heavy machinery, for removal from Building No. 4. Together with two other General Bronze employees, he assisted in the loading of such equipment.
17. Smaller items determined not to be needed by the Government were donated to public or private schools, or sold at the site in response to an invitation for bids on July 24, 1961. Bemoval by purchasers was required by July 28, 1961.
18. Moving of the heavy machinery required the services of an expert rigging contractor. Under the direction of the Air Force, General Bronze accepted a bid from the James A. McEwan Corporation to prepare the heavy equipment.
19. At the beginning of June 1961, the McEwan Corporation began preparing the heavy equipment in Building No. 4 for removal. Because of its size, weight, and delicacy, rigging of this heavy equipment and machinery for transportation was a laborious and time-consuming task. Each machine was disassembled, cleaned, sprayed with preservative, and shrouded. Large and heavy parts were placed on wooden platforms or skids, and related smaller parts were wrapped, boxed, and attached to the skids. After the skids were placed on trailers, they had to be blocked and protected to prevent fibifti-ng or damage during travel. Mr. McEwan testified that it would require 15 to 21 work days to prepare a 90-ton machine for transport.
Since the rigging work had to be accomplished in accordance with detailed Air Force specifications, a quality control representative of the Air Force was stationed on the premises to verify compliance with those specifications. Such verification consumed some time, and required McEwan Corporation to interrupt its operations at various checkpoints in the preparation process.
20. By August 25, 1961, 39 days after transfer of title of the real property to plaintiff, no further personal property of defendant remained on the premises.
21. The presence on the premises of Government-owned property in diminishing quantity for this 39-day period from July 17 (the date of closing of title) to August 25, 1961, forms the basis for this action. Plaintiff claims it is entitled to recovery on either of two theories, as follows:
(1) That the Government breached its covenant that "such removal or in-place sale will be conducted in such a manner as to cause the least possible interference with the successful bidder's use and occupancy of the premises."
(2) That, in any event, the Government had a common-law or implied obligation to pay plaintiff the reasonable rental value of the premises, for the period July 17 to August 25.
22. Defendant, under Rule 6.4 of this court [since September 1, 1969, Rule 101], filed a motion for summary judgment on July 13, 1967. Plaintiff thereafter filed a similar cross-motion. By order of March 18, 1968, following oral argument, the court denied both motions and remanded the case to the trial commissioner "for trial or other further proceedings."
23. At pretrial conference held May 29,1968, it was agreed that the facts to be developed at a trial or other further proceedings, related to the phrase "least possible interference" in the contract, but without prejudice to plaintiff's right to urge its interpretation that the contract as a whole carried an implied obligation on the part of the Government to pay rent during the period reserved in the contract for removal by the Government of its property.
It was further agreed that plaintiff would be privileged to introduce evidence on alleged interference with plaintiff's proposed plans for the property, not on the issue of damages, but solely as such evidence might bear upon the phrase "least possible interference."
24. Plaintiff's witnesses at the trial held October 21,1968, were two of the three partners comprising plaintiff company. They 'testified that, with the exception of one 90-ton machine, all the heavy equipment and smaller items were moved from Building No. 4, through the passageway to Building-No. 5, across Building No. 5 through the passageway to Building No. 6, and then loaded from a platform serving Building No. 6. This procedure, they testified, deprived them of the opportunity to lease any of the three buildings separately, prior to removal of all property by August 25, 1961.
The clear weight of the evidence, however, establishes that all of the Government property (which had been stored in Building No. 4 by July 13, 1961, prior to closing) was removed directly from that hangar-type building by driving vehicles through its large doors, and loading items directly on the vehicles.
. 25. One of plaintiff's witnesses also testified that there existed but one meter for each utility serving all three buildings, and that the presence of the Government property after July 17, 1961 (the date of closing), made it impossible for plaintiff to find lessees for less than the entire premises. However, the evidence shows, and it is found, that on September 11,1961, plaintiff rented a portion of the premises to General Motors Corporation, and that lease expressly provided that the lessee "shall pay for its consumption of electricity and water on a metered basis." In view of this fact, 'and the fact that approximately six separate lessees were occupying various parts of the premises simultaneously at the date of trial, it is further concluded that the diminishing presence of Government property from July 17 through August 25,1961, did not in and of itself prevent plaintiff from leasing portions of the property during that period.
Ultimate Findings
26. Removal of the defendant's personal property or equipment within 39 days of the 120 days after closing of title reserved for that purpose in the contract, and the manner of removal or in-place sale, caused the least possible interference with plaintiff's use and occupancy of the premises.
27. Plaintiff has sustained no damages attributable to acts or omissions of the defendant in derogation of plaintiff's contract rights.
CONCLUSION OF LAW
Upon the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover and the petition is dismissed.
Cf. Chain Belt Co. v. United States, 127 Ct. Cl. 38, 115 F. Supp. 701 (1953).