Court Opinion

ID: 4194062
Source: CourtListenerOpinion
Date Created: 2017-08-08 15:00:08.131434+00
Date Added: 2024-06-11T14:39:54.262674
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                   )
                                               )
Benjamin Medina                                )    ASBCA No. 60289
                                               )
Under Contract No. DACA63-5-12-0384            )

APPEARANCE FOR THE APPELLANT:                       Mr. Benjamin Medina

APPEARANCES FOR THE GOVERNMENT:                     Thomas H. Gourlay, Jr., Esq.
                                                     Engineer Chief Trial Attorney
                                                    Arthur B. Archambeau, Esq.
                                                     Engineer Trial Attorney
                                                     U.S. Army Engineer District, Fort Worth

               OPINION BY ADMINISTRATIVE JUDGE WOODROW

        This case involves a leasehold contract between appellant, Benjamin Medina (the
lessor), and the U.S. Army Corps of Engineers (Corps or government) for a residence
located in Cypress, Texas, as a part of the U.S. Army Family Housing Program. In his
claim, Mr. Medina alleges entitlement to $9,200.00 on Contract No. DACA63-5-12-0384
for restoration of the leased premises after the expiration of the lease term. Mr. Medina
timely appeals from a contracting officer's final decision awarding him a payment of
$1,528.32. In his appeal, Mr. Medina seeks reimbursement of$7,671.68, the balance of his
$9,200.00 claim for damages. After filing this appeal, Mr. Medina made a request for so-
called "quantum meruit" damages, relating to financial strain caused by Army payment
delays, diminution in property value, and his personal time spent in trying to collect
reparations from the government.

       The parties elected to proceed without an evidentiary hearing, via Board Rule 11,
with each side relying upon the Rule 4 file and its supplements and submitting opening
and reply briefs in accordance with an agreed-upon schedule. For the reasons set forth
below, we conclude that Mr. Medina has not met his burden of demonstrating entitlement
to additional damages and, accordingly, deny the appeal.

                                FINDINGS OF FACT

I. The Lease Agreement

       1. On 27 March 2012, the U.S. Government entered into Lease No. DACA63-5-12-0384
with appellant for a residence located in Cypress, Texas, as part of the U.S. Army Family
Housing Program to provide leased housing for military families. The lease was for an initial
one-year term that commenced on 1 April 2012. The government had the right to renew the
lease from year to year or for a lesser period of time so long as notice of renewal was provided
at least 30 days prior to expiration of the current term. (R4, tab 5 at 1)

         2. On 3 April 2012, Mr. Medina and a government representative conducted an
initial Joint Survey and Inspection of Condition of Government Leased Property. The
initial survey was signed by Mr. Medina and the government's representative. (R4, tab 13)

       3. On 19 February 2013, the parties renewed the lease for an additional year, from
1 April 2013 until 31 March 2014 (R4, tab 6). On 13 February 2014, the parties renewed
the lease for a third year, from 1 April 2014 until 31March2015 (R4, tab 7). On 27 June
2014, the parties executed a supplemental lease agreement that adjusted the amount of
rent (R4, tab 8).

     4. The lease contains several terms pertinent to this appeal. Paragraph 14 of the lease,
"DISPUTES," states the lease is subject to the Contract Disputes Act of 1978 (R4, tab 5 at 4).

       5. Paragraph 13, "RESTORATION," provides that a "final joint inspection and
condition report shall be conducted" upon vacating the premises, and that "the lessor may
require restoration of the demised premises, when damage beyond normal wear and tear
exists" (R4, tab 5 at 3). Pursuant to paragraph 13.B. of the lease, the government's
obligation to pay for restoration is subject to the following exclusions:

              The Government shall not restore, either physically or by
              payment in lieu thereof: 1) reasonable and ordinary wear and
              tear, 2) damage by acts of God, 3) any alterations, damage
              thereto, which the Lessors installed and were reimbursed by
              the Government through payment therefore, or 4) the interior
              paint of the demised premises, when the Government has
              possessed the leased premises for three or more years prior to
              the date of termination.

(Id.)

        6. The lease also contains an indemnification clause, as follows:

               5. INDEMNIFICATION.

                      A. The Lessors shall not be responsible or liable for
              injuries to persons or damage to property when such injuries
              or damage are caused by or result from the Government's use

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              of the premises under the terms of this agreement and are not
              due to the negligence of the Lessors.

(R4, tab 5 at 3)

II. Termination of the Lease and Final Inspection

       7. On 23 February 2015, the government sent a letter terminating the lease
effective 24 April 2015 (R4, tab 12). Effectively, the lease was extended an additional
24 days and thus the total duration of the lease term was slightly longer than 3 years,
from 1 April 2012 to 24 April 2015.

        8. On 27 April 2015, Mr. Medina, the service member tenant, and the Corps'
representative conducted an exit survey (R4, tab 13). The exit survey was recorded on
the same document as the initial survey, and included columns to indicate the initial and
final condition of each room's components. The survey also included a space for general
comments regarding the home's condition. Both parties signed the exit survey, which
stated that "[w]e, the undersigned, jointly made a survey and inspection of the condition
of the property mentioned above. We agree that as of the date of survey, the condition of
the property is as described herein." (Id. at 11)

       9. During the exit survey, the Corps' representative took photos of the property which
represented the condition of the property after the tenant vacated the premises (R4, tab 14 ).

        10. On 14 May 2015, Mr. Medina submitted a request for reimbursement of
$9,200.00 (R4, tab 10). Mr. Medina's request listed 31 items that allegedly needed
repair, and included cost estimates for each item (R4, tab 11 ).

       11. On 26 May 2015, the government completed its own Independent
Government Estimate (IGE) for the cost of the itemized repairs for which Mr. Medina
was seeking reimbursement (R4, tab 9). In a declaration, the contracting officer
explained, on an item-by-item basis, his justification for providing reimbursement in the
amount of $1,528.32 (gov't br., tab B).

III. Repairs Completed by Appellant

       12. Mr. Medina made three payments to Mr. Carlos Azua, from 30 April 2015
through 8 May 2015, for "reparations and painting" in a total amount of $7,500 (app. supp.
R4, tab 5 at 2-4). Mr. Medina's evidence of these payments includes two cleared checks
and an invoice from the vendor (app. supp. R4, tab 4 at 2). According to Mr. Medina, there
were "hundreds of holes (some baseball size holes) to all the walls in the house" (app.
supp. R4, cover ltr. at 1). Mr. Medina maintains that "most of the $7,500 invoice [from

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Mr. Azua] was for repairs and preparation for painting" (app. supp. R4, tab 3 at 1).
However, the $7,500 invoice contained general descriptions of the work completed and did
not assign dollar figures to any specific item (app. supp. R4, tab 4 at 2).

       13. Mr. Medina also made a payment of $2,250 to B&D Granite and Tile for the
fabrication and installation of granite kitchen counters, which he states, "does not include
the cost of the granite" itself ( app. supp. R4, tab 4 at 1). The granite counters replaced
the existing Formica counters, which Mr. Medina claimed were damaged by the
government's tenant during the lease (app. supp. R4, tab 7).

IV. Contracting Officer's Final Decision

      14. Based on the exit inspection, the exit photos, and the IGE, the contracting officer
determined that appellant was entitled to reimbursement of $1,528.32 (R4, tab 3 at 1).

       15. On 26 June 2015, Mr. Medina wrote to the Army, rejecting the Army's offer
of reimbursement in the amount of $1,528.32 and requesting additional damages of
$7,671.68, for a total damage amount of $9,200.00. Mr. Medina also requested a formal
contracting officer's final decision. (R4, tab 10)

        16. On 11 August 2015, the real estate contracting officer (CO) issued a final
decision, which determined that appellant was entitled to reimbursement of$1,528.32 for
repairs to the demised premises (R4, tab 3). Specifically, the CO concluded that the
government was liable only for the following items: ( 1) repair of five interior doors;
(2) repair stairway paneling; (3) repair staircase banister; (4) repair baseboards; (5) repair
hole in garage wall; and (6) prepare the home to be painted (id. at 2-3).

      17. On 9 October 2015, Mr. Medina filed this timely appeal seeking
reimbursement of $7,671.68, the balance of his $9,200.00 claim for damages (R4, tab 2).

       18. While the appeal was pending, in a letter dated 29 January 2016, Mr. Medina
submitted a request for additional discovery and a "Quantum Meruit Request" asking the
Board to consider additional payments due to:

             •   Financial strained [sic] caused by the ARMY due to
                 payment delays

             •   Selling of my property at lower price due to financial
                 strain. Reduced price by $24,000

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             •   Amount of time invested on my part in order to collect
                 reparations from the ARMY

(App. supp. R4, tab 5)

        19. Both parties elected to proceed without an evidentiary hearing, via Board
Rule 11, with each side relying upon the Rule 4 file and its supplements and submitting
briefs in accordance with an agreed-upon schedule.

                                        DECISION

I.     The Board Lacks Jurisdiction to Entertain Appellant's Quantum Meruit Claims

       After filing this appeal, Mr. Medina made a request for so-called quantum meruit
damages, relating to financial strain, diminution in property value, and his personal time
spent in trying to collect reparations from the government. Because this request was not
presented to the CO as a part of Mr. Medina's claim, we lack jurisdiction to entertain it.

        Submission of a claim to the CO is a prerequisite to our jurisdiction. E.g., Northrop
Grumman Computing Sys., Inc. v. United States, 709 F.3d 1107, 1111-12 (Fed. Cir. 2013)
(valid claim a jurisdictional prerequisite for legal action). Although Mr. Medina's claim to
the CO was for damage to his house, that claim did not put the CO on notice that there would
be an additional request for quantum meruit damages allegedly due to financial strain,
diminution in value, or personal time. As we held recently, "[a]lthough we generally allow
some modification of a claim amount to reflect better information as litigation progresses,
this tolerance for adjustment to the amount of damages does not extend to a case .. .in which
an entire category of damages is first presented in the final brief on the merits of the appeal."
Monica Walker, ASBCA No. 60436, 16-1BCA~36,452 at 177,656 (citations omitted).

       A claim is "new" if it is not "based on a common or related set of operative facts."
See Placeway Constr. Corp. v. United States, 920 F.2d 903, 907 (Fed. Cir. 1990). In this
appeal, Mr. Medina's claim for quantum meruit damages would require us to consider a host
of new facts, such as Mr. Medina's personal finances, the amount of Mr. Medina's personal
time spent on restoration, and the condition of the local real estate market. None of these
facts were presented to the CO as a part of Mr. Medina's claim, nor are they in the record
before us. See Unconventional Concepts, Inc., ASBCA No. 56065 et al., 10-1 BCA ~ 34,340
at 169,591; see also Santa Fe Engineers, Inc. v. United States, 818 F.2d 856, 859-60 (Fed.
Cir. 1987) ("unrelated problems" to original claims on same contract not properly before the
Board). Therefore, we do not possess jurisdiction to consider Mr. Medina's post-appeal
request for quantum meruit damages.

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II.    Mr. Medina is Not Entitled to Compensation for Interior Painting

       Mr. Medina seeks $7,500 in costs associated with painting the interior of the
house. In support of reimbursement of these costs, Mr. Medina contends that the
contract's indemnification clause requires the government to reimburse appellant for cost
of re-painting the house. (App. supp. R4, tab 7)*

       Relying on the contract's indemnification clause at paragraph 5 of the lease,
appellant contends that the "hundreds of nails and staples on walls and doors (tape damage)
and damage to the kitchen counters are 'damage to property ... caused by or result from
the Government's use of the premises under the terms of this agreement and are not
due to the negligence of the Lessors"' (app. supp. R4, tab 7). In response, the government
contends that its obligation to restore the premises is limited to the duties set forth in the
restoration clause in paragraph 13.B., which, among other things, specifically excludes the
duty to pay for interior painting if "the Government has possessed the leased premises for
three or more years prior to the date of termination" (gov't br. at 2-3). We agree.

       The parties do not dispute that the lease term extended for more than three years
(finding 7). We find no contradiction between the indemnification and restoration
clauses. When read together, the indemnification clause states broadly that the lessor is
not responsible for damage caused by the government tenant, while the restoration clause
more specifically states that the government only will pay to restore the property for
certain enumerated types of damage. It is settled that the contract should be interpreted
as a whole, to harmonize and give a reasonable meaning to all of its parts. Supreme
Foodservice GmbH, ASBCA No. 57884 et al., 16-1 BCA ~ 36,387 at 177,393 (citing
NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)). In the
event of an apparent conflict between specific and more general language, the more
specific language takes precedence. Morris Mechanical Enterprises, Inc., ASBCA
No. 31566, 90-1 BCA ~ 22,278 at 111,899 (citing United Pacific Insurance Company v.
United States, 497 F.2d 1402 (Ct. Cl. 1974)).

       Moreover, the indemnification clause contains an important qualification limiting
damages to those reimbursable "under the terms of this agreement" (finding 6). This
language cabins the duty of indemnification to the more specific obligations in the
restoration clause set forth in paragraph 13.B. The painting exclusion applies only when
the government has "possessed the leased premises for three or more years prior to the
date of termination" (finding 5). Here, the record demonstrates that the term of the lease

• Appellant submitted a Rule 11 filing that included additional documents that we deem
      appellant's supplemental Rule 4 file.

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exceeded three years (finding 7). Therefore, we conclude that Mr. Medina is not entitled
to compensation for interior painting.

III.   Whether Mr. Medina is Entitled to Any Other Damages

       The lease required the government to restore any damage that exceeded "ordinary
wear and tear" (R4, tab 5 at 4 ). As with any claim against the government, the party
seeking recovery must prove a causal connection between the damages alleged and the
government by a preponderance of the evidence. Mark O'Connor, ASBCA No. 56863,
10-1 BCA ii 34,329 at 169,562 (citing Servidone Construction Corp. v. United States,
931 F .2d 860, 861 (Fed. Cir. 1991)). In addition, the party seeking recovery must bring
forth evidence that damages exceed the level of ordinary wear and tear. Monica Walker,
16-1BCAii36,452 at 177,660.

        Mr. Medina seeks reimbursement for $9,200.00 in expenses, less the amount he
received from the government of $1,528.32, for a total reimbursement of $7,671.68
(finding 17). Of the claimed amount, $7,500.00 was paid to Carlos Azua Painting for
work including: ( 1) painting entire home interior; (2) exterior painting of entry way and
back door; (3) repair staining of interior handrail; (4) repainting and repairing all doors
and baseboards; and (5) repairing multiple sheetrock nail holes and staple holes
(finding 12). Mr. Medina seeks a further $1,700 for replacing the Formica kitchen
counters with granite countertops. Although Mr. Medina paid $2,250 to B&D Granite, he
seeks reimbursement of only $1, 700 of that amount for the cost of replacing the counters
less the cost of the granite itself. (Finding 13)

      With the exception of the painting costs, which we have determined to be not
recoverable, we examine each of these items below.

             A.      Interior Doors

       Mr. Medina asserts that all seventeen interior doors were damaged and needed to be
repaired. Relying on the exit inspection and photographs, the government agreed to reimburse
Mr. Medina for the cost of only five interior doors. (R4, tabs 13, 14 at 8, 11, 13-14, 26)

       Mr. Medina provided an estimate of $1,200 for repairing and painting all
seventeen interior doors and frames (R4, tab 11 ). However, his estimate did not
differentiate between the costs for repairing and painting. Moreover, Mr. Medina did not
provide any evidence - photographic or otherwise - of the nature of the damage to the
doors. Instead, the record evidence from the exit survey and photographs taken during
the survey demonstrate that most of the interior doors were in "good" condition. Indeed,
the exit survey lists the doors in only four rooms as being in "fair" rather than "good"

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condition. (R4, tab 13 at 4, 7-8, 10) This evidence is insufficient to demonstrate that the
remaining twelve interior doors were damaged in excess of reasonable wear and tear.

              B.     Formica Countertops

       The record evidence of the condition of the Formica countertops consists of the
exit survey, photographs taken during the exit survey, and Mr. Medina's statements in his
claim and subsequent correspondence (findings 8, 10). The exit survey, which
Mr. Medina signed, indicates that the kitchen cabinets were in "GOOD" condition.
Although the survey does not contain a specific line item for the countertops, Mr. Medina
made no mention of the condition of the countertops in the "COMMENT" section for the
cabinets or in the "NOTES" section at the end of the survey. (Finding 8) The few
photographs of the countertops do not clearly depict damage of any kind beyond
reasonable wear and tear (R4, tab 14 at 22-23). This evidence fails to demonstrate that
the countertops were damaged during the lease in excess of ordinary wear and tear.

              C.     Interior Wall Repairs and Painting Preparation

        In Monica Walker, we held that reimbursement for painting was precluded by the
similarly-worded restoration clause of the lease because the government tenant had
possessed the property for more than three years. See Walker, 16-1 BCA ~ 36,452
at 177 ,657. Here, the preparation of the walls prior to painting - including repairing
multiple sheetrock nail holes and staple holes - is part of the cost of painting. Indeed, the
work was accomplished by the same contractor, Carlos Azua Painting, and the contractor
made no attempt to separately bill the preparation work from the painting work.
Therefore, we conclude that Mr. Medina is not entitled to recover for the cost of
preparing the walls for repainting beyond what the CO previously awarded (finding 16).

       Accordingly, we hold that the CO's decision adequately compensated appellant
for damages to the leased property. Appellant has failed to demonstrate that the
additional costs claimed are recoverable under the contract.

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                                    CONCLUSION

      For these reasons, the appeal is denied.

      Dated: 24 July 2017

                                                 Administrative Judge
                                                 Armed Services Board
                                                 of Contract Appeals

I concur                                         I concur

RICHARD SHACKLEFORD                              OWEN C. WILSON
Administrative Judge                             Administrative Judge
Acting Chairman                                  Acting Vice Chairman
Armed Services Board                             Armed Services Board
of Contract Appeals                              of Contract Appeals

     I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 60289, Appeal of Benjamin
Medina, rendered in conformance with the Board's Charter.

      Dated:

                                                 JEFFREYD. GARDIN
                                                 Recorder, Armed Services
                                                 Board of Contract Appeals

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