Court Opinion

ID: 3066515
Source: CourtListenerOpinion
Date Created: 2015-10-15 02:04:51.412462+00
Date Added: 2024-06-11T07:38:20.706651
License: Public Domain

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
                    is not citable as precedent. It is a public record.

 United States Court of Appeals for the Federal Circuit

                                         04-1332

                                 BRUCE E. ZOELLER,

                                                 Appellant,

                                            v.

                 Les Brownlee, ACTING SECRETARY OF THE ARMY,

                                                 Appellee.

                           ___________________________

                           DECIDED: October 25, 2004
                           ___________________________

Before MICHEL, CLEVENGER, and BRYSON, Circuit Judges.

PER CURIAM.

                                       DECISION

      Bruce E. Zoeller appeals from the decision of the Armed Services Board of

Contract Appeals, ASBCA No. 54205, affirming a partial termination of his lease with

the Army. Because we agree with the Board of Contract Appeals that the Army properly

terminated Mr. Zoeller’s lease in this case, we affirm the Board’s decision.

                                     BACKGROUND

      Beginning in 1999, Mr. Zoeller leased three parcels of land from the Army at Fort

Leavenworth, Kansas, for farming purposes. The three parcels were referred to as
parcels AA, FW, and FE. The lease was to expire on December 31, 2003. By its terms,

however, the lease was “revocable at will by the Secretary [of the Army].” The contract

also provided that, in the event the lease was revoked or the leased premises were

otherwise reduced, and the premises were being used for farming purposes, “the

Lessee shall have the right to harvest, gather and remove such crops as may have

been planted or grown on said premises, or if funds are available, compensation will be

made to the Lessee for the value of the remaining crops.”

       In a letter dated February 21, 2003, Gary Dye, the Chief of the Military Branch,

Real Estate Division, Kansas City District, U.S. Army Corps of Engineers, informed Mr.

Zoeller that the Army was terminating the lease with respect to parcels FE and FW. By

letter dated May 21, 2003, Mr. Zoeller appealed the termination with respect to those

two parcels to the Armed Services Board of Contract Appeals.

       The Board construed Mr. Zoeller’s appeal to raise two issues, both relating to the

termination of the lease. First, the Board understood Mr. Zoeller to be contending that

the lease was not properly terminated because Gary Dye, the person who wrote the

letter terminating the lease, lacked authority to effect the termination. After tracing the

delegation of authority to terminate lease agreements, the Board concluded that Gary

Dye did indeed have authority to terminate the lease. Second, the Board understood

Mr. Zoeller to argue that the lease could not be terminated as to only two of the three

parcels. The Board rejected that argument because the contract specifically provided

for adjustments to be made if the leased premises were reduced. The Board found that

Mr. Zoeller had not raised a question as to his entitlement to compensation for any loss

of crops and therefore that no such claim was before the Board.

04-1332                                     2
       Following a motion for reconsideration, the Board affirmed its initial decision. In

its opinion on reconsideration, the Board addressed Mr. Zoeller’s arguments that (1) an

internal Army regulation required that the revocation of leases must be approved at the

same level of command necessary for the original determination that the property was

available for lease to private parties, and (2) that the revocation decision was not made

at the proper level of command.        The Board held that the regulation in question,

paragraph 4-4 of Army Regulation 405-80, required the same level of command for a

decision to declare particular property available for private lease as for a decision to

revoke or terminate the declaration of availability. The Board explained, however, that

the regulation did not mean that the decision to revoke a particular lease required that

same level of authority, because the revocation of a lease was different from the

revocation of the determination that particular land should be available for private

leasing. The Board further held that the regulation was an internal operating procedure

of the government designed for the benefit of the government and was not for the

benefit of the government’s contracting party. For that reason, the Board held that Mr.

Zoeller would not have been entitled to relief even if the contracting officer had failed to

comply with the requirements of the regulation.

                                      DISCUSSION

       On appeal, Mr. Zoeller contends that the Board of Contract Appeals erred in

determining that the lease agreement was properly terminated, both because Mr. Dye

lacked authority to effect the termination and because the lease could not lawfully be

terminated with respect to fewer than all three parcels. He also argues that under the

contract and the Uniform Relocation Assistance and Real Property Acquisition Policies

04-1332                                      3
Act of 1970, 84 Stat. 1894, 42 U.S.C. § 4601 et seq., he should have been given at

least 90 days notice prior to the termination of his lease. Finally, Mr. Zoeller contends

that the contracting officer erred in determining that there were no crops on the

premises, and that for that reason he was not entitled to any compensation for the

termination of the lease.

       1. Mr. Zoeller concedes that the Army was authorized to revoke the agreement

at will. He contends, however, that there was no such revocation because Mr. Dye, the

person who notified Mr. Zoeller that his lease was being terminated on parcels FE and

FW, lacked authority to revoke the lease.

       In support of his position, Mr. Zoeller argues that the decision to remove land

from the program under which Army property was leased to private parties had to be

made at the same level of command as the decision to make the property available for

such uses in the first instance. He cites paragraph 4-4(f) of Army Regulation 405-80 for

that proposition. That regulation states that “[w]hen real property under outgrant is

needed for Army purposes, the revocation/termination of availability will be approved at

the same level of command that was needed for the original DOA.”

       We agree with the Board that the level of authority needed to determine whether

land is available for lease to private parties (“outgrant”), or whether the determination of

availability should be revoked, is not the same as the level of authority needed to

terminate a specific lease. Thus, although Mr. Dye may have lacked authority to make

and revoke availability determinations with regard to the land, he was authorized to

terminate Mr. Zoeller’s lease. Deciding whether to revoke a particular lease is a more

specific action than deciding whether particular land should be made available for

04-1332                                      4
private use or deciding whether the determination of availability should be revoked.

Moreover, the Board correctly ruled that Army Regulation 405-80 is designed for

internal regulatory purposes and is not intended to protect the Army’s contracting

partners. For that reason, the Board was correct to hold that Mr. Zoeller cannot obtain

any relief even if the Army violated the requirements of that regulation with respect to

the level of authority for availability determinations. See American Farm Lines v. Black

Ball Freight Serv., 397 U.S. 532, 538-39 (1970); Freightliner Corp. v. Caldera, 225 F.3d

1361, 1365 (Fed. Cir. 2000) (“In order for a private contractor to bring suit against the

Government for violation of a regulation, that regulation must exist for the benefit of the

private contractor.”). Mr. Zoeller’s rights were defined by the terms of the lease, which

provided that the lease could be revoked at will. Furthermore, as the Board held, the

specific authority to revoke the lease was delegated to Mr. Dye. Mr. Zoeller therefore

cannot complain that the revocation was unauthorized and invoke the lack of authority

to overturn the revocation.

      2.   With respect to Mr. Zoeller’s argument that the Army could not properly

terminate the lease as to only two of the three parcels, we agree with the Board that

paragraph 11 of the lease clearly contemplated a partial revocation when it referred to

cases in which the Army “materially reduces the lease area” prior to the expiration date

of the lease. Paragraph 11 specifically explains what would happen in the event that

the Army revoked the lease or otherwise materially reduced the leased area, which

indicates that the Army was authorized to take action having either effect.

      3.   Mr. Zoeller asserts that the government breached the contract and the

Uniform Relocation Act by failing to provide him with sufficient notice to enable him to

04-1332                                     5
remove his crops from the premises. The government responds by arguing that Mr.

Zoeller did not raise that issue before the Board of Contract Appeals and therefore

those arguments are not properly before us. After reviewing the materials that Mr.

Zoeller submitted to the Board of Contract Appeals, we agree with the government that

Mr. Zoeller failed to raise that argument before the Board and therefore has waived his

argument that the government failed to provide him with sufficient notice prior to the

termination of his lease.

       4. Finally, Mr. Zoeller contends that the Army breached the contract by

destroying the bare root stock that remained on the land without providing him with

compensation. Specifically, he alleges that the plants growing on parcels FE and FW

were perennials and that the “root stock” of those plants had significant value. Because

the contract provided that he would be compensated for the loss of crops remaining on

the premises if funds were available, he contends that the Army erred when it

determined that there were no crops on the premises.

       In response, the government argues that Mr. Zoeller failed to raise this issue

before the Board and has therefore waived it for purpose of this appeal. The Board held

that the issue of compensation for plants on the leased property was not before it. That

finding is supported by the record, which contains a memorandum of a telephone

conference call between the parties and a Board staff attorney on June 6, 2003. In the

memorandum, the staff attorney noted that the only issue before the Board was the

propriety of the partial termination of the lease. The memorandum further noted that

“the contractor’s submitting a monetary claim to the contracting officer, in an amount

certain for his losses, was discussed. Once final decision is issued, appellant may

04-1332                                    6
choose to file an additional appeal to the Board in the event the claim is denied.” In light

of the staff attorney’s memorandum, we sustain the Board’s finding that the issue of

compensation for the loss of the root stock on parcels FE and FW was not before the

Board in this appeal and therefore is not properly before this court, even though Mr.

Zoeller referred to the issue of compensation in some of the materials he submitted to

the Board.

04-1332                                      7