Appeal of

BARBARA BEALL

LEASE AGREEMENT

PSBCA No. 6307

APPEARANCE FOR APPELLANT:
Barbara Beall

APPEARANCE FOR RESPONDENT:
Rozann M. Heininger, Esq.
St. Louis Law Office
United States Postal Service

OPINION OF THE BOARD

            Appellant, Barbara Beall, appeals a contracting officer’s final decision issued by Respondent, United States Postal Service, assessing her $585, which Respondent expended to repair lighting fixtures at a postal facility Appellant leases to Respondent.  Appellant elected the Board’s Small Claims (Expedited) Procedure, and both entitlement and quantum are at issue (April 28, 2010 Order).  The parties have submitted this appeal on the record, pursuant to 39 CFR § 955.12.[1]

FINDINGS OF FACT

            1. In 1996, Appellant’s predecessor in interest and Respondent entered into a lease for the Gilman City, Missouri Post Office. The lease has been renewed twice and will expire in 2011. Appellant succeeded to the lease in 2006. (Appeal File Tabs (AF) 3, 12).

            2. The Gilman City Post Office lease includes the following relevant provisions:

            Lessor, as part of the rental consideration, shall furnish . . . Light Fixtures . . .

Lease, ¶ 6.

            Lessor must provide light fixtures in good working order.

Lease, ¶ A.24(e).

            The Lessor shall, except as otherwise specified herein and except for damage resulting from the negligence of Postal Service agents or employees, maintain the demised premises, including the building and any and all equipment, fixtures and appurtenances, whether severable or non-severable, furnished by the Lessor under this lease, in good repair and tenantable condition. . . . Additionally, the Lessor shall designate emergency repairmen for electrical emergencies. . . and other emergencies . . . , who may be called by the Postal Service in the event of an emergency situation involving maintenance when the Lessor or the Lessor’s agent cannot be contacted within a reasonable time.

Lease, Maintenance Rider, section a.

            Whenever there is a need for maintenance or a repair which is the Lessor’s obligation under this Maintenance Rider. . ., the Postal Service shall give the Lessor written notice thereof, specifying a time for completion of the work which is reasonable and commensurate with the nature of the work required. . . . If the Lessor . . . fails to prosecute the work with such diligence as will ensure its completion within the time specified in the written notice . . . or fails to complete the work within said time, the Postal Service shall have the right to perform the work by contract or otherwise and withhold the cost thereof . . . from payments due or to become due under this Lease . . .

Lease, Maintenance Rider, section g. (AF 12).

            3. The record does not indicate, and Appellant does not assert, that emergency repairmen were designated by Appellant.

            4. On November 6, 2009, the Gilman City Postmaster notified Respondent’s Facilities Service Office that three light fixture repairs were needed at the facility. The needed repairs involved: (1) a chain in the light fixture of the lobby was broken resulting in the only light fixture in the lobby being inoperable; (2) the light fixture in the bathroom was broken and the light was inoperable; and (3) the ballast in the light fixture above the postmaster’s desk was broken and the light was inoperable. (AF 6-11; Declaration of S. Baker (Baker Decl.) ¶ 2; Declaration of S. Ott (Ott Decl.) ¶¶ 2-3).

            5. Respondent considered repair of the light fixtures to be an emergency situation as there was insufficient light to operate the post office, critically affecting the operation and safety of post office employees and customers (Baker Decl. ¶¶ 2-3; Declaration of C. Kinne (Kinne Decl.) ¶ 5).

            6. On November 6, 2009, an official at Respondent’s Facilities Service Office contacted and spoke with Appellant by telephone in the afternoon to request that the repairs be performed.[2]

            7. Also on November 6, 2009, Respondent sent Appellant by Express Mail an Emergency Notification of Repairs describing the situation as an emergency, and requesting immediate attention (AF 6; Ott Decl. ¶ 3).

            8. Appellant did not retrieve the Express Mail notification until November 14, 2009. On that date, Appellant’s husband called an official for Respondent, stated that Appellant would not perform the repairs and abruptly ended the conversation. (Ott. Decl. ¶ 4; see also AF 7).

            9. On November 17, 2009, Respondent contacted a Facility Knowledge Center, which was under contract with it to administer and manage facility repairs. Respondent requested that GPFO, LLC, which was a registered contractor with the Facility Knowledge Center, perform the light fixture repairs. Separate work orders for each of the three light fixture repairs were issued by Respondent to GPFO. (AF 8-10; Declaration of P. Boeschen (Boeschen Decl.) ¶ 3).[3]

            10. An official of Respondent prepared a government estimate of the expected repair costs, in the amount of $564.50 (Boeschen Decl. ¶ 3 and Exhibit 1 thereto).

            11. On November 18, 2009, an electrician for GPFO performed the three repairs at the Gilman City Post Office. It took the electrician four hours to perform the work, excluding travel time, and the electrician purchased $75 in materials with which to perform the repairs. (AF 4-5; Baker Decl. ¶ 3; Boeschen Decl. ¶ 3; Kinne Decl. ¶ 4).

            12. Respondent paid GPFO $585 for the repairs (Kinne Decl. ¶ 7). The payment consisted of $300 for labor (four hours at $75 per hour), $75 for materials, $150 for mobilization (two hours at $75 per hour), and three separate $20 transaction fees (AF 4-5, 8-11; Kinne Decl. ¶ 6; Boeschen Decl. ¶¶ 3-4). During the course of this litigation, Respondent’s contracting officer concluded that the $150 mobilization fee charged to and paid by Respondent was unreasonable, and that $75 for mobilization was reasonable (Kinne Decl. ¶ 8). She concluded that the remaining costs for the light fixture repairs billed to and paid by Respondent were reasonable in amount (id.).

            13. On December 2, 2009, Respondent’s contracting officer transmitted a letter to Appellant requesting reimbursement for the $585 repair costs (AF 5).

            14. On January 6, 2010, Respondent’s contracting officer issued a final decision, concluding that Appellant owed Respondent $585, and announcing that this sum would be deducted from rent otherwise due Appellant (AF 4).

            15. On January 27, 2010, Appellant transmitted a letter to the contracting officer appealing the final decision (AF 3).

DECISION

            Respondent argues that the light fixture repairs were necessary to remedy an emergency situation which was Appellant’s responsibility under the lease, and that the costs expended were reasonable.  Appellant argues that the repairs were not an emergency, that she received inadequate notice preventing her from performing at a lower cost, that two of the repairs were only necessary because of Respondent’s negligence, and that the repair costs were unreasonable.[4]

            To recover, Respondent must demonstrate that the light fixture repairs were necessary to keep them in good working order, or to maintain the facility in good repair and tenantable condition, and that Appellant breached the lease by failing to perform the repairs after being notified by Respondent of the need for repairs.  See J. Leonard Spodek, Nationwide Postal Management, PSBCA No. 4310 et al., 00-2 BCA ¶ 30,979.

            On this record, it cannot reasonably be disputed that the three light fixtures at issue were not in good working order as required by the lease.  It also cannot be disputed that their inoperable status affected suitability for the business purpose contemplated by the lease, rendering the facility not to be in good repair and tenantable condition.  (Id.; Findings 4-5).  It is also clear that Appellant is responsible for those repairs unless caused by the negligence of Respondent (Finding 2). 

            Although Appellant has alleged that Respondent was negligent in failing to replace bulbs resulting in damage to one of the fixtures, and that Respondent negligently damaged a chain on another fixture, she has not presented any evidence of such negligence.  Accordingly, in the absence of persuasive evidence that Respondent’s negligence or improper use of the light fixtures caused the need for their repair, Appellant remains responsible.  See Camden Securities Co., PSBCA Nos. 1266, 1325, 86-1 BCA ¶ 18,519.

            Appellant next argues that the notice she received was inadequate, and with adequate notice, she could have hired a less expensive electrician to perform the repairs.[5]  Appellant was notified of the need for the repairs on November 6 and again on November 14 (Findings 6-8).  On the latter date, Appellant’s husband flatly stated that Appellant would not perform the repairs (Finding 8).  Respondent was thereafter justified in performing the repairs promptly (at Appellant’s expense) to allow the post office to become fit for its intended business purpose.[6]

            Appellant’s argument that the cost of the repairs was unreasonable, however, is a closer question.  Respondent has not demonstrated that the contract under which the work orders were issued was competitively awarded, as a demonstration of the reasonableness of the costs.  Cf. J. Leonard Spodek, Wisconsin Postal Holdings, PSBCA No. 4243, 02-1 BCA ¶ 31,705 (work done through the use of a competitively awarded indefinite quantity contract establishes a prima facie case that costs incurred were reasonable). 

            While there is no evidence to rebut the reasonableness of the number of hours actually spent performing the repairs by the electrician, Appellant argues that $75 per hour is exorbitant.  On this point, Respondent presents the conclusion by the contracting officer that the amount was fair and reasonable, and a similar internal cost estimate prepared by Respondent’s architect/engineer (Findings 10, 12).  In contrast, Appellant presents unsworn double hearsay evidence (with nothing at all from potential contractors) to the effect that $35 per hour was a more reasonable cost for electricians in the area.  On balance and without more, we must conclude that Appellant has insufficiently rebutted Respondent’s sworn testimony that the $75 per hour rate that it paid was reasonable. 

            Appellant also alleges that the $75 Respondent paid for materials was unreasonable, and that $12.68 was a more reasonable expenditure.  We find in favor of Respondent in this regard for similar reasons.  Appellant next argues that two hours for mobilization was unreasonable.  However, Appellant acknowledges that some travel time reimbursement is appropriate (see Appellant’s Witness List, p. 1), and Respondent‘s contracting officer subsequently determined that only one hour of such time rather than the two hours it initially sought (and paid to GPFO) is reasonable.  We see no reason to dispute Respondent’s concession in this regard, and award Respondent only one hour ($75) for mobilization costs as reasonable.  However, the three $20 transaction fees were unexplained, and are not recoverable by Respondent.

            Accordingly, Respondent may recover $450, but not the additional $135 it claimed in the final decision.  The reasonableness of these awarded costs is supported by the higher government estimate prepared by Respondent.  See Real Properties MLP Limited Partnership, PSBCA No. 3453, 95-2 BCA ¶ 27,829 (appropriate to consider internal estimates in determination of reasonableness of repair costs). 

            Appellant’s appeal is sustained in the amount of $135 and is otherwise denied.   

Gary E. Shapiro
Administrative Judge
Board Member

[1] Respondent submitted four sworn declarations.  In her Evidence and Brief, and Witness List, Appellant provided unsworn statements from herself despite having been instructed to submit sworn evidence. (See April 28, 2010 Order).  Nonetheless, Appellant’s evidence has been considered.

[2] Although Respondent’s official testified that she was unable to speak with Appellant that day, and could not leave a message because Appellant did not have any type of answering device on her telephone, we find that the weight of the evidence is to the contrary.  Respondent’s contemporaneous letter provided that telephonic notice was provided that day and that Appellant stated that she would not perform the repairs.  Compare Ott Decl. ¶ 3 and AF 4 with AF 6 (November 6 letter).  Furthermore, three documents submitted by Appellant describe the late-afternoon telephone conversation (AF 3; Appellant’s Evidence and Brief; Appellant’s Witness List; see also Respondent’s Answer, at ¶ 1).

[3] Estimates provided by GPFO for the repair work calculated to the amount paid by Respondent, except for three $20 transaction fees.  The estimates were dated November 5, 2009.  (AF 8-10).  Neither party has explained the discrepancy in the dates.  Appellant’s Evidence and Brief, at ¶ 2, states that Appellant’s husband spoke with an unnamed employee of GPFO on an unidentified date, who told Mr. Beall that the work was completed on November 5, 2009.  The Board finds that this evidence is substantially outweighed by other evidence in the record that the work was not performed until November 18, 2009.

[4] Appellant also argues that the lease requires Respondent to pay for repairs costing less than $500, and she accuses Respondent of deliberately increasing the cost to shift responsibility to her.  The argument is baseless as the lease includes no such provision.  Notwithstanding this argument, Appellant also complains that she does not have a complete copy of the lease at issue despite its appearance in the appeal file.

[5] Appellant argues that had she been notified earlier in the day on November 6 or prior thereto, she “could have had someone in there to compete the job on the following Monday (November 9).”  (Appellant’s Witness List, p. 2).  This argument is belied by her failure to have done so then, or following her receipt of Respondent’s written notice.  Appellant has not presented any evidence of a less expensive contract or any efforts on her part to contract with a repairmen for this purpose.

[6] While the record does not indicate when the light fixtures became inoperable, and it would be a tremendous coincidence for all three fixtures simultaneously to have become inoperable, it is clear that all three inoperable lights required repair and that without working light fixtures the post office environment was untenable for customers and employees.  Given the pressing need for the repairs, the twelve-day period of notice, from November 6 when Appellant was notified by telephone to November 18 when the repairs were performed, was a reasonable period of time to have allowed Appellant to have performed the repairs regardless of whether they may be characterized as emergency in nature.  Further, even were we to find that notice was inadequate, Respondent would not be disqualified from recovering, but rather would be limited to the amount Appellant would have paid to perform the repairs.  See J. Leonard Spodek d/b/a Nationwide Postal Management, PSBCA No. 3710, 96-2 BCA ¶ 28,457.  Appellant has not presented persuasive evidence in this regard.  See infra.