February 19, 2013

Appeal of

TEMESCAL PLAZA, LLC

LEASE AGREEMENT

PSBCA No. 6437

APPEARANCES FOR APPELLANT:
Mark S. Askanas, Esq.
Dylan B. Carp, Esq.
Conor J. Dale, Esq.

APPEARANCE FOR RESPONDENT:
Rozann M. Heininger, Esq. 

OPINION OF THE BOARD
ON RESPONDENT’S MOTION TO DISMISS

Respondent, United States Postal Service, moves to dismiss the appeal of Appellant, Temescal Plaza, LLC, for lack of jurisdiction.  We grant the motion in part and deny it in part.

FACTUAL BACKGROUND

Effective July 24, 2000, Appellant's predecessor-in-interest leased land within the Temescal Plaza Shopping Center in Oakland, California to Respondent for a twenty-year term with four five-year renewal options (Appeal File Tab (AF) 2 (Ground Lease and Addendum, hereafter the "Ground Lease")).  Under the Ground Lease, Respondent was responsible to prepare plans and specifications for construction of a post office, and to use its best efforts to match the construction design with the remainder of the Temescal Plaza Shopping Center (AF 2 at 75 (Addendum, ¶ 3)).  Respondent engaged a contractor to construct the post office (AF 2 at 72 (Ground Lease, ¶ 16); AF 2 at 75 (Addendum, ¶ 3); AF 5; AF 14).  With regard to that construction, the Ground Lease provided that the "Postal Service agrees to comply with all applicable codes and laws."  (AF 2 at 75 (Addendum, ¶ 3(c)).
 
The Ground Lease also included a Claims and Disputes clause, which stated that the lease was subject to the Contract Disputes Act (hereafter "CDA"), and recited procedures for compliance with the CDA (AF 1 at 14-15 (General Condition A.6)).  It defined a "claim" as "a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract."  (Id.)

On November 22, 2011, Appellant's counsel sent a letter to Respondent's contracting officer (hereafter the "claim letter").  The claim letter stated that Appellant was named as a defendant in a lawsuit alleging violations of the Americans with Disabilities Act ("ADA") and analogous state law at the Temescal Plaza Shopping Center including the post office property.  It attached a report produced by an expert for the plaintiff in that lawsuit identifying purported ADA violations, including those on the post office portion of the property.  The claim letter stated that Respondent was responsible for any such ADA violations on its leased property, citing Ground Lease Addendum section 3(c).  The claim letter further stated that Appellant "demands that [Respondent] immediately remediate any and all ADA and California law violations on the Premises."  The claim letter also requested a final decision.  (AF 6).
 
On March 8, 2012, Respondent replied in the form of a contracting officer's final decision (AF 3).  The final decision stated that the ADA does not apply to the Postal Service and therefore the "applicable codes and laws" provision of the Ground Lease referenced in the claim letter is not relevant.  The contracting officer stated that therefore she was "further denying the claim for lack of jurisdiction under the Contract Disputes Act."  Nonetheless and despite asserting that the claim was "denied in its entirety," the contracting officer agreed to perform certain identified alterations to the post office premises for accessibility reasons, which had been identified in the report attached to the claim letter.  By letter dated May 24, 2012, Appellant's counsel sent a notice of appeal of Respondent's March 8 decision to the contracting officer, who forwarded it to the Board (AF 1).

Following docketing by the Board, Appellant filed a complaint.  The complaint stated that Respondent is responsible for any accessibility violations at the ground leased property.  For relief, Appellant's complaint requested that Respondent "immediately remediate any and all violations of the ADA, California law, the Architectural Barriers Act ("ABA"), or other applicable federal or state law on the Premises."  The complaint also stated that Respondent is
responsible for indemnifying [Appellant] for its monetary loss occasioned by USPS's failure to ensure the Premises are compliant with the ADA, California law, the ABA, or other applicable federal or state law.  [Appellant's] monetary losses to date total approximately $83,210.29 and is (sic) ongoing.
 
Respondent filed a motion to dismiss.

DECISION

Respondent challenges the Board’s jurisdiction over this dispute on several grounds.  Respondent argues that the Board lacks the authority to order specific performance – i.e., to direct that Respondent immediately remediate any and all ADA and California law violations on the Premises.  In addition, Respondent argues that we lack jurisdiction to consider the monetary demand, expressed in a dollar amount first appearing in Appellant’s complaint, because that demand was not previously filed as a claim with the contracting officer, as required by the CDA.  Finally, Respondent argues that it is subject neither to the ADA nor California law, and that the ABA, cited in Appellant’s complaint, does not provide Appellant a private right of action against Respondent.  Appellant filed an opposition arguing that the precedent on which Respondent relies is inapplicable.
 
We agree with Respondent’s first two arguments.  Respondent is correct that we lack the authority to order equitable relief, such as specific performance and injunctive relief.  See JM Carranza Trucking Co., PSBCA No. 6354, 11-1 BCA ¶ 34,643; Rig Masters, Inc., ASBCA No. 52891, 01-2 BCA ¶ 31,468; Mr. and Mrs. Edward R. Ester, PSBCA No. 1559, 87-2 BCA ¶ 19,719.  Therefore, we dismiss that portion of the complaint that seeks such relief – a direction to the Postal Service to remediate.  Should Appellant suffer damages, through the other litigation or otherwise, from what it contends is Respondent’s breach of the lease, its remedy lies in submitting a monetary claim to the contracting officer under the CDA.  See David Sahagian, PSBCA No. 3543, 94-3 BCA ¶ 27,269; Raymond Kaiser Eng'r., Inc., ASBCA No. 34133, 87-3 BCA ¶ 20,140.

Appellant's request for indemnification, also first identified in its complaint, must be dismissed for the same reasons.  In this regard, Appellant's complaint asserts that if it is found responsible in the other court proceeding for accessibility violations at the post office property, Respondent should indemnify it for any damages it is ordered to pay to a third party.  The indemnification request in the complaint is tied directly to Appellant's request for money damages (seeking indemnification for any such monetary damages it may incur).  The indemnification request also is premature.  Appellant has not stated that it has been found liable to pay damages to a third party, which might trigger an indemnification under its theory of the case.  This element of Appellant's requested relief also is dismissed.

Moreover, inasmuch as any monetary claim must first be submitted to the contracting officer for a decision, we lack jurisdiction to consider Appellant’s demand, again first appearing in its complaint, for monetary relief.  See 41 U.S.C. § 7103(a); Christopher M. Cote', et al., PSBCA Nos. 3898, 3899, 96-2 BCA ¶ 28,288; ACC Constr. Co., Inc., ASBCA No. 56451, 09-1 BCA ¶ 34,037. Therefore, we also dismiss that portion of the complaint that demands a monetary recovery.  Such dismissal is without prejudice to Appellant’s right to submit such a claim to the contracting officer.  See Debra Lea McSheffrey, PSBCA No. 4061, 98-2 BCA ¶ 29,826, recon. denied, 98-2 BCA ¶ 30,081.
 
We do not agree, however, with Respondent’s argument that we lack jurisdiction over this appeal on the grounds that Respondent is not subject to the ADA or California law and because the ABA does not provide a remedy for Appellant.  The question of whether particular statutes are “applicable” is a question of contract interpretation, over which we have jurisdiction under the CDA and the language of the Claims and Disputes clause.

Appellant’s claim letter asserted a violation of the lease’s “applicable codes and laws” provision and may fairly be said to be requesting relief in the form of an interpretation of contract terms in order to determine whether Respondent is subject to the provisions of particular laws under the terms of the lease.  Specifically, Appellant's claim letter asserted that Respondent is responsible for any accessibility liabilities because of a provision in the Ground Lease, and demanded that Respondent satisfy that responsibility.  The question to be answered in order to rule on the current motion is not whether particular statutes are “applicable” but whether the Board has the jurisdiction to make that determination.  We conclude that under the language of the CDA and the Claims and Disputes clause, we have that jurisdiction.    
  
We examined a similar issue in Stewartsville Postal Properties, PSBCA No. 6377, 11-2 BCA ¶ 34,836.  We there concluded that a nonmonetary assertion to the contracting officer requesting a decision as to which party was responsible (and stating that Respondent was responsible) for snow removal under a postal lease constituted a valid claim for contract interpretation.  Id.; accord N.J. Hastetter, PSBCA No. 3064, 92-3 BCA ¶ 25,189 (nonmonetary claim to determine extent of Respondent's lease obligation to paint a post office is within Board's jurisdiction); Greater Eastern Holding Co., PSBCA No. 1128, 83-2 BCA ¶ 16,784 (nonmonetary claim to determine continuing responsibility for roof repairs under a lease is within Board's jurisdiction).  We do not see a meaningful distinction between our authority to determine whether a lessor or the Postal Service is responsible under a post office lease for snow removal, painting, or roof repairs, and the present case asking us to decide responsibility for complying with applicable codes and laws regarding accessibility to a post office.

We possess jurisdiction to determine whether Respondent breached its contractual obligation to comply with applicable accessibility codes and laws, which determination may have the effect of providing Appellant ultimately with the relief it seeks.  See Eyak Tech., LLC v. Dept. of Homeland Sec., CBCA No. 1975, 10-2 BCA ¶ 34,538.  This jurisdiction is sufficient to defeat the motion to dismiss, and Appellant's claim letter is sufficient to constitute a cognizable nonmonetary claim within the meaning of the Ground Lease's definition of a claim.  Determination as to whether particular statutes or codes are “applicable” is premature at this time and must await further development of the record in this appeal.  Accordingly, we deny this part of Respondent’s motion.

CONCLUSION

The elements of this appeal seeking monetary damages and an indemnification for any monetary damages realized are dismissed without prejudice.  The element of this appeal seeking specific performance is dismissed as beyond the Board's authority.  The element of this appeal requesting the Board to determine whether any accessibility violations are Respondent's responsibility under the Ground Lease for its failure to have complied with applicable codes and laws is properly before the Board.  Respondent's motion to dismiss in that regard is denied.

Accordingly, as described above, Respondent’s motion to dismiss this appeal is granted in part and denied in part.  The stay ordered by the Board while Respondent's motion to dismiss was pending is lifted.  Further proceedings will be directed by subsequent order.

Gary E. Shapiro
Administrative Judge
Board Member

I concur:     

William A. Campbell
Administrative Judge
Chairman

I concur:
Peter F. Pontzer
Administrative Judge
Board Member

¹ Our description of the facts is based on the limited record before us at this early stage of the proceedings, and is made solely for purposes of deciding the pending motion.