PSBCA No. 6886

DISMISSAL

This appeal involves a lease between Paul Schmidt d/b/a Patco Realty Co. (Patco) and the Postal Service. Patco sought reimbursement from the Postal Service of a use and occupancy (U&O) tax that Patco paid to the City of Philadelphia (City) in 2021. After the appeal was filed, the City notified the parties that the Postal Service was immune from the tax, refunded Patco the full amount it had paid, and stated that Patco does not have to pay the tax in the future. The issue before us now is whether the appeal should be dismissed as moot, as requested by the Postal Service, or dismissed without prejudice, as requested by Patco.

FINDINGS OF FACT

The Postal Service leases from Patco premises at 2801 Levick Street, Philadelphia, Pennsylvania, under Lease No. Q90000436195. The lease included a tax rider that requires the Postal Service to reimburse Patco for certain real property taxes. Reimbursement is made after Patco pays the taxes and then presents the Postal Service with a request that complies with the contract. (Appeal File, Exhibit 1).¹
Based on that tax rider, in April 2021, Patco billed the Postal Service $31,901.19 for various taxes, including the U&O tax, it paid in 2021. The Postal Service reimbursed Patco for all the taxes paid except the U&O tax, which totaled $13,645. The Postal Service asserted that, as a federal agency, it was immune from that tax under the City’s tax regulations. (Exhibit 2).
On July 22, 2021, Patco submitted a claim to a contracting officer seeking $13,645 for 2021 taxes under the tax rider (Id.).
In December 2021, Patco filed a notice of appeal based on a deemed denial. Patco stated that it was seeking a “decision awarding Patco the amount in the Claim and resolving the issue of contract interpretation as to whether under the lease the USPS must reimburse Patco for future real property taxes of the type currently unpaid, as they are applied to the lease property.” (Notice of Appeal, Dec. 23, 2021).
In February 2022, the Postal Service contacted the City,² which responded that it agreed that the Postal Service is immune from the City’s U&O tax. The City agreed to refund Patco for the taxes paid from 2016 (the year the current lease term became effective) through 2021. The City also agreed that the Postal Service could tell Patco that it did not have to make that month’s payment or any future payments. (Exhibit 3 at 116–121). Patco received a refund that covered the amount claimed in December 2022 (Patco’s Letter to the Board, Dec. 6, 2022).
Before Patco’s receipt of its refund, the Postal Service moved to dismiss the appeal as moot. (Respondent’s Motion to Dismiss as Moot, or in the Alternative, to Stay, May 6, 2022). While Patco first opposed a dismissal of the appeal, it now requests a dismissal without prejudice. (Appellant’s Response in Opposition to Respondent’s Motion to Dismiss as Moot or, in the Alternative, to Stay, May 25, 2022; Appellant’s Opposition to Respondent’s Supplement to its Motion to Dismiss as Moot or, in the Alternative, to Stay [and] Appellant’s Request to Dismiss as the Appeal Without Prejudice, Mar. 13, 2023 (Appellant’s Opp’n and Request)).

DISCUSSION

A case becomes moot “‘when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.’” Humane Soc’y of the United States v. Clinton, 236 F.3d 1320, 1331 (Fed. Cir. 2001) (quoting NEC Corp. v. United States, 151 F.3d 1361, 1369 (Fed. Cir. 1998)); Ramah Navajo School Board, Inc., CBCA No. 5753-ISDA, 17-1 BCA ¶ 36,897; Combat Support Associates, ASBCA No. 58945, 16-1 BCA ¶ 36,288. When a case is moot, there is no longer “‘a justiciable controversy over which a federal court may exercise jurisdiction.’” Humane Society, 236 F.3d at 1331 (quoting NEC Corp., 151 F.3d at 1369); Ramah Navajo, 17-1 BCA ¶ 36,897.
There is, however, an exception to this rule for issues that are no longer live, but are nonetheless “capable of repetition, yet evading review.” Id. (quoting Torrington Co. v. United States, 44 F.3d 1572, 1577 (Fed. Cir. 1995)); Combat Support, 16-1 BCA ¶ 36,288. To fit within this exception: (1) “the action must ‘in its duration be too short to be fully litigated prior to its cessation or expiration,’” and (2) “there must be ‘reasonable likelihood’ that the party ‘will again suffer the injury that gave rise to the suit.’” Humane Society, 236 F.3d at 1331 (quoting Torrington, 44 F.3d at 1577); see also Combat Support, 16-1 BCA ¶ 36,288.
In its claim, Patco sought reimbursement for $13,645 paid to the City for U&O taxes in 2021. Because the City determined that the tax did not have to be paid and subsequently issued a refund, Patco’s claim for reimbursement is no longer live.
The exception does not apply here, nor does Patco allege that it does. The duration of this action is not too short to be fully litigated before its cessation or expiration. This appeal became moot based on the City’s actions. There is no evidence or allegation that the refund—given by the City, not the Postal Service—was structured in a way to evade judicial review. Moreover, Postal Service officials are presumed to act in good faith. Patrick M. Murray v. United States Postal Service, PSBCA No. 6635, 19-1 BCA ¶ 37,469. There also is no reasonable likelihood that the City will demand its refund back given the City’s written statements and actions. Patco has not alleged that it paid, or has been told to pay, the tax since being told that it did not have to in February 2022.³ The issue presented here—whether Patco is entitled to reimbursement from the Postal Service of $13,645for 2021 U&O taxes—is not “capable of repetition, yet evading review.” ⁴
In sum, there is no longer a justiciable controversy. The appropriate resolution of this appeal is a dismissal as moot. Even so, a dismissal based on mootness is a dismissal without prejudice as to the merits. Ramah Navajo, 17-1 BCA ¶ 36,897; URS Federal Support Services, Inc., ASBCA No. 60364, 17-1 BCA ¶ 36,587; Combat Support, 16-1 BCA¶ 36,288. We are simply dismissing this appeal as moot because Patco received a refund from the City.
Our holding is supported by several decisions by the Armed Services Board of Contract Appeals (ASBCA). See, e.g., URS Federal Support Services, Inc., ASBCA No.60364, 17-1 BCA ¶ 36,587; Combat Support Associates, ASBCA No. 58945,16-1 BCA ¶ 36,288; L-3 Communications Integrated Systems, L.P., ASBCA No. 60431, 16-1 BCA ¶ 36,362; H.Z. & Co., Ltd., ASBCA No. 29590, 85-2 BCA ¶ 18,062; Impresa Construzioni Geom. Luigi Slavi & C., ASBCA No. 16594, 76-1 BCA ¶ 11,733.
Impresa and H.Z. involved contractor claims for reimbursement of taxes paid to a foreign government. In Impresa, the ASBCA dismissed a motion for reconsideration as moot after the Italian government refunded the taxes. 76-1 BCA ¶ 11,733. In H.Z., the ASBCA stated that a refund from the Kenyan government would render the appeal moot. 85-2 BCA ¶ 18,062.
In Combat Support and L-3 Communications, contracting officers rescinded the final decisions on which the appeals were based. Combat Support, 16-1 BCA ¶ 36,288; L-3 Communications, 16-1 BCA ¶ 36,362. The ASBCA dismissed the appeals as moot instead of with prejudice for lack of jurisdiction. Id.
In URS Federal, the government moved to dismiss an appeal without prejudice after a contracting officer rescinded a final decision but reserved the government’s right to assert a revised claim under a different legal theory. 17-1 BCA ¶ 36,587. The ASBCA dismissed the appeal as moot instead. Id. It held that the mere possibility that a contracting officer could assert a revised claim under a different legal theory did not change its determination that the appeal must be dismissed as moot. Id. The ASBCA, which decided this appeal in 2016, noted that in the past it had sometimes dismissed appeals with prejudice when a contracting officer rescinded a final decision. Id. But it noted that in recent years it had begun dismissing such appeals as moot. Id.
The Civilian Board of Contract Appeals (CBCA) dismissed an appeal as “moot, without prejudice” after the government rescinded the findings and determinations on which the appeal was based, but it did so because both parties requested it. Ramah Navajo, 17-1 BCA ¶ 36,897. Otherwise, it would have followed the normal CBCA practice of dismissing a moot appeal with prejudice. ⁵ Id.
In Ramah Navajo, the CBCA determined that there is precedent for dismissing an appeal without prejudice when the parties’ dispute may be resurrected by a new or revised contracting officer’s decision or subject to continuing action or discussion by the parties. Id. As an example, the CBCA cited to a 1983 decision from this Board, Nathan Dal Santo, PSBCA Nos. 1125–26, 83-1 BCA ¶ 16,354, which dismissed without prejudice two appeals challenging several terminations for default. We found that those appeals were moot based on a district court’s injunction preventing the Postal Service from terminating or otherwise interfering with the appellant’s right to perform. We found that no issue remained for adjudication “at this time,” but that if the injunction were removed or there were later terminations on the same basis, then the appeals could be reinstated or new appeals filed.
Here, unlike in Dal Santo, it is unlikely that there will be either another claim, a contracting officer’s final decision, or continuing action or discussion by the parties on reimbursement of the U&O tax for 2021 or any future year. The City agreed that the Postal Service is immune from paying this tax. Patco suggested that the Postal Service could assert an affirmative claim for prior years because the City’s refund included U&O taxes paid in 2016 through 2020, and Patco contests that claim. But the mere possibility of a new claim under a different legal theory does not prevent a dismissal as moot. URS Federal, 17-1 BCA ¶ 36,587. If the Postal Service brings such a claim, Patco may file a new appeal.
Patco cited to three of our decisions in support of a dismissal without prejudice, but those cases are distinguishable. The first two, Castel Constr. of Fla., Inc., PSBCA No. 607, 1976 WL 1763, and O.M. Hendrickson & Co., PSBCA No. 464, 1978 WL 1840, were dismissed under Rule 955.31, which applies to suspended appeals that cannot proceed to resolution for reasons outside the Board’s control. Under that rule, when an appeal is suspended for an inordinate length of time, or appears that it will be, we may dismiss the appeal without prejudice to its reinstatement when the cause of the suspension has been removed. In addition, in both cases, the appeals were only potentially moot, and in Castel the contractor’s request was unopposed. The last case cited by Patco, Corbin’s Trucking, Inc. v. United States Postal Service, PSBCA No. 6696, 2018 WL 1449288, was dismissed for lack of jurisdiction, not mootness.
Patco also argued that the appeal should be dismissed without prejudice because the issues of interest and contract interpretation for future taxes remain outstanding. We disagree. First, Patco never brought up interest until its latest filing. Further, its right to interest—both statutory and under the lease—is tied to its success on its claim. Under the CDA and the lease, Patco is entitled to interest on “an amount found due” from the date the contracting officer received the claim until the date of payment. 41 U.S.C. § 7109(a); Exhibit 1 at 7. Here, none of the $13,645 claimed was found due; therefore, there is no remaining issue about interest.⁶
As for Patco’s second argument, it never presented a request for contract interpretation for future taxes to the contracting officer. That request was not made until the notice of appeal. Patco points only to this statement in its claim: “Tenant has failed to timely reimburse Landlord for Real Property Taxes as required under the Tax Rider Reimbursement of Paid Taxes (the “Rider”) to the Lease.” Appellant’s Opp’n and Request 7–8 (emphasis added by Patco). But that statement is not a request for contract interpretation. It only stated the theory underlying Patco’s monetary claim for $13,645 for 2021 taxes.
We generally cannot decide a claim that was not first presented to a contracting officer for a final decision.⁷ 41 U.S.C. § 7103(a)(1). A claim for monetary relief is distinct from a claim for contract interpretation even when contract interpretation may have the effect of ultimately providing a contractor with the monetary relief it seeks. Temescal Plaza, LLC Lease Agreement, PSBCA No. 6437, 13 BCA ¶ 35,238. In Temescal Plaza, we found that the contractor’s claim included a request for a contract interpretation but not a request for monetary damages. Id. We therefore dismissed the contractor’s request for monetary damages because it was not presented to the contracting officer for a final decision. Id.
But even if a request for contract interpretation were part of Patco’s claim, there is nothing we can decide. First, Patco cannot bring a claim for contract interpretation under these facts. A claim for monetary relief cannot be dressed up as a non-monetary request for contract interpretation. Securiforce Int’l America, LLC v. United States, 879 F.3d 1354, 1360 (Fed. Cir. 2018). Requests for contract interpretation have sometimes been considered when the question is whether a party is obligated to perform at all. See, e.g., Alliant Techsystems, Inc. v. United States, 178 F.3d 1260 (Fed. Cir. 1999); Temescal Plaza, 13 BCA ¶ 35,238; Stewartsville Postal Properties Lease Agreement, PSBCA No. 6377, 11-2 BCA ¶ 34,836; Parsons Government Services, Inc., ASBCA No. 62113, 20-1 BCA ¶ 37,586. But if “the only significant consequence” of the request is the payment of money, then it must be submitted as a monetary claim. Securiforce, 879 F.3d at 1360. Simply put, we cannot consider a non-monetary claim when the underlying claim is, in reality, a monetary claim. Id.
In Parsons, two contractors sought certain costs relating to the sale and leaseback of a building they were obligated to stay in until 2026. 20-1 BCA ¶ 37,586. They sought these costs for Fiscal Year (FY) 2011 and all subsequent FYs by requesting contract interpretation rather than filing a monetary claim. Id. The ASBCA held that the contractors could not avoid contract performance by merely filing a claim for contract interpretation, especially when the only significant consequence of the request would be the payment of money. Id. The ASBCA therefore dismissed the appeal for lack of jurisdiction. Id.
The facts here are analogous to Parsons. Patco seeks contract interpretation about future tax payments, but resolution of that question would not allow Patco to avoid performance of the lease. This is not a situation in which a lessor is seeking to avoid performing repairs or maintenance. A decision on interpretation would only decide whether the Postal Service must reimburse Patco for the U&O taxes as currently enacted if, for some far-fetched reason, Patco paid them. The only significant consequence of that interpretation would be money damages.
Secondly, and more importantly, any request for contract interpretation was mooted by the City’s written assurance that Patco does not have to pay the U&O tax in the future. There is not, and will not be, an expense to be reimbursed. As noted above, Patco has not alleged that it paid, or has been told to pay, the tax since being told that it did not have to in February 2022. Whether the tax rider requires the Postal Service to reimburse Patco for U&O taxes for 2021 or future years is not a live issue.

ORDER

For the above reasons, we grant the Postal Service’s motion to dismiss as moot and deny Patco’s motion to dismiss without prejudice. Accordingly, the appeal is dismissed as moot. This dismissal is, however, without prejudice as to the merits.