DISMISSED WITHOUT PREJUDICE IN PART;
DISMISSED FOR LACK OF JURISDICTION IN PART:
September 16, 1992
VAN NESS ASSOCIATES, LTD., A CALIFORNIA LIMITED PARTNERSHIP,
GENERAL SERVICES ADMINISTRATION,
Richard I. Deringer, General Partner, Van Ness Associates,
Ltd., A California Limited Partnership, San Francisco,
California, appearing for Appellant.
Martin A. Hom and Gerald Schrader, Office of General
Counsel, General Services Administration, Washington, DC, counsel
Before Board Judges PARKER, HYATT, and WILLIAMS.
PARKER, Board Judge.
Van Ness Associates, Ltd., appellant, has appealed the
General Services Administration's assessment of $104,682.83 in
overpayments on a lease. Appellant also claims respondent owes
it $309,876.78, plus interest and legal fees. However, since
filing this appeal, appellant has filed for a Chapter 11
"reorganization" in bankruptcy. Because the bankruptcy laws
require us to stay an assessment of costs against appellant until
the estate is wound up, we dismiss without prejudice the appeal
of the Government's claim against appellant. In addition,
because appellant failed to file a certified claim with the
contracting officer concerning whether respondent owes appellant
$309,876.78, we dismiss that count for lack of jurisdiction.
Respondent, on August 20, 1984, entered into Contract No.
GS-09B-83349 with appellant to lease office space. In late 1985,
the Internal Revenue Service began occupying most of appellant's
office building, located at 1650 Mission Street in San Francisco,
California. The lease contained a standard rent escalation
clause, which required the parties to agree upon a "base year,"
then calculate all increases or decreases against that year, to
find the rent due annually.
Respondent's contracting officer, by letter dated February
27, 1992, told appellant that its audit of the lease payments
from 1985 through 1992 revealed that:
the bills for tax increases submitted by the Lessor
pursuant to paragraph 32 of the above-referenced
Government lease were incorrect in that, among other
things, such bills incorrectly used calendar year
("CY") 1985 as the base year.
Letter from James Draley to Richard Deringer (February 27, 1992).
Respondent contended that the parties should use 1986 as the
base year in assessing California and local real estate taxes.
Since changing the base year changed respondent's tax liability
under the escalation clause, respondent sought to recover
$104,682.83 in overpayments from appellant. Count I of this
appeal contests that claim by the Government.
Appellant's president on May 20, 1992, wrote to respondent's
contracting officer and noted that: "as of today's date the
government owes our partnership $309,876.78, plus accrued
interest," as part of the property tax pass-through for 1988
through 1991. Letter from Richard Deringer to James Draley
(May 20, 1992). Appellant's president added that his firm had
decided to file an appeal concerning the tax liability with the
Board so that appellant could continue working with respondent to
resolve the case. Appellant's letter contained no certification
language of any kind.
Before receiving a response to that letter, appellant on
May 22, 1992, sent the Board a notice of appeal of the "final
decision of Mr. James Draley." In this appeal, appellant seeks a
cash award of $309,876.78, plus 18% interest from the date it
billed the Government, and legal fees of approximately $25,000.
Meanwhile, the Swiss Bank Corporation at the end of 1991
moved to foreclose on the San Francisco office building, and
appellant was placed into receivership on December 6, 1991. On
July 10, 1992, appellant filed a Chapter 11 bankruptcy petition
in the Northern District of California.
The federal bankruptcy statute, 11 U.S.C. 362 (a)(1)
(1988)[foot #] 1, stays recovery of claims against a
bankruptcy estate while the Court, trustee, and receiver wind up
the affairs of the estate. The stay provision applies to an
appeal of a Government claim at the Board, which is an action
that may well result in a judgment against appellant. Kroy Inc.,
GSBCA 10619, 90-3 BCA 23,182. Van Ness's appeal of
respondent's claim for $104,682.83 is just such a case.
Accordingly, we grant respondent's motion to dismiss the appeal
of the $104,682.83 assessment. The appeal is dismissed without
prejudice, subject to reinstatement within 60 days after the
conclusion of the federal bankruptcy proceedings in California.
Next, we examine appellant's claim for $309,876.78. The
Contract Disputes Act requires a contractor to present each claim
"against the government relating to a contract" to the
contracting officer for decision. 41 U.S.C. 605(a) (1988).
For claims over $50,000, the contractor must certify that the
claim is made in good faith, that the supporting data is accurate
and complete to the best of its knowledge and belief, and that
the amount requested accurately reflects the contract adjustment
for which the contractor believes the Government is liable. 41
U.S.C. 605(c)(1) (1988). Appellant here sent an informal
letter to the contracting officer two days before sending its
"appeal" to the Board. Appellant did not certify its "claim" or
even wait to receive a final decision. See 41 U.S.C. 605(b).
Our appellate authority has interpreted strictly the Act's
requirement that parties present claims to the contracting
officer before filing an appeal at the boards or the Claims
Court. Neither the Government nor a contractor can bypass this
"presentation" requirement merely by filing a counterclaim, as a
party might in other federal litigation. Joseph Morton Co. v.
United States, 757 F.2d 1273, 1279 (Fed. Cir. 1985). Paragon
Energy Corp. v. United States, 227 Ct. Cl. 176, 192-93, 645 F.2d
966, 976 (1981). In this case, until appellant presents a
----------- FOOTNOTE BEGINS ---------
[foot #] 1 The automatic stay provision, in pertinent
part, states that:
a petition filed under section 301, 302, or 303 of
this title . . . operates as a stay, applicable to
all entities, of - (1) the commencement or
continuation, including the issuance or employment
of process, of a judicial, administrative, or
other action or proceeding against the debtor that
was or could have been commenced before the
commencement of the case under this title, or to
recover a claim against the debtor that arose
before the commencement of the case under this
11 U.S.C. 362(a)(1).
----------- FOOTNOTE ENDS -----------
properly certified claim, and gives the contracting officer a
reasonable time to consider it, the Board lacks jurisdiction over
this dispute and must dismiss it. Diamond Envelope Corp., GSBCA
10752, 91-3 BCA 24,138, at 120,791; Roubin & Janeiro, Inc.,
GSBCA 6042, 82-2 BCA 15,802, at 78,262 (In drafting CDA,
Congress intended contracting officers to decide claims drafted
with same precision as those which eventually would come before
boards of contract appeals and courts).
For the reasons stated above, we DISMISS WITHOUT PREJUDICE
appellant's appeal of respondent's assessment of $104,682.83.
Appellant may reinstate the case within 60 days after the
conclusion of its bankruptcy proceedings. We also DISMISS FOR
LACK OF JURISDICTION appellant's claim for $309,876.78.
ROBERT W. PARKER
CATHERINE B. HYATT MARY ELLEN COSTER WILLIAMS
Board Judge Board Judge