ny _________________________________________________ RESPONDENT S MOTION FOR SUMMARY RELIEF GRANTED: February 9, 1995 _________________________________________________ GSBCA 12851 ADELAIDE BLOMFIELD MANAGEMENT COMPANY, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Darryl L. Thompson, Anchorage, AK, counsel for Appellant. Sharon A. Roach, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS, BORWICK, and GOODMAN. BORWICK, Board Judge. Background This appeal involves a claim of $898,544.28 by Adelaide Blomfield Management Company (ABMC) for lost rent occasioned by the General Services Administration's (GSA's) early termination of a lease. GSA terminated the lease, having procured new space for the increased space requirements of two tenant agencies. In terminating, GSA relied on the cancellation clause of the lease. ABMC maintains that the termination was in bad faith and that the GSA had waived its rights under the termination clause in exchange for the performance of interior work--painting and carpeting. GSA filed a motion for summary relief, which ABMC opposes. We conclude that in opposing GSA's motion, ABMC has not established that there is a genuine issue of material fact; we conclude that GSA is entitled to relief as a matter of law, and we grant GSA's therefore motion for summary relief. Findings of Fact The following facts are not in dispute. 1. On February 15, 1985, ABMC and GSA entered into a lease for 24,651 net usable square feet of space in a building at 201 East Ninth Avenue, Anchorage, Alaska, for a term of five years beginning on May 1, 1985 and ending on April 30, 1990. Appeal File, Exhibit 1 at 26-27. 2. Paragraph four of the lease provided that: The Government may terminate this lease at any time after April 30, 1990, by giving at least 90 days notice in writing to the Lessor and no rental shall accrue after the effective date of termination. Appeal File, Exhibit 1 at 26. Paragraph five of the lease provided: This lease may be renewed at the option of the Government, for the following terms and at the following rentals: One additional 5-year term at an annual rental of $517,671 as adjusted by operation of the Operating Cost Escalator Clause. Provided notice be given in writing to the Lessor at least 90 days before the end of the original lease term or any renewal term; all other terms and conditions of this lease shall remain the same during any renewal term. Id. 3. On January 30, 1990, the Government timely exercised its option to renew the lease for an additional five-year term beginning on May 1, 1990 and ending on April 30, 1995. Appeal File, Exhibit 2. 4. On or about February 22, 1990, ABMC's employee asked a GSA real property specialist whether GSA was planning to move from ABMC's building. She told him that GSA was working on new requirements but that GSA was not moving any time soon, nor did she know if GSA would move. Appeal File, Exhibit 3. On March 22, 1990, the ABMC employee wrote the contracting officer expressing concern that GSA might vacate the space to accommodate two agencies' increased space requirements, and suggested that GSA move one of the agencies and backfill the vacant space with the other. He questioned Congress' intent on the ninety-day cancellation clause. Id., Exhibit 4. 5. On April 9, 1990, the contracting officer responded, advising ABMC that the ninety-day cancellation was a condition to which the parties had mutually agreed in the lease, and that "its basis has nothing to do with the Congress." He advised that GSA was reviewing the space requirements for the tenant agencies and would be making a determination whether it would be in the Government's best interest to remain in the space. Appeal File, Exhibit 5. 6. On April 15, 1991, ABMC's counsel objected to GSA's contemplated use of the ninety-day cancellation provision in the lease, noting that ABMC "was required to perform certain scheduled maintenance such as carpeting and painting (as recently as March 1, 1991). The total costs incurred by [ABMC] to perform is approximately $57,000 to date." Appeal File, Exhibit 6. 7. On August 16, 1991, the contracting officer responded. He advised that GSA advertised in April for space to accommodate the agencies' space requirements. He asserted that the ninety-day cancellation provision gave the Government the right to cancel upon ninety days notice, and that the right was included in the lease from the outset. He advised that regularly scheduled maintenance was a lessor responsibility under the lease for which the Government paid as part of the rent. Appeal File, Exhibit 8. 8. On April 7, 1993, GSA awarded a lease for space in the Calais Office Building II to fill the agencies' office requirements. Appeal File, Exhibit 17.[foot #] 1 On June 18, 1993, GSA gave notice to ABMC that "in accordance with the option contained in paragraph [number] 4" of the lease, GSA would quit ABMC's premises effective close of business on September 17, 1993. Id., Exhibit 13. 9. On March 25, 1994, ABMC, through counsel, filed a certified claim for $898,544.28 with the contracting officer, maintaining that GSA had not lawfully exercised its right to cancel the lease, that GSA's failure and refusal to tender past and future rent due and owing under the lease were a breach of the lease. Appeal File, Exhibits 15, 16. The contracting officer denied the claim, id., Exhibit 17, and a timely appeal followed, id., Exhibit 18. 10. ABMC proffers the affidavit of John Blomfield in opposition to GSA's motion for summary relief. Mr. Blomfield states in pertinent part: 2. It was never our understanding that the government, if it exercised the right to renew for an additional five year term, would have the right to terminate during that five-year renewal period with ninety days notice. It was our understanding that if the ----------- FOOTNOTE BEGINS --------- [foot #] 1 ABMC successfully protested award of that lease at the General Accounting Office (GAO); GAO held that GSA incorrectly evaluated ABMC's proposal, having misapplied the evaluation factors in the solicitation. Nevertheless, GAO refused to rescind the award. Adelaide Blomfield Management Co., _________________________________ 72 Comp. Gen. 335 (1993), 93-2 CPD 197. ABMC's subsequent action for injunction in federal court was unsuccessful. Adelaide Blomfield Management Co. v. United States,No. A93-0214 ----------- FOOTNOTE BEGINS --------- (D. Ala. June 28, 1994). ----------- FOOTNOTE ENDS ----------- government did not exercise the renewal option for an additional five-year term, in that instance they had the right to terminate within ninety days. 3. Additionally, in late 1989 [and] early 1990, I had discussions with various representatives from [GSA] regarding whether or not they intended on renewing for an additional five year term. In the course of all those discussions, and negotiations as to whether they would renew for an additional five year term, at no time was it ever discussed that they would ever be claiming a right to terminate with ninety days notice during the five-year renewal period. In fact, they asked me to perform, on behalf of [ABMC] items that were outside of the contract specifications. In particular, they requested that the color be changed in the interior of the building, which required more coats [of paint], additional time and materials. Further, the carpeting, which had already been acceptable, they asked to be replaced, and I did so. [ABMC] spent approximately $56,000 doing these upgrades and it was my understanding that in so doing the government would remain in the building for the full five-year term. Affidavit of John Blomfield (Blomfield Affidavit) (October 3, 1994). Discussion Our Rule 8(g) on summary relief is modeled after the summary judgment rule of the Federal Rules of Civil Procedure; the holdings of the federal courts, particularly the United States Court of Appeals for the Federal Circuit, therefore, are applicable in defining the quantum of evidence necessary to maintain or defeat a motion for summary relief. We are obliged in ruling on motions for summary relief to draw all inferences in favor of the party opposing the motion; a motion for summary relief is proper only on those facts about which we "need not function as an arbiter among differing versions of every factual reality for which evidentiary support has been presented. . . ." Cable Electric Products, Inc. v. Genmark, Inc., 770 F.2d 1015, 1020 (Fed. Cir. 1985). Summary relief is appropriate only when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Armco v. Cyclops Corp., 791 F.2d 147, 149 (Fed. Cir. 1986.) However, where appropriate, summary relief is a salutary method of disposition, which is designed to secure the just and speedy resolution of disputes. Thus, when countering a motion for summary relief, more is required than mere assertions of counsel. The non-movant must present specific evidence which sets forth a genuine issue of material fact. See Sweats Fashions v. Pannill Knitting Co., 833 F.2d 1560, 1562-63 (Fed. Cir. 1987). In considering respondent's motion for summary relief, and ABMC's opposition, we first examine the words of the lease itself. The cancellation clause was clear and unambiguous: the Government could "terminate this lease at any time after April 30, 1990" upon giving of the specified notice. Finding 2. In this matter, ABMC argues that the motion for summary relief is inappropriate, because "It was [ABMC's] understanding that during a hold over period, the government could maintain its occupancy under the same terms and conditions and would be entitled to vacate with ninety days notice." Appellant's Opposition to Government's Motion for Summary Relief at 10. It argues that the language "all other terms and conditions of this lease shall remain the same" upon the exercise of the renewal term, Finding 2, meant that upon renewal, there would be no cancellation provision, as there was no cancellation provision during the base term. Appellant s Opposition to Respondent s Motion for Summary Relief at 11. ABMC ignores that the lease from its inception provided for a government option to cancel at any time after April 30, 1990; the phrase "all other terms and conditions shall remain the same," therefore, as applied to the cancellation clause meant nothing more than the cancellation clause was operative during the renewal term. The clause is as plain as words can make it, is unambiguous, and must be enforced according to its terms. Madigan v. Hobin Lumber Co., 986 F.2d 1401 (Fed. Cir. 1993). ABMC's unilateral understanding, Finding 10, 2, cannot vary the unambiguous terms of the lease. City of Oxnard v. United States, 851 F.2d 344, 347 (Fed. Cir. 1988); cf. Capricorn Enterprises Inc., AGBCA 89-125-1, 90-1 BCA 22,587 (no breach of lease when Government terminated lease under thirty day cancellation clause thirteen months before lease term expired). ABMC argues that "summary judgment in this case is inappropriate because the termination exercised by the government in this matter was exercised in bad faith" and analogizes the cancellation clause to the termination for convenience clause.2 ABMC's Opposition to Respondent's Motion for Summary Relief at 14. ABMC argues that "in either situation, the government will be required to tender to the contractor anticipated lost profits." ABMC cites Torncello v. United States, 681 F.2d 756 (ct. cl. 1982)(Government may not exercise of termination for ____________________ 2 We consider the analogy far-fetched. The termination for convenience clause developed from the governmental necessity of ending the massive procurement efforts which accompanied major wars. J. Cibinic, R. Nash, Administration of Government ______________________________ Contracts, at 817 (2d ed. 1985). In contrast, cancellation _________ clauses in leases are common in the private sector. They are often used to accommodate changing requirements of tenants and landlords and are considered "common, useful and very important." Friedman on Leases, Vol. II, 21.1, 21.201, at 1028 - 1029 (2d __________________ ed. 1983). convenience clause in bad faith). The United States Court of Appeals for the Federal Circuit has subsequently noted that Torncello "stands for the unremarkable proposition that when the government contracts with a party knowing full well that it will not honor the contract, it cannot avoid a breach claim by adverting to the termination for convenience clause." Salsbury Industries v. United States, 905 F.2d 1518, 1521 (Fed. Cir. 1990). Here, there is no evidence that GSA entered the lease without every intention of honoring it; the Government, under the lease, occupied ABMC's building for the five-year base term and also from May 1, 1990 through September 17, 1993, three years and four months into the renewal term. Government officials are presumed to act in good faith; to overcome that presumption, even on a motion for summary relief, ABMC must present sufficient evidence upon which a reasonable trier of fact could find in its favor. A-Transport Northwest Co. v. United States, 36 F.3d 1576, 1585 (Fed. Cir. 1994). The evidence presented--principally the affidavit of Mr. Blomfield--does not overcome that presumption. It is not disputed that GSA needed more space to house its tenant agencies, and soliciting for contiguous space was one of many reasonable actions available to the Government. That GSA did not take the suggestion offered by ABMC--to move one agency out and backfill the vacated space with the other agency, Findings 4, 8, is not evidence of bad faith in the administering of the lease. ABMC argues that GSA s actions in the subsequent procurement are evidence of "bad faith" in canceling its lease. While ABMC is understandably upset at GSA's action in awarding the procurement for the increased space requirements to a competitor, n.1, the termination of the lease and GSA's conduct of the procurement are distinct transactions. Finally, ABMC maintains that: "As a result of negotiations and discussions in late 1989 and early 1990, between John Blomfield and GSA representative[s], [ABMC] agreed to perform matters which were above and beyond the contractual requirements and that [ABMC] would thus be receiving the additional five-year term fix [sic] with no ninety (90) day notice option to terminate." ABMC's Opposition to Respondent's Motion for Summary Relief at 2. Here, ABMC claims that the Government impliedly waived its cancellation rights under paragraph four of the lease in exchange for allegedly out-of-contract improvements. We couch the issue as implied waiver because ABMC has not suggested that the Government signed a modification expressly waiving the cancellation clause of the lease. An implied waiver by the Government must be supported by clear, decisive, and unequivocal conduct or statements of government officials. Cf. United States v. Chichester, 312 F.2d 275, 283 (9th Cir. 1963) (waiver of rights under termination for default clause must be demonstrated by clear, decisive, unequivocal conduct where implied waiver not based on consideration); Eagle Forest Products, AGBCA 84-242-3, 85-1 BCA 17,719, at 4256 (implied waiver of specification must be specific, clear and unambiguous). In his affidavit, Mr. Blomfield states that government officials asked him to perform work outside the contract, and it was his understanding that in performing the services, the Government would stay in his building until the end of the renewal term. Finding 10, 3. What he does not say is that GSA officials in any manner confirmed his understanding. ABMC simply has not submitted evidence sufficient to create a genuine issue of material fact as to whether the Government clearly and unambiguously waived its rights under the cancellation clause of the lease. Decision Respondent's motion for summary relief is GRANTED and the appeal is DENIED. _________________________ ANTHONY S. BORWICK Board Judge We concur: ____________________ STEPHEN M. DANIELS Board Judge ____________________ ALLAN H. GOODMAN Board Judge