_________________ November 26, 1997 _________________ GSBCA 14114-RELO In the Matter of JEROME GORTON Jerome Gorton, International Falls, MN, Claimant. Jeanne Di Gange, Authorized Certifying Officer, Office of Finance and Management, National Finance Center, New Orleans, LA, appearing for Department of Agriculture. NEILL, Board Judge. The United States Department of Agriculture (USDA) asks our opinion pursuant to 31 U.S.C. 3529 regarding the propriety of paying certain costs incurred by one of its employees, Jerome Gorton, in connection with the sale of his home at his old duty station. The costs in question were legal fees paid to an attorney for assistance in changing the legal description on the title to Mr. Gorton's home. The agency believes that these costs cannot be paid because they are litigation costs. In addition, the agency also declines to pay these costs because they were incurred after the date of settlement. For the reasons set out below, we find that Mr. Gorton may not be reimbursed for these costs. Background On August 11, 1995, Mr. Gorton was transferred from Fergus Falls, Minnesota, to International Falls, Minnesota. His travel authorization allowed him real estate expenses for the sale of his residence at the old official work station. Closing on the sale of the residence occurred on September 1, 1995. Shortly before the closing, the attorney tasked with preparing an opinion regarding the title to the property voiced his objection to some of the wording in the property's legal description. Nevertheless, it was eventually decided to proceed with the closing. Mr. Gorton agreed, as part of the settlement, to pay for the cost of having the language in the property description officially changed. The costs for this change were estimated to be $2000. A total of $4000 was retained in escrow to coverthem. On September 20, 1995, Mr. Gorton submitted a voucher seeking reimbursement for $8201 in costs associated with the sale of his residence. In the remarks block of the voucher he noted that a request for some additional expense for surveying and preparation of an abstract might be coming at a later date. The agency initially declined to reimburse Mr. Gorton. It sought instead to determine whether sale of the residence was in fact final. On October 23, Mr. Gorton resubmitted his claim. In doing so, he provided written assurance that the sale was final but repeated that some additional expense might be coming at a latter date as a result of survey and abstract work which remained to be done. Shortly thereafter, the agency paid the resubmitted voucher. In April 1996, Mr. Gorton received a statement from his attorney for services and disbursements in connection with the revision and filing of the property description for his prior residence. From the attorney's bill, it is evident that the correction in question was effected through an action to quiet title. Pleadings were filed on behalf of the new owners. Mr. Gorton, his wife, and others who might have a title interest were listed as defendants in the suit. These pleadings were filed in the local district court. Also filed with the court and recorded by the clerk was a notice that this suit was pending ("lis pendens"). A hearing was held and judgment was rendered and recorded. The title company, after paying the attorney's fees from the $4000 retained in escrow, returned the remaining balance to Mr. Gorton. In early May, Mr. Gorton submitted a claim for the attorney's fees paid from the escrow account. His voucher was rejected on the ground that the costs in question were for litigation. Disagreeing with this conclusion, Mr. Gorton resubmitted his request. In July, the request was again rejected. This time the voucher was rejected on the ground that the legal costs had been incurred after the date of settlement. Mr. Gorton thereupon sought review of his request at higher levels within the agency. The matter has now been referred to this Board by an authorized certifying officer of the agency. Discussion The Federal Travel Regulation (FTR) provides that a Government employee who has been transferred and sells his or her residence at the old official station can be reimbursed legal and related expenses if the expenses are customarily paid by the seller and if they do not exceed amounts customarily charged in the locality of the residence. The regulation expressly notes, however, "Costs of litigation are not reimbursable." 41 CFR 302- 6.2(c) (1996) (FTR 302-6.2(c)). The issue squarely presented here is whether the attorney's fees which Mr. Gorton attempts to recover represent litigation costs. Claimant writes: 3 The fees are for the purpose of correcting the wording on an abstract or Title in order to prepare or give the buyer a warrantee deed. No one was taking anyone to court. This requested change in wording resulted from a[n] Attorney's Title Opinion when representing the purchasers of my old residence. We disagree. Counsel's bill for services indicates that the wording change promised by the claimant at settlement was effected through a subsequent action to quiet title. The agency correctly surmises that this does constitute litigation. "Litigation" has been defined as: A lawsuit. Legal action including all proceedings therein. Contest in a court of law for the purpose of enforcing a right or seeking a remedy. A judicial contest, a judicial controversy, a suit at law. Black's Law Dictionary 841 (5th ed. 1979). The suit undertaken on behalf of the new owners against Mr. and Mrs. Gorton and anyone else with a possibly conflicting claim was apparently a friendly one paid for from funds provided by Mr. Gorton himself. Nevertheless, it was far more than a mere administrative matter. A judicial proceeding with identified plaintiff and defendants took place. This is clearly litigation as defined above. Costs associated with it are, therefore, non-reimbursable under the FTR. The agency is correct in refusing to pay Mr. Gorton's claim. The agency also asks if an employee can be reimbursed for expenses on a real estate sale or purchase if those expenses are incurred after the settlement date. Having concluded that the costs sought by Mr. Gorton are unallowable because they are litigation costs, we do not reach this second issue. This is an issue which is best addressed within the factual context of an unresolved claim. _____________________ EDWIN B. NEILL Board Judge