Woodies Holdings, L.L.C. v. United States , 120 Fed. Cl. 113 ( 2015 )

In the United States Court of Federal Claims
No. 12-59C
(Filed: February 10, 2015)
**********************
WOODIES HOLDINGS, LLC,
Plaintiff,
Contract; Trial; Mail Box Rule.
v.
THE UNITED STATES,
Defendant.
**********************
Lynn E. Calkins, Washington, D.C., with whom was Thomas J.
McIntosh, Washington, D.C., for plaintiff.
Martin M. Tomlinson, United States Department of Justice, Civil
Division, Washington, D.C., with whom were Franklin E. White, Jr., Assistant
Director, Robert E. Kirschman, Jr., Director, and Joyce R. Branda, Acting
Assistant Attorney General, for defendant.
_________
OPINION
_________
BRUGGINK, Judge.
This case presents a dispute between Woodies Holdings, LLC
(“Woodies” or “plaintiff”) and the United States, acting through the General
Service Administration (“GSA”), about whether GSA is obligated by the terms
of the lease to reimburse Woodies for a portion of real estate taxes Woodies
paid to the District of Columbia in 2007 and 2008. In a previous opinion
disposing of cross-motions for summary judgment, we held that GSA and
Woodies agreed upon a value to be used for the base year figure in the real
estate tax adjustment calculation. Woodies Holdings, LLC v. United States,
115 Fed. Cl. 204 (2014). That holding established GSA’s obligation to pay
plaintiff for the government’s portion of the real estate taxes for the first part
of lease year 2007-2008.1 Id. at 211-15. With respect to the second part of
lease year 2007-2008, we reserved for trial the question of whether Woodies’
representative timely submitted to GSA the documents showing that Woodies
had paid the District of Columbia for its September 2008 real estate taxes,
thereby satisfying the lease’s notification requirement. On December 1, 2014,
we had a trial on this limited issue. For the reasons set out below, we hold that
Woodies timely submitted the notice and is therefore entitled to recover
$37,837.34 for GSA’s portion of the tax.
BACKGROUND2
The 60-day period for timely submission of an invoice and proof of
payment is central to resolution of this case. Clause 3.2 of the lease at issue
provides the following:
D. The Lessor shall furnish the Contracting Officer with copies
of all notices which may affect the valuation of said land and
buildings for real estate taxes thereon, as well as all notices of
a tax credit, all tax bills, and all paid tax receipts . . . . All such
documents are due within 10 calendar days of receipt except that
the proper invoice and evidence of payment shall be submitted
within 60 calendar days after the date the tax payment is due
from the Lessor to the taxing authority. FAILURE TO
SUBMIT THE PROPER INVOICE AND EVIDENCE OF
PAYMENT WITHIN SUCH TIME FRAME SHALL BE A
WAIVER OF THE RIGHT TO RECEIVE PAYMENT
RESULTING FROM AN INCREASED TAX
ADJUSTMENT UNDER THIS PARAGRAPH.
1
There are several time cycles that run in the background of this case: 1) the
lease year runs from June 1 to May 31; 2) the District of Columbia’s tax year
runs from October 1 to September 30; 3) the District of Columbia bills plaintiff
for real estate taxes twice a year, once on March 31 for the period of October
1 through March 31 and then on September 15 for the period of April 1
through September 30; and 4) pursuant to the lease, plaintiff must submit to
GSA the tax invoice and evidence of payment no later than 60 days after the
payment is due.
2
A more complete recitation of the facts is available in our previous opinion,
which is reported at 115 Fed. Cl. 204.
2
JX 1 at WHL 061 (emphasis in original).3
At trial, we heard from two witnesses: Shahla Motamedi and Joel
Berelson. Ms. Motamedi was Woodies’ sole representative and real property
administrator for the lease during the relevant period.4 As the lease
administrator, Ms. Motamedi was tasked with securing compliance with the
terms of the lease, ensuring that the land owner maintained the building, and
verifying that the tenant complied with its obligations under the lease, such as
paying rent. Ms. Motamedi was also authorized to bill and seek payment from
tenants for increases in operating costs, annual rent, or taxes. We find Ms.
Motamedi to be credible, trustworthy, knowledgeable about lease
administration with GSA, detail-oriented, and methodically organized.
Ms. Motamedi testified that she wrote a letter to GSA on or before
November 13, 2008, but bearing that date, for the purpose of submitting proof
that Woodies paid the September 15, 2008 real estate tax bill. It was sent
using certified mail. According to Ms. Motamedi, she prepared the letter for
mailing by typing the certified mail tracking number on the top of the letter,
making several copies for sending and filing, placing the letter and attached
documents in an envelope, addressing and sealing the envelope, affixing the
cards for certified mail with return receipt request to the envelope,5 sticking the
certified mail tracking number on the green return receipt request, printing the
3
“JX” refers to the Joint Exhibits admitted into evidence at trial and the page
number refers to the bates number stamped on the document.
4
Ms. Motamedi is actually employed by Douglas Development Corporation,
which is a real estate management company that was hired to manage the
Woodies building.
5
Ms. Motamedi testified about her use of services offered by the United States
Postal Service (“Postal Service”) that provide the sender a record of mailing
and delivery. She frequently utilized certified mail with an additional return
receipt request. In order to signify that a letter is certified, part of a white card
is attached to the envelope that bears a bar code and tracking number, while
the other part of the card, which includes the replicated tracking number, is
retained by the sender. Ms. Motamedi also used the return receipt service,
whereby the Postal Service will furnish evidence of delivery on a green card
that was attached to the original envelope, which bears the same certified
tracking number, was signed for upon delivery, and returned to the sender
through the mail.
3
appropriate amount of postage at the office postage machine, stamping the
envelope with the postage, and, finally, placing the envelope in the outgoing
mail tray,6 which was next to the postage machine. After she completed this
mailing process, Ms. Motamedi stapled the certified mail receipt to a copy of
the letter and filed it.
Regarding the internal office mailing tray, Ms. Motamedi testified that
there are two responsible and long-tenured employees who pick up the mail
twice daily from the tray. The first pickup is at lunchtime, and this batch of
mail is brought to the lobby of the building to an official United States Postal
Service (“Postal Service”) mailbox. The letters that accumulate after lunch are
picked up later in the afternoon and brought to a nearby blue public mailbox.
Letters are not left in the outgoing mail tray overnight. In Ms. Motamedi’s
experience, this internal mailing system is reliable and has never been the
source of any problems in the past.
Ms. Motamedi was never presented with the receipt of certified delivery
that she had requested in the mailing of the November 13, 2008 letter but did
not immediately follow up with GSA. Her response to the fact that she had not
received confirmation of delivery was informed by her previous experiences
communicating with GSA. The lease at issue was not the only lease between
Woodies and GSA that Ms. Motamedi administered. At this time, Ms.
Motamedi was responsible for at least eighteen other GSA leases.7 She
testified, based on her extensive experience with GSA, that it was abnormal to
receive the receipt confirming delivery when she sent a certified letter to GSA
with a return receipt request. At trial, Ms. Motamedi was asked, “What
percentage of the time do you get a return receipt from your mailings to
GSA?” and responded, “One in ten.” Tr. 36:19-21. This was the case despite
the fact that Ms. Motamedi testified that she always sent bills or official
communication to GSA via certified mail with return receipt requested. The
lack of a return receipt did not give Ms. Motamedi much cause for concern,8
6
This outgoing mail tray is the only one designated for mail being sent through
the Postal Service, and it serves the entire Douglas Development Corporation
office.
7
Woodies was only one of Ms. Motamedi’s clients that leased to GSA.
8
When plaintiff’s counsel asked if Ms. Motamedi had “experienced situations
where you’ve sent [c]ertified [m]ail but it wasn’t delivered for whatever
reason,” she replied, “[i]f it’s not delivered, then it will the whole envelope
4
however, because she would later receive an e-mail from a GSA employee
stating that the letter had been received and that the matter was being acted
upon.
Finally, Ms. Motamedi told the court about a 2008 change in procedure
for submitting proof of tax payment to GSA. Beginning in March of that year,
GSA began to transition from receiving requests for real estate tax
reimbursements through the mail to receiving the requests through a
centralized fax system. Throughout 2008, GSA received submissions by both
methods: mail and fax. GSA notified lessors by letter in December 2008 that
they should begin making submissions using the new fax system. While Ms.
Motamedi testified that she did not receive a notice from GSA regarding the
new submission procedure specific to the lease at issue, Ms. Motamedi was
aware of the change in policy because of her administration of other GSA
leases.
On December 29, 2008, Ms. Motamedi faxed to GSA the same proof
of tax payment documents that she had originally included in her November
13, 2008 submission. She testified that, “[f]or all the other buildings that I had
already mailed my letters and billings, I started faxing all of them once more
one more time, and for this specific one . . . . I put an invoice according to
what I had gotten in mail, and with the second set . . . faxed it, I faxed this one,
too.” Tr. 57:25-58:7. On the fax, she wrote “[t]hese were previously sent to
the contracting officer.” JX 6 at WHL 642. GSA received the faxed
submission on December 29, 2008, but Mr. Joel Berelson, the GSA
Contracting Officer (“CO”) assigned to the lease at issue, rejected it as
untimely on June 23, 2009. JX 7 at WHL 640.
Mr. Berelson was not the only GSA employee who had responsibility
for administering the lease on behalf of GSA. GSA used a team approach to
lease administration whereby several other lower level GSA employees shared
responsibility for the routine administration of the lease at issue. These
employees included: Budget Analyst Terez Haines, Realty Specialist Donald
Scoggins, Budget Analyst Victoria Rinehardt, and prior to Mr. Berelson,
Contracting Officer Michelle Parrish. Due to the team approach, Mr. Berelson
was unable to answer many of the questions posed by counsel or the court
comes back to us.” Tr. 55:14-18. According to Ms. Motamedi, the
correspondence at issue was never returned to her or to Douglas Development
Corporation.
5
from personal knowledge at trial. We therefore find Mr. Berelson to be candid
but uninformed or lacking personal knowledge concerning whether GSA did,
in fact, receive the November 13, 2008 letter.
Mr. Berelson testified that Budget Analyst Victoria Rinehardt was
responsible for the daily administration of the lease at issue, which included
“receiving documentation submitted by the lessor,” whether by fax or mail,
“and then reviewing that documentation and preparing the lease amendment
for reimbursement.” Tr. 86:12-15. Although Mr. Berelson admitted that he
did not know exactly how mail communications were distributed within GSA,
and, even though he conceded that the lessor was under no obligation to direct
its submission to the specific Budget Analyst assigned to the lease, he asserted
that any communication regarding the lease at issue should have been
delivered to Ms. Rinehardt. Mr. Berelson was adamant that, if GSA actually
received the November 13, 2008 submission, then Ms. Rinehardt would have
been the eventual recipient and custodian of those documents even though he
was aware that others within GSA had received misdirected mail and had
personal experience with misdirected delivery of documents within GSA.
Specifically, Mr. Berelson recalled that prior to the new fax system, he
received at least one mailed-in document that should not have been delivered
to him. When this happened, Mr. Berelson determined who was the proper
GSA recipient and hand delivered the document to the correct individual. Mr.
Berelson further admitted that it was “not uncommon for mail to be addressed
to a contracting officer [who was] no longer responsible for a lease or a realty
specialist” who was not the proper recipient, particularly as reassignments
were common within GSA. Tr. 131:24-132:1. According to Mr. Berelson, the
centralized fax system was intended to address this issue of misdirected
communications because one administrative employee was tasked with
receiving the faxes and identifying the proper recipient based on an updated
database of administrators assigned to specific leases.
Additionally, the parties stipulated to the following:
Prior to establishing the fax system, GSA received complaints
from lessors that they had submitted material that GSA had no
record of having received and no way of definitively verifying
whether the material was sent or received. According to Carla
Walker, a GSA budget analyst intern who helped establish the
fax system and then monitored and tracked submissions through
6
the fax system, GSA had “no way to track whether or not [the
lessors] actually really had sent them.”
Stipulation ¶ 10. Mr. Berelson was unsure about how mail was tracked and
delivered within GSA prior to establishment of the centralized fax system.
Mr. Berelson testified that, before he denied Woodies’ submission for
untimeliness, Ms. Rinehardt advised him “that there was a search through the
lease file and the payment file and that there was not evidence of a timely
submission by the lessor.” Tr. 92:9-11. The lease file, which was the official
GSA file containing the lease, amendments, and supporting documentation,
was one of two places where the November 13, 2008 submission could have
been stored. The other was the payment file, which was a working file kept
by Ms. Rinehardt. However, Mr. Berelson did not know which file Ms.
Rinehardt had checked in order to reach the conclusion that Woodies had not
timely submitted the proof of tax payment. Tr. 93:9-12. Mr. Berelson also did
not know whether Ms. Rinehardt had checked if the missing document had
been delivered to one of the other members of the team. Instead, he testified
that he assumed she had conducted a thorough check for a timely submission,
but he had not pressed Ms. Rinehardt for details or searched himself.9 Mr.
Berelson also stated, “I have no way of knowing” if the November 13, 2008
letter was misdirected within GSA. Tr. 98:4.
With these facts before us, we endeavor to resolve whether Woodies
has proved that it timely submitted the November 13, 2008 proof of tax
payment. If it did, GSA is obligated to reimburse plaintiff for the tax
differential for the remaining two months of lease year 2007-2008.
9
Mr. Berelson also did not know whether the files for the other GSA leases
within the Woodies building had been searched for the missing submission.
Mr. Berelson was asked “why would it not have been logical to look at the file
folder for [lease numbers] 1641 or 1751 or 1838 because you have a common
billing for four different leases? Isn’t it possible that [] one bill could have
been stuck in one of those other files?” Tr. 108:20-24. Mr. Berelson replied,
“It could have been.” Tr. 108:25. When pressed further as to whether there
“were . . . standing orders that when you get a single billing for multiple leases,
the first thing you do is make copies?” Tr. 109:2-4. To which he answered,
“I’m not aware of how that works.” Tr. 109:5.
7
DISCUSSION
We find that Ms. Motamedi did, in fact, place the postage-stamped and
properly addressed envelope containing the letter and proof of tax payment in
the outbox of Woodies’ internal mailing system on November 13, 2008, and
that, based on the routine practice of her office, the mail that was placed in the
outbox tray was placed in a Postal Service box.10 Thus, Ms. Motamedi did, in
fact, mail the certified return receipt requested letter on November 13, 2008.
Normally, the fact that Woodies mailed the letter using the Postal
Service would entitle it to a presumption of delivery regardless of GSA’s
assertion of non-receipt. Rosenthal v. Walker, 111 U.S. 185, 193 (1884) (“If
a letter properly directed is proved to have been either put into the post-office
or delivered to the postman, it is presumed, from the known course of business
in the post-office department, that it reached its destination at the regular time,
and was received by the person to whom it was addressed.”). However, the
common law mailbox rule presumption is rebuttable with evidence that the
letter was never received. Rios v. Nicholson, 490 F.3d 928, 931 (Fed. Cir.
2007). “If there is opposing evidence that the letter was not received, the trier
of fact must weigh the evidence ‘with all the other circumstances of the case’
to determine whether the letter was actually received.” Tantum v. MSPB, 482
F. App’x 554, 556 (Fed. Cir. 2012) (citing Rios, 490 F.3d at 931).
Defendant argues that plaintiff is not entitled to the mailbox rule
presumption of delivery because it never received the return receipt card that
it requested, which would have confirmed delivery. In other words, defendant
proffers the non-existence of the requested receipt of delivery to establish the
fact that the November 13, 2008 letter was not delivered to GSA. The
rationale is that, if a letter is sent by certified mail and the sender does not
receive the confirmation of delivery from the Postal Service, the sender is on
notice that there may have been a problem with delivery. Moya v. United
States, 35 F.3d 501, 504 (10th Cir. 1994). Several Courts of Appeal also have
held that the lack of a return receipt when a letter was sent certified with return
receipt requested rebuts the presumption of delivery. Busquets-Ivars v.
10
Circumstantial evidence of mailing, including the customary mailing
practices used in the sender’s normal course of business, is sufficient for
purposes of the mailbox rule. Custer v. Murphy Oil USA, Inc, 503 F.3d 415,
420 (5th Cir. 2007); Rios, 490 F.3d at 933; Lopez v. Gonzales, 468 F.3d 81, 85
(2d Cir. 2006); Davis v. U.S. Bancorp, 383 F.3d 761, 766 (8th Cir. 2004).
8
Ashcroft, 333 F.3d 1008, 1009 (9th Cir. 2003); Moya, 35 F.3d at 504; Mulder
v. Comm’r, 855 F.2d 208, 212 (5th Cir. 1988); McPartlin v. Comm’r, 653 F.2d
1185, 1191 (7th Cir. 1981).
In addition to the non-existence of the receipt card, defendant argues
that, because it is entitled to a presumption of regularity in its record-keeping,
its inability to locate the November 13, 2008 letter in its records overcomes the
presumption of receipt. “The ‘presumption of regularity’ supports official acts
of public officers. In the absence of clear evidence to the contrary, the
doctrine presumes that public officers have properly discharged their official
duties.” Butler v. Principi, 244 F.3d 1337, 1340 (Fed. Cir. 2001); see
Chrysler Corp. v. United States, 604 F.3d 1387, 1380 (Fed. Cir. 2010).
Specifically, defendant asserts that, because its records are presumed to be
regular and correct and because its records contain no evidence that GSA
received the November 13, 2008 submission, then GSA did not receive the
proof of tax payment until Woodies submitted it via fax on December 29,
2008, which was untimely.
Neither the use of certified mail nor a presumption of regularity helps
the agency in this case. There is clear evidence to rebut defendant’s
presumption of regularity. First, there were the problems at GSA that
necessitated the implementation of the centralized fax system. Second, there
was the team approach and the history of at least two contracting officers
having been assigned to this lease, which increased the number of potential
recipients within GSA. There were multiple files for each lease and several
other lease files related to the Woodies building that could have shared the
same proof of tax payment. Finally, Mr. Berelson was unable to provide
assurances that he had personally searched any of these potential resting places
for the missing submission before concluding that the fax submission was
untimely. The internal mail delivery system within GSA was unreliable, at
best, during the period of time when the November 13, 2008 letter went
missing. Mr. Berelson could not recall doing anything to investigate the
location of the initial submission, nor did he follow up with subordinate
employees about whether the November 13, 2008 letter may have been
misplaced or misfiled. Under these circumstances, the government is not
entitled to the presumption of regularity in its business practices.11
11
Even if the government had been entitled to the presumption of regularity,
that presumption “alone, cannot overcome another presumption.” Rios, 490
F.3d at 933. In other words, the presumption of regularity is only relevant if
9
In addition, any evidentiary weight which might normally attach to the
non-receipt of the certified mail form is inapplicable here in view of the clear
evidence that the agency routinely ignored the basic rules of that system: it
often did not sign for the mail or return the receipt. Ms. Motamedi testified
that 9 out of 10 times she did not receive a green return receipt when she sent
certified mail to GSA, despite later confirmation that the letter had actually
been delivered to GSA.
There is thus nothing entitled to evidentiary weight to rebut the
presumption that the first, certified letter was actually received. As Judge
Skelton of the Court of Claims observed:
A presumption cannot be overturned or rebutted by speculation
or suspicion. It can only be destroyed or overcome by
convincing and uncontradicted evidence to the contrary which
clearly and distinctly establishes a fact so that reasonable minds
can draw but one inference. In addition to the foregoing, to
overcome the strong presumption of the arrival of a letter in due
course of the mails, the countervailing evidence must show the
contrary to be true by direct and positive proof of affirmative
facts.
Charlson Realty Co. v. United States, 384 F.2d 434, 444-45 (Ct. Cl. 1967)
(internal citation omitted).
We are satisfied that the November 13, 2008 letter was properly
stamped and addressed and placed in the United States mail, and we can thus
presume that it was delivered to GSA within a short period of time, making it
timely to trigger Woodies’ rights under the lease to claim reimbursement.
There is no credible evidence to the contrary.
CONCLUSION
The parties agree that the amount in controversy for this narrow issue
is $37,837.34. We find that Woodies timely submitted the November 13, 2008
letter with attached proof of payment and is therefore entitled to recover
$37,837.34, GSA’s proportional tax burden for the 2 month period originally
denied as untimely. We previously held that plaintiff is also owed GSA’s tax
we find that the presumption of delivery does not apply. See id. at 933-34.
10
share for the other ten months of the 2007-2008 lease year. Altogether,
Woodies is hereby awarded a total principal amount of $227,024.04, GSA’s
portion of the 2007-2008 real estate taxes for the lease at issue. Plaintiff is
also entitled to interest on this amount under the Contract Disputes Act, 41
U.S.C. § 7109(a)(1) (2012), from the date of its claim, June 2, 2011. The
Clerk’s Office is instructed to enter judgment accordingly.
s/ Eric G. Bruggink
Eric G. Bruggink
Judge
11