CBCA 5149

DISMISSED FOR FAILURE TO STATE A CLAIM: November 22, 2016 CBCA 5149 STRAWBERRY HILL, LLC, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Robert K. Stewart, Jr. of Davis Wright Tremaine LLP, Anchorage, AK, counsel for Appellant. Leonard E. Lucas III, Office of General Counsel, General Services Administration, Nashville, TN, counsel for Respondent. Before Board Judges SOMERS, HYATT, and WALTERS. SOMERS, Board Judge. In this appeal, Strawberry Hill, LLC (appellant or lessor) seeks payment of annual rent under a lease amendment between it and the General Services Administration (GSA or the Government). Pending before the Board is GSA’s motion to dismiss for failure to state a claim upon which relief may be granted. After reviewing GSA’s motion, appellant’s opposition thereto, the reply, the pleadings, and supplemental briefing requested by the Board on the issue of jurisdiction over the amended claim, we grant the motion to dismiss the appeal. CBCA 5149 2 Background GSA and the lessor entered into a lease on April 29, 2010, for 3202 rentable square feet of general office space and reserved surface parking spaces. Part III of the lease agreement, entitled “Award,” stated, in bold type, that “This document is not binding on the Government of the United States of America unless signed below by authorized contracting officer.” Supplemental lease agreement no. 1 provided the following: Terms and Conditions: All prior terms and conditions of this Lease as expressly contained herein represent the total obligations of the Lessor and the Government. Any agreements, written or oral, between the parties prior to the execution of this agreement are not applicable or binding. This agreement may be amended only by written instrument executed by the Lessor and the Government. In December 2014, GSA submitted to the lessor a request for additional office space for the National Oceanic and Atmospheric Administration (NOAA or tenant agency). At the time of the request, the lessor had one office suite that could be made available to satisfy GSA’s request for additional space. The lessor determined that it would be in the lessor’s financial interest to accommodate NOAA’s new space needs by “entering into a lease agreement with GSA.” Soon thereafter, the lessor began to negotiate with a GSA project manager on leasing two spaces, office suite 109 and apartment 411. The lessor took the apartment and the office space off the market and began to prepare the spaces for NOAA’s planned move-in date. The parties agreed that the lessor would amortize the February and March rent over the first twelve months of the lease period, i.e., from April 2015 to March 2016. In April 2015, the project manager sent draft lease amendments to the leasing contracting officer (the contracting officer or CO) for review. On April 10, 2015, the contracting officer sent the lease amendments to the lessor for its signature. The lessor signed the lease amendments and returned them to the contracting officer. Several days later, NOAA informed GSA that it had received an offer from the Alaska State Troopers (the other agency) to sublease to NOAA used space in the same building. On May 12, 2015, NOAA formally notified appellant’s project manager that it no longer needed the office space. Shortly thereafter, the contracting officer informed the lessor that the tenant agency no longer needed the office suite and that GSA would not be signing the lease amendment. Ultimately, GSA signed a supplemental lease agreement to add apartment 411 to the lease, but did not sign the supplemental lease agreement for suite 109. CBCA 5149 3 By letter dated June 12, 2015, the lessor submitted a claim to the contracting officer. In that claim, the lessor requested “the first year annual rent as defined in the original [lease agreement] of $51,457.69 as compensation for the time that the office suite was taken off the market and for various cost[s] incurred to prepare the Suite for GSA.” Appellant certified the claim. GSA’s contracting officer denied the claim on October 8, 2015, stating, in part: After sending the [supplemental lease agreement] to [the lessor] for signature, GSA was notified that NOAA no longer had a requirement to expand their current GSA lease in Dutch Harbor.