THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND

THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND

IS BEING PUBLICLY RELEASED IN ITS ENTIRETY ON AUGUST 7, 2023

RESPONDENT’S MOTION FOR PARTIAL SUMMARY JUDGMENT GRANTED;

APPELLANT’S MOTION FOR SUMMARY JUDGMENT GRANTED IN PART;

APPEAL GRANTED IN PART: July 25, 2023

CBCA 7135

THE HEIRS OF BAHAWOUDDIN, SON OF NEYAZ MOHAMMAD,

Appellant,

v.

DEPARTMENT OF STATE,

Respondent.

Roia Shefayee of Wellspring Advisers, PC, Alameda, CA, counsel for Appellant.

Erin M. Kriynovich, Office of the Legal Adviser, Buildings and Acquisitions,

Department of State, Washington, DC, counsel for Respondent.

Before Board Judges BEARDSLEY (Chair), VERGILIO, and SULLIVAN.

SULLIVAN, Board Judge.

The Heirs of Bahawouddin, Son of Neyaz Mohammad (the Heirs or appellant), filed

a motion for summary judgment, seeking, as a matter of law, the payment of unpaid rent and

the costs to rebuild a building on property leased to the Department of State (DOS or

respondent). DOS filed a motion for partial summary judgment, asserting that the Heirs’

claim for the destruction of the building was untimely and contrary to the terms of the lease

CBCA 7135

2

and that it did not owe the Heirs rent for the period after the lease was assigned. We grant

DOS’ partial motion, grant in part the Heirs’ motion, and grant in part the appeal.

Background

In December 2013, DOS entered into a lease with the Heirs for residential property

in Kabul, Afghanistan, referred to as the “Jill-Fab.” Appeal File, Exhibit 1 at 12.1

Mr. Mohammad Tariq Baha, appointed through a power of attorney, signed the lease on

behalf of the Heirs. Id. at 12. The lease term was for ten years, starting March 1, 2014, and

rent was $120,000 per year. Id. at 1-2.

Several lease provisions control the resolution of the parties’ dispute. Article eight

provided that DOS would return the property “as is” at the end of the lease and had the right

to demolish any structure on the premises, at its own discretion, without any requirement to

compensate the Heirs:

C.

The TENANT will not be responsible for restoring the Premises to any

condition or for any changes or damages to the Premises. The Premises are

leased in “as is” condition and may be returned in the “as is” condition as of

the date of lease expiry or termination.

D.

The TENANT may demolish, at its discretion and cost, any buildings

on the Premises, without paying compensation, with no responsibility to

rebuild at a future time.

Exhibit 1 at 4. Article nine provided that DOS may “assign its interest in the Premises . . .

to any party without the prior consent of the LANDLORD” and that it would provide the

Heirs with notice of the assignment. Id. at 5.

The lease also contained two provisions pertaining to the choice of law to be

employed in resolving any disputes arising under the lease. Article fifteen provided that “all

disputes arising under or relating to this Lease shall be resolved exclusively under” the

Contract Disputes Act (CDA), 41 U.S.C. §§ 7101–7109 (2018), and that claims by the

landlord “shall be submitted within [six] years after accrual of the claim.” Exhibit 1 at 7-8.

If claims were found due, article fifteen also provided for DOS to pay CDA interest

calculated from the date of receipt of the claim. Article sixteen provides that “[t]he terms of

this lease shall be construed in accordance with the local laws of Afghanistan.” Id. at 10.

1

All exhibits are found in the appeal file, unless otherwise noted.

CBCA 7135

3

On June 27, 2019, DOS assigned its interest in the lease to the Federal Republic of

Germany (FRG). Exhibit 2 at 45. In the notice to the Heirs, DOS stated that all future rent

payments would be made by FRG and that DOS would no longer have any further

responsibility for or liability under the lease. Id. DOS made five annual payments pursuant

to the lease, a total of $600,000, for rent owed through February 28, 2019. Appellant’s

Statement of Undisputed Material Facts ¶ 3. In response to the claim, DOS acknowledged

that it had not paid the rent owed from March 1, 2019, through the date of the assignment

because of concerns about Mr. Baha’s authority to receive those payments. Exhibit 3 at 4.

According to Mr. Baha, FRG made two additional payments, a total of $240,000.

Declaration of Mohammad Tariq Baha (date) ¶ 20. The Heirs seek payment of $360,000,

in unpaid rent, for two periods: March 1–June 30, 2019, and July 1, 2021–February 29,

2024. Id. ¶ 23.

At some point during the lease, DOS demolished the Jill-Fab. On September 28,

2014, Mr. Baha emailed DOS’ contact in Kabul, stated that the house on the property had

been demolished, and asked for an explanation. Exhibit 18; Appellant’s Response to

Respondent’s Statement of Undisputed Material Facts ¶ 25. In a reply the next day, DOS’

contact stated that DOS would not be compensating the Heirs because, “[a]ccording to . . .

article 8 section D, it is clearly written that we have the right to demolish your house with

no cost.” Exhibit 18; see Appellant’s Reply to Respondent’s Motion for Summary Judgment

at 6-7.

On October 14, 2020, the Heirs submitted a claim to DOS’ contracting officer,

seeking compensation for the demolished building and rent owed for the months preceding

and subsequent to DOS’ assignment to FRG. Exhibit 2 at 21.

Discussion

I.

The Heirs’ Claim for Demolition of the Jill-Fab is Untimely

DOS moves for dismissal of the Heirs’ claim arising from the demolition of the

Jill-Fab as untimely because the Heirs’ claim was submitted more than six years after the

claim for demolition of the property accrued. Pursuant to the CDA, “[e]ach claim by a

contractor against the Federal Government relating to a contract shall be submitted within

6 years after the accrual of the claim.” 41 U.S.C. § 7103(a)(4)(A). The lease included this

requirement in article 15. “A party’s failure to submit a claim within six years of accrual is

an affirmative defense to the claim.” ThinkGlobal Inc. v. Department of Commerce, CBCA

4410, 16-1 BCA ¶ 36,489, at 177,793 (citing Systems Management & Research Technologies

Corp. v. Department of Energy, CBCA 4068, 15-1 BCA ¶ 35,976, at 175,789),

reconsideration granted in part, 17-1 BCA ¶ 36,642.

CBCA 7135

4

Whether and when a claim has accrued is determined according to the Federal

Acquisition Regulation (FAR), the language of the contract, and the facts of the particular

case. Kellogg Brown & Root Services., Inc. v. Murphy, 823 F.3d 622, 626 (Fed. Cir. 2016).

The FAR defines the “accrual of a claim” as “the date when all events, that fix the alleged

liability of . . . the Government . . . and permit assertion of the claim, were known or should

have been known. For liability to be fixed, some injury must have occurred. However,

monetary damages need not have been incurred.” 48 CFR 33.201 (2021) (FAR 33.201).

“[O]nce a party is on notice that it has a potential claim, the limitations period begins to run.”

ThinkGlobal, 16-1 BCA at 177,793 (quoting Cardinal Maintenance Service, Inc., ASBCA

56885, 11-1 BCA ¶ 34,616, at 170,610 (2010)).2

“[T]o determine when appellant’s claims accrued, and the events that fixed the alleged

liability, we start by examining the legal basis for each particular claim.” Crane & Co. v.

Department of the Treasury, CBCA 4965, 16-1 BCA ¶ 36,539, at 178,007 (quoting

Environmental Safety Consultants, Inc., ASBCA 54615, 07-1 BCA ¶ 33,483, at 165,984).

The Heirs’ claim for the demolition of the Jill-Fab is based upon a purported violation of

Afghan law and a breach of the lease. “Generally, ‘[i]n the case of a breach of a contract, a

cause of action accrues when the breach occurs.’” Id. (quoting Alder Terrace, Inc. v. United

States, 161 F.3d 1372, 1377 (Fed. Cir.1998)); see Brighton Village Associates v. United

States, 52 F.3d 1056, 1060 (Fed. Cir. 1995) (“These claims accrued on the dates the alleged

breaches occurred.”). The cause of action accrues at the time of breach because that is when

the party suffers the injury. Crane & Co., 16-1 BCA at 178,008 (“[I]n the usual case the

contractor suffers damages upon the occurrence of the breach . . . .”).

Appellant’s claim for the demolition accrued, at the latest, at the time that Mr. Baha

learned that the building on the property had been demolished, sometime on or before

September 28, 2014. At this point, the injury had occurred (the building had been

demolished), and the time within which to file a claim began to run. Since appellant did not

2

The DOS contracting officer did not deny the claim for the demolition of the

property because it was untimely. New legal theories may be raised in response to newly

acquired information. See Tecom, Inc. v. United States, 732 F.2d 935, 937 (Fed. Cir. 1984);

Crane & Co., 16-1 BCA at 178,006 (allowing respondent to argue for the first time that

appellant’s new claims were untimely in response to a motion to amend). The Heirs did not

include in the claim the date that Mr. Baha learned of the Jill-Fab’s demolition, and DOS

learned of this information in discovery after the appeal was filed. Respondent’s Statement

of Undisputed Material Facts ¶ 42.

CBCA 7135

5

submit its claim until October 14, 2020, more than six years later, the claim for the

demolition of the property is untimely. 41 U.S.C. § 7103(a)(4)(A).

Appellant disputes that the Heirs all had notice of the demolition, asserting that only

Mr. Baha knew, so the claim did not accrue until all of the Heirs were informed (a date not

provided by appellant). Appellant’s Response to Respondent’s Statement of Undisputed

Material Facts ¶ 27. In general, knowledge acquired by an agent acting within the scope of

his or her agency is imputed to the principal, and the latter is bound by that knowledge even

if the information is never actually communicated. Long Island Savings Bank, FSB v. United

States, 503 F.3d 1234, 1249 (Fed. Cir. 2007). Once an agent has knowledge of the existence

of a claim, the statute of limitations begins to run. Immunocept, LLC v. Fulbright &

Jaworski, LLP, 504 F.3d 1281, 1287 (Fed. Cir. 2007); see Florida Dehydration Co. v. United

States, 101 F. Supp. 361, 363 (Ct. Cl. 1951) (dismissing plaintiff’s petition as untimely when

it was filed more than six months after plaintiff’s attorney received notice of denial). The

critical factor is whether the knowledge was within the scope of the authority granted to the

agent. Immunocept, 504 F.3d at 1287. The Heirs granted Mr. Baha broad powers of attorney

that “give him unfettered and unconditional authority to make decisions about, and supervise,

and maintain, and rent.” The Board has previously ruled in this case that this grants

Mr. Baha the power to file claims on appellant’s behalf with respect to and arising under the

lease. The Heirs of Bahawouddin, Son of Neyaz Mohammad v. Department of State, CBCA

7135, 22-1 BCA ¶ 38,212, at 185,565-66. Mr. Baha had authority to bring the claim for

damages for the demolition; therefore, Mr. Baha’s knowledge of this claim is imputed to all

of the Heirs.

The Heirs also assert that the claim should not accrue until the lease ended; at the time

the building was demolished, there were still nine years remaining on the lease. Appellant’s

Reply to Respondent’s Motion for Summary Judgment at 7. The Heirs’ assertion is contrary

to the law on the accrual of claims. In a continuing contract, claim accrual happens at the

time of the breach and does not require contract completion. United Liquid Gas Co. v.

General Services Administration, CBCA 5846, 18-1 BCA ¶ 37,172, at 180,941. The

remaining time on the lease did not forestall the accrual of a claim.

The Heirs argue that the term “accrual” is not defined in the CDA or in Afghan law

so the Board has no means of determining when the claim accrued. Appellant’s Reply to

Respondent’s Motion for Summary Judgment at 6. The lease uses the word accrual in

specifying the period within which the lessors must file a claim and provides that disputes

would be resolved in accordance with the CDA. We interpret the contract term “accrual” to

be consistent with the FAR definition and case law. See, e.g., Triple Canopy, Inc. v.

Secretary of the Air Force, 14 F.4th 1332, 1338 (Fed. Cir. 2021); Amec Foster Wheeler

CBCA 7135

6

Environment & Infrastructure, Inc. v. Department of the Interior, CBCA 5168, et al., 19-1

BCA ¶ 37,272, at 181,366.

Finally, the Heirs assert that the breach occurred not when the Jill-Fab was

demolished but when the property was abandoned in 2021 with the withdrawal from

Afghanistan. Appellant’s Brief in Response to Respondent’s Motion for Partial Summary

Judgment at 5.3 According to the Heirs, the claim arose when DOS failed to return the

premises in the “as is” condition of the property when it was first leased. This argument runs

counter to the Heirs’ claim, which asserted that the destruction of the building was the

breach. This argument also is not supported by the lease, which provides that DOS may

return the premises in the “as is” condition it is when the lease is terminated, not the “as is”

condition it was at the beginning of the lease. The provision is a right granted to DOS to

return the property in whatever condition it is without any obligation to restore it.

Because we determine that the claim for the demolition of the building is untimely,

we do not reach the merits of the Heirs’ claim.

II.

DOS Does Not Owe the Heirs Rent After the Assignment

The Heirs assert that DOS remained obligated to pay the rent after the assignment of

the lease to FRG and, therefore, that DOS is liable for the rent unpaid by FRG. Appellant’s

Motion for Summary Judgment at 4. In essence, the Heirs assert that DOS’ assignment was

of the rights to use the property, not the obligation to pay the rent.

To decide this claim, we first look to the language of the assignment provision within

the lease to determine DOS’ remaining obligations, if any. LAI Services, Inc. v. Gates, 573

F.3d 1306, 1314 (Fed. Cir. 2009); Hunt Construction Group, Inc. v. United States, 281 F.3d

1369, 1373 (Fed. Cir. 2002). Article nine of the lease provides that DOS could “assign” its

interest in the premises at any time but does not state whether the assignment could include

all of DOS’ obligations. We next look to Afghan law to define the term and determine the

scope of DOS’ permitted assignment because the parties agreed that the lease would be

construed in accordance with Afghan law. The Heirs of Bahawouddin, 22-1 BCA at 185,565

3

DOS moves to strike this reply brief as untimely, pursuant to Board Rule 8(g)

(48 CFR 6101.8(g)). Counsel for the Heirs correctly observed that the Board’s

November 16, 2022, scheduling order that adopted dates proposed by the parties set the date

for the filing of reply briefs as June 19, 2023, rather than requiring the parties to follow the

requirements of Rule 8(g). Since June 19, 2023, was a federal holiday, appellant’s reply

brief was timely filed on June 20. DOS’ motion to strike is denied.

CBCA 7135

7

(citing Sam Gray Enterprises, Inc. v. United States, 43 Fed. Cl. 596, 601 (1999) (finding that

the lease states that Afghan law would be followed in interpreting the contract), aff’d, 250

F.3d 755 (Fed. Cir. 2000)). Afghan law provides that, “[i]n case of assigning lease, assignee

shall succeed lessee with regards to his relationship with lessor on rights and obligations

arising from lease contract.” Afghan Civil Code, Article 1381 (1977) (Elite Legal Services,

Ltd., Mohammad Fahim Barmaki trans., Stanford University Law School 2014).4 Afghan

law further provides that the assignor “shall be recognized as guarantor of assignee regarding

fulfillment of his obligations” but that the lessee “shall be recognized as acquitted against

lessor . . . [w]hen rent is paid by assignee or sub-lessee, without expressing retention of his

rights against the first lessee.” Id. arts. 1381, 1383.5 There is no evidence of any reservation

of rights when FRG paid—and the Heirs accepted—the rent for the two years after the

assignment. Accordingly, DOS was permitted to and did assign all of its rights and

obligations under the lease and is not liable for the rent after the assignment.

III.

DOS Owes the Heirs Rent for the Period for March 1, 2019 until the Assignment

As noted above, there are two periods of unpaid rent—the three months before the

assignment and the months after the assignment. In its motion, appellant moved for

summary judgment on DOS’ liability for $360,000 in unpaid rent—the amount owed, but

unpaid from both before and after the assignment. Appellant’s Motion for Summary

Judgment at 2. DOS moved for partial summary judgment regarding its liability for rent after

the assignment but did not address the period before the assignment in its briefing. DOS has

acknowledged liability for the rent prior to the assignment but expressed concerns regarding

Mr. Baha’s authority to receive the rent payment on behalf of the Heirs. In a prior ruling, the

Board required Mr. Baha to provide notice of the appeal to all of the Heirs, and DOS had the

4

The compilation of the Afghan Civil Code was provided as exhibit 11 in the

Rule 4 file.

5

Article 1383 also provides that a lessee can be acquitted against a lessor if the

lessor explicitly accepts the assignment. The Heirs offer the opinion of an expert in Afghan

law, who opines that these two provisions of Article 1383 must be read together so that DOS

had to both have the Heirs accept the assignment and FRG pay the rent without reservation

for DOS to be “acquitted against the lessor.” Appellant’s Motion, Exhibit 1. This

interpretation is contrary to both the provision itself and the terms of the lease. Article 1383

states that the first lessee “shall be acquitted against the lessor in the following cases” and

then lists the two options. The phrase “in the following cases” indicates that the provisions

are to be read in the disjunctive. The lease allows DOS to assign its interest in the property

without the Heirs’ approval, so to construe a requirement for approval would be contrary to

the parties’ agreement.

CBCA 7135

8

opportunity to depose at least one of the Heirs during discovery. Respondent’s Motion for

Partial Summary Judgment at 1. DOS did not raise any issue in its briefing regarding Mr.

Baha’s authority to receive the rent owed. None of the other heirs have come forward during

the pendency of the appeal to challenge Mr. Baha’s authority.

Since DOS has not raised an objection to the Heirs’ motion for the payment of the rent

prior to the assignment, the Board accepts DOS’ prior acknowledgment that it is liable for

this portion of the unpaid rent and grants the Heirs’ motion in part. Neither party quantified

in its briefing the amount owed for this period. The annual rent was $120,000, which

averages to $10,000, per month. On this basis, DOS owes the Heirs $30,000, plus CDA

interest calculated from October 14, 2020, the date of the Heirs’ claim.

Decision

DOS’ motion for partial summary judgment is GRANTED, the Heirs’ motion for

summary judgment is GRANTED IN PART, and the appeal is GRANTED IN PART.

Marian E. Sullivan

MARIAN E. SULLIVAN

Board Judge

We concur:

Erica S. Beardsley

ERICA S. BEARDSLEY

Board Judge

Joseph A. Vergilio

JOSEPH A. VERGILIO

Board Judge