# THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

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

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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

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(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

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Acbca%3A2b05cae88c07f6bd. Public record. Not legal advice.