APPELLANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT DENIED;

APPELLANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT DENIED;

RESPONDENT’S MOTION FOR SUMMARY JUDGMENT GRANTED IN PART:

January 17, 2024

CBCA 7502, 7503

HAMIDULLAH, SON OF MOHAMMAD RAJAB,

Appellant,

v.

DEPARTMENT OF STATE,

Respondent.

Enayat Qasimi and Shamsi Maqsoudi of Whiteford, Taylor & Preston LLP,

Washington, DC, 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 VERGILIO, GOODMAN, and SULLIVAN.

SULLIVAN, Board Judge.

Hamidullah, Son of Mohammad Rajab (Hamidullah or appellant), appealed the

decisions of the contracting officer for the Department of State (DOS) on appellant’s claims

arising from the termination of lease contracts in Afghanistan following the withdrawal of

United States forces. In cross-motions for summary judgment, the parties address whether

the terminations were proper and Hamidullah’s contention that DOS was required, but failed,

to return physical control of the properties upon termination of the lease. Consistent with

Abdul Mutakaber v. Department of State, CBCA 7576 (Jan. 17, 2024), we hold that DOS

terminated the leases for convenience and that DOS was not obligated to return physical

control of the property to Hamidullah.

CBCA 7502, 7503

2

Statement of Undisputed Facts

I.

Lease Contracts and Their Relevant Provisions

A.

Qasemi Lot

In September 2013, DOS entered into a lease with Hamidullah for a 10,060-squaremeter lot in Kabul, Afghanistan, referred to as the Qasemi lot. Respondent’s Statement of

Undisputed Facts ¶¶ 16-17. The initial lease term was for approximately ten years and rent

was $1,327,920 annually. Id. ¶¶ 18, 20. The Qasemi lease was renewable for four additional

periods until 2063, provided that DOS gave written notice to the landlord (Hamidullah) “at

least 30 days prior to the date the Lease term or any renewal period would otherwise expire.”

Id. ¶ 19.

The Qasemi lease contained two termination provisions that control the resolution of

the parties’ dispute. First, article 12, Destruction of Premises, gave DOS the right to

immediately terminate the lease should the property be rendered unfit for tenancy:

Whenever the Premises or any essential part thereof shall be destroyed or

rendered unfit for further tenancy through fire, vandalism, earthquake, flood,

storm, war, civil disturbance, Act of God, or other similar casualty, this Lease

shall, at the option of the TENANT, immediately terminate. In case of partial

destruction or damage, this Lease may be terminated in whole or in part at the

TENANT’s option. Should the TENANT exercise its option, it shall provide

at least twenty days’ written notice to the LANDLORD, and no rent shall

accrue to the LANDLORD after such termination.

Respondent’s Statement of Undisputed Facts ¶ 23. Article 12 required the landlord to

“refund any advance rental payments in excess of rental liabilities accrued to the date of

termination.” Id.

The second termination provision, article 14, Termination, allowed DOS to terminate

the lease for its convenience by giving ninety days’ notice of its intent:

The TENANT may, for its convenience, terminate this Lease in whole or in

part at any time, if it determines that such termination is in the best interests

of the TENANT, by giving written notice to the LANDLORD 90 days in

advance. If the TENANT terminates this Lease in accordance with this clause,

the TENANT shall not be liable for any charges additional to those normally

incurred up to the date the Lease is terminated.

CBCA 7502, 7503

3

Respondent’s Statement of Undisputed Facts ¶ 24. Article 14 required the landlord to issue

a “pro rata refund of any rent payments made for periods beyond the date” DOS

“surrender[ed]” the premises. Id.

Article 14 stated that DOS was to return the property in the condition received, less

normal wear and tear: “The TENANT will return the property in which [sic] it was received

minus normal wear and tear. No unnecessary make-ready will be accomplished unless the

damages is [sic] the result of negligence by the TENANT.” Respondent’s Statement of

Undisputed Facts ¶ 24. But, article 8, Tenant Rights and Responsibilities, permitted DOS

to alter the premises and permitted, but did not require, DOS to remove the alterations:

The TENANT shall have the right, during the existence of this Lease, to erect

structures, additions and signs, to make alterations, and/or attach fixtures in or

upon the premises including internal and external security upgrades, access

doors in the East wall of the property to an adjacent property to be leased by

the TENANT, installation of generators, fuel tanks, air conditioners, and any

other items deemed necessary by the TENANT. Such fixtures, additions, or

structures placed in our [sic] upon or attached to the said Premises shall be and

remain the property of the Tenant and may be removed before, at the time of,

or within a reasonable time after the Lease or any extension thereof expires or

is terminated.

Id. ¶ 22. Article 8 also relieved DOS of responsibility for damage to the property caused by

forces outside of its control:

The TENANT shall, unless specified to the contrary, maintain the said

Premises in good repair and Tenantable condition, including minor

maintenance such as trash removal and light bulb replacement, during the

continuance of this Lease, except for reasonable and ordinary wear and tear,

damage by the elements, or other circumstances not under the TENANT’s

control. Any damage arising from the intentional acts or negligence of the

LANDLORD, its agents or employees, or any other third parties not under

LANDLORD’s or TENANT’s control, is similarly excepted.

Id.

B.

Polaski Lot

In November 2014, DOS entered into a second lease with Hamidullah for a 2612square-meter lot in Kabul, Afghanistan, referred to as the Polaski Lot. Respondent’s

Statement of Undisputed Material Facts ¶¶ 28-29. The initial lease term was for five years,

CBCA 7502, 7503

4

beginning July 2014, and the rent was $344,784 annually. Id. ¶¶ 30, 32. The Polaski Lease

was renewable for three additional five-year periods provided that DOS gave written notice

to the landlord “at least sixty days” prior to the expiration of the current lease term. Id. ¶ 31.

DOS renewed the Polaksi lease in 2019, extending the lease term through July 2024. Id. ¶ 8.

The Polaski lease also contained a clause, article 12, Destruction of the Premises,

giving DOS the right to terminate if the premises were rendered unfit for further tenancy:

Whenever the Premises or any essential part thereof shall be destroyed or

rendered unfit for further tenancy through fire, explosion, vandalism,

earthquake, flood, storm, war, act of terrorism, civil disturbance, Act of God,

or other similar casualty, this Lease shall, at the option of the TENANT,

immediately terminate upon provision of written notice to the LANDLORD.

In the event of such termination, no rent shall accrue to the LANDLORD after

he/she/it receives the TENANT’s written notice.

Respondent’s Statement of Undisputed Facts ¶ 36. Article 12 also stated that the landlord

would be required to refund advanced rental payments in excess of rental liabilities accrued

to the date of termination. Id.

Article 14, Termination, gave DOS the right to terminate the lease for its convenience:

The TENANT may, for its convenience, terminate this Lease in whole or in

part at any time, if it determines that such termination is in the best interests

of the TENANT, by giving written notice to the LANDLORD sixty (60) days

in advance. If the TENANT terminates this Lease in accordance with this

clause, the TENANT shall not be liable for any charges additional to those

normally incurred up to the date the Lease is terminated.

Respondent’s Statement of Undisputed Facts ¶ 37. Unlike the Qasemi lease, the Polaski

lease did not specify the condition in which the property was required to be returned. The

lease also provided for the return of rent payments “made for periods beyond the date the

TENANT surrender[ed]” the premises. Id.

Both leases contained provisions specifying that the leases are subject to the Contract

Disputes Act (CDA), 41 U.S.C. §§ 7101–7109 (2018), and that the terms of the lease were

to be construed in accordance with the laws of Afghanistan. Respondent’s Statement of

Undisputed Facts ¶¶ 25-26, 38-39.

CBCA 7502, 7503

II.

5

Facts Leading to the Dispute

In February 2020, the United States signed the “Agreement for Bringing Peace to

Afghanistan between the Islamic Emirate of Afghanistan which is not recognized by the

United States as a state and is known as the Taliban and the United States of America,”

referred to as the “Doha Agreement.” Respondent’s Statement of Undisputed Material Facts

¶ 41. On August 15, 2020, the Taliban entered Kabul. Id. ¶ 48. Subsequently, the Ghani

administration, which led the Government of the Islamic Republic of Afghanistan, collapsed.

Id.

In the period leading up to the Taliban’s advance, DOS evacuated properties

peripheral to the embassy, including the Qasemi and Polaski lots. Id. ¶ 43. When it left the

properties, DOS did not dismantle fixtures that it had installed and left behind certain

equipment. Appellant’s Statement of Undisputed Material Facts ¶ 55. On August 31, 2021,

the U.S. embassy suspended its operations in Kabul. Id. ¶ 33; Respondent’s Statement of

Undisputed Material Facts ¶ 52. The Taliban took control of the properties after DOS

departed. Respondent’s Statement of Undisputed Material Facts ¶ 66.

Following suspension of the embassy mission, DOS discussed whether to maintain

or terminate its leases for properties in Kabul. Respondent’s Statement of Undisputed

Material Facts ¶ 56. For some properties, DOS entered an arrangement for Qatar to serve

as a protecting power for U.S. diplomatic and consular interests in Afghanistan. Appellant’s

Statement of Undisputed Material Facts ¶¶ 35-37. The Qasemi and Polaski lots were not

included in this arrangement. Id. ¶ 38.

On November 9, 2021, DOS issued a termination notice for the Qasemi lease,

referencing article 12 of the lease. Appellant’s Statement of Undisputed Material Facts ¶ 44.

The notification email informed Hamidullah that the final rent payment, covering the period

between September 30, 2021, and November 29, 2021, in the amount of $221,926 would be

paid to Hamidullah. Id. The email did not explain why DOS was invoking article 12. Id.;

Respondent’s Statement of Undisputed Material Facts ¶¶ 58-59.

On March 3, 2022, DOS issued a termination notice for the Polaski lease, also

referencing article 12. Appellant’s Statement of Undisputed Material Facts ¶ 45. The

notification email stated that Hamidullah owed DOS a refund of $118,076, for the period

March 3, the termination date, through July 6, 2022, the date through which DOS had paid

rent in advance. Id. The email did not explain why DOS was invoking article 12. Id.;

Respondent’s Statement of Undisputed Material Facts ¶¶ 61-62.

On February 4 and April 15, 2022, Hamidullah submitted claims contesting the

terminations of the Qasemi lease and the Polaski lease, respectively. Respondent’s Statement

CBCA 7502, 7503

6

of Undisputed Material Facts ¶¶ 78, 84. The contracting officer denied the claims on June

27 and July 19, 2022, respectively. Notice of Appeal (CBCA 7502), Attachment A; Notice

of Appeal (CBCA 7503), Attachment B. In addition to denying Hamidullah’s claim for the

Polaski lot, the contracting officer demanded Hamidullah refund the $118,076 requested in

the termination notice. Notice of Appeal (CBCA 7503), Attachment B. Hamidullah timely

appealed both decisions to the Civilian Board of Contract Appeals, and the appeals were

consolidated pursuant to Board Rule 2 (48 CFR 6101.2 (2022)).

Discussion

I.

The Lease Terminations Are Converted to Terminations for Convenience

A.

DOS Fails to Establish That Termination Was Proper Under Article 12

DOS asserts that its terminations were proper because the Taliban takeover “was an

act of a third party, akin to war, civil disturbance, or similar casualty, that rendered the

premises unfit for further tenancy” per article 12 of the leases. To decide this claim, the

Board must interpret the meaning of the article 12 language “unfit for further tenancy” and

determine whether the facts here fall within the circumstances contemplated in article 12 that

would justify the terminations.

We look first to the plain language of the lease contract. Foley Co. v. United States,

11 F.3d 1032, 1034 (Fed. Cir. 1993). “[P]rovisions of a contract must be so construed as to

effectuate its spirit and purpose . . . an interpretation which gives a reasonable meaning to

all of its parts will be preferred to one which leaves a portion of it useless, inexplicable,

inoperative, void, insignificant, meaningless, superfluous, or achieves a weird and whimsical

result.” Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991) (quoting Arizona

v. United States, 575 F.2d 855, 863 (Ct. Cl. 1978)). Given that the clause provides for the

immediate cancellation of DOS’s obligation to pay rent, the termination is akin to a

termination for default, wherein the agency bears the burden to prove the termination was

justified. See generally Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed.

Cir. 1987).

The clause in both leases gave DOS the right to terminate should some physical event

render the property itself destroyed or unfit for occupation. The first indicator of this

construction is found in the title of the clause, “Destruction of the Premises.” This title

suggests that the type of event that would merit a termination under article 12 would need

to alter the habitability or physical use of the property. The text of the clause supports this

construction: “Whenever the Premises or any essential part thereof shall be destroyed or

rendered unfit for further tenancy through fire, explosion, vandalism, earthquake, flood,

storm, war, act of terrorism, civil disturbance, Act of God, or other similar casualty, this

CBCA 7502, 7503

7

Lease shall, at the option of” the tenant, “immediately terminate.” DOS’s right to terminate

arises when some kind of event occurs that affects the “[p]remises or any essential part

thereof,” clarifying that the impact of the events listed in the clause must be to the physical

premises or the environs. The type of events contemplated that would destroy or render the

premises unfit for further tenancy, such as fires, explosions, earthquakes, and floods, would

all have an immediate and obvious destructive impact to the properties. Reading the other

listed events in this context, including the circumstances of war or civil disturbance relied

upon by DOS, makes clear that these events must cause some kind of similar destructive

impact to justify termination under the clause. Finally, article 12 gives DOS the option to

terminate or partially terminate immediately the lease of the property or portion of the

property damaged by an event, which reinforces the idea that the damage to the premises that

would give DOS the right to terminate must be of a nature that requires DOS to determine

whether it can continue to use or inhabit the damaged properties.

DOS puts forth no material facts showing that the Taliban occupation destroyed the

premises or damaged them to such an extent that they were rendered unfit for further

tenancy. Instead, DOS asserts that the Taliban takeover “created a dangerous security

situation that . . . [made] it impracticable for the U.S. Embassy to maintain operations in

Afghanistan.” Respondent’s Motion for Summary Judgment at 8. This assertion does not

demonstrate that the properties themselves were destroyed or rendered unfit for tenancy, as

required by the clause. Instead, it appears that the Taliban takeover created a situation which

affected DOS’s ability to carry out its mission in Afghanistan and eliminated its need for the

properties, rather than any determination about the condition of the properties.

After it suspended embassy operations, DOS waited two months to terminate the

Qasemi lease and six months to terminate the Polaski lease. DOS did not claim that it

discovered some destruction or damage to the premises during those periods that influenced

its decisions to terminate. Rather, DOS admits that it undertook discussions internally as to

whether to terminate its Afghanistan leases and that, for some leases, it entered into an

agreement with Qatar to protect its interests. DOS’s decision to terminate did not arise from

any destruction or damage to the Qasemi or Polaski lots themselves. DOS has not met its

burden of justifying its termination pursuant to the requirements of article 12.

B.

Terminations Were Proper Terminations Under Article 14

DOS argues in the alternative that its termination was proper pursuant to article 14 of

both leases. In considering this alternative argument, the Board looks to the judicial doctrine

of constructive termination. “Constructive termination is applied when the basis upon which

a contract was actually terminated is legally inadequate to justify the action taken.” Maxima

Corp. v. United States, 847 F.2d 1549, 1553 (Fed. Cir. 1988). In such cases, so long as the

contract was actually terminated and contains a termination for convenience clause, an

CBCA 7502, 7503

8

improper termination “will not be considered a breach but rather a convenience termination.”

Id. (quoting G.C. Casebolt Co. v. United States, 421 F.2d 710, 712 (Ct. Cl. 1970)). When

a tribunal finds constructive termination to be the proper remedy, the contractor will be

entitled to the amount owed under a termination for convenience. See John Reiner & Co. v.

United States, 325 F.2d 438, 444 (Ct. Cl. 1963).

DOS terminated the Qasemi lease on November 9, 2021, and the Polaski lease on

March 3, 2022. Because DOS had the right to terminate the leases for convenience under

article 14 on those dates, we construe the article 12 terminations to be terminations for

convenience pursuant to article 14 of both leases, with notice given on the dates that DOS

issued the terminations. Maxima, 847 F.2d at 1553-54.

In light of this conversion to terminations for convenience, we must determine the

amount of rent either owed to Hamidullah or to be refunded by Hamidullah to DOS pursuant

to article 14. Reiner, 325 F.2d at 444. We return the matter to the parties to calculate the

amounts owed with the following guidance. For the Qasemi lease, article 14 provides that

DOS will pay rent for ninety days after the notice of the termination for convenience

(November 9, 2021). Because DOS paid rent through November 29, 2021, Hamidullah is

entitled to an additional seventy days of rent, plus CDA interest starting February 2, 2022,

the date Hamidullah submitted its claim to DOS. The parties shall calculate the amount

owed for the additional seventy days.

For the Polaski lease, article 14 provides that DOS will pay rent for sixty days from

the notice of the termination for convenience (March 3, 2022). In the contracting officer’s

decision, DOS demanded a refund of $118,076 for 125 days of prepaid rent. Hamidullah is

entitled to retain sixty days of rent post-termination. The parties shall determine the amount

Hamidullah owes DOS, an amount that will include CDA interest starting July 19, 2022, the

date the contracting officer issued the final decision asserting the right to a refund.

II.

DOS Was Not Required to Return Physical Control of the Property After Termination

Hamidullah contends that DOS did not terminate the leases because DOS failed to

return physical control of the property. We find no such requirement in the provisions of the

lease relied upon by Hamidullah.

Determination of this issue again requires us to look to the plain language of the

contracts. Foley, 11 F.3d at 1034; Gould, 935 F.2d at 1274. When the provisions of the

contract are “clear and unambiguous, they must be given their plain and ordinary meaning,”

and the Board “may not resort to extrinsic evidence to interpret them.” McAbee

Construction, Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir. 1996) (citations omitted).

CBCA 7502, 7503

9

Article 14 of the Qasemi lease reads in part: “The [tenant] will return the property in

which [sic] it was received minus normal wear and tear. No unnecessary make-ready will

be accomplished unless the damages is [sic] the result of negligence by the [tenant].”

Although Hamidullah argues that the clause imparts an obligation on the tenant to perform

some kind of physical transfer of control or walk-through of the leased property, the word

“return” is simply used to describe the condition the property must be in at the end of the

lease and does not impart any additional transfer duties.

Other clauses of the Qasemi lease support this interpretation. Article 4 states the

tenant must give thirty days’ notice of renewal or “any renewal period would otherwise

expire.” Article 4 requires no action from DOS for turnover of the property at the end of the

lease. We cannot construe a requirement to undertake an action upon termination for

convenience that does not exist at the end of the lease. Similarly, article 8 of the lease

permits DOS to install fixtures and make modifications to the property and allows that such

modifications “may be removed” at the end of the lease. “May” is permissive and imparts

no duty on DOS to alter the property upon the end of the lease term. Pursuant to article 8,

DOS is only responsible for damage that it caused, not for the actions of third parties,

including the Taliban. See Ieyada M. Ahirir v. Department of State, CBCA 6644, 22-1 BCA

¶ 38,044, at 184,752 (based upon a similar lease provision, DOS was determined not to be

responsible for damage to property that occurred during a Libyan civil war after DOS

vacated the property). Article 8 also releases DOS from any responsibility for damage

caused by third parties. This provision belies Hamidullah’s contentions that DOS still

possesses the property because of the fixtures and equipment left there or that DOS was

obligated to protect the property from the Taliban.

This analysis also applies to the terms of the Polaski lease. Article 14 does not

contain any “return” language and does not specify any condition in which it must be

returned. Again, we will not read duties into the lease that do not exist and need not look to

the Afghan Civil Code to supplement the terms of the lease. McAbee Construction, 97 F.3d

at 1435; cf. The Heirs of Bahwouddin, Son of Neyaz Mohammad v. Department of State,

CBCA 7135, 22-1 BCA ¶ 38,212, at 185,565.

Hamidullah cites to DOS’s Foreign Affairs Manual (FAM), which requires, in part,

that “[t]ermination of all leases must be executed in accordance with the specific terms of the

lease and local laws.” Appellant’s Reply to Respondent’s Response to Appellant’s Motion

for Partial Summary Judgment (Appellant’s Reply) at 14-15 (citing 15 FAM 344). As

concluded above, the terminations were proper under article 14 of the leases. Moreover,

Hamidullah has not established that this DOS policy was created for its benefit or that it

provides a cause of action for Hamidullah. Freightliner Corp. v. Caldera, 225 F.3d 1361,

1365 (Fed. Cir. 2000) (citing Cessna Aircraft Co. v. Dalton, 126 F.3d 1442, 1451-52 (Fed.

Cir. 1997)). Therefore, the purported failure to follow this DOS policy does not provide

CBCA 7502, 7503

10

Hamidullah with a basis to overturn the termination for convenience. Hamidullah also cites

to language from a sample lease termination agreement that provides that “the Landlord

hereby acknowledges that the Premises (and furnishings) were returned by the Tenant to the

Landlord on [date], in a condition acceptable to the Landlord, free of any and all claims

against the United States Government.” Appellant’s Reply at 15. This language does not

expand the requirements of the lease found in article 8.

Finally, Hamidullah argues that the covenant of good faith and fair dealing created an

obligation that DOS protect and maintain the premises to ensure that the premises were

returned to the landlord following termination. Hamidullah asserts that DOS breached this

duty when it failed to terminate the leases prior to the Taliban taking over Kabul or by not

placing the properties under the protection agreement DOS reached with Qatar. The

covenant of good faith and fair dealing imposes a duty on both parties “not to act so as to

destroy the reasonable expectations of the other party regarding the fruits of the contract.”

Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005). However, the covenant

“cannot expand a party’s contractual duties beyond those in the express contract or create

duties inconsistent with the contract’s provisions.” Metcalf Construction, Co. v. United

States, 742 F.3d 984, 991 (Fed. Cir. 2014) (quoting Precision Pine & Timber, Inc. v. United

States, 596 F.3d 817, 831 (Fed. Cir. 2010)). Hamidullah’s argument fails because, as we

have determined, the lease contained no duty to return the property or protect the properties

from third parties. Instead, article 8 specifically relieved DOS of responsibility for damages

to the properties caused by third parties not under DOS’s control. Because there is no duty

in the express terms of the contract, we find no violation of the duty of good faith and fair

dealing.

Decision

Hamidullah’s motion for partial summary judgement is DENIED, and DOS’s motion

is GRANTED IN PART. The Board will issue a separate order scheduling further

proceedings to determine the amounts owed based upon this decision.

Marian E. Sullivan

MARIAN E. SULLIVAN

Board Judge

CBCA 7502, 7503

11

We concur:

Joseph A. Vergilio

JOSEPH A. VERGILIO

Board Judge

Allan H. Goodman

ALLAN H. GOODMAN

Board Judge