MOTION FOR SUMMARY RELIEF DENIED:

MOTION FOR SUMMARY RELIEF DENIED:

December 7, 2017

CBCA 5269, 5659

NOAA MARYLAND, LLC,

Appellant,

v.

GENERAL SERVICES ADMINISTRATION,

Respondent.

Diana Parks Curran and Hadeel N. Masseoud of Curran Legal Services Group, Inc.,

Johns Creek, GA, counsel for Appellant.

James F. H. Scott, Office of General Counsel, General Services Administration,

Washington, DC, counsel for Respondent.

Before Board Judges HYATT, KULLBERG, and RUSSELL.

RUSSELL, Board Judge.

Under the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101 – 7109 (2012), appellant,

NOAA Maryland, LLC, timely appealed the denial of its claim under a lease with the General

Services Administration (GSA or Government). In its appeal, appellant seeks reimbursement

of charges levied by Prince George’s County, Maryland. The charges at issue were

designated for stormwater management (“Stormwater Tax”), transit (“Transit Tax”),

watershed protection and restoration (“Clean Water Fee”) and education (“Supplemental

Education Tax”). Appellant has moved for summary relief arguing that these charges are

reimbursable “real estate taxes” under its lease with GSA. GSA disputes this

characterization.

CBCA 5269, 5659

2

Based on the record before us, we cannot find that appellant is entitled to judgment

as a matter of law. The record is not sufficiently developed to answer the question whether

the charges are reimbursable. Therefore, we deny appellant’s motion.

Background

I.

The Lease

In September 2005, GSA executed a lease with appellant’s predecessor in interest,

Maryland Enterprise, LLC, to rent a building located in Prince George’s County for a

thirteen-year term. Appeal File, Exhibit 1 at 1.1 The lease was assigned to appellant in

December 2011. Exhibit 19. In addition to annual rent, the Government agreed to pay

operating expenses and real estate taxes as prescribed by the lease’s Tax Adjustment clause

during the lease term. Exhibit 1 at 1.

The Tax Adjustment clause describing the real estate taxes subject to reimbursement

states:

Real estate taxes . . . are only those taxes, which are assessed against the

building and/or the land upon which the building is located, without regard to

benefit to the property, for the purpose of funding general Government

services. Real estate taxes shall not include, without limitation, general and/or

special assessments, business improvement district assessments, or any other

present or future taxes or governmental charges that are imposed upon the

Lessor or assessed against the building and/or the land upon which the

building is located.

Exhibit 1 at 24. The Tax Adjustment clause defines base year taxes as “an amount negotiated

by the parties that reflects an agreed upon base for a fully assessed value of the property.”

Id. The clause also provides that the Government’s obligation for any tax increase (or

reimbursement for any tax decrease) shall be based on the ratio of the square footage

occupied by the Government to the total rentable square feet. Id.

In the original lease, the negotiated real estate tax base for escalation purposes was

$711,900. Exhibit 1 at 2. In January 2014, the parties executed a supplemental lease

agreement establishing a new tax base of $1,387,574.20. Exhibit 2. The supplemental lease

agreement expressly noted that “[a]ll other terms and conditions of the [original] [l]ease shall

remain in full force and effect.” Id.

1

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

CBCA 5269, 5659

II.

3

The Disputed Charges

The charges at issue are described in the county’s code or records as summarized

below. Notably, these charges are itemized on the county’s tax bill separate from imposed

real estate taxes.

A.

Stormwater Tax

In 1987, Prince George’s County created a stormwater management district that

includes all the land within the county except the city of Bowie. Prince George’s County,

Md., Code § 10-262(a). The county imposes “a direct ad valorem tax” on all property

assessed for tax purposes within the district to pay for stormwater management operations

and activities. Id. § 10-263(a). The tax also pays for costs associated with bonds issued

by the county and the Washington Suburban Sanitary Commission. Id. All receipts and

revenues from the tax are paid into the county’s Stormwater Management District Fund. Id.

§ 10-264(b).

B.

Transit Tax

The Washington Suburban Transit District includes the counties of Prince George’s

and Montgomery in Maryland. Prince George’s County, Md., Washington Suburban Transit

District Municipal Code, § 3. The district is authorized to enter into contracts or agreements

with the Washington Metropolitan Area Transit Authority in exchange for the district

contributing sums for the construction or acquisition of transit facilities, for debt service

requirements, and for meeting expenses and obligations incurred in the operation of transit

facilities. Id. § 12(a). These contributions are funded by a tax levied against all assessable

property within the district by the councils of Prince George’s and Montgomery County. Id.

§ 14(a). The Washington Suburban Transit Commission (WSTC), created in 1965, is the

agency that provides planning and oversight for mass transit services for the two counties.

Id. §§ 4, 14(a)(1). The WSTC also determines the amounts necessary to be raised by the

counties for a given year based on the valuation of assessable property within the counties.

Id. § 14(a)(1). The county councils levy and collect the transit tax in the same way as county

taxes. Id. The transit tax has the same priority rights, bears the same interest and penalties,

and in every respect is treated the same as county taxes, but is earmarked for transit. Id.

C.

Clean Water Fee

On July 24, 2013, the Prince George’s County Council adopted a resolution

concerning a “Clean Water Act Fee.” Prince George’s County, Md., CR-059-2013 (July 24,

2013). The resolution established a schedule of fees to be collected as part of the county’s

CBCA 5269, 5659

4

Watershed Protection and Restoration Program. Id. Fees are to be deposited into the

county’s Local Watershed Protection and Restoration Fund. Prince George’s County, Md.,

Code § 10-302(b)(1). The fund is used to support various stormwater management activities

and projects, id. § 10-303(a), and money in the fund cannot revert or be transferred to the

general fund. Id. § 10-303(c). The specific fee is determined based on the impervious

surface area existing on a property and the zoning classification of the property, and it

includes an administrative charge. Prince George’s County, Md., CR-059-2013.

D.

Supplemental Education Charge

The county’s website explains the purpose of the education charge.2 It was imposed

by the county for the first time for tax year July 2015 to June 2016, and was designated

exclusively for the county’s school system.

III.

The Claims and the Appeals

A.

CBCA 5269

In January 2016, appellant filed a certified claim with GSA requesting a contracting

officer’s final decision on its claim for county charges assessed against the leased building.

Specifically, appellant sought reimbursement of $167,979.76 for stormwater taxes and

$80,879.44 for transit taxes for the tax periods 2012 – 2015, arguing that the taxes were

reimbursable under the Tax Adjustment clause of the parties’ lease as “real estate taxes.”

Exhibit 5. Appellant contended that both the stormwater and transportation taxes were

reimbursable ad valorem real estate taxes because (1) they were assessed on all real property

in the county, (2) they were based on the value of the leased property, (3) they were not onetime charges, and (4) they were not imposed on a limited group of taxpayers who exclusively

benefitted from the services funded by the taxes. Id. According to appellant, a tax that has

these features is properly categorized as a reimbursable real estate tax under the parties’

lease.

In its claim, appellant also requested that GSA provide a basis for denying

reimbursement of $32,017.32 for the supplemental education charge and $1615.25 for a

clean water fee imposed by the county for the tax period of July 2015 to June 2016.

Exhibit 5. Appellant asserted that these charges were assessed and collected like other real

estate taxes by the county. Id.

2

See https://www.princegeorgescountymd.gov/faq.aspx?TID=58.

CBCA 5269, 5659

5

In April 2016, appellant filed an appeal pursuant to paragraph 33.211(g) of the Federal

Acquisition Regulation (48 CFR 33.211(g) (2015)) which allows a party to bring a case

before the Board if the contracting officer has not issued a decision within the time period

prescribed by the CDA. The appeal was docketed as CBCA 5269.

On May 3, 2016, the Board ordered the agency to issue a contracting officer’s final

decision on appellant’s claim for reimbursement of the transit, stormwater, clean water, and

supplemental education charges. The agency did so later that same month, denying the

claim.

B.

CBCA 5659

In October 2016, appellant filed a certified claim with GSA requesting a contracting

officer’s final decision on its request for reimbursement for taxes assessed on the leased

building for the tax year July 2016 to June 2017. The specific amounts sought were

$46,543.66 for the stormwater tax, $34,476.79 for the supplemental education charge, and

$1615.25 for the clean water fee. In March 2017, appellant filed an appeal pursuant to

48 CFR 33.211(g), arguing that GSA had not issued a contracting officer’s decision within

the period prescribed by the CDA. The appeal was docketed as CBCA 5659, and

subsequently consolidated with CBCA 5269.

IV.

County’s Response to NOAA Maryland’s Inquiry on Disputed Charges

In May 2017, appellant submitted an inquiry to Prince George’s County asking

whether the charges in question are deposited into a general municipal fund to cover general

county expenses or if they are deposited into separate funds for specified purposes. Exhibit

34. Appellant specifically wanted to know whether the county considered the charges special

assessments. Id. In its response, the county stated that the education tax is collected for the

Prince George’s County Board of Education, the stormwater/water quality taxes go directly

to a fund dedicated to addressing flood control and protection needs and maintenance of the

countywide storm drain systems, and the transportation tax goes to the WSTC to fund

transportation projects in Prince George’s and Montgomery counties. Id. The county added

that these charges are considered taxes, not special assessments. Id.

V.

Appellant’s Motion

Appellant has moved for summary relief asserting that there are no material facts in

dispute and the issue presented is a matter of legal interpretation. In support of its motion,

appellant argues that a plain reading of the lease, applicable local law, and statements and

publications by the local taxing authority support its position that the charges at issue are

CBCA 5269, 5659

6

reimbursable real estate taxes. Appellant also contends that GSA has established a course

of dealing of reimbursing appellant for certain tax increases under the terms of the initial

lease effectuated by the parties in 2005, and the supplemental lease agreement effectuated

by the parties in 2014. Appellant alternatively argues that the lease provision carving out or

excluding taxes that are non-reimbursable (“carve-out” provision) is ambiguous and should

be construed against GSA.

GSA opposes appellant’s motion, arguing that the agency is only responsible for

reimbursing appellant for ordinary real estate taxes funding general governmental services,

not other assessments imposed by the county.

Discussion

I.

Standard of Review

Appellant has filed a dispositive motion asking that the Board find that appellant is

entitled to reimbursement from GSA for the disputed charges. Board Rule 8(g) allows the

Board to provide summary relief if there are no “uncontested material facts,” and the movant

is entitled to judgment as a matter of law. 48 CFR 6101.8(g) (2008); Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). Summary relief in a party’s favor is appropriate only if

the party provides evidence of uncontested facts sufficient to show entitlement to judgment

as a matter of law, even if the non-moving party fails to present opposing evidence.

Broomall Industries, Inc. v. Data Design Logic Systems, Inc., 786 F.2d 401, 405 (Fed. Cir.

1986).

When considering a motion for summary relief, evidence and all factual inferences

must be viewed in the light most favorable to the non-moving party. Litton Industrial

Products, Inc. v. Solid State Systems Corp., 755 F.2d 158, 163 (Fed. Cir. 1985). “[A] party

seeking summary [relief] always bears the initial responsibility of informing the [Board] of

the basis for its motion, and identifying those portions of [the record] which it believes

demonstrate the absence of a genuine issue of material fact.” Celotex Corp., 477 U.S. at 323.

The non-moving party can defeat a motion for summary relief by showing that a contested

material fact exists; however, the non-moving party cannot simply rely on the parties’

pleadings but must support its argument with evidence such as affidavits, depositions,

answers to interrogatories, admissions, and other admissible documents under Board Rule 8.

SBBI, Inc. v. International Boundary & Water Commission, CBCA 4994, 17-1 BCA ¶

36,722, at 178,813; 48 CFR 6101.8(g)(3); see also Crown Operations International, Ltd. v.

Solutia, Inc., 289 F.3d 1367, 1375 (Fed. Cir. 2002) (opposing party must present actual

evidence of a genuine issue of material fact rather than relying on mere allegations).

CBCA 5269, 5659

7

The parties agree that their dispute is one of contract interpretation. When reviewing

an appeal involving disputed interpretations, the Board will ascertain the intention of the

parties under the contract. See Alvin Ltd. v. United States Postal Service, 816 F.2d 1562,

1565 (Fed. Cir. 1987) (“In the case of contracts, the avowed purpose and primary function

of the court is the ascertainment of the intention of the parties.”) (citing 4 Samuel Williston,

A Treatise on the Law of Contracts § 601 (3d ed. 1961)). “The parties’ intent must be

gathered from the instrument as a whole,” Kenneth Reed Construction Corp. v. United States,

475 F.2d 583, 586 (1973), from the perspective of “a reasonably intelligent person

acquainted with the contemporary circumstances.” Firestone Tire & Rubber Co. v. United

States, 444 F.2d 547, 551 (1971). “Generally, the plain language of a contract [or

instrument] controls, and only language which is reasonably susceptible to more than one

meaning may be considered ambiguous.” Thermal Electronic, Inc. v. United States, 25 Cl.

Ct. 671, 673 (1992) (citing Neal & Co. v. United States, 19 Cl. Ct. 463, 471 & n. 4 (1990),

aff’d, 945 F.2d 385 (Fed. Cir. 1991)). However, “[t]he mere fact that the parties are asserting

different interpretations is not sufficient to constitute an ambiguity.” Thermal Electric, Inc.,

25 Cl. Ct. at 673.

Here, we must determine whether the lease addresses whether the disputed charges

are real estate taxes. If they are, they are reimbursable under the lease.

II.

The Current Record Does Not Show Whether the Disputed Charges Are

Reimbursable

A.

The Tax Adjustment Clause

Appellant claims that the lease’s Tax Adjustment clause speaks to how to categorize

the charges in question. As defined under the clause, real estate taxes are those that are

assessed against the building without benefit to the property for the purpose of funding

general government services. Exhibit 1 at 24. However, the definition is qualified and

excludes, “without limitation, general and/or special assessments, business improvement

district assessments, or any other present or future taxes or governmental charges that are

imposed upon the Lessor or assessed against the building and/or the land upon which the

building is located.” Id. (emphasis added).

Appellant argues that the charges are reimbursable under the lease because of how

they are assessed – namely, like real estate taxes “used for traditional governmental services.”

However, even accepting appellant’s characterization of the charges, under the carve-out

provision, GSA is not obligated to reimburse appellant for “any other present or future taxes”

outside of real estate taxes as defined in the provision. Appellant has not shown that the

carve-out provision excludes the charges at issue.

CBCA 5269, 5659

8

Additionally, appellant has not conclusively demonstrated that the disputed charges

are reimbursable. Generally, we may not draw on evidence extrinsic to the contract when

interpreting its provisions absent an ambiguity. The Board may, however, rely on such

evidence “for the limited purpose of shedding light on the parties’ objective intent by

clarifying the circumstances affecting a contract or the meaning of terms found within the

four corners of the contract itself.” Applied Companies v. United States, 37 Fed. Cl. 749,

759 (1997), aff’d, 144 F.3d 1470 (Fed. Cir. 1998); see also Reliable Contracting Group, LLC

v. Department of Veterans Affairs, 779 F.3d 1329, 1332 (Fed. Cir. 2015) (“Generally,

evidence of contemporaneous beliefs about the contract is particularly probative of the

meaning of a contract.”); Blinderman Construction Co. v. United States, 695 F.2d 552, 558

(Fed. Cir. 1982) (“It is a familiar principle of contract law that the parties’ contemporaneous

construction of an agreement, before it has become the subject of a dispute, is entitled to

great weight in its interpretation.”); see also CH2M-WG Idaho, LLC v. Department of

Energy, CBCA 3876, 17-1 BCA ¶ 36,849, at 179,563 (“[T]he conduct of the parties prior to

the dispute is especially strong evidence of [a] contract’s true meaning.”); ACE-Federal

Reporters, Inc. v. General Services Administration, GSBCA 13507-REM, 02-2 BCA

¶ 31,913, at 157,659 (“While extrinsic evidence is ordinarily admitted to shed light on

ambiguous contract provisions, it may also be used to explain and interpret, but not

contradict, an integrated contract.”). Here, appellant’s evidence is not meaningfully

probative of the parties’ intent as to reimbursement of the disputed charges. Although

appellant includes in the record an email from the county asserting that the disputed taxes are

not “special assessments” but taxes, the document is not conclusively probative. Under the

Tax Adjustment clause, reimbursable real estate taxes are those assessed against a building

or land, without regard to benefit to the property, for the purpose of funding general

government services. The definition excludes any other taxes or governmental charges that

are assessed against a building or land. Accordingly, the disputed charges, although

identified as taxes by the county, might still be non-reimbursable items under the Tax

Adjustment clause.3

3

However, the language of the Prince George’s County municipal code

describing the transit tax does appear to suggest that this tax might be construed as within the

scope of a reimbursable real estate tax. The tax is not only levied and collected as county

taxes are levied and collected, but under the county code, is to be treated in every respect as

a county tax. Prince George’s County, Md., Washington Suburban Transit District

Municipal Code, § 14(a)(1). We will defer making a determination on appellant’s

entitlement to reimbursement until after the parties have had an opportunity to put forth a

more substantial record.

CBCA 5269, 5659

B.

9

Parties’ Course of Dealing

In further support of its position, appellant argues that the parties’ course of dealing

supports reimbursement of the charges under the lease. To the extent relevant, we consider

GSA’s performance under the lease before this dispute arose. Alvin, Ltd., 816 F.2d at 1566.

Indeed, how the parties performed under the lease before the dispute would likely reveal

more than the “dry language” of the lease itself. See Macke Co. v. United States, 467 F.2d

1323, 1325 (1972). Here, however, appellant did not show that GSA had previously paid the

disputed charges. Appellant merely showed that GSA paid tax increases under the Escalation

clause of the original lease and the supplemental lease agreement executed in January 2014.

The mere fact that GSA paid increased real estate taxes does not demonstrate a course of

dealing regarding the disputed charges. Additionally, the supplemental lease agreement

simply established a new tax base, but all other terms from the original lease remained the

same. As such, the document does not show a course of dealing whereby GSA knowingly

reimbursed appellant for the county charges in dispute.

C.

Contemporaneous Intent of Parties

Appellant also presents no evidence that the charges were a direct substitute for, or

successor to, the real estate tax scheme existing when the lease was effectuated. Specifically,

the current record does not show that GSA had at some point during the lease period paid the

disputed charges but is now refusing to do so. In Alvin, Ltd., the Federal Circuit held that the

Postal Service was obligated to pay certain successor charges that were formerly

encompassed in general real estate taxes regardless of how the successor charges were

categorized. 816 F.2d at 1567. Examining the expectations and intent of the parties when

the lease was effectuated, the Federal Circuit concluded that the Postal Service’s payment

of the successor charges would reflect the parties’ original bargain. Id.; see also S.S.

Silberblatt, Inc. v. United States, 888 F.2d 829 (Fed. Cir. 1989) (affirming Postal Service’s

decision that certain new tax assessments were not direct substitutes for prior general real

estate tax scheme, and thus, not reimbursable). From the current record in these appeals,

including language from the county’s municipal code, we cannot determine whether GSA’s

reimbursement of the disputed charges would similarly uphold the parties’ original bargain

under the lease at issue.

D.

“Carve-Out” Provision

We also disagree with appellant’s argument that the carve-out provision of the Tax

Adjustment clause is ambiguous. Appellant asserts that, under the Tax Adjustment clause,

reimbursable real estate taxes can be construed as both present and future taxes, yet the

carve-out language of the clause states that such taxes are non-reimbursable. Appellant

CBCA 5269, 5659

10

claims that this inconsistency makes the carve-out provision ambiguous. On the contrary,

we find no ambiguity. The carve-out provision states that GSA is not responsible for “any

other present or future taxes or governmental charges” that are not real estate taxes. We

consider the plain meaning of this phrase. Our reading is that the phrase reflects the parties’

intent that GSA is responsible for real estate taxes, not other taxes imposed by the county.4

Finally, even granting an ambiguity exists, on the present record, the doctrine of

contra proferentum does not apply. “It is well settled that where a contractor seeks recovery

based upon [its] interpretation of an ambiguous contract, [it] must show that [it] relied on this

interpretation in submitting [its] bid.” Lear Siegler Management Services Corp. v. United

States, 867 F.2d 600, 603 (Fed. Cir. 1989) (quoting Edward R. Marden Corp. v. United

States, 803 F.2d 701, 705 (Fed. Cir. 1986)). Appellant does not argue that it, or its

predecessor, relied upon its current interpretation of the Tax Adjustment clause in submitting

the proposal for the lease. Thus, at this point, appellant has not presented evidence meeting

the reliance requirement consistent with the doctrine of contra proferentum.

Decision

Appellant has not shown that, at the time that the lease was effectuated, the disputed

charges were real estate taxes that the parties agreed would be paid by the Government, such

that it is entitled to prevail as a matter of law. Therefore, its motion is DENIED.

__________________________

BEVERLY M. RUSSELL

Board Judge

We concur:

_____________________________

CATHERINE B. HYATT

Board Judge

4

___________________________

H. CHUCK KULLBERG

Board Judge

Because we do not find the “carve-out” provision ambiguous, the clean water

fee effectuated in 2013 and supplemental education tax imposed for the first time during the

2015 - 2016 tax year might reasonably be construed as taxes not subject to reimbursement

by GSA as they post-date, by a number of years, effectuation of the original lease, and there

is no evidence in the record, at least at this time, that GSA has agreed to pay them.