Detroit International Bridge Co. v. United States

39 Cont. Cas. Fed. 76,711, 32 Fed. Cl. 225, 1994 U.S. Claims LEXIS 201, 1994 WL 580959
CourtUnited States Court of Federal Claims
DecidedOctober 21, 1994
DocketNo. 94-35C
StatusPublished
Cited by3 cases

This text of 39 Cont. Cas. Fed. 76,711 (Detroit International Bridge Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Detroit International Bridge Co. v. United States, 39 Cont. Cas. Fed. 76,711, 32 Fed. Cl. 225, 1994 U.S. Claims LEXIS 201, 1994 WL 580959 (uscfc 1994).

Opinion

OPINION

BRUGGINK, Judge.

This action, brought pursuant to the Tucker Act, 28 U.S.C. § 1491 (1992), and the Contract Disputes Act of 1978 (CDA), 41 U.S.C. §§ 601-613 (1988), is before the court on the Government’s motion to dismiss. The motion is asserted under RCFC 12(b)(1), lack of subject matter jurisdiction, and RCFC 12(b)(4), failure to state a claim upon which relief can be granted. After considering the parties’ written and oral arguments, the [227]*227court denies the motion to dismiss for lack of jurisdiction but grants dismissal for failure to state a claim.

FACTUAL BACKGROUND1

Plaintiff Detroit International Bridge Company (Detroit) owns the Ambassador Bridge, which spans the border between the United States and Canada, and property adjacent to the bridge. Detroit built inspection facilities there for use by the United States Customs Service, but the company retained ownership of the facilities and property. The United States Government began occupying the new facilities on January 1,1985. Detroit and the Government, acting through the General Services Administration (GSA), did not execute a written lease, however, until May 1, 1991.2

The lease covered the period from January 1,1985, through December 31, 2004. It contained a standard integration clause, which provided that:

It is mutually agreed by the parties hereto that all 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 Lessor and the Government prior to execution of this lease are not applicable or binding____

When the parties executed the lease, the Government paid Detroit a lump sum of $2,808,400.08 for its pre-lease tenancy from January 1, 1985, through April 30, 1991. That sum was calculated according to a formula in the lease which provided that annual rent would be based on three factors: return of and on Detroit’s investment for the cost of construction; operating costs; and real estate taxes.

During negotiations leading to the agreement, the Government rejected Detroit’s assertion that it was entitled to an additional sum to compensate for the fact that rent for the period through April 30, 1991, was paid in a lump sum more than six years after occupancy began, rather than monthly from the start of the tenancy. They noted their disagreement by including in the lease the following reservation-of-rights clause:

The terms and conditions contained in this contract represent the full and final agreement of the parties regarding all aspects of the contract, except as follows:

It is recognized by the parties that the Lessor has requested that the rental payment under this lease for the period prior to the date of the lease execution reflect that payment occurs in excess of six years after occupancy of the Leased Premises. It is also recognized by the parties that the Government maintains that the lessor is not entitled to have rental reflect said delay in payment. Notwithstanding any other provision of this agreement, it is acknowledged by both parties that the Lessor enters into this agreement specifically reserving its rights to take legal action with respect to this sole issue as it may see fit. Notwithstanding this issue, the Government will pay rent in accordance with the provisions of this contract.

Detroit took the position that the lump-sum payment should have included an additional $1,099,503.64 to compensate for the deferral of monthly rental payments. It submitted a certified claim for that amount to GSA on August 27, 1993.3 The contracting officer (CO) to whom the claim was submitted responded on November 29, indicating that a formal reply to the claim would be prepared by the end of December. Because the CO did not respond within sixty days after receipt of the claim, Detroit deemed the claim denied and filed suit.

[228]*228DISCUSSION

The parties’ contentions

The Government’s primary argument is that the relief Detroit seeks is interest and thus is barred by the “no-interest rule.” This long-standing rule provides that “interest cannot be recovered against the Government in the absence of an express waiver of sovereign immunity from an award of interest.” Library of Congress v. Shaw, 478 U.S. 310,314,106 S.Ct. 2957,2961, 92 L.Ed.2d 250 (1986) (waiver of immunity as to interest must be “separate from a general waiver of immunity to suit”); accord Chiu v. United States, 948 F.2d 711, 718-19 (Fed.Cir.1991); Doyle v. United States, 931 F.2d 1546, 1550 (Fed.Cir.1991), cert, denied, 502 U.S. 1029, 112 S.Ct. 866, 116 L.Ed.2d 772 (1992).

The Government further relies on the codification of the “no-interest rule” at 28 U.S.C. § 2516(a), which provides that: “[¿Interest on a claim against the United States shall be allowed in a judgment of the United States Court of Federal Claims only under a contract or Act of Congress expressly providing for payment thereof.”

Detroit’s primary argument is that the sum it seeks is not interest, but unpaid rent, which the Government is contractually obligated to pay. It argues in the alternative that, even if the claim is one for interest, the interest is permitted by contract and thus can constitute an independent claim asserta-ble under the CDA Analysis

The court initially rejects the Government’s motion to dismiss insofar as it asserts an absence of subject matter jurisdiction under RCFC 12(b)(1). Detroit submitted a claim to the CO asking for what it termed additional rent. That claim was deemed denied, giving this court jurisdiction under the CDA Whether the facts alleged would constitute an actionable claim is a separate question that will be addressed under RCFC 12(b)(4).

The court notes initially that even if what Detroit seeks can be characterized as rent rather than interest, there must still be a substantive source for the right to receive thát rent.4 As discussed below, there are exceptions to the “no-interest” rule, although they always involve a statutory or contractual right to interest. There are no exceptions, however, to the general requirement that any right to monetary relief against the Government, however characterized, must similarly be grounded in a contract, a statute, or the constitution. Detroit’s difficulty ultimately is not the nature of the relief it seeks but the lack of any substantive right to that relief.

By any reasonable construction, however, what Detroit seeks here is in fact interest. Black’s Law Dictionary defines interest as the “compensation allowed by law or fixed by the parties for the use or forbearance or detention of money____[or the] [b]asic cost of borrowing money or buying on [an] installment contract.” Black’s Law Dictionary 729 (5th ed. 1979).

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39 Cont. Cas. Fed. 76,711, 32 Fed. Cl. 225, 1994 U.S. Claims LEXIS 201, 1994 WL 580959, Counsel Stack Legal Research, https://law.counselstack.com/opinion/detroit-international-bridge-co-v-united-states-uscfc-1994.