27-35 Jackson Ave LLC v. United States


In the United States Court of Federal Claims No. 16-947 Filed: October 12, 2022 27-35 JACKSON AVE. LLC, Plaintiff, v. THE UNITED STATES, Defendant. Jeffrey W. Varcadipane, Varcadipane & Pinnisi, PC, New York, New York, for Plaintiff. Stephanie A. Fleming, Trial Attorney, Elizabeth M. Hosford, Assistant Director, Patricia M. McCarthy, Director, Commercial Litigation Branch, Brian M. Boynton, Principal Deputy Assistant Attorney General, U.S. Department of Justice, Washington, D.C., Leigh E. Izzo, Senior Assistant Regional Counsel, General Services Administration, of counsel, for Defendant. MEMORANDUM OPINION AND ORDER TAPP, Judge. The resolution of every contract claim begins, and often ends, with the agreement itself. Plaintiff, 27-35 Jackson Ave., LLC, (“Jackson”), invites the Court to depart from the discretion it contracted for with the United States in connection with a lease agreement for office space located in New York City. The Court declines to do so. Here, the parties agreed that the untenantability of the leased premises was to be determined by the United States. After a sprinkler head burst, water damaged the property, and the United States, acting through the General Services Administration (“GSA”), concluded the premises were untenantable and exercised a contractual right to terminate the lease. Jackson challenges this termination. It argues (1) the United States never made a “determination” of untenantability because its decision lacked an objective standard and instead relied on its subjective belief about the adequacy of Jackson’s plan to restore the premises; (2) that the decision to terminate the lease was pretextual and therefore violated the implied duty of good faith and fair dealing; and (3) the United States should be equitably estopped from terminating the lease because its own actions contributed to damage to the property. Because the plain language of the lease provided that untenantability was to be “determined by the Government,” the Court finds that the United States did not breach the contract by relying on its own standard to determine untenantability as opposed to a standard supplied by Jackson. Further, even when viewing the evidence in the light most favorable to Jackson, the Court finds that Jackson has failed to establish a genuine issue of material fact sufficient to preclude summary judgment as to Jackson’s claims for violation of the duty of good faith and fair dealing and equitable estoppel. Accordingly, the Court grants the United States’ motion for summary judgment, (ECF No 82), and denies Jackson’s cross-motion for summary judgment, (ECF No. 88). I. Background GSA leased two floors of space at a building in Long Island City, New York, from Jackson. (Pl.’s Am. Compl. at ¶ ¶ 4-6, ECF No. 13). GSA used these premises to house field offices for the Department of Homeland Security’s United States Citizenship and Immigration Services (“USCIS”). (Id. ¶ 7). USCIS used the space for its daily operations, including meeting with members of the public seeking visas and other immigration services. (Def.’s Mot. App. 345). 1 To accommodate this use, the United States included requirements of specialized security infrastructure, customized surfaces, and other requirements, together …

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