Canpro Investments, Ltd v. United States
130 Fed. Cl. 320
| Fed. Cl. | 2017Background
- CanPro Investments (owner of One Park Place, Boca Raton) leased office space to GSA for an SSA local office (lease executed Oct. 22, 2012; ~9,978 usable sq ft). Tenant improvements and rent schedule were incorporated; lease included an integration clause and a clause barring claims for "normal and customary use."
- During negotiations CanPro asked about expected daily SSA visitor volume and was told peak-day volume would not exceed ~250; SSA occupancy began Feb. 18, 2014 and a nearby SSA office closed shortly thereafter.
- After SSA occupancy CanPro alleges daily visitors regularly rose to 350–700, causing overcrowding, complaints, security and maintenance costs, downgrading of the building to Class B, and loss of tenants/reputation.
- CanPro filed a certified CDA claim (Nov. 12, 2014) seeking $250,000, lease termination (and sought mediation). The contracting officer denied the claim (Mar. 6, 2015); suit followed in the Court of Federal Claims (filed Feb. 25, 2016).
- Complaint pleaded multiple breach theories: superior knowledge, mutual mistake, misrepresentation/concealment, breach of implied duty of good faith and fair dealing, impossibility, commercial impracticability, and frustration of purpose; remedies sought included damages and termination (not rescission before the CO).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court has CDA jurisdiction over each pleaded theory (i.e., whether each claim was presented to the contracting officer) | CanPro contends its certified claim put the CO on notice of all legal theories and sought damages and termination | Gov argues many theories (superior knowledge, impossibility, rescission) were not presented to the CO and thus fall outside CDA jurisdiction | Court: lacked jurisdiction over claims not presented to CO (Counts I and V and portions of IV & VII based on superior knowledge/impossibility); had jurisdiction over claims that were presented (mutual mistake, misrep/concealment, commercial impracticability, implied duty, frustration) but limited remedies to those presented (damages and termination; rescission not presented) |
| Superior-knowledge / misrepresentation (pre-contractual statements about expected visitors) — can these support breach? | CanPro alleges GSA/SSA knew or should have known true visitor volumes and failed to disclose or affirmatively misrepresented expected numbers | Gov says alleged statements were predictions about future events (not existing facts), and CanPro did not present superior-knowledge theory to CO | Court: misrepresentation/superior-knowledge theories fail as pleaded—future-event predictions cannot support misrepresentation or mutual-mistake claims; Count III (misrep) dismissed; superior-knowledge-based counts dismissed for lack of jurisdiction because not presented to CO |
| Mutual mistake, commercial impracticability, impossibility, frustration of purpose — are they viable bases for affirmative relief? | CanPro argues parties shared an erroneous expectation re: visitor volume; ensuing costs and loss of benefit make performance impracticable or justify relief | Gov contends these doctrines are defenses (not affirmative claims for relief), hinge on future predictions, or were not raised to the CO; also argues CanPro failed to plead required elements | Court: mutual mistake, commercial impracticability, impossibility, and frustration claims fail as pleaded: mutual mistake and misrepresentation cannot be predicated on future-event estimates; commercial impracticability, impossibility, and frustration are defenses to excuse performance and not available as affirmative claims here (Counts II, V, VI, VII dismissed as applicable) |
| Breach of implied duty of good faith and fair dealing based on post‑execution unreasonable use of premises (excessive visitors) — viable? | CanPro alleges SSA’s post‑occupancy conduct unreasonably exceeded "normal and customary use," interfering with CanPro’s expectations and causing damages; seeks monetary relief and termination | Gov argues lease contains no numeric cap and clause excluding liability for "normal and customary use" precludes this claim; also invokes presumption of good faith | Held: The lease is ambiguous as to what "normal and customary use" permits; ambiguity is latent and construed against drafter (GSA). The complaint pleads facts sufficient to state a plausible breach of implied duty claim for post‑execution unreasonable use (Count IV survives as to that theory); damages and termination remain available (rescission not available). |
Key Cases Cited
- United States v. Testan, 424 U.S. 392 (Tucker Act limits and money-mandating sources)
- Loveladies Harbor, Inc. v. United States, 27 F.3d 1545 (Fed. Cir.) (source of substantive right required by Tucker Act)
- Scott Timber Co. v. United States, 333 F.3d 1358 (Fed. Cir.) (same‑claim rule under CDA; contracting officer must have opportunity to decide substantive issues)
- K-Con Bldg. Sys., Inc. v. United States, 778 F.3d 1000 (Fed. Cir.) (jurisdiction requires CO submission and CO final decision; different remedies can create separate claims)
- Giesler v. United States, 232 F.3d 864 (Fed. Cir.) (doctrine of superior knowledge / duty to disclose)
- Seaboard Lumber Co. v. United States, 308 F.3d 1283 (Fed. Cir.) (commercial impracticability doctrine as excuse for nonperformance)
- Ace Constructors, Inc. v. United States, 499 F.3d 1357 (Fed. Cir.) (distinguishing remedies and when new theories are separate claims)