Palafox Street Associates, L.P. v. United States
117 Fed. Cl. 324
Fed. Cl.2014Background
- This is a contract dispute over a tax adjustment clause in a GSA courthouse lease.
- Palafox St. Assocs. is the successor to Keating Development; plaintiff leased to the government with a $250,000 base-year tax adjustment.
- From 1997–2011, GSA paid $250,000 annually; a 2011 audit showed actual taxes were different.
- GSA later offset $824,416.01 by withholding rent, triggering plaintiff’s dispute about the tax adjustment clause.
- April 2012 contracting officer decision found government entitlement to the difference and a separate excess obligation; December 2012 decision denied plaintiff’s arguments.
- Plaintiff filed suit April 8, 2013; the court previously stayed part of defendant’s motion pending briefing on the election doctrine applicability to the December 2012 decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether October 2012 certified claim tolls finality of the April 2012 decision | Palafox's claim is a separate certified claim, not a reconsideration. | October claim is a reconsideration; tolling should apply if timely. | Certified claim, not a reconsideration; tolling not triggered. |
| Whether the December 2012 decision is barred by the election doctrine | Court should hear the appeal of the December 2012 decision. | Election doctrine may bar review of the December 2012 decision. | Stay of that portion pending additional briefing. |
| Whether the October 2012 certified claim and the April 2012 government claim are separate and distinct | They are separate, with different factual/ legal issues. | They are not clearly separate; should be treated as a single claim. | To be addressed in supplemental briefing. |
Key Cases Cited
- Palafox St. Assocs., L.P. v. United States, 114 Fed. Cl. 773 (2014) (Palafox I; clarifies Board jurisdiction and election doctrine interplay)
- Environmental Safety Consultants, Inc. v. United States, 95 Fed. Cl. 77 (2010) (discusses tolling where reconsideration not recognized by CO)
- K. & S. Construction v. United States, 35 Fed. Cl. 270 (1996) (tolling not triggered when contractor delays seeking reconsideration)
- Metrotop Plaza Assocs. v. United States, 82 Fed. Cl. 598 (2008) (tolling where correspondence could be viewed as reconsideration in some contexts)
- Arono, Inc. v. United States, 49 Fed. Cl. 544 (2010) (reconsideration/tolling framework under CDA)