BIGGS RENTAL COMPANY v. United States

• Decision Date: 17 December 1965
• Docket Number: No. 420-61.,420-61.
• Citation: 173 Ct. Cl. 789,353 F.2d 1013
• Parties: BIGGS RENTAL COMPANY v. The UNITED STATES.
• Court: U.S. Claims Court

173 Ct. Cl. 789, 353 F.2d 1013 (1965)

BIGGS RENTAL COMPANY v. The UNITED STATES.

No. 420-61.

United States Court of Claims.

December 17, 1965.

Bert W. Levit, San Francisco, Cal., attorney of record, for plaintiff. Long & Levit, San Francisco, Cal., of counsel.

Rodney H. Hamblin, San Francisco, Cal., with whom was Asst. Atty. Gen. Edwin L. Weisl, Jr., for defendant. Kenneth H. Masters, Washington, D. C., of counsel.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS and COLLINS, Judges.

LARAMORE, Judge.

This is an action for the alleged taking by the government of certain personal property owned by plaintiff. In the alternative, plaintiff claims restitution plus rent. Plaintiff alleges defendant took its personal property at Fort Ord, California, simultaneously with the condemnation of the property interests of two "Wherry" housing corporations,¹ namely, the Likins-Foster Ord and Likins-Foster Monterey Corporations.

In 1950, two Wherry housing projects of 500 units each were built for Fort Ord personnel at Monterey, California. The first project, known as Bay View Park, was owned by Likins-Foster Ord Corporation (hereinafter L-F Ord). The second project, known as North Bay View Park, was owned by Likins-Foster Monterey Corporation (hereinafter L-F Monterey). Both corporations were wholly-owned by the partnership, Likins-Foster & Associates, and later, by its successor, Likins-Foster Honolulu Corporation. T. Jack Foster was president of the above corporations.

Prior to the commencement of the L-F Ord and L-F Monterey projects, two other Foster-controlled corporations had started construction on Wherry housing at the Biggs Air Force Base in El Paso, Texas. As a result of discussions between Foster's partner and the Commanding General at Biggs regarding methods of increasing the occupancy rate of the housing units, a corporation was set up to purchase furniture for rental to service personnel whose own furniture had been delayed in shipment. It was necessary to use a separate leasing corporation because charter limitations of the Wherry Act forbid Wherry corporations from renting household furniture and television antennas.

The occupancy problem was the same at Fort Ord. Military personnel reporting for duty from foreign assignment frequently did not have the necessary furnishings for an unfurnished apartment. This caused great inconvenience because even though apartments were available, they were not usable for lack of furniture. After discussions concerning this problem between Foster, the Commanding General, and others at Fort Ord who had heard of the furniture rental operation at Biggs, a third corporation, the plaintiff, was incorporated. Plaintiff thereafter purchased apartment furnishings to rent to military personnel. The two Wherry corporations and plaintiff utilized the same office and the same employees and plaintiff stored its personal property in the warehouses owned by the Wherry corporations. The military tenants, if they chose to rent either household furniture or a television antenna, or both, entered into a rental agreement with plaintiff, separate from the rental of apartments from either of the Wherry corporations.

In January of 1957, it was determined that "Capehart" housing² would be constructed at Fort Ord, thus making it necessary for the government to buy or condemn the equities of L-F Ord and L-F Monterey. The United States Army Chief of Engineers as designee of the Secretary of Defense had the responsibility for acquiring the Wherry housing at Fort Ord. Under the special regulations issued by the Office of the Chief of Engineers, the Real Estate Division of the San Francisco District, Corps of Engineers, was given the responsibility of carrying out the acquisition. On January 18, 1957, the San Francisco District Engineer's Office, by identical letters, advised L-F Ord and L-F Monterey that acquisition of their housing projects, situated within the Fort Ord Military Reservation, was mandatory. Inquiry was made in the letters as to whether L-F Ord and L-F Monterey would agree to negotiate. The two corporations, through their vice-president and attorney, Roy C. Lytle, agreed to negotiate.

On August 29, 1957, the San Francisco District Engineer's Office received a teletype from the Office of the Chief of Engineers, authorizing negotiations to acquire the two Wherry housing projects at Fort Ord. The teletype was received in advance of the Real Estate Directive (approved August 26, 1957), which was not received in the San Francisco District Engineer's Office until October 29, 1957. The Real Estate Directive, designated RE-D 6950, set forth the interest to be acquired from L-F Ord and L-F Monterey as —

Termination of sponsors\' leasehold interest by purchase of sponsors\' equities subject to outstanding mortgages.

Negotiations were commenced by telephone and by letter between Lytle for the two Wherry corporations and defendant's agents. Throughout negotiations for the acquisition of the housing interests of L-F Ord and L-F Monterey, there was no reference to, nor any negotiation with, the plaintiff. Plaintiff was neither a Wherry nor a sponsor corporation. The Chief of the Real Estate Division, San Francisco District Engineer's Office, was not informed by the plaintiff of its existence or that it had property at Fort Ord until the court hearing on November 7, 1957. However, the Army authorities at Fort Ord were, at all times, familiar with the existence of the plaintiff and its property.

When negotiations for acquisition of the equities of L-F Ord and L-F Monterey failed, the Army was required by law to condemn the interests of the two Wherry corporations. The Chief of Real Estate in the San Francisco District Office, Army Engineers, had prepared the requisite pleadings. One complaint in condemnation and two declarations of taking were filed, all on November 1, 1957, with Declaration of Taking No. 1 describing the estates and interests of L-F Monterey Corporation, and Declaration of Taking No. 2 describing the estates and interests of L-F Ord Corporation. Included within the taking were 1,000 housing apartments, two warehouses, and items which were covered by chattel mortgages, namely, stoves, water heaters, refrigerators, and window shades, most of which were installed in the houses, but some were stored in the warehouses. The two Wherry corporations also owned numerous items of personal property not covered by the chattel mortgages, but used in connection with the operation and maintenance of the 1,000 housing units. On November 1, 1957, the Order for Delivery of Possession was issued and served on the two Wherry corporations. A dispute immediately arose as to whether the personal property owned by the two Wherry corporations, consisting of maintenance equipment, spare parts, and office furniture, but which was not covered by the chattel mortgages, was included within the term "apparatus and equipment" as used in the condemnation pleadings.

On November 1, 1957, plaintiff owned the following property at Fort Ord: an unworkable master television antenna system worth $37,820; 775 individual TV antennas installed in the housing units and rented on a monthly basis, worth $19,375; extra antennas and parts stored in the two Wherry warehouses, worth $537.66; and household furniture of all kinds, most of which was being rented to Wherry housing tenants, but some of which was stored, worth $11,576.

It is clear that there was confusion at the time as to the disposition of plaintiff's property. However, a review of the facts shows that by December the plaintiff knew or should have known that the defendant had no intention of including pl...