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BRUBRAD CO. v. USPS

November 6, 1975

BRUBRAD COMPANY, Plaintiff,
v.
UNITED STATES POSTAL SERVICE, Defendant



The opinion of the court was delivered by: JUDD

JUDD, J.

 MEMORANDUM AND ORDER

 Cross motions have been made for summary judgment by the plaintiff and to dismiss by the defendant.

 Facts

 On November 4, 1964 plaintiff's predecessor, Brubrad Corporation, and the United States of America entered into a lease agreement for a store at 2934-36 Avenue X, Brooklyn, New York, to be used by the then Post Office Department. The lease was for an initial period of ten years at a rate of $510 per month, with four five-year renewals at the option of the defendant-tenant, at the rates of $475, $500, $525, and $550 per month, respectively. Plaintiff is a partnership.

 The terms of the lease were reached after a process of public bidding and negotiation. The original bid submitted by Brubrad Corporation was for $545 per month, the lowest of three bids, but was accepted only after further negotiations which reduced the rent to $510.

 Plaintiff's complaint asserts that since 1964 "the enormous rates of inflation and consequent declining value of the dollar" have been both unprecedented and uncontemplated by the parties. Plaintiff maintains that these economic developments have caused an "unfair hardship upon plaintiff" while unjustly enriching the defendant.

 In affidavits supporting its motion for summary judgment, plaintiff asserts that the inflation and declining value of the dollar have been caused, at least in part, by the affirmative acts of the federal government in pursuing its fiscal and monetary policies.

 The complaint asks for judgment reforming the terms of the lease so that the rentals shall "be deemed to read as being in terms of 1964 dollars to be adjusted at the 1974 renewal period and each subsequent renewal period in accordance with the alteration in the value of the dollar from base year 1964. . . ." In its briefs and oral argument, however, plaintiff retreats from the claim of reformation of the lease and asserts instead a right to have the lease interpreted so as to make an adjustment for inflation.

 Plaintiff suggests various standards by which the court might make such an adjustment. Plaintiff first points out that the redemption of silver certificates for silver bullion was terminated on June 24, 1968, 31 U.S.C. § 405a-3, and that the value of silver has increased from $1.29 per ounce to $4.58 per ounce since the lease was executed. In its memorandum of law, it includes tables to show that $510 a month is worth only about $120 in terms of gold, and that wholesale prices have risen more than 50% and construction costs more than 90% since 1967. On oral argument, counsel said that plaintiff was asking for damages from the date of the complaint at a rate of not more than $800 per month, but gave no explanation of how the $800 was computed. In its supplemental brief, plaintiff claims the right to damages based on the decrease in buying power of the dollar.

 In the motion papers, plaintiff asked simply "that a hearing be conducted to determine the precise method of adjustment."

 Discussion

 Defendant's motion to dismiss under F.R.Civ.P. 12 (c) may be granted only if the complaint fails to state a claim upon which relief could be granted under any legal theory. Mitchell v. Hart, 41 F.R.D. 138 (S.D.N.Y. 1966).

 The court concludes that the complaint must be dismissed, whether viewed as an action for reformation of the contract or as a suit for a ...


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