Government’s motion for summary judgment on a contractor’s claim for unpaid rent is granted where the contractor agreed to release the government from liability. The contractor argued that the release was unconscionable because he was not a sophisticated contractor and the government took advantage of him. But a contractor’s lack of sophistication does not render a contract unconscionable. The contractor also argued that the release was void under the doctrine of equitable estoppel. In the absence of affirmative misconduct by the government, however, that doctrine was inapposite.
Muhammed Baha leased residential property in Afghanistan to the government under two successive leases. Baha later sued the government for unpaid rent under both leases. Baha moved for summary judgment on his claim. The government filed a cross-motion, arguing that the second lease it signed with Baha released the government from liability for unpaid rent under the first lease.
The court agreed with the government: the second lease—which discharged the government from all liability arising from occupancy of the land—released the government from any unpaid rent obligations arising under the first lease. The court reasoned that if a party who exercises a general release knows of facts sufficient to constitute a claim, they should explicitly reserve that claim in the lease. Here, Baha knew of the facts giving rise to a claim for rent under the first lease, but he did not reserve the claim.
Still, Baha argued that the release provision was unconscionable because the government knew (1) that it owed Baha money under the first lease when it signed the second lease, and (2) that Baha was not a sophisticated contractor. But the court found that these facts did not prove the release was unconscionable. To prove unconscionability, a plaintiff had to show that it was delusional or oppressive to enter the agreement. Baha made no such showing. In fact, the court noted, the more than two-fold increase in rent under the second lease was evidence of consideration for unpaid rent under the first lease.
Next, Baha argued that the doctrine of equitable estoppel barred enforcement of the release. But the court found that equitable estoppel requires a showing of affirmative misconduct by the government. Here, again, Baha knew of the facts giving rise to his claim on the first lease before he signed the second lease and thus could not show he had been mislead by the government.
Finally, Baha argued that regardless of the lease, the government occupied his land without paying thereby establishing quasi-contract, which entitled him to rent. The court noted, however, that a quasi-contract is an implied-in-law contract, and the COFC does not have jurisdiction over such contracts.
The court denied Baha’s motion for summary judgment, and it granted the government’s cross-motion on the release language. The court stayed further proceedings in the case to allow some of Baha’s family members—who may have been beneficiaries under the second lease—to join the suit.
Baha is represented by Roia Shefayee of Weiss Law PC. The government is represented by Andrew W. Lamb, Joseph H. Hunt, Robert E. Kirschman, Jr., and Franklin E. White, Jr. of the U.S. Department of Justice as well as Major Collin P. Evans of the U.S. Army Legal Services Agency.
