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1-6040-15503-3 |
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE CITY OF RICHFIELD
HOUSING AND REDEVELOPMENT AUTHORITY
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In the Matter of the Business Relocation Claims by Walser Buick/Isuzu (WBI) and Motorwerks, Inc. (BMW) |
ORDER AMENDING INTEREST CALCULATION |
Respondent Richfield Housing and Redevelopment Authority (“HRA”) filed a Petition for Reconsideration dated February 25, 2004 in this matter seeking an amendment of the interest calculation contained in the Order dated February 17, 2004. The Claimants, Walser Buick/Iszu (“WBI”) and Motorwerks, Inc. (“BMW”) filed replies to the Petition for Reconsideration on February 27, 2004 and March 10, 2004.
Robert J.V. Vose, Esq. of the firm of Kennedy and Graven, 470 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402, represents the Respondent, HRA. Jon W. Morphew, Esq., of the firm of Schnitker and Assoc., P.A. 2300 Central Avenue NE, Minneapolis, MN 55418, represents the Claimants, WBI and BMW.
This Order is an interim decision, pending resolution of the Claimant’s Petition for Reconsideration on the issue of eligibility for relocation benefits for its in-house pre-move planning costs.
Based upon the filings by the parties, the record in this matter, and for the reasons set out in the Memorandum which follows:
IT IS HEREBY ORDERED that:
1. Respondent’s Petition for Reconsideration of the calculation of interest is granted to the extent set out in the Memorandum which follows.
2. The Respondent shall pay Claimants the total amount of $2,101.58 as interest due on claims paid prior to the hearing.
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Dated this |
7th |
day of |
April |
2004. |
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/s/ George A. Beck |
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GEORGE A. BECK |
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Administrative Law Judge |
MEMORANDUM
The HRA’s Petition seeks reconsideration of the calculation of interest on claims that it paid from 2001 through 2003 as was set out in the ALJ’s February 17, 2004 Order. The HRA argues that interest should not have been calculated from the date that initial documentation was provided to its consultant, Conworth, but instead from the dates that the claim forms were executed and submitted to the HRA. In its written submissions the Claimants urged denial of the Petition on the grounds that it would suffer a disproportionate hardship if a consultant were allowed to delay consideration of claims indefinitely before presenting them to the agency for a decision. The Claimants did not address the specifics of the Respondent’s request for recalculation of the interest determination.
The federal regulations do require that a claim be supported by documentation.[1] A claim is not complete until it is reasonably documented. The ALJ’s February 17, 2004 order was based upon demonstrative Exhibits 11 and 12 submitted by the Claimants. The ALJ assumed that the submission dates set out in those exhibits were the dates that fully documented claims were presented to Conworth. A review of the record indicates that the executed Department of Transportation claim forms were not submitted until later when the claim was submitted to the HRA. [2] Additionally, further documentation was submitted by the Claimants to Conworth after the submission dates set out in Exhibits 11 and 12.
In regard to the first set of claims submitted by the Claimants it wasn’t until July 16, 2001 that the Claimants notified Conworth that they would proceed with claims based on the bids for moving, as opposed to the actual cost of moving.[3] The claim forms were executed on July 16, 2001 and submitted to the HRA. This is the appropriate date from which to calculate interest since the HRA could not take action until notified of the Claimants’ decision. However, consistent with the ALJ’s prior Order, the HRA should be allowed only 30 days from this date in order to pay the claim. Interest is therefore appropriately calculated beginning 30 days after submission of the claim forms to the HRA.
The second set of claims were formally presented to the HRA on October 5, 2001. The first installment of this set was paid to Claimants on December 6, 2001. However, the Claimants compiled and submitted additional documentation for the second installment of the second set on January 4, 2002, which was then paid by the HRA on February 19, 2002. Interest should not be paid on claims submissions that lack sufficient documentation.
The Claimants had listed a submission date of June 7, 2002 for the third set of claims which were ultimately paid on April 21, 2003. The HRA argues that the documentation supporting these claims was not submitted on June 7, 2002 but was compiled and forwarded to Conworth periodically over many months. Claimants have not identified the source of this date in the record. The HRA points out that the draft of the third set of claims were prepared and discussed in 2002 as part of settlement negotiations. Substantial modifications were made to the third set of claims before they were finally submitted.[4] It would therefore be unfair to use the unsubstantiated June 7, 2002 date upon which to base an interest calculation. As the party with the burden of proof, the Claimants have failed to establish any date prior to submission of the DOT claim forms when its claims were complete, so as to justify payment of interest based upon that date. It is therefore appropriate to use the date of the claim form submission to the HRA, March 12, 2003, to calculate interest.
Based upon the foregoing, Findings of Fact No. 87 and 88 in the Order dated February 17, 2004, are amended as follows:
87. The WBI and BMW claims were submitted to the HRA after review by Conworth and then paid by the HRA. The number of days before payment is as follows:
a. submitted 7/16/01 paid 10/03/01 79 days
b. submitted 7/16/01 paid 11/28/01 135 days
c. submitted 10/5/01 paid 12/06/01 62 days
d. submitted 1/4/02 paid 02/19/02 46 days
e. submitted 3/12/03 paid 04/21/03 42 days
88. Thirty days is a reasonable amount of time in which to allow for payment of claims in this case once they were submitted by Conworth to the HRA.
Additionally, the interest calculation tables contained on page 32 of the February 17, 2004 Order is amended as follows:
Date Submitted Days Over 30 Interest on
7/16/01 49 $111,430.74 $ 598.16
7/16/01 105 12,597.90 144.98
10/5/01 32 46,178.50 161.99
1/4/02 16 10,576.84 18.53
3/12/03 12 243,371.67 _ 320.28
7/16/01 49 $104,676.82 $561.91
7/16/01 105 4,305.00 49.54
10/5/01 32 9,070.00 31.82
1/4/02 16 10,256.00 17.97
3/12/03 12 149,240.71 196.40
$857.64
Based upon these revised calculations the interest due to the Claimants on the paid claims totals $2,101.58.
The Claimants express concern about the possibility that a consultant may take a lengthy period of time to review claims to the detriment of a claimant. This record does not support a conclusion to that effect, especially given the complicated nature of the claims. It appears that the Claimants willingly participated in settlement discussions for the third set of claims rather than filing a claim form and requesting a hearing. The HRA cannot therefore be penalized for delay in concluding the claim review process.
G.A.B.