
    DODGE STREET BUILDING CORPORATION, A NEBRASKA CORPORATION v. THE UNITED STATES
    [No. 325-61.
    Decided February 19, 1965]
    
      Lyle E. Strom for plaintiff. James J. Fitzgerald, Jr. of counsel.
    
      Herbert Pittle, with whom was Assistant Attorney General Ramsey Clark, for defendant.
    Before Cowen, Chief Judge, Laramore, Durfee, Datis, and Collins, Judges.
    
   Cowen, Chief Judge,

delivered the opinion of the court:

In 1924 Elks Lodge No. 1817 (then known as Lodge No. 89) of Omaha, Nebraska, erected an 8-story, concrete and brick structure at 18tb aiid Dodge Street in. Omaha'. The building was constructed in ■ a manner to facilitate various, uses by the.lodge.' The seventh and eighth floors were corn-, bined for use as a ballroom and club; the fourth, fifth, and sixth floors were designed, for and devoted to hotel use, having a total of 105- rooms — 35 on each floor. Each room on these floors contained a private lavatory and toilet. Twelve of the rooms on each floor had full private baths. For the remaining 23 rooms on each of .these floors there was one common shower room, consisting of four shower stalls. The administrative offices of the lodge and some clubroóms occupied, the third floor. The first floor has been rented to various, store-type operations, including a restaurant, a- bar, a bowling alley, and some small retail. shops'. Since 1950 the Omaha Chamber of Commerce has leased the entire second-floor.

In 1950 the lodge, which to that time had been the owner and operator pf the building, organized the Dodge Street Corporation, plaintiff herein, to take oyer that ownership and operation. All of the plaintiff’s outstanding stock is held by the lodge.

.. Early in Í953 defendant leased the fourth, fifth, and sixth floors from plaintiff for use by. an agency pf defendant as office space. In order to so use these floors defendant made extensive additions,, alterations, and repairs. The changes included removal, addition and/or alteration of partitions, floors, walls, ceilings, doors, windows, hardware, millwork, plumbing, electrical wiring, light fixtures, switches, outlets, and electrical panels. All three floors were painted and the bedroom-type lighting fixtures were replaced by large ceiling fluorescent fixtures. Carpeting was replaced by asphalt tile. The shower rooms'were converted to restrooms for men and women by removirtg the old plumbing fixtures and installing new plumbing equipment. The outmoded electrical power supply and systems were transformed to a system that was adequate for either hotel or office use. In performing this work, the defendant expended a total of $101,946.69!

A condition survey made jointly by representatives of both parties prior to defendant’s conversion showed that the paper on the walls of the hotel rooms was in poor to good condition and that the walls of the bathroom, janitor’s closets, and supply closets were in poor condition. The carpets on the floor were in fair condition and the ceiling of the rooms in good condition. The doors were found to be in good condition but the wood sash windows were loose. The plumbing fixtures were cracked and the enamel worn. In general, the woodwork was in fair condition while the halls, stairways, and elevators were in good condition.

Included in the lease, which provided for an annual rental of $67,000, was a clause obligating the defendant upon termination of the lease to restore the premises to the condition existing at the beginning of the lease, except for ordinary wear, and tear and damages by the elements or circumstances beyond the Government’s control. A special proviso limited the restoration to partitions, plumbing and electrical wiring at the places indicated on drawings of the floor plans attached to the lease as exhibits.

By supplemental agreement of August 1963, the restoration provisions of paragraph 8 of the original lease were modified as follows:

The Lessor agrees that should the Government make changes in or additions to the premises by construction and installing for its use general toilet room facilities for and located on the 4th, 5th and 6th floors, that the Government, at the termination of this lease, will not be required to restore that part of the demised premises used for said general toilet room facilities, provided the Government elects not to remove said general toilet room facilities at or before the expiration of this lease so that said general toilet room facilities will remain as provided and installed and shall become the property of the Lessor when this lease is terminated. The Lessor, in consideration for the Government not removing said general toilet room facilities, further agrees not to require the Government to restore any plumbing from wherever removed, if any, on the 4th, 5th and 6th floors, provided further, that the word “plumbing” as used in paragraph 8 and herein is defined to mean and include all water and sewage pipes, toilet room, bath room and shower room fixtures and. installations, partitions and floorings presently installed in, and used in conjunction with and comprising the toilet rooms, bath rooms and shower rooms. The provisions of this paragraph are notwithstanding the provisions of paragraph 8.

Defendant occupied the leased space until October 15,1960, at which time it vacated the premises pursuant to earlier written notice to the plaintiif. Prior to that date, and after defendant had given its notice to terminate, plaintiff had requested that the defendant restore the premises in accordance with the lease and the - supplements thereto. After an exchange of letters and some negotiating, plaintiff furnished defendant with an itemized bill of $120,560 as its claimed restoration costs. Defendant replied that it would not restore the premises, since its appraisal had shown that the market value of the property in its condition at the termination of the lease exceeded the value of the property if restored in accordance with the covenants of the lease as supplemented.

After a denial of its claim by the General Services Administration on June 30, 1960, plaintiff brought this suit for breach of the restoration clause in the 1953 lease, as amended by the supplemental agreement. Plaintiff now claims that defendant’s share of the cost of the restoration is $121,326.

The Trial Commissioner correctly found that, as a result of the amendment of the lease contract, the Government’s obligation to restore the premises was limited to the partitions (excluding those around the former bathrooms) and the electrical wiring on the fourth, fifth, and sixth floors. After considering the conflicting evidence on the question, the Commissioner determined that the fair and reasonable cost of making such restoration was $47,243. The cost of restoration is not, however, the measure of plaintiff’s damage. In an action for breach of contract, as opposed to a suit sound-1 ing in specific performance, the lessor is entitled only to the damages that were caused to the property by the failure to' restore. Where the expense of restoration exceeds the diminution in the market value of the property caused by the lessee’s nonperformance, the diminution in fair market value is the proper measure of damages. Spitzel v. United States, 146 Ct. Cl. 399. Furthermore, if the fair market value of the property is greater in its unrestored condition than it would be if restored in accordance with the covenants of the lease contract, the lessor has sustained no damage and is entitled to recover nothing. Realty Associates, Inc. v. United States, 134 Ct. Cl. 167.

Plaintiff lias tried this case upon the theory that the highest and best use of the leased premises is for hotel use and has sought, by expert testimony, to establish that if the property were completely restored to its 1953 condition, with hotel rooms on the fourth, fifth, and sixth floors, the fair market value would exceed its value in the condition that existed upon the termination of the lease by an amount greater than plaintiff’s claimed costs of restoration.

There are, however, several obstacles to plaintiff’s right to recover under the facts of this case.

First, it is clear, that the Government did not obligate itself to reconvert the fourth, fifth, and sixth floors to hotel rooms as they existed in 1953 when the lease was executed. It is conceded that if the Government had elected to restore the premises in full compliance with the provisions of the agreement, the fourth, fifth, and sixth floors would not have been usable for hotel purposes. A reconversion of the space to hotel rooms would have required the installation of pipes, plumbing fixtures and partitions for private bathrooms, plus other changes beyond the scope of defendant’s covenant to restore.

Second, the Trial Commissioner, after hearing and considering the widely varying testimony of the experts called by the parties regarding the fair market value of the building in various stages of restoration, as well as its highest and best use at the time the lease was terminated, has rejected plaintiff’s evidence in favor of that offered by the- defendant. The Commissioner found that, from the record as a whole, the following conclusions are warranted:

(a) As of the date the defendant vacated the premises, i.e., October 15, 1960, the highest and best use of the Elks Building, with the interior thereof in the same condition then existing, was for, general office use.
(b) Assuming that the fourth, fifth, and sixth floors of the building were restored to their condition as of June 1953, the highest and best use of the Elks Building at October 15, 1960, would have been to convert the said floors to offices and lease the same for general office use.
(c) As of October 15, I960, the fair market value of the building in its then condition together, with the land on which it stood approximated $560,000.
(d) Assuming that the fourth, fifth, and sixth floors of the building had been restored to their condition in June 1953 (except for bathrooms, plumbing, and bathroom partitions), the fair market value of the building and land would have been approximately $500,000, as of October 15,1960.

Cinder our Rule 66 the findings of the Commissioner are presumed to be correct because of his opportunity to hear the witnesses, to evaluate their credibility, and to determine the weight to be accorded to their testimony. To overcame this presumption, plaintiff must make a strong affirmative showing to the contrary. Wilson v. United States, 151 Ct. Cl. 271; Davis v. United States, 164 Ct. Cl. 612 (1964). Cf., Toronto, Hamilton and Buffalo Nav. Co. v. United States, 116 Ct. Cl. 184, as to the presumption accorded to a finding made by the trier of the facts where there is a conflict in the testimony of expert witnesses. After a review of the record, we are satisfied that the Commissioner’s findings are amply supported by the evidence. Furthermore, as we shall indicate below, we are convinced he adopted the only course that was available to him in the light of the proof presented by the parties.

Third, plaintiff failed to offer any evidence on the measure of damages which we have found to be applicable to the facts of this case. Under the rule announced in Realty Associates, Inc. v. United States, supra, and stated at the outset of this opinion, it was incumbent upon plaintiff to establish by a preponderance of the evidence that the fair market value of the building in the condition in which defendant had covenanted to restore it, was greater than its fair market value in an unrestored state at the termination of the lease. Each of the two expert appraisers called by the plaintiff gave his opinion as to what the fair market value of the building would have been if the fourth, fifth, and sixth floors had been restored to the condition existing in 1953, including the private bathrooms and other changes required to reconvert the three floors for hotel use as in the prior period. Each also stated his opinion as fo the fair market value of the premises in an unrestored state. However, neither ventured an opinion as to what the fair market value would have been if defendant had restored it in the manner required by the covenants of the lease contract. Instead, each declared that if the reconversion was so limited, he could not value the property at all, pr that such a restoration would add nothing to the market value of the property in its conditiou when the premises were surrendered. Defendant offered the only evidence as to the fair market value of the premises if they had been restored in the manner required by the provisions of the lease contract; plaintiff has not contradicted this evidence; our Trial Cpmmissioner has accepted defendant’s evidence, and we have adopted his findings.

As the record has revealed, it makes no difference whether we find that the fair and reasonable cost of restoration was $121,326, as plaintiff contends, or $47,243, as the Trial Commissioner has found. The expenditure of either amount for restoration would have the deleterious effect of diminishing the present market value of the property.

As previously stated, defendant expended $101,946.69 in alterations and improvements which became the property of plaintiff upon the termination of the lease. The only pertinent evidence before us shows that at the time defendant vacated the premises, the fair market value of the property was approximately $60,000 in excess of what its fair market value would have been if defendant had elected to restore the fourth, fifth, and sixth floors in the manner specified in the amended lease contract.

It follows from what we have said that plaintiff is not entitled to recover and its petition is dismissed.

Laramore, Judge,

dissenting:

In my opinion, under the majority’s holding, the government’s obligation under a “partial restoration” provision would never be enforceable. This result would seem to always follow, since the fair market value of the subject property would necessarily decrease when only partially restored to its prior condition. A building in such a stage of completion cannot possibly be productive since, as in this case, it can be used neither as an office building nor as a hotel. This is especially true here, since the valuation of rental property is universally based on its rate of return. The majority applies our holdings in the Spited and Realty Associates decisions, supra, as the proper measure of damages to the instant case. However, those cases involved provisions for complete restoration of the property. Although I do not question their correctness, I believe they should not be applied to instances where the government’s obligation under the lease contract is to partially restore the premises to its prior condition. These decisions are exceptions to the general rule governing damages for a breach of the covenant in a lease to restore the premises to its prior condition. They result from unusual circumstances which are not present in the instant case. In Spittzel the property could not be economically restored since it involved complicated dedudding operations; while in Realty Associates, what were once unproductive buildings in their prior condition became valuable rental property as a result of improvements made by the government. For these reasons, I think that the general rule should be applied here and plaintiff should be entitled to recover the costs of partial restoration as f ound by our commissioner.

FINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner Lloyd Fletcher, and the briefs and argument of counsel, makes findings of fact as follows:

1. The plaintiff herein is a corporation organized and existing under the laws of the State of Nebraska. On the day of its incorporation, March 22, 1950, it became the owner and at all pertinent times since has been the owner and operator of a building known as the Elks Building, located at 108 South 18th Street, Omaha, Nebraska. All of its outstanding stock is held by Ellis Lodge No. 1817 in Omaha, Nebraska.

2. The Elks Building was built in 1924, and, until its acquisition by plaintiff on March 22, 1950, it was owned and operated directly by the aforesaid Elks Lodge in Omaha. It is an eight-story, reinforced concrete structure faced with brick and cast stone trim Tbe first three floors occupy a corner tract of land at 18th and Dodge Streets in Omaha. Above the first three floors, the building is L-shaped. The basement, the lowest level, contains the boiler room. Above the lowest level is the lower lobby which contains the engineer’s room, including the electrical servicing into the building and wiring panels. On that lower lobby level, there is storage space and a now abandoned bowling alley. A portion of the lobby level contains the ventilation room, including duct work and blowers for the ventilation of the entire building, the elevator shafts, and the main lobby area. On the lobby level, there are also located storage rooms, a restaurant, stores, and a tavern. The second floor of the building has been occupied since 1953 by the Chamber of Commerce which uses it for office and meeting purposes. The third floor contains the Elks club rooms and two or three offices.

3. Prior to June 16, 1953, the . fourth, fifth, and sixth floors of the building were designed and used for hotel purposes and were rented to both transient and permanent guests. The fourth, fifth, and sixth floors contained a total of 105 rooms, 35 rooms on each floor. Each room on the fourth, fifth, and sixth floors contained at least a private lavatory and toilet. Twelve of the rooms had full private baths and on each floor was located one common shower room consisting of four shower stalls for the use of the 23 rooms on each floor which had no private baths. The seventh and eighth floors have been used for club purposes by the Elks Lodge.

4. On June 16,1953, the plaintiff and the defendant entered into a lease under the terms of which the defendant leased from the plaintiff approximately 30,500 square feet of space, including the fourth, fifth, and sixth floors of the Elks Building exclusive of elevator shafts and stair wells. The space leased, however, did include a portion of the ground floor and the right to the use of existing building facilities.

5. The lease provided for a term to begin June 22, 1953, and to expire June 21, 1958, at an annual rental of $67,000. Paragraph 2 of the lease provided that the leased premises were to be used by the defendant exclusively for office, storage, and related'uses. Paragraph 8 of the lease provided:

8. The Government shall have the right, during the existence of this lease, to make alterations, attach fixtures, and erect additions, structures, or signs, in or upon the premises hereby leased (provided such alterations, additions,. structures, or signs shall not be detrimental to or inconsistent with the rights granted to other tenants on the property or in the building in which said premises are located); which fixtures, additions, or structures so placed in or upon or attached to the said premises shall be and remain the property of the Government and may be removed therefrom by the Government prior to the termination of this lease, and the Government, if required by the Lessor, shall, before the expiration of this lease or renewal thereof, restore the premises to the same condition as that existing at the time of entering upon the same under this lease, reasonable and ordinary wear and tear and damages by the elements or by circumstances over which the Government has no control, excepted: Provided, however, that if the Lessor requires such restoration, the Lessor shall give written notice thereof to the Government 180 days before the termination of the lease. Provided that restoration if required by Lessor shall consist only of restoring of partitions, plumbing and electrical wiring at the places shown on Exhibits “B”, “C”, and “D”, which exhibits are hereto attached and made a part of this lease, with the plans of the 5th and 6th floors the same as the 4th floor. No obligation exists on the part of the Government to restore the ground floor area.

6. By Supplemental Agreements Nos. 1, 2, 3, and 5 through 8, executed on June 23, 1953, July 2, 1953, July 31, 1953, October 1,1953, October 8,1954, January 5,1955, and October 11, 1955, respectively, additional space in the Elks Building was leased to the United States for an additional rental consideration. Supplemental Agreement No. 9, executed June 11, 1958, extended the term of the lease to June 21, 1961.

7. By Supplemental Agreement No. 4, executed in August 1953, paragraph 8 of the original lease was modified as follows:

18(c). The Lessor agrees that should the Government make changes in or additions to the premises by constructing and installing for its use general toilet room facilities for and located on the 4th, 5th and 6th floors, that the Government, at the termination of this lease, will not be required to restore that part of the demised premises used for said general toilet room facilities, provided the Government elects not to remove said general toilet room facilities at or before the expiration of this lease so that said general toilet room facilities will remain as provided and installed and shall become the property of the Lessor when this lease is terminated. The Lessor, in consideration for the Government not removing said general toilet room facilities, further agrees not to require the Government to restore any plumbing from wherever removed, if, any, on the 4th, 5th and 6th floors, provided further, that the word “plumbing” as used in paragraph 8 and herein is defined to mean, and include all water and sewage pipes, toilet room, bath room and shower room fixtures and installations, partitions and floorings presently installed in, and used in conjunction with and comprising the toilet rooms, bath rooms and shower rooms. The provisions of this paragraph are notwithstanding the provisions of paragraph 8.

8. The physical condition of the entire building and specifically the physical condition of the fourth, fifth, and sixth floors, as of the time when the Government entered into possession, are described in a condition survey made August 12 and 13, 1953, jointly by a representative of the plaintiff and a representative of the defendant. The following comprises a summary of the interior condition of the building as described in said survey:

(a) The walls of all of the hotel rooms on the fourth, fifth, and sixth floors were papered and were in poor to good condition. Many of the rooms, particularly the bathrooms and the janitor’s closets and supply closets, which were finished in painted plaster, were in poor condition. The walls were chipped, marred, or cracked.

(b) The rooms on the fourth, fifth, and sixth floors contained concrete floors, many of which were covered with carpeting in fair condition. The ceilings were in good condition but contained small hairline cracks.

(c) The doors to the rooms on the fourth, fifth, and sixth floors were in good condition but the wood sash windows were loose, and many of the window screens were mended.

(d) The plumbing equipment in the rooms on the fourth, fifth, and sixth floors consisted for the most part of pedestal-type lavatories, most of which contained cracks, and the enamel on some of the fixtures was worn.

(e) The rooms on the fourth, fifth, and sixth floors contained overhead, small, circular fluorescent lighting fixtures and one 12-inch tube fluorescent lighting fixture in each bathroom. The rooms contained from one to three electrical outlets on the average.

(f) The woodwork was in fair condition throughout, and the hallways, stairs, and elevators were in good condition.

9. The defendant took possession of the leased premises in June 1953, and thereupon converted the fourth, fifth, and sixth floors from hotel rooms to office space, which conversion included the removal, modification, addition and/or alteration of partitions, floors, walls, ceilings, doors, windows, jams, trim, hardware, millwork, plumbing, electrical wiring, fixtures, switches, outlets, and electrical panels. More specifically, defendant painted all of the rooms on the fourth, fifth, and sixth floors, removed the bedroom-type fixtures, and installed large ceiling fluorescent fixtures. Plaintiff removed the carpeting, and defendant installed asphalt tile in all of the former bedrooms. Defendant also installed ceiling tile in the rooms. The shower rooms on the fourth, fifth, and sixth floors were altered by removal of the plumbing fixtures and installation of plumbing equipment converting the shower rooms to rest rooms on each floor for men and women. The electrical power supply and electrical systems were insufficient for modern use, and defendant transformed them from an inadequate system to one that was adequate for either hotel or office operation. In this electrical conversion, defendant installed an 800 ampere service in the basement of the building together with a new power riser flexible enough for power distribution throughout the building. The electrical circuits were transferred from old panels to new panels, and new conductors and breaker panels were installed to handle the increased number of circuits. The circuits were increased to 12 circuits on the first floor, 24 circuits on the third floor, and 22 circuits each on the fourth, fifth, and sixth floors. Many of the doors were removed along with the removal of the partitions in order that the rooms might be used more efficiently for office purposes.

The following table shows the nature of the alterations and improvements made by defendant in 1953, and the total cost for each item:

Demolition $ 9,203.00
Plastering 10,350.00
Floor Repairs 1,640.00
New Partitions 1,332.00
Millwork & Carpentry 10,913.00
Wire Partitions 2,463.00
Finish & Rough Hardware 400.00
Carpet & Asphalt Tile 6,781.00
Acoustic Ceiling 1,513.00
Marble & Tile 6,627.00
Shades & Drapes 1,075.00
Painting 7,800.00
Plumbing & Heating 7,817.00
Electrical 26,600.00
Bond 945.00
Total Additions 6,487.69
Total $101,946.69

10. Defendant remained in possession and used the leased premises exclusively for office use until October 15, I960. Prior to that date,' the parties had exchanged correspondence relating to the matter of restoration of the premises under paragraph 8 of the lease, as amended. On November 12, 1957, plaintiff sent the following “Notice” to defendant:

Please be advised that the Lessor, Dodge Street Building Corporation, hereby gives notice, more than 180 days before the termination of said lease, which expires June 21, 1958, that Lessor requires that the Government restore the leased premises to the same condition as that existing at the time of entering upon the same under the above designated lease, reasonable wear and tear and damages by the elements or circumstances over which the Government has no control excepted; such restoration to be under and pursuant to the terms of said lease dated June 16, 1953 and the supplements or amendments thereto, particularly the supplement or amendment designated “Agreement #4” dated August 27, 1953.

Defendant responded to that Notice by a letter dated November 25, 1957, reading, in pertinent part:

With your letter of November 12, 1957, which pertains to occupancy of space now held under Lease GS-06B-2502 after expiration thereof, you forwarded a restoration claim.
It is necessary that we have a listing of the items you require restored together with a detailed description and the extent of restoration required for each. In addition, please give us your estimate of the cost of each item.

The term of the lease was thereafter extended as described in footnote No. 1, supra. Then, on May 12, 1959, plaintiff again gave notice to defendant that it required restoration of the leased premises “to the same condition as that existing at the time of entering upon the same under the ahove-designated lease, reasonable wear and tear, damages by the elements or circumstances over which the Government has no control, excepted, such restoration to be under and pursuant to the terms of said Lease and all amendments and supplements thereto to date.” On July 30, 1959, defendant responded as follows:

In your notice of May 12,1959, you state that restoration of premises in the Elks Building, Omaha, Nebraska, covered by Lease GS-06B-2502, will be required.
The provisions of this Lease exempt from restoration the pipes, fittings and plumbing fixtures removed by the Government. Also, the electric fixtures removed, from toilet rooms will not have to. be reinstalled.
We shall have an engineer list partition and any other changes and determine the cost to-restore, and the value of electric wiring installed by the Government to provide additional power to' the building will-be computed. Other installations which may be considered an improvement will also be considered.
It is requested that you have a listing made of items on which you feel restoration should be effected, and that estimates be prepared as to the cost' of each. We should like to request that we be furnished a copy of this list and cost estimates. This will allow us to consider effecting monetary settlement in lien of actual physical restoration if this would be advantageous, and we would also be certain that there does not exist any disagreement as to items on which restoration is required under the Lease terms.

On April 14, 1960, plaintiff wrote defendant the following letter:

Incident to pushing our negotiations to a conclusion in contemplation of a hotel lease commencing with September of 1960 by which date we understand that GSA will have vacated the rented property at the above location, it is necessary that we place ourselves in readiness to meet the expenditures that such a hotel restoration job would incur. You have heretofore been furnished with figures by our architect wherein the GSA’s share of such restoration work is placed at $120,560.00.
Will you please advise us when payment can be reasonably expected.

Defendant then proceeded with its own appraisal of the property, and on June 30, 1960, it rejected plaintiff’s claim for restoration by the following letter:

Reference is made to the claim of $120,560.00 for restoration to space occupied by the Government in the Elks Building, 108 South 18th Street, Omaha, Nebraska, under Lease GS-06B-2502.
As you are aware, we have had an appraisal made to determine the value of these premises at the time they were originally occupied, and at this time, based on the highest and best use. This appraisal discloses a value which is greater at this time.
The Comptroller General has stated that where the cost of restoration exceeds the amount of difference between the current market value of property if restored to its original condition and current appraised market value of property in its existing condition, the amount that may be expended for restoration or be paid to the Lessor in lieu thereof is the amount by which the market value of the property has been diminished by the Government’s failure to restore as provided in the lease.
An extension of the statement made by the Comptroller General would necessarily be that where there has been no diminution of value the Government has no restoration obligation. In view of this and the appraisal which we have secured, we must deny your claim for restoration. In tbe event yon may wish to discuss this further or raise questions, we shall be happy to go over the items with you.

11. The cost estimates for restoration, as claimed by plaintiff in the total amount of $120,560, were prepared by Mr. Lyle A. Lydick, an Omaha architect. As later modified in some respects, the estimate of total cost of restoration was increased to $121,326, consisting of the following items and amounts:

Construction tower, hoist in use for 60 days $ 4,500.00
Drayage for 60 days. 900.00
Removals, including loading . 121.00
New masonry partitions, plaster two sides 19,501.00 Plaster patching, old walls and ceilings ... 2,616.00
New doors, complete (74) . 11,998.00
New millwork .'. 3,700.00
Repair windows after removal of air conditioners .1. 446.00
Small tools, taxes, insurance (12% of labor) . 1,892.00
Subcontracts:
Painting and paper hanging. 14,100.00
Electrical work ;. 22,660.00
Contingency, small items and damage .... 8,243.00
Contractor’s overhead and profit. 11,355.00
Architect’s fee. 10,203.00
Total ... $112,235.00
Increase in construction costs from January 8, 1958 to October 15 1960 (8.1%) . 9,091.00
Total cost . $121,326.00

12. Shortly after the defendant terminated the above described lease, plaintiff endeavored to rent the vacated fourth, fifth, and sixth floors of the building by listing the same with one of the leading real estate firms in Omaha. Mr. Alfred C. Kennedy of that firm recommended to plaintiff that rental efforts be directed towards obtaining a tenant or tenants who would use large amounts of space for office use. The rental figure authorized by plaintiff was $2.75 per square foot as contrasted to the. approximately $2.20 per square foot rate paid by defendant. Mr. Kennedy was unable to find a tenant willing to pay such price. The record does not indicate that either Mr. Kennedy or the plaintiff ever made any effort to lease the three floors as office space for less than $2.75 per square foot.

13. On December 29,1960, plaintiff received a written offer to lease a portion of the premises for hotel purposes. This offer proposed a 25-year lease of the entrances, lobby, and cocktail lounge on the first floor; basement storage and work rooms, and the entire third, fourth, fifth, and sixth floors. The offer proposed a sharing of rental receipts on a specified percentage basis with a guaranteed minimum annual rental of $46,800. Among other things, the offer required the plaintiff to remodel and restore the third, fourth, fifth, and sixth floors for hotel usage with 13 apartments on the third floor and either a tub or shower with lavatory and toilet in each of the 105 rooms on the fourth, fifth, and sixth floors. Because it did not have sufficient funds to convert the said floors as required by the terms of the offer, plaintiff was unable to accept the same. Thereafter, Mr. Kennedy recommended to the plaintiff that the entire property be sold, but plaintiff decided not to list it for sale.

14. Both parties presented expert testimony by real estate appraisers familiar with the Omaha area regarding the fair market value of the Elks Building and regarding its highest and best use. There was considerable variance in such testimony but from the record as a whole, the following conclusions are warranted:

(a) As of the date the defendant vacated the premises, i.e., October 15, 1960, the highest and best use of the Elks Building, with the ■ interior ■ thereof in- the same condition then existing, was for general office use.

(b) Assuming that the fourth, fifth, and sixth floors of the building were restored to their condition as of June 1953, the highest and best use of the Elks Building at October 15, 1960, would have been to convert the said floors to offices and lease the same for general office use.

(c) As of October 15, 1960, the fair market value of the building in its then condition together with the land on which it stood approximated $560,000.

(d) Assuming that the fourth, fifth, and sixth floors of the building had been restored to their, condition in June 1953 (except for bathrooms, plumbing, and bathroom partitions) , the fair market value of the building and land would have been approximately $500,000, as of October 15, 1960.

15. Inasmuch as paragraph 8 of the lease limited the defendant’s obligation for restoration to “partitions, plumbing and electrical wiring” at the places shown on Exhibits “B”, “C”, and “D” which were floor plans; inasmuch as Supplemental Agreement No. 4 to the lease further relieved the defendant from restoring “any plumbing from wherever removed, if, any, on the 4th, 5th and 6th floors,” and from restoring “that part of the demised premises used for said general toilet room facilities,” the defendant having permitted the facilities to remain; and inasmuch as Supplemental Agreement No. 4 further provided that the word “plumbing,” as used in paragraph 8 of the original lease, “is defined to mean and include all water and sewage pipes, toilet room, bath room and shower room fixtures and installations, partitions and floorings presently installed in, and used in conjunction with and comprising the toilet rooms, bath rooms and shower rooms”, the Government’s obligation to restore the premises was by agreement of the parties limited to partitions and electrical wiring (excluding partitions around the former bathrooms). The fair and reasonable cost of making such restoration at October 15, 1960, would have been $47,243.

16. Other than the claim presented to the General Services Administration, which was denied by that agency on June 30, 1960, no action has been taken on plaintiff’s claim in Congress or by any of the other departments or agencies of defendant. Plaintiff is the owner of said claim, and no other person or persons own any part of it or any interest therein, nor has plaintiff assigned or transferred said claim or any part thereof or any interest therein.

CONCLUSION OF LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover, and the petition is dismissed. 
      
       Tlie expiration date in tlie original lease was June 21, 1958. By a subsequent amendment, tlie expiration date was extended to June 21, 1961, subject, however, to earlier termination by the Government on December 31, 1959, or at any time thereafter upon the giving of 180 days’ written notice to plaintiff.
     