Aldrich Enterprises, Inc. v. U.S.

• Decision Date: 12 July 1991
• Docket Number: 89-1038,Nos. 88-2575,s. 88-2575
• Citation: 938 F.2d 1134
• Parties: ALDRICH ENTERPRISES, INC., etc., et al., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1134

938 F.2d 1134

20 Fed.R.Serv.3d 609

ALDRICH ENTERPRISES, INC., etc., et al., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.

Nos. 88-2575, 89-1038.

United States Court of Appeals, Tenth Circuit.

July 12, 1991.

Rehearing Denied Oct. 4, 1991.

Jerry E. Cardwell, Denver, Colo. (George T. Ashen, Denver, Colo., Henry Pedersen, Jr., Estes Park, Colo., Joseph C. French and David M. Haynes of French & Stone, P.C., Jonathan M. Jellema of Bragg & Dubofsky, P.C., Boulder, Colo., Richard A. Winkel, Denver, Colo., Dale S. Carpenter of Dale S. Carpenter, II, Lakewood, Colo., Joseph P. Genchi of Joseph P. Genchi, P.C., Estes Park, Colo., and Robert B. Miller of Miller, Hale & Harrison, Boulder, Colo., with him on the brief), for plaintiffs-appellants.

Phyllis Jackson Pyles, Asst. Director, Torts Branch, Civil Div., U.S. Dept. of Justice, Washington, D.C. (John R. Bolton, Asst. Atty. Gen., Michael J. Norton, U.S. Atty., and Jeffrey Axelrad, Director, Torts Branch, Civil Div., U.S. Dept. of Justice, Washington, D.C., with her on the brief), for defendant-appellee.

Before HOLLOWAY, Chief Judge, and SEYMOUR and ANDERSON, Circuit Judges.

HOLLOWAY, Chief Judge.

Certain residents and property owners of the Town of Estes Park, Colorado (the Landowners) commenced this action against the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. Secs. 1346(b) and 2671, et seq., seeking to recover for property damage allegedly resulting from the collapse of Lawn Lake Dam. Two consolidated appeals are presently before us. In No. 88-2575, the Landowners appeal from the district court's entry of summary judgment against them on their first claim for relief, which alleged negligence by the government in relation to the inspection, maintenance, and repair of Lawn Lake Dam. In No. 89-1038, the Landowners appeal from the district court's denial of their 60(b)(2) Fed.R.Civ.P. motion respecting their first claim on the ground of newly discovered evidence. We affirm.

I

A

In July 1982, the Lawn Lake Dam collapsed, releasing great quantities of water, and flooding downstream property in the Town of Estes Park, Colorado. ¹ The Lawn Lake Dam and Reservoir were constructed on federal lands in the Rocky Mountain National Park by the Farmers Irrigating Ditch & Reservoir Company (Farmers) under a right-of-way granted by the United States Department of the Interior in 1903. The grant was authorized by the Act of March 3, 1891, 42 U.S.C. Secs. 946-49, and was made by an Occupancy Use Permit issued to Farmers.

Following the collapse of Lawn Lake Dam, the Landowners commenced separate actions in federal district court in Colorado against the United States under the FTCA to recover for property damage caused by the flooding. The district court consolidated these actions, and the Landowners filed an amended consolidated complaint in February 1985, which alleged five claims for relief. In the first four claims, the Landowners asserted four distinct theories of tort liability grounded essentially on negligence, ² and in the last claim they alleged that the government was liable for trespass. The Landowners sought monetary relief in excess of $25,000,000.

At issue here is the first claim. In that claim, the Landowners alleged that, as the owner of Rocky Mountain National Park, the government owed them a duty to require or perform inspections, maintenance, and repairs of Lawn Lake Dam, and to warn them of any hazards associated with the dam; that the government in fact knew that the dam was leaking and in need of repairs and, further, that the dam was in a dangerous condition due to the storage of unauthorized quantities of water; and, as a proximate result of the government's breach of its duty to the Landowners, the dam weakened to the point of collapse.

B

The government moved for summary judgment on the first three claims of the amended consolidated complaint. In an unpublished memorandum opinion the district court granted this relief as to the first two claims, and denied it as to the third.

As to the first claim, the district court observed that the issue presented was "whether the plaintiffs made a sufficient showing of the defendant's control of the Lawn Lake Dam to make the government liable as an owner under the [Colorado] statute." Dist.Ct.Op. at 2. The principal statute at issue was Colo.Rev.Stat. Sec. 37-87-104(1) (1973), which made reservoir "owners" liable for all damages caused by flooding due to the collapse of their dams. ³ The court read Colorado authorities as making control (including operation and maintenance) of a reservoir and dam the key element in the statutory "ownership" inquiry. It concluded that the Landowners "h[ad] failed to show that the United States government had sufficient control of the dam to make it liable for negligence as an owner under Colorado's statute." Dist.Ct.Op. at 4.

The Landowners moved for reconsideration of the court's summary judgment ruling as to their first claim. They argued that such reconsideration was appropriate in light of Weiss v. United States, 787 F.2d 518 (10th Cir.1986), which was decided after the court entered summary judgment. In Weiss, we upheld a FTCA claim against the government under Colorado law arising from a helicopter accident on federal lands. Referencing analogous Colorado decisions in the landlord-tenant context, we concluded that the government (as landowner) owed a duty of care with regard to artificial conditions placed on its premises by third parties (i.e., an aerial tramway cable), even though it neither owned nor controlled the instrumentality. 787 F.2d at 520, 525-26.

The district court, however, denied relief. It said that Weiss did not "affect the issues under the first claim for relief and [wa]s not an applicable change of law." I R., Doc. 8, at 1. The Landowners and the government subsequently agreed to the dismissal of the remaining claims, bringing the action to a close. The Landowners commenced a timely appeal from the court's summary judgment ruling on their first claim (No. 88-2575).

In preparing their appellate brief as to the first claim, the Landowners discovered a letter written to Farmers by the United States Park Service on August 14, 1975 that imposed certain restrictions on Farmers' activities in the maintenance and repair of Lawn Lake Dam. They believed that the letter could convince the court that there was adequate evidence of the government's exercise of control over Lawn Lake Dam to support a negligence action against it as a statutory "owner." Accordingly, they moved the district court for reconsideration on the ground of newly discovered evidence. See generally Fed.R.Civ.P. 60(b)(2).

The motion was denied. The court noted that it "ha[d] no jurisdiction in the matter" because of the pending appeal from its summary judgment ruling (No. 88-2575) and, further, that the letter was "not persuasive." I Supp.R., Doc. 3, at 1. The Landowners filed a timely appeal from the denial of the motion for reconsideration (No. 89-1038), and this appeal was consolidated with the appeal in No. 88-2575 by order of this court.

II No. 88-2575

Generally, the FTCA constitutes a waiver of sovereign immunity for certain suits against the government arising from the negligence or wrongful conduct of its employees. See Dalehite v. United States, 346 U.S. 15, 17, 73 S.Ct. 956, 959, 97 L.Ed. 1427 (1953). For liability purposes, the statute mandates that the government be treated as a private person, and specifies that the governing substantive law is the law of the place where the negligent or wrongful conduct occurred. 28 U.S.C. Sec. 1346(b); see, e.g., LeMaire By and Through LeMaire v. United States, 826 F.2d 949, 953-54 (10th Cir.1987) (applying Colorado law). Accordingly, Colorado law governs our liability inquiry here relating to the collapse of Lawn Lake Dam.

Guided by the Supreme Court's decision in Salve Regina College v. Russell, --- U.S. ----, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991), we give no deference here to the district court's reading of Colorado law. We hold that the rationale of Salve Regina, although adopted in a diversity case, applies in the context of this FTCA suit governed by state law. ⁴ This rationale should be given retroactive effect. See Solem v. Stumes, 465 U.S. 638, 642, 104 S.Ct. 1338, 1341, 79 L.Ed.2d 579 (1984).

We review summary judgment rulings de novo, applying the same legal standard under Fed.R.Civ.P. 56 as the district court. See Gonzales v. Millers Cas. Ins. Co., 923 F.2d 1417, 1419 (10th Cir.1991). Specifically, we must determine whether there are any genuine issues of material fact and, if not, whether the substantive law was correctly applied. The evidence is viewed in the light most favorable to the nonmovant. See Baker v. Penn Mut. Life Ins. Co., 788 F.2d 650, 653 (10th Cir.1986). Entry of summary judgment is mandated, after an adequate time for discovery and upon motion, against a party who "fails to make a showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57, 106 S.Ct. 2505, 2514-15, 91 L.Ed.2d 202 (1986).

A

According to the government, Colorado statutes addressing the liability of reservoir owners are controlling, in particular, Colo.Rev.Stat. Sec. 37-87-104(1) (1973). This statute provides that "the owner of a reservoir shall be liable for all damages arising from leakage or overflow of the waters therefrom or floods caused by the breaking of the embankments of such reservoir." It codifies the principle of strict or absolute liability as to property damage or personal injuries caused by the collapse of reservoirs--a principle which is rooted in Colorado common law. See Garnet Ditch & Reservoir Co. v. Sampson, 48 Colo. 285, 110 P. 79,...