Bessinger v. U.S.

• Decision Date: 09 August 2006
• Docket Number: C.A. No. 9:05-cv-03058-PMD.
• Citation: 448 F.Supp.2d 684
• Court: U.S. District Court — District of South Carolina
• Parties: Donald Richard BESSINGER and Leilani Bessinger, Plaintiffs, v. UNITED STATES of America, Tri-Command Military Housing LLC, Actus Lend Lease LLC, Tri-Command Managing Member LLC, County of Beaufort, State of South Carolina, South Carolina Department of Health & Environmental Control, Beaufort County Public Works, South Carolina Department of Transportation, Defendants.

448 F.Supp.2d 684

Donald Richard BESSINGER and Leilani Bessinger, Plaintiffs, v. UNITED STATES of America, Tri-Command Military Housing LLC, Actus Lend Lease LLC, Tri-Command Managing Member LLC, County of Beaufort, State of South Carolina, South Carolina Department of Health & Environmental Control, Beaufort County Public Works, South Carolina Department of Transportation, Defendants.

C.A. No. 9:05-cv-03058-PMD.

United States District Court, D. South Carolina, Beaufort Division.

August 9, 2006.

COPYRIGHT MATERIAL OMITTED

Jarrel L. Wigger, Wigger Law Firm, North Charleston, SC, for Plaintiffs.

Anthony W. Livoti, John M. Grantland, Murphy and Grantland, Christie V. Newman, U.S. Attorneys Office, Columbia, SC, Marshall H. Waldron, Jr., Carolina Litigation Associates, Bluffton, SC, for Defendants.

ORDER

DUFFY, District Judge.

This is a tort action brought by Plaintiffs Donald and Leilani Bessinger ("Plaintiffs") for damage caused by flooding on their property located at 4381 Pinewood Circle, Beaufort, South Carolina. The negligently performed construction of military housing on the United States Marines Corps Air Station (the "Air Station") adjacent to Plaintiff's property allegedly caused the flooding. Plaintiffs assert several tort claims against the United States of America (hereinafter "the United States") under the Federal Tort Claims Act (hereinafter "FTCA"), 28 U.S.C. § 2671, et seq. Jurisdiction for the FTCA claims is based in 28 U.S.C. § 1346(b). Plaintiffs also assert state law claims against the private entities involved in the leasing and development of the Air Station, the State of South Carolina, Beaufort County, and agencies of the State of South Carolina and Beaufort County. Jurisdiction as to these claims is based solely on supplemental jurisdiction, codified at 28 U.S.C. § 1367.¹

This matter is currently before the court on the Defendant United States of America's motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for a lack of subject matter jurisdiction.

BACKGROUND

The facts relevant to this motion are as follows:

In 1996, Congress established the Military Housing Privatization Initiative ("MHPI") through the 1996 Defense Authorization Act to improve the quality of housing conditions for active-duty military personnel. Pub.L. 104-106, 110 Stat. 186, 544, 10 U.S.C. § 2871, et seq. (1996). Pursuant to the MHPI, Congress intended to "substantially upgrade military housing on an accelerated basis" through the utilization of new "authorities" that permit the military to offer certain cost-saving and money earning benefits to private entities as a quid pro quo for their provision of housing and related services to military personnel. 141 Cong. Rec. 518853. The MHPI provides the Department of Defense with twelve alternative authorities or tools to initiate housing projects which include the authorization of direct loans and loan guarantees (10 U.S.C. § 2873), differential payments to supplement service members' housing allowances (10 U.S.C. § 2877), investments such as limited partnerships, stock/bond ownership, and limited liability companies (10 U.S.C. § 2875), and the conveyance or lease of existing military housing and facilities to the contractor (10 U.S.C. §§ 2876, 2878).²

On March 1, 2003, the United States, through the Department of the Navy, entered into a "Real Estate Ground Lease and Conveyance of Facilities" (the "Lease," Def. Exhibit 2) with Tri-Command Managing Member LLC ("TCMM"). Through this Lease, authorized by section 2876 of the MHPI, the Department of the Navy conveyed its rights and interests in the Air Station adjoining Plaintiffs' property to TCMM for fifty years, and, further, conveyed title to all existing personal property, e.g., equipment, appliances, furnishings, and title to the newly constructed units. (Lease, ¶¶ 1.6; 23.1.) In return, TCMM agreed to construct, operate, manage and maintain rental housing units on the Air Station. During the construction of the new housing units, the Department of the Navy had the right to send, from time to time, a representative known as the Resident Officer in Charge of Construction ("ROICC"), who would provide "limited initial construction start up assistance, as needed" and would visit "the construction site, as appropriate to gain a perspective for the safety and quality practices being performed." (Lease, ¶ 13.6.) The Department of the Navy retained the right to inspect the premises for compliance with various environmental and safety regulations, and to assure contract compliance, but otherwise agreed to not unreasonably interfere with the construction, use and operation of the premises by TCMM and its contractors and sublessees. (Lease, ¶¶ 12.2.4; 12.2.18; 15.1.) The Department of the Navy also agreed to own and maintain certain `common areas' within the Air Station, such as the storm water drainage and street systems of the Air Station, though the construction and installation of these systems was exclusively the duty of TCMM. (Lease, ¶¶ 19.5; 19.6.) TCMM agreed to assume all risks and waive all claims against the United States for suits, claims and liabilities arising out of loss or damage to property resulting from any activities conducted or services furnished by TCMM in connection with this Lease. (Lease, ¶ 16.2.)

Prior to or concurrently with the execution of the Lease, TCMM, as a managing member, and the Department of the Navy, as an equity investor, formed a limited liability company called Tri-Command Military Housing LLC ("TMH"). As lessee under the Lease, TCMM agreed to assign to TMH all of TCMM's leasehold interests, rights, title and obligations under the Lease, and TMH agreed to assume all financial obligations of TCMM. (Lease at 1-2.) TCMM, as managing member of the Company, is responsible for the design, financing, demolition, renovation, ownership, management, operation, and maintenance of existing and new housing units. (Lease at 2.) The subject property, therefore., is under the control of TMH and under the direction of TCMM, the managing member.

At some time prior to November, 2003, TCMM and its subcontractors began construction of a commercial rental residential subdivision on the Laurel Bay Housing property on the Air Station near Plaintiffs' property. During the course of construction, TCMM and its subcontractors mucked out and filled in wetlands, graded the land for lots, and removed excess groundwater from the construction site.

On or about Thanksgiving of 2003, Plaintiffs discovered that water was beginning to accumulate on their property. Plaintiffs contacted the Commander of the Marine Corps Air Station to complain about the water draining onto their property, and the ROICC, as a result, told the project manager to immediately turn off the pumps that were draining the excess ground water onto the Plaintiffs' property. Following this incident, Plaintiffs' land continued to flood during and following heavy rainfalls. Their property still remains flooded for several days, and interferes with the use and enjoyment of their property. Plaintiffs' house has also shown signs of water damage.

On October 28, 2005, Plaintiffs filed this action in federal district court, alleging that the flooding and damage to their property was caused by the construction on the Air Station, as well as by the improperly designed and maintained water drainage systems in the County. Plaintiffs asserted causes of action for negligence, gross negligence, reckless indifference, negligent infliction of emotional distress, outrage, negligent trespass, negligent construction, nuisance, conversion, and violation of South Carolina Code section 5-31-450. The United States, claiming that this court lacks jurisdiction due to sovereign immunity, now moves for the action to be dismissed.

STANDARD OF REVIEW

When evaluating a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) on the grounds that the complaint fails to state facts upon which jurisdiction can be founded, the plaintiff has the burden of proving jurisdiction. Richmond, Fredericksburg & Potomac R. Co. v. U.S., 945 F.2d 765, 768 (4th Cir. 1991). Where jurisdiction is challenged under a claim of sovereign immunity, "[t]he party who sues the United States bears the burden of pointing to . . . an unequivocal waiver of immunity." Williams v. United States, 50 F.3d 299, 304 (4th Cir.1995) (citing Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir.1983), cert. denied, 466 U.S. 958, 104 S.Ct. 2168, 80 L.Ed.2d 552 (1984)). In ruling on a Rule 12(b)(1) motion, the court may consider exhibits outside the pleadings. See Mortensen v. First Federal Say. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977). Indeed, "the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Id.; see also Richland-Lexington Airport Dist. v. Atlas Properties, 854 F.Supp. 400, 407 (D.S.C.1994) (cogently explaining the differences between dismissal procedure under Rule 12(b)(1) and summary judgment under Rule 56(c)).

ANALYSIS

As a threshold matter, the court finds that Plaintiffs' causes of action arise from the alleged misconduct of TCMM and its sublessees. Plaintiffs, noting that the United States "is the owner of the property" and "continues to hold an interest in the control and management of the property,"³ claim that the Lease created a "partnership" or "joint venture" between the United States and the private developers, such that the developers are agents of the United States. As such, Plaintiffs assert that the United States is liable for the tortious conduct of its agents, the developers. (Pl. Memo. at 6.) In contrast, the United States asserts that Plaintiffs' complaint alleges misconduct only of the activities of independent contractors of the United States. Accordingly, the United States asserts that this court lacks subject matter jurisdiction because the United States is not subject...