Blum v. Campbell

• Decision Date: 12 July 1972
• Docket Number: Civ. No. 19322.
• Citation: 355 F. Supp. 1220
• Parties: Eugene BLUM v. Wallace H. CAMPBELL et al.
• Court: U.S. District Court — District of Maryland

355 F. Supp. 1220

Eugene BLUM v. Wallace H. CAMPBELL et al.

Civ. No. 19322.

United States District Court, D. Maryland.

July 12, 1972.

Elsbeth Levy Bothe, Baltimore, Md., for plaintiff.

George Beall, U. S. Atty., and Francis S. Brocato, Asst. U. S. Atty., Baltimore, Md., for defendants Ratcliffe, The Maryland Management Co., Clapp, Davis and Borcherding.

Donald E. Sharpe and Piper & Marbury, Baltimore, Md., for defendant Wallace H. Campbell.

MEMORANDUM AND ORDER

HARVEY, District Judge.

Efforts undertaken by the Federal Housing Administration (the FHA) in 1966 to evict a tenant of Sutton Place Apartments have resulted in this civil action for libel and slander brought against various FHA employees and others. At the time of the matters in suit, Eugene Blum, plaintiff herein, was the tenant in question at Sutton Place Apartments, 1111 Park Avenue, Baltimore, Maryland. In this action, he seeks compensatory and punitive damages from the following six defendants:

1. Charles H. Borcherding, Sr., who was Director of the FHA insuring office in Baltimore, Maryland until December 31, 1966;

2. Allen T. Clapp, who became Director of such office on February 27, 1967;

3. H. Leroy Davis, who was Realty Officer for such FHA office in Baltimore during the time of the matters in suit;

4. The Maryland Management Company, which had contracted with FHA to manage Sutton Place Apartments commencing on October 1, 1966;

5. Phillip E. Ratcliffe, who was Vice President of The Maryland Management Company until June of 1967 when he became the Company's President; and

6. Wallace H. Campbell, who was appointed Receiver for Sutton Place Apartments by this Court on April 22, 1966 and who managed and operated the property as Receiver until discharged by Order of this Court on September 30, 1966.

This action was instituted in the Baltimore City Court but was removed here under the provisions of 28 U.S.C. § 1442(a)(1), which permits removal of any civil action commenced in a state court against an officer of the United States or any agency thereof for any act done by him under color of his office. Presently before the Court are motions for summary judgment filed by all the defendants, who claim that any statements made by them during the period in question were absolutely or qualifiedly privileged.

Plaintiff originally leased an apartment at Sutton Place in April 1963. When the owners of the apartment building defaulted in connection with payments due on their FHA mortgage, an action was instituted in this Court for foreclosure of the mortgage. United States v. Gilman, et al., Civil No. 17247.¹ Defendant Campbell was appointed Receiver by an Order entered by Judge Thomsen on April 22, 1966. On June 22, 1966, such Receiver filed with the Court his First Report, Account and Recommendations, which contained the following statement:

"10. There are approximately a dozen tenants that in our opinion harm the reputation of the building. Not only are they objectionable to other occupants, but have generally been slow in paying rent and consistent in violating covenants of the lease agreement. These residents should be removed from the property by any legal means available."

On August 8, 1966, the apartment building was sold to the FHA at public auction, ownership to become effective on September 30, 1966. Upon assuming ownership, defendant Borcherding decided to terminate the leases of plaintiff and several other tenants and ordered plaintiff to vacate by October 31, 1966. Plaintiff objected strenuously and thereupon called upon various public officials to intercede in his behalf to prevent his eviction. When plaintiff refused to vacate, ejectment proceedings were brought against him by the FHA in the People's Court of Baltimore City. In an opinion rendered on March 17, 1967, Judge Henry L. Rogers of that Court ruled that the FHA had the legal right to repossess the apartment occupied by plaintiff, the Order to become effective July 1, 1967. Plaintiff thereupon took an appeal to the Baltimore City Court. After Judge Rogers had filed his opinion, the Supreme Court of the United States decided the case of Thorpe v. Housing Authority of City of Durham, 386 U.S. 670, 87 S.Ct. 1244, 18 L.Ed.2d 394 (1967). A Special Commissioner was appointed by the Baltimore City Court to take testimony and determine whether the FHA had complied with the principles of the Thorpe case in seeking to evict plaintiff. The Special Commissioner submitted his Report and Recommendation on August 29, 1967, finding that the FHA had acted unreasonably and recommending that judgment be entered in favor of Mr. Blum. The FHA then decided to conclude the litigation by entering into a new lease with Mr. Blum for his apartment at Sutton Place, and plaintiff has remained as a tenant until the present time.

In this action, plaintiff claims that the eviction proceedings were the subject of much public attention, that his reputation was greatly injured thereby, that he has been held up to hatred, ridicule and contempt, and that he has suffered extreme and prolonged mental anguish and great financial loss and damage. Plaintiff seeks $10,000 as compensatory damages and $200,000 as punitive damages.

I

In support of their motion for summary judgment, defendants Borcherding, Clapp and Davis claim that at the time of the matters in suit they were public officials acting within the scope of their employment and that they are therefore immune from suit for damages allegedly resulting from statements made in the performance of their official duties. At the hearing on these motions, counsel for plaintiff conceded that under the principles of Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), this action cannot proceed against the defendants Borcherding, Clapp and Davis, all of whom are employees of the FHA. Quite clearly, the doctrine of absolute privilege applies not only to high officials of the United States but extends as well to officers of lower rank in the executive hierarchy. 360 U.S. at 573, 79 S.Ct. 1335. See also Howard v. Lyons, 360 U.S. 593, 79 S.Ct. 1331, 3 L.Ed.2d 1454 (1959). To the same effect are recent decisions in this Court and in the Fourth Circuit. Heine v. Raus, 261 F.Supp. 570 (D.Md. 1966), vacated and remanded 339 F.2d 785 (4th Cir. 1968); 305 F.Supp. 816 (D.Md.1969), affirmed 432 F.2d 1007 (4th Cir. 1970); Donnelly v. Johnson, Civil No. 21364 (D.Md. April 6, 1972).

II

Plaintiff does not concede that his claims against defendants The Maryland Management Company and Phillip E. Ratcliffe are likewise barred by the doctrine of absolute privilege. Plaintiff contends that these two defendants were acting as independent contractors and not as agents of the federal government at the time that the alleged tortious acts were committed and that therefore they were not privileged to make and publish the statements which plaintiff claims to have harmed him.

In support of their motion for summary judgment, defendants Ratcliffe and Maryland Management Company contend that they were agents of the FHA and therefore enjoy the same privilege as government employees. In claiming that there is no genuine issue of fact before the Court, these defendants rely on various depositions and affidavits. Included in the present record are depositions of the defendants Clapp, Davis, Borcherding and Ratcliffe, taken on November 20, 1968. In addition, the defendants have filed affidavits of each of these four individual defendants, all dated in August, 1971. Attached to each of these affidavits are numerous exhibits which include correspondence, memoranda, reports and other documents, detailing the activities of the various defendants during the period in question.²

From this extensive record, this Court finds from the undisputed facts that The Maryland Management Company and Ratcliffe during the period involved were acting as agents under the direct supervision and control of the FHA and not as independent contractors. As agents of the government acting within the scope of their contract, defendants Ratcliffe and Maryland Management Company are likewise immune from suit under the principles of Barr v. Matteo, supra. In particular, the provisions of the written agreement dated July 29, 1966 between the United States and The Maryland Management Company show quite clearly that the Company was being employed to manage Sutton Place Apartments under the direct and continuing supervision of the FHA. Article 5 of the agreement provides that the day-to-day administrative details of operation under the contract will be under the supervision of the Baltimore office of the FHA. Pursuant to Article 12, the Company agreed to abide by all instructions relating to the management, rental and maintenance of the project issued from time to time by the FHA. The various documentary exhibits show not only that the FHA had the power to direct and control the activities of the Company but in fact exercised close supervision of the Company's activities continually during the period involved in this action. What Ratcliffe and his Company did in seeking to evict the plaintiff was as much governmental action as if such acts had been undertaken by defendants Borcherding, Clapp and Davis themselves.

Furthermore, it is quite clear from the record here that the decision to terminate plaintiff's lease was made by Borcherding before the agreement with The Maryland Management Company became effective. Ratcliffe and other representatives of his Company thereafter did no more than carry out FHA instructions designed to accomplish this objective.

This Court's conclusion that these two defendants are likewise protected by an absolute privilege is supported by the opinion of the Fourth Circuit in Becker v. Philco, 372 F.2d 771 (4th Cir. 1967), cert. den. 389 U.S. 979, 88 S.Ct. 408, 19 L.Ed.2d 473 (1967). There, certain employees of a private contractor brought an action for libel against their employer...