Claxton v. SMALL BUSINESS ADMIN. OF US GOVERN.

• Decision Date: 30 October 1981
• Docket Number: Civ. A. No. CV680-64.
• Citation: 525 F. Supp. 777
• Parties: Jerry CLAXTON, Plaintiff, v. SMALL BUSINESS ADMINISTRATION OF the UNITED STATES GOVERNMENT and Brown Childs Realty and Auction Company, Defendants.
• Court: U.S. District Court — Southern District of Georgia

525 F. Supp. 777

Jerry CLAXTON, Plaintiff, v. SMALL BUSINESS ADMINISTRATION OF the UNITED STATES GOVERNMENT and Brown Childs Realty and Auction Company, Defendants.

Civ. A. No. CV680-64.

United States District Court, S. D. Georgia, Swainsboro Division.

October 30, 1981.

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Thomas R. Taggart, Savannah, Ga., for plaintiff.

Francis W. Allen, Susan E. Warren Cox, Statesboro, Ga., Henry L. Whisenhunt, Jr., Asst. U. S. Atty., Augusta, Ga., for defendant.

ORDER

BOWEN, District Judge.

In this action, plaintiff seeks damages for alleged breach of contract in the sale of a certain parcel of land by defendant Small Business Administration of the United States SBA through its agent co-defendant Brown Childs Realty Auction Company Childs. Plaintiff also seeks equitable relief of specific performance against the SBA. Specifically, plaintiff avers: (1) following public auction of the subject land, as organized and operated by Childs, at a price of $36,250.00, plaintiff entered into a sales contract agreement for the property with the SBA; (2) pursuant to this agreement, plaintiff paid Childs, as agent for the SBA, ten percent (10%) of the total sales price as binder and earnest money; (3) plaintiff subsequently paid the balance of the purchase price to Childs; and (4) the SBA has refused to convey title of the subject property to plaintiff and Childs has returned to plaintiff the entire purchase price.

In its answer, defendant Childs crossclaimed against the SBA seeking indemnification for any loss Childs might suffer as the result of plaintiff's civil action and monetary damages allegedly resulting from the cancellation of a loan guaranty by the SBA. Childs also counterclaimed against plaintiff alleging that the SBA loan guaranty cancellation was the result of plaintiff's institution of the present suit. The case is presently before the Court on defendant SBA's motion to dismiss.

Upon review of the SBA's memorandum of authorities, it appears that the following grounds are asserted in support of the motion to dismiss: (1) the gravamen of the complaint is in tort and thus plaintiff's failure to timely file its claim with the appropriate federal agency, as required by the Federal Tort Claims Act FTCA, 28 U.S.C. § 2675(a), precludes federal court action; (2) since actions naming a federal agency, as opposed to the United States, as a party defendant, are not cognizable under the FTCA, 28 U.S.C. § 2679(a), the SBA is not a proper party defendant in the present case; (3) no authorized official of the SBA approved conveyance of the subject property to plaintiff and thus no valid contractual agreement exists which may be subject to the equitable remedy of specific performance; and (4) assuming a valid agreement exists, 28 U.S.C. § 2409a would not provide a statutory basis for plaintiff's claim. Since Childs' cross-claim has been dismissed without prejudice, this order will consider the SBA's motion only as it relates to the main claim.

I

Before considering the merits of defendant's motion to dismiss, it is useful to first set the bounds of the Court's consideration. The motion of the SBA is seemingly premised on Fed.R.Civ.P. 12(b)(1), lack of subject matter jurisdiction, and Fed.R. Civ.P. 12(b)(6), failure to state a claim upon which relief can be granted. Ordinarily, a Rule 12(b)(1) motion to dismiss for want of subject matter jurisdiction may take two forms: (1) a facial attack on the complaint, in which the court must consider the allegations as true and determine whether a sufficient basis for subject matter jurisdiction has been alleged; and (2) a factual attack on the subject matter jurisdiction of the court, in which the presumption of truthfulness ends, matters beyond the pleadings are considered, and factual determinations are made pertaining to jurisdiction. See Williamson v. Tucker, 645 F.2d 404, 412-414 (5th Cir. 1981); Oaxaca v. Roscoe, 641 F.2d 386, 391 (5th Cir. 1981). The burden of proof on a Rule 12(b)(1) motion rests with the party asserting jurisdiction. See 5 C. Wright & A. Miller, Federal Practice and Procedure § 1350, at 555 (1969).

In contrast to Rule 12(b)(1), it is a fundamental tenet in deciding Rule 12(b)(6) motions that all the allegations of the complaint shall be accepted as true. See Williamson v. Tucker, 645 F.2d at 412; Miller v. Stanmore, 636 F.2d 986 (5th Cir. 1981). If matters outside the pleadings are considered, the motion is automatically converted to motion for summary judgment, thereby according additional safeguards for the plaintiff. See Williamson v. Tucker, 645 F.2d at 412. In some instances, e. g., statutory waivers of sovereign immunity, the basis of subject matter jurisdiction may be intertwined with the plaintiff's federal cause of action. Where this occurs and "the defendant's challenge to the court's jurisdiction is also a challenge to the existence of a federal cause of action, the proper course of action for the district court ... is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of the plaintiff's case." Id. at 415.

The SBA's motion, with supporting affidavits, presents a factual attack on the subject matter of the complaint. Additionally, the SBA contends that no valid contract exists and offers a supporting affidavit. Of course, if the affidavit is considered, this aspect of defendant's motion, while ostensibly arising under Rule 12(b)(6), would be converted to a motion for summary judgment. Furthermore, in claiming that 28 U.S.C. § 2409a is of no avail as a statutory basis for plaintiff's claim, the SBA presents an argument which subsumes both a jurisdiction issue and a federal cause of action issue. Thus, under Williamson, supra, the question should be decided utilizing the appropriate standards under Rule 12(b)(6).

II

It is well settled that "`the United States, as sovereign, is immune from suit save as it consents to be sued ..., and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.'" United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1352, 63 L.Ed.2d 607 (1980) (quoting United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941)); see Stanley v. Central Intelligence Agency, 639 F.2d 1146, 1156 (5th Cir. 1981); Stanton v. United States, 434 F.2d 1273, 1275 (5th Cir. 1970). One such "consent to suit" is encompassed in the Federal Tort Claims Act FTCA, 28 U.S.C. §§ 1346(b), 2671-2680, which constitutes "a limited waiver of sovereign immunity, making the Federal Government liable to the same extent as a private party for certain torts of federal employees acting within the scope of their employment." United States v. Orleans, 425 U.S. 807, 813, 96 S.Ct. 1971, 1975, 48 L.Ed.2d 390 (1976); see Payton v. United States, 636 F.2d 132, 135-36 (5th Cir.) rehearing en banc ordered, 649 F.2d 385 (5th Cir. 1981); Johnson v. United States, 576 F.2d 606, 610 (5th Cir. 1978). Of course, any waiver of sovereign immunity, including the FTCA, must be strictly construed and, to come within the ambit of a particular waiver, a claimant must fully adhere to all statutory procedures. See Foyt v. United States, 561 F.2d 599 (5th Cir. 1977); Molinar v. United States, 515 F.2d 246 (5th Cir. 1975).

As a jurisdictional prerequisite to commencement of a federal court action under the FTCA, a claimant must first file an administrative claim with the appropriate federal agency. 28 U.S.C. § 2675(a). See Ware v. United States, 626 F.2d 1278, 1283 (5th Cir. 1980); Lovell v. Unknown Federal Correctional Officers, 595 F.2d 281, 282 (5th Cir. 1979); Ducharme v. Merrill-National Laboratories, 574 F.2d 1307, 1311 (5th Cir.), cert. denied, 439 U.S. 1002, 99 S.Ct. 612, 58 L.Ed.2d 677 (1978). In this action, it is uncontroverted that no administrative claim was filed. Thus, an initial question presented by the SBA's motion to dismiss is whether plaintiff's claim sounds in tort, and as such, must be dismissed for plaintiff's failure to comply with 28 U.S.C. § 2675(a).

With respect to federal waiver of sovereign immunity, courts recognize that "though distinctions between contract and tort claims do not retain historic significance under modern judicial administration, they retain vitality in view of the jurisdictional provisions of laws consenting to actions against the government." Murray v. United States, 405 F.2d 1361, 1366-67 (D.c. Cir. 1968). In considering the tort/contract distinction, as it pertains to actions against the United States, the Fifth Circuit adopted the following characterization of a "contract claim":

"Many breaches of contract can also be treated as torts. But ..., where the `tort' complained of is based entirely upon breach by the government of a promise made by it in a contract, so that the claim is in substance a breach of a contract claim, and only incidentally and conceptually also a tort claim, we do not think that the common law or local state law right to `waive the breach and sue in tort' brings the case within the Federal Tort Claims Act."

United States v. Smith, 324 F.2d 622, 625 (5th Cir. 1963) (quoting Woodbury v. United States, 313 F.2d 291, 295 (9th Cir. 1963)).

Here, the relationship, if any, between the SBA and the plaintiff was entirely contractual in character. It is apparent, from the face of plaintiff's complaint and attached exhibit, that the parties entered into a "Sales Contract Agreement" on September 3, 1981, for the sale of certain real property. Plaintiff's grievance relates specifically to the SBA's alleged failure to perform under the terms of the contract. Given these factors, the Court finds that plaintiff's claim "is in substance a breach of contract claim" and thus, falls outside the reach of the FTCA and its jurisdictional prerequisites.¹See Blanchard v. St. Paul Fire and Marine Insurance Co., 341 F.2d 351, 359 (5th Cir. 1965).

Since the complaint...