Dragiou v. United States
| Decision Date | 09 January 2013 |
| Docket Number | Case Number 10-11896 |
| Parties | ALIN DRAGIOU and MONIQUE DRAGOIU, Plaintiffs, v. UNITED STATES OF AMERICA, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable David M. Lawson
The plaintiffs have filed a complaint, which they have amended three times, alleging that they purchased a house from the Department of Housing and Urban Development (HUD) that had prior flooding and mold problems, which were not disclosed by the seller. They have sued the United States, which, as one might anticipate, has asserted the defense of sovereign immunity. The case was referred to Magistrate Judge Mona K. Majzoub to conduct all pretrial proceedings. The United States filed a motion to dismiss, and after full briefing, Judge Majzoub filed a report recommending that the motion be granted. She found that sovereign immunity barred the lawsuit, and none of the statutory exceptions to that doctrine applied, although she rejected or did not address certain aspects of the government's arguments. Both sides filed timely objections, and the matter is before the Court for fresh review. The Court has considered the report and recommendation, the motion to dismiss, the response, and all related papers in light of the objections filed and now concludes that the doctrine of sovereign immunity bars the plaintiffs' lawsuit. Therefore, the Court will grant the motion to dismiss.
Plaintiff Alin Dragoiu purchased property at 2361 Marwood, Waterford, Michigan from HUD in October 2004. Although the property was sold "as is," and the purchase documents are rife with warnings, disclaimers, and advice to the purchaser to obtain her own inspections, the plaintiff alleges that the house was defective due to prior flooding from a broker water pipe, about which HUD was aware and did not disclose to her. She says the water damage to the house required extensive repairs and debris removal that occurred before the plaintiff made her offer on the property. That water damage, the plaintiff alleges, caused the growth of toxic mold, which the plaintiff has attempted to eradicate, at great expense.
According to the papers attached to the government's motion to dismiss, HUD acquired the property on July 26, 2004. The next day, HUD assigned the property to Michaelson, Connor, and Boul ("MCB") for management, marketing, and disposition. MCB selected the listing broker, Future Real Estate ("Future"). Future listed the property on August 6, 2004 with the notation that it would be sold "as is," HUD would not make any repairs, and neither MCB nor Future would "make[ any] warranty as to the existence of mold in this prop[erty]"
On August 29, 2004, plaintiff Alin Dragoiu signed a purchase agreement and a "Radon Gas and Mold Notice Release Agreement." The release stated again that the property was sold "as is," and it acknowledged that no one on behalf of the seller had made any representation about the condition of the property. However, the release also contained the following representation:
The Secretary of the U.S. Department of Housing and Urban Development, his/her officers, employees, agents, successors and assignee (the "Seller") and Michaelson, Connor & Boul, Inc. an independent management and marketing contractor ("M&M Contractor") to the Seller, have no knowledge of . . . mold in, on, or around theProperty other than what may have already been described on the web site of the Seller or M & M Contractor or otherwise made available to Purchaser by the Seller or M & M Contractor.
Def.'s Mot. to Dismiss at 3-4 (citing Walker Declaration at ¶¶ 30-33; Ex. V).
On August 30, 2004, MCB tentatively accepted the bid of $138,000 from the plaintiffs, issued the Owner Occupant Bid Acceptance Notification to the plaintiffs' broker, and forwarded the sales contract package.
On September 10, 2004, MCB (on behalf of HUD) and Alin and Monique Dragoiu, as joint tenants with right of survivorship, entered into an "as is" sales contract for the property. On September 17, 2004, the plaintiffs hired their own home inspector. According to the inspector's bill, the plaintiffs' home inspection included a written report and a mold sample. The property's closing was on October 21, 2004.
The plaintiffs allege that they later learned that the defendant left the house flooded for months and then concealed the damage by removing the water and other debris prior to the sale. HUD stated it did not receive any complaints regarding the property from the plaintiffs from the closing date through September 2008.
Plaintiff Monique Dragoiu states that she sent a letter of intent to HUD on February 25, 2009, outlining a proposed settlement for $500,000 in damages and requiring Freddie Mac to repurchase the house. On March 29, 2009, attorney Christopher Bowman sent a letter to HUD seeking settlement for $200,000. On May 14, 2009, the Plaintiffs filed the Form 95 Administrative Claim.
On June 25, 2009, the plaintiffs filed a complaint in this Court, which was dismissed because the plaintiffs failed to exhaust administrative remedies. The Court found that the plaintiffs did notwait for either a denial of the claim by HUD or the six-month period after presentment that would constitute denial so they could file a civil action under the Federal Tort Claims Act (FTCA).
On May 10, 2010, the plaintiffs filed the present action acting pro se, initially naming HUD as the defendant. The complaint was amended later to substitute the United States as the defendant. On May 19, 2011, the plaintiffs filed a second amended complaint alleging that the United States was liable under the FTCA based on nuisance and trespass, as well as violations of the Fifth and Fourteenth Amendments. The United States responded with a motion to dismiss. The plaintiffs then obtained counsel, who filed a third amended complaint on November 30, 2011. As the case now stands, the plaintiffs allege counts entitled Negligence, Revocation, and Declaratory Judgment. On February 14, 2012, the defendant moved to dismiss the third amended complaint for lack of subject matter jurisdiction and failure to state a claim under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
The government raised several grounds in support of its position that the case should be dismissed. First, it argued that the complaint alleged a contractual dispute that was governed by the Tucker Act, and therefore the Court of Federal Claims, not the district court, had exclusive jurisdiction. Second, if the claims are tort-based, the government contended that sovereign immunity applied, and the FTCA did not amount to the government's consent to be sued because this case falls within the misrepresentation exception. Third, the plaintiffs did not present their claim within the two-year limit required by the FTCA, so it is barred. Fourth, HUD delegated its authority to a contractor, and the conduct about which the plaintiffs complain was not HUD's. Fifth, the FTCA's discretionary function exception leaves this case within the sovereign immunitydoctrine. And, finally, the counts labeled "revocation" and "declaratory judgment" do not state causes of action. The magistrate judge filed a report in which she agreed that the Tucker Act and misrepresentation exception arguments had merit, a fact question existed on whether the plaintiffs presented their administrative claim on time, and counts II and III of the third amended complaint failed to state a claim. The magistrate judge did not address the delegation or discretionary function arguments. She recommended that the case be dismissed.
The plaintiffs filed timely objections, arguing that the case is not based on contract, so the Tucker Act does not apply; and the negligence count is not based on any sort of misrepresentation, so that exception in the FTCA does not apply, either. The government objects on the ground that there was no timely presentment of the claim under the FTCA, and its unaddressed discretionary function argument has merit.
The plaintiffs quite obviously have sued the United States. However, the doctrine of sovereign immunity shields the government from lawsuits. Dep't of the Army v. Blue Fox, Inc., 525 U.S. 255, 259 (1999). It is well established that a claim against the United States is barred absent a waiver of sovereign immunity, "'and the terms of [the government's] consent to be sued in any court define that court's jurisdiction to entertain the suit.'" United States v. Testan, 424 U.S. 392, 399 (1976) (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)). A waiver of immunity cannot be implied; it must be "unequivocally expressed in statutory text." Lane v. Pena, 518 U.S. 187, 192 (1996); FDIC v. Meyer, 510 U.S. 471, 475 (1994) ().
Sovereign immunity is a jurisdictional doctrine. Unless the plaintiff can show a waiver of sovereign immunity, a complaint brought against the United States must be dismissed for lack of subject mater jurisdiction. Milligan v. United States, 670 F.3d 686, 692 (6th Cir. 2012). To show such waiver, a plaintiff must identify a specific statutory provision that waives the government's sovereign immunity. United States v. Sherwood, 312 U.S. 584, 590 (1941); Lane v. Pena, 518 U.S. 187, 192 (1996) (); see also United States v. Nordic Village, Inc., 503 U.S. 30, 33-34 (1992). Even when Congress enacts a statute that waives federal sovereign immunity in some...
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