Dunbar Corp. v. Lindsey

• Decision Date: 19 June 1990
• Docket Number: No. 89-2714,89-2714
• Parties: DUNBAR CORPORATION; Robert L. Maxey, Plaintiffs-Appellants, v. James LINDSEY, Frederick A. Perrenot; A.B. Whittington; James M. Ellis; Lt. Gen. John W. Foss; United States of America, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 754

905 F.2d 754

DUNBAR CORPORATION; Robert L. Maxey, Plaintiffs-Appellants, v. James LINDSEY, Frederick A. Perrenot; A.B. Whittington;

James M. Ellis; Lt. Gen. John W. Foss; United

States of America, Defendants-Appellees.

No. 89-2714.

United States Court of Appeals, Fourth Circuit.

Argued March 5, 1990.

Decided June 8, 1990.

As Amended June 19, 1990.

Mark A. Sternlicht, H. Gerald Beaver, Beaver, Thompson, Holt & Richardson, P.A., Fayetteville, for plaintiffs-appellants.

Paul Martin Newby, Asst. U.S. Atty., Raleigh, for defendants-appellees; Margaret Person Currin, U.S. Atty., Raleigh, on brief.

Before SPROUSE, CHAPMAN, and WILKINS, Circuit Judges.

CHAPMAN, Circuit Judge:

Plaintiffs-appellants Dunbar Corporation (Dunbar) and Robert L. Maxey, president and owner of Dunbar, brought this action against defendants-appellees, James Lindsey, Frederick A. Perrenot, James M. Ellis, and A.B. Whittington (in their individual capacities), John W. Foss (in his official capacity), and the United States. Dunbar alleges an unconstitutional seizure of possession of its land without due process in violation of the Fifth Amendment and a claim for damages under the Federal Tort Claims Act (FTCA), seeking monetary damages and declaratory and injunctive relief. The district court dismissed the suit for lack of subject matter jurisdiction, finding that since Dunbar actually sought to quiet title to the real property, it must bring its action under the Quiet Title Act (QTA). For the reasons given below, we reverse and remand for further proceedings.

I

The property at issue, a strip of land 100 feet in width and containing about 10.56 acres, is located in Cumberland County, North Carolina, adjacent to Fort Bragg, North Carolina. Seaboard Systems Railroad, Inc. (Seaboard), abandoned a portion of its railroad right-of-way in 1979 and The Grantee acknowledges that the herein conveyance is made at its solicitation, and was not in any way initiated by the Grantor. The Grantor does not represent or warrant to the Grantee that it owns said land or has any specific title or interest in said land, and the Grantee hereby releases the Grantor, its officers and agents from any claim or demand resulting from this conveyance, or from any failure of or defect in the Grantee's title to said land conveyed by this deed.

decided to sell the subject property. In November 1980, it offered the land to the United States, which expressed no interest. After several years of continuing negotiations, Seaboard agreed to sell the former right-of-way land to Dunbar on November 7, 1983. Dunbar received a quitclaim deed in September 1984, which contained the following paragraph:

On August 28, 1984, Dunbar wrote the United States asking whether the United States owned or controlled any of the property. On September 18, 1984, Frederick A. Perrenot, Director of Engineering and Housing at Fort Bragg, informed Dunbar that Fort Bragg "has no interest in the property ... and concurs with [Dunbar's] recordation." Dunbar subsequently purchased the property and properly recorded its deed.

Dunbar conveyed three tracts of land by corporate warranty deed to McCauley & McDonald Investments, Inc. (McCauley), which properly recorded the deed and built a convenience store on the tracts conveyed. Dunbar advertised the remainder of the land for sale and posted eight four-foot by four-foot signs thereon bearing the following language:

FOR SALE OR LEASE

COMMERCIAL PROPERTY

ZONED C-3

CITY WATER AND SEWER

OWNER WILL IMPROVE

CALL 497-5154

Dunbar sold all of the timber and pulpwood on the remaining land to Manchester Woodyards, Inc., which used heavy machinery to remove the timber and pulpwood. Dunbar also contracted to have the stumps removed and the property graded with fill dirt, a task finished by June 30, 1985.

On October 30, 1985, James M. Ellis, Chief of the Real Estate Division of the Savannah District Corps of Engineers, Department of the Army, notified Seaboard, Dunbar and McCauley by letter that the United States was asserting all right, title and interest to the land. On November 6, 1985, Dunbar asked Ellis for substantiation of the United States' claim to the property. On February 2, 1986, A.B. Whittington, an employee of the Department of Engineers of Fort Bragg, and some men wearing hard hats came on the property and were told by Maxey to leave and not to trespass again. On February 13, 1986, and without any notice, James Lindsey, the Commanding General of the XVIII Airborne Corps and Fort Bragg, sent Whittington and armed military police to the property, unoccupied at the time, to remove Dunbar's signs and post signs forbidding trespassing on the property of the United States. A fence was erected around the property by military personnel.

Dunbar filed suit on August 12, 1988. Count I asserts the constitutional claim that the individual defendants violated Dunbar's possessory interest in the property. This claim is based on the theory enunciated in Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), whereby under certain circumstances a cause of action against government officials for damages arises from constitutional violations: the deprivation of property without due process of law. Count II alleges a claim against the United States under the FTCA. Both Counts I and II seek recovery for the loss of rents and profits that Dunbar would have earned from the property. Counts III, IV, and V seek the return of the property and an injunction against any future deprivation of the property without due process of law.

The defendants-appellees moved to dismiss for lack of subject matter jurisdiction and failure to state a claim under Rule 12(b)(1) and (6) of the Federal Rules of Civil Procedure. The district court granted the motion, because it found that the action was to quiet title and that the QTA was the exclusive means to challenge the United States' title. The court also held that the FTCA claim did not state a claim for which relief could be granted, reasoning that if the United States was the owner of the property, Dunbar had no viable tort claim.

II

We turn first to Dunbar's claim that the United States is liable under the FTCA for the trespass of its employees on property in Dunbar's possession. United States' liability under the FTCA depends upon state law. 28 U.S.C. Sec. 1346(b) (1976). ¹ The district court held that Dunbar did not have a claim under North Carolina law, explaining that it was "unpersuaded that plaintiffs' allegations pursuant to the FTCA state a claim for which relief may be granted. If the United States is the true owner of the property in question, then plaintiffs have no viable tort claim." Although we understand the district court's pragmatic focus on title, the court erred in applying North Carolina law.

Under North Carolina law, "[t]he essence of a trespass to realty is the disturbance of possession." Matthews v. Forrest, 235 N.C. 281, 283, 69 S.E.2d 553, 555 (1952). As a result, a plaintiff may bring an action in trespass alleging that either "he is the owner of described lands" or "he is in the lawful possession of described lands," and that "the defendant has committed acts of trespass against his possession to his damage, and the amount thereof." Short v. Nance-Trotter Realty, Inc., 262 N.C. 576, 578, 138 S.E.2d 210, 211 (1964) (emphasis added). In the latter circumstance, "the plaintiff is not required to prove title, but only lawful possession and damages for interfering therewith." Id. See also Dobbs, Trespass to Land in North Carolina--Part I. The Substantive Law, 47 N.C.L.Rev. 31, 43 (1968) ("[T]itle is not an issue at all in a trespass case where the plaintiff sues only to vindicate his possessory rights.").

Dunbar's cause of action under North Carolina law hinges on whether it was in "lawful possession" of the property at the time of the alleged trespass. Lawful possession has two components. First, Dunbar must have possession of the property. It is sufficient that Dunbar was "either actually or constructively in possession of the land." Matthews, 235 N.C. at 283, 69 S.E.2d at 555. " 'Actual possession of land consists in exercising acts of dominion over it, and in making the ordinary use of it to which it is adapted, and in taking the profits of which it is susceptible.' " Id., 235 N.C. at 284, 69 S.E.2d at 556 (quoting State v. Baker, 231 N.C. 136, 139, 56 S.E.2d 424, 426 (1949)). See also Dobbs, Trespass to Land in North Carolina, 47 N.C.L.Rev. at 45 ("Actual possession involves physical presence upon the land or upon some portion of it, and although this presence need not be continuous, it must involve more than an occasional or casual entry."); 75 Am.Jur.2d Trespass Sec. 25 (1974) (actual possession shown "where, by the particular use [one] makes of the land, [one] indicates with precision the extent to which he proposes to enjoy it to the exclusion of others.").

Dunbar contends that it had actual possession of the property through its conveyance of three tracts of the property to McCauley, which constructed a convenience store; its erection of large signs on the property advertising its availability for sale or lease; its improvement of the property by selling the timber and pulpwood and by grading the land; and its actions excluding the employees of the United States from the land. We find that this use of the property is more than sufficient to show actual possession under Matthews and Baker.

Second, Dunbar's possession of the property must be "lawful." However, what "lawful" means is never fully elucidated in North Carolina case law. Nevertheless, it seems clear that Dunbar's possession of the land was lawful by any definition. Dunbar was no wrongful trespasser; it purchased the land and properly recorded a quitclaim deed. Dunbar had reason to believe in good faith that its title was good, especially against the United...