Falls Riverway Realty, Inc. v. City of Niagara Falls, N.Y.

• Citation: 754 F.2d 49
• Decision Date: 15 January 1985
• Docket Number: Nos. 211,D,212,s. 211
• Parties: FALLS RIVERWAY REALTY, INC., and Forest City Development Corp., Plaintiffs, v. The CITY OF NIAGARA FALLS, NEW YORK and Niagara Falls Urban Renewal Agency, Defendants and Third-Party Plaintiffs-Appellants, v. Samuel PIERCE, as Secretary of the United States Department of Housing and Urban Development and Joseph Monticciolo, as Regional Administrator, Region II of the United States Department of Housing and Urban Development and Richard W. Lippold as Buffalo Area Manager, Buffalo Area Office, Region II, of the United States Department of Housing and Urban Development, Third-Party Defendants-Appellees. ockets 83-6303, 83-6305.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 49

754 F.2d 49

FALLS RIVERWAY REALTY, INC., and Forest City Development

Corp., Plaintiffs, v. The CITY OF NIAGARA FALLS, NEW YORK and Niagara Falls Urban

Renewal Agency, Defendants and Third-Party Plaintiffs-Appellants, v. Samuel PIERCE, as Secretary of the United States Department

of Housing and Urban Development and Joseph Monticciolo, as

Regional Administrator, Region II of the United States

Department of Housing and Urban Development and Richard W.

Lippold as Buffalo Area Manager, Buffalo Area Office, Region

II, of the United States Department of Housing and Urban

Development, Third-Party Defendants-Appellees.

Nos. 211, 212, Dockets 83-6303, 83-6305.

United States Court of Appeals,

Second Circuit.

Argued Sept. 25, 1984.

Decided Jan. 15, 1985.

Patrick J. Berrigan, Niagara Falls, N.Y., for defendant and third-party plaintiff-appellant the City of Niagara Falls, New York.

David A. Stern, Buffalo, N.Y. (Blair & Roach, Buffalo, N.Y., of counsel), for defendant and third-party plaintiff-appellant Niagara Falls Urban Renewal Agency.

Sonia C. Jaipaul, Buffalo, N.Y. (Salvatore R. Martoche, U.S. Atty., W.D.N.Y., Buffalo, N.Y., of counsel), for third-party defendants-appellees.

Before LUMBARD, MESKILL and PIERCE, Circuit Judges.

PIERCE, Circuit Judge:

The City of Niagara Falls, New York ("City"), and the Niagara Falls Urban Renewal Agency ("URA"), third-party plaintiffs, appeal from an order entered June 6, 1983, in the United States District Court for the Western District of New York, John T. Curtin, Chief Judge. The district court dismissed the third-party complaint, which had pleaded four causes of action, on the grounds that there was no valid waiver of sovereign immunity with respect to the first cause of action, the court lacked subject matter jurisdiction over the second cause of action, and the third cause of action failed to state a claim upon which relief could be granted. The fourth cause of action was not addressed by the court; it is not raised on appeal and we will not address it here.

We reverse and remand as to the three causes of action.

BACKGROUND

Falls Riverway Realty, Inc. and Forest City Development Corp., the plaintiffs in the principal action, own real property located in the City of Niagara Falls. They sued the City and URA in the New York State Supreme Court, alleging that certain actions of the defendants taken pursuant to an Urban Renewal Plan ("Plan") deprived the plaintiffs of reasonable and suitable access to this property and claiming damages therefor. The City and URA thereafter filed a third-party complaint in the New York State Supreme Court against the Secretary and other named officials of the United States Department of Housing and Urban Development (hereinafter collectively referred to as "HUD"), ¹ alleging that if the City and URA were found liable to the plaintiffs, HUD would be liable to the City and URA. HUD invoked title 28, section 1442 of the United States Code and removed the entire case to the United States District Court for the Western District of New York.

The City and URA, in their third-party complaint, alleged as a first cause of action that the URA entered into several contracts with HUD, pursuant to a program of federal financial assistance for slum clearance and urban renewal. They further alleged that all actions complained of by the plaintiffs were taken pursuant to the directions of HUD, under the contracts and the Federal Housing Act of 1949 as amended, 42 U.S.C. Secs. 1450-1469c ("Act"), ² and The second cause of action alleged that HUD directed that changes be made in the Plan, that the City and URA relied on HUD's expertise in preparing the Plan, and that if the City and URA were found liable to the plaintiffs, "third-party defendants [HUD] will have been negligent and will have breached their duties to the City and the [URA] and by reason of such negligence and breach of duties, the City and the [URA] will have suffered damages at least equal to the amount recovered by plaintiffs."

that if the plaintiffs were to recover judgment against the City and URA the "third-party defendants [HUD] will have breached the Planning Contracts and Loan and Capital Contract with damages at least equal to the amount recovered by the plaintiffs."

The third cause of action alleged that HUD "selected the [URA] as [HUD's] representative and agent" and that therefore HUD was liable for the consequences of actions taken by the City and URA pursuant to the Plan.

The district court found that the first cause of action was a "contract claim for a settlement in excess of $10,000" and therefore that, under 28 U.S.C. Secs. 1346, 1491 (1982), only the Court of Claims had jurisdiction of the cause. The court held that the second cause of action sounded in negligence and was barred by the Federal Tort Claims Act provision for "misrepresentation," 28 U.S.C. Sec. 2680(h) (1982), see United States v. Neustadt, 366 U.S. 696, 81 S.Ct. 1294, 6 L.Ed.2d 614 (1961), or alternatively was barred by the "discretionary function" doctrine of Dalehite v. United States, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427 (1953) and 28 U.S.C. Sec. 2680(a) (1982). The court dismissed the third cause of action because "[t]he ... federal financial assistance [that] was extended to the local agency cannot constitute the supervision of the day-to-day operation of the agency by the federal government" required for a finding of an agency relationship by United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976).

The issues presented for our review with respect to the first two causes of action are jurisdictional; the issue with respect to the third cause of action is whether the court could properly, on the record before it, dismiss the complaint.

DISCUSSION

As a preliminary matter, we note that HUD's motion to dismiss did not state under which Federal Rule of Civil Procedure it was brought, and that the district court did not refer to any rule in granting the motion. Since the pleadings of both parties had been filed at the time the motion was made, we treat the motion as one under Fed.R.Civ.P. 12(c), for judgment on the pleadings. See Federal Commerce & Navigation Co. v. The M/V Marathonian, 392 F.Supp. 908, 909 n. 1 (S.D.N.Y.), aff'd, 528 F.2d 907 (2d Cir.1975), cert. denied, 425 U.S. 975, 96 S.Ct. 2176, 48 L.Ed.2d 799 (1976). As such, it encompassed both the motions to dismiss the first two causes of action for lack of jurisdiction, Amundson v. United States, 279 F.Supp. 779 (S.D.N.Y.1967), and the motion to dismiss the third cause of action, disposed of on the merits by the district court. See Federal Commerce & Navigation Co., 392 F.Supp. at 909 n. 1; 5 C. Wright & A. Miller, Federal Practice & Procedure Sec. 1350, at 544 (1969); id. Sec. 1367. With respect to the third cause of action, the district court considered, in addition to the pleadings, the affidavit of Nicholas E. Marchelos, former Deputy Director of the URA, which was submitted by the URA in opposition to HUD's motion. Rule 12(c) permits the court, in its discretion and upon notice to all parties, to consider materials outside the pleadings. If it does, however, the motion is to be treated as one for summary judgment and disposed of as provided by Rule HUD's defenses to the first two causes of action, relating to the court's jurisdiction, were thus raised by motion for judgment on the pleadings. Accordingly, we assume the truth of all facts pleaded by the parties opposing this motion, Beal v. Missouri Pac. R.R., 312 U.S. 45, 51, 61 S.Ct. 418, 421, 85 L.Ed. 577 (1941); MacDonald v. DuMaurier, 144 F.2d 696, 700-01 (2d Cir.1944), and draw all reasonable inferences in their favor, Wager v. Pro, 575 F.2d 882, 884 (D.C.Cir.1976). With respect to HUD's summary judgment motion to dismiss the third cause of action, the court's task was to determine whether there existed any issues of material fact, viewing the record in the light most favorable to the parties opposing the motion, Poller v. CBS, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), and with the burden on the moving party to show the absence of any material issue appearing genuinely to be in dispute, Adickes v. S.H. Kress Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); United States v. Pent-R-Books, Inc., 538 F.2d 519, 529 (2d Cir.1976), cert. denied, 430 U.S. 906, 97 S.Ct. 1175, 51 L.Ed.2d 582 (1977). See Heyman v. Commerce & Industrial Insurance Co., 524 F.2d 1317, 1320 (2d Cir.1975). Whether confronted with review of a ruling on a motion for judgment on the pleadings or one for summary judgment, we must read the record in the light most favorable to the party opposing the motion.

56. Fed.R.Civ.P. 12(c); see Parker v. CBS, 331 F.2d 297 (2d Cir.1964); 5 C. Wright & A. Miller, supra, Sec. 1371. No issue with respect to notice is raised herein.

A. The First Cause of Action

The third-party complaint's first cause of action was asserted against the sovereign and thus was properly before the district court only if there existed both a valid waiver of sovereign immunity and a grant of subject matter jurisdiction. S.S. Silberblatt, Inc. v. East Harlem Pilot Block--Building 1 Housing Development Fund Co., 608 F.2d 28, 35 (2d Cir.1979); Marcus Garvey Square, Inc. v. Winston Burnett Construction Co., 595 F.2d 1126, 1132 (9th Cir.1979); Ghent v. Lynn, 392 F.Supp. 879, 880-81 (D.Conn.1975). Since the existence of such a waiver and grant depend partly upon the nature of the cause of action before the court, we begin our analysis by examining the substance of the first cause of action. HUD--third-party defendant--contends that the first cause of action sounds in contract, and that only the Court of Claims may hear such cases against the United States when the amount at issue exceeds $10,000. This argument is based on the Tucker Act, 28 U.S.C. Secs. 1346, 1491, which provides both subject matter jurisdiction and a waiver of sovereign...