Fleischer v. U.S. Dept. of Veterans Affairs

• Decision Date: 25 February 1997
• Docket Number: Civil Action No. H-96-1120.
• Parties: Paul G. FLEISCHER and Ruth M. Fleischer, Plaintiffs, v. UNITED STATES DEPARTMENT OF VETERANS AFFAIRS, et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

955 F.Supp. 731

Paul G. FLEISCHER and Ruth M. Fleischer, Plaintiffs, v. UNITED STATES DEPARTMENT OF VETERANS AFFAIRS, et al., Defendants.

Civil Action No. H-96-1120.

United States District Court, S.D. Texas.

February 25, 1997.

Deborah J. Fleischer, Fleischer, Fleischer & Lanier, Sommerville, NJ, for Plaintiffs.

William Brad Howard, Office of U.S. Atty., Houston, TX, James B. Clark, III, Office of U.S. Atty., Trenton, NJ, for Defendant USDVA.

Gary F. Werner, Newark, NJ, for Defendant Montgomery County.

Charles M. Silverman, Winstead, Sechrest & Minick, Houston, TX, for Defendant G.E. Capital Mortgage.

James B. Clark, III, Office of U.S. Atty., Trenton, NJ, for Defendants USSBA and FEMA.

MEMORANDUM AND ORDER

CRONE, United States Magistrate Judge.

Pending before the court is Defendant United States Department of Veteran Affairs' ("USDVA") Motion to Dismiss (# 12) and Plaintiffs Paul G. Fleischer and Ruth M. Fleischer's (collectively the "Fleischers") Countermotion to Transfer their contract action against the USDVA to the United States Court of Federal Claims (# 18).

Having reviewed the motions, the submissions of the parties, the pleadings, and the applicable law, this court is of the opinion that USDVA's Motion to Dismiss should be granted in part and denied in part and that the Fleischers' Countermotion to Transfer should be granted.

I. Background

This case arises out of a 1988 real estate transaction involving residential property located at 3611 Kentwood in Spring, Texas, in Montgomery County. The Fleischers purchased the property from the USDVA in 1988 through a broker, who was acting as the agent of the USDVA. The USDVA was both the seller of the property and the lender of a portion of the monies the Fleischers used to purchase the property. Documents for the transaction were mailed to the Fleischers in New Jersey, and the terms of the sale were negotiated over the telephone.

As part of the transaction, the USDVA required the Fleischers to sign a document entitled "Acknowledgments(s) Required." The Fleischers were to acknowledge individually, by way of initials, that certain conditions of the premises were acceptable and that the USDVA made no warranties, expressed or implied, with respect to those conditions. One of the items listed on the documents was "AR-4____ This Property is located in a special flood hazard area. Flood insurance will be required." The Fleischers were not required to initial acceptance of that condition. According to the Fleischers, the USDVA's agent indicated that this was not one of the acknowledgments required. The agent allegedly obtained property information from public notices published in the newspaper and from direct communication with the USDVA. On June 26, 1988, the Fleischers initialed all required items and submitted the documents with their offer to purchase.

On October 16, 1994, the Fleischers' residential property flooded to its roof causing extensive damage. Subsequently, the Fleischers learned that the property is and has been in a federally designated 100-year flood plain since Montgomery County began participating in the National Flood Insurance Program in August 1984. Montgomery County assessed damages to the property after the flood and determined that more than fifty percent of the market value was damaged, i.e., it was "substantially damaged." The Fleischers allege that based on the assessment, Montgomery County refused to issue a building permit to allow them to repair or rebuild at the present location at the present elevation. According to the Fleischers, before the flood, the market value of the property was $68,000.00.

The Fleischers also claim that the Federal Emergency Management Agency through the United States Small Business Administration denied them disaster assistance to replace the property due to their claim against the USDVA. The Fleischers assert that this was done in violation of their rights to due process of law under the Fourteenth Amendment to the Constitution. The Fleischers further assert that their constitutional rights under the Equal Protection Clause of the Fourteenth Amendment were violated when the Federal Emergency Management Agency and Montgomery County did not include the property in the Hazard Mitigation Grant Program. According to the Fleischers, they were selectively denied buyout funds to replace the property lost in the flood.

In early 1995, the Fleischers submitted their claim in writing to the USDVA seeking damages for the market value of the flooded property. Their claim was administratively denied by letter dated May 12, 1995, from the District Counsel for Veterans. At that time, the Fleischers were advised of their rights under the Federal Tort Claims Act ("FTCA").

On November 13, 1995, the Fleischers filed suit against the USDVA, Montgomery County, General Electric Capital Mortgage Services, Inc., the United States Small Business Administration, and the Federal Emergency Management Agency. As to Defendant USDVA, the Fleischers assert a claim for negligence under the FTCA, 28 U.S.C. § 2671, including allegations that the USDVA failed to comply with provisions of the National Flood Insurance Act, 42 U.S.C. § 4104a, and the Flood Disaster Protection Act, 42 U.S.C. § 4012a(b). In addition, the Fleischers assert contractual claims against the USDVA. The Fleischers request damages covering the market value of the flooded property, together with costs and disbursements of this action or, alternatively, to be allowed to rescind their contract with the USDVA, to collect damages, and to be protected from enforcement of the outstanding lien against the property by either the USDVA or its successors or assigns.

II. Analysis

A. Standard for Dismissal Under 12(b)(1) and 12(b)(6)

A motion to dismiss for lack of subject matter jurisdiction under FED.R.CIV.P. 12(b)(1) may be granted on any one of three bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir.1996); Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1384 (5th Cir.1989); Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981). In ruling on a motion to dismiss for lack of subject matter jurisdiction, the court must take as true all of the allegations of the complaint. Saraw Partnership v. United States, 67 F.3d 567, 569 (5th Cir.1995); Garcia v. United States, 776 F.2d 116, 117 (5th Cir.1985). A motion to dismiss under Rule 12(b)(1) should not be granted "unless it appears certain that the plaintiff cannot prove any set of facts in support of [his] claim which would entitle [him] to relief." Saraw Partnership, 67 F.3d at 569; Hobbs v. Hawkins, 968 F.2d 471, 475 (5th Cir.1992); Benton v. United States, 960 F.2d 19, 21 (5th Cir.1992) (citing Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 742 n. 1, 96 S.Ct. 1848, 1850 n. 1, 48 L.Ed.2d 338 (1976)).

Similarly, a motion to dismiss under FED. R.CIV.P. 12(b)(6) tests only the formal sufficiency of the statements of the claims for relief. It is not a procedure for resolving contests about the facts or the merits of the case. In ruling on a motion to dismiss, the court must take the plaintiff's allegations as true, view them in a light most favorable to the plaintiff, and draw all inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); see also Capital Parks, Inc. v. Southeastern Advertising & Sales Sys., Inc., 30 F.3d 627, 629 (5th Cir.1994); Fernandez-Montes v. Allied Pilots Assn., 987 F.2d 278, 284-85 (5th Cir.1993). The court may not look beyond the four corners of plaintiff's pleadings. McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir.1992). Thus, the motion must be denied unless it appears to a certainty that the plaintiff can prove no set of facts that would entitle him to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232-33, 81 L.Ed.2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir.1995); Matter of U.S. Abatement Corp., 39 F.3d 556, 559 (5th Cir.1994); ALX El Dorado, Inc. v. Southwest Sav. & Loan Ass'n, 36 F.3d 409, 410 (5th Cir.1994); McCartney, 970 F.2d at 47.

B. Claims Under the FTCA

The doctrine of sovereign immunity is a jurisdictional bar to suit against the United States unless the United States waives immunity and consents to suit. United States v. Sherwood, 312 U.S. 584, 586-87, 61 S.Ct. 767, 769-70, 85 L.Ed. 1058 (1941); United States v. Shaw, 309 U.S. 495, 501, 60 S.Ct. 659, 661-62, 84 L.Ed. 888 (1940); Bank One Texas v. Taylor, 970 F.2d 16, 33 (5th Cir. 1992), cert. denied, 508 U.S. 906, 113 S.Ct. 2331, 124 L.Ed.2d 243 (1993). "Congress sets forth the terms of those waivers and courts may not exercise subject matter jurisdiction over a claim against the federal government except as Congress allows." Wilkerson v. United States, 67 F.3d 112, 118 (5th Cir.1995). A waiver of sovereign immunity must be strictly construed and, therefore, it cannot be implied but must be unequivocally expressed. See United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351-52, 63 L.Ed.2d 607 (1980); Sherwood, 312 U.S. at 590, 61 S.Ct. at 771; Wilkerson, 67 F.3d at 118; Interfirst Bank Dallas v. United States, 769 F.2d 299, 306 n. 10 (5th Cir.1985), cert. denied, 475 U.S. 1081, 106 S.Ct. 1458, 89 L.Ed.2d 716 (1986). Thus, the United States is immune from suit except as specifically and expressly provided by statute. See Armendariz-Mata v. United States Dept. of Justice, Drug Enforcement Admin., 82 F.3d 679, 682 (5th Cir.), cert. denied, ___ U.S. ___, 117 S.Ct. 317, 136 L.Ed.2d 232 (1996) (citing FDIC v. Meyer, 510...