Jablon v. U.S.

• Decision Date: 28 September 1981
• Docket Number: No. 79-3465,79-3465
• Citation: 657 F.2d 1064
• Parties: Jerome JABLON, M.D., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1064

657 F.2d 1064

Jerome JABLON, M.D., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 79-3465.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 5, 1981.

Decided Sept. 28, 1981.

Michael Korn, Sherman Oaks, Cal., for plaintiff-appellant.

Lawrence B. Gotlieb, Asst. U. S. Atty., Los Angeles, Cal., argued, for defendant-appellee; Frederick M. Brosio, Jr., Asst. U. S. Atty., Andrea Sheridan Ordin, U. S. Atty., Los Angeles, Cal., on brief.

Appeal from the United States District Court for the Central District of California.

Before GOODWIN and REINHARDT, Circuit Judges, and TEMPLAR, ^* District Judge.

GOODWIN, Circuit Judge.

Jerome Jablon, a medical doctor practicing in Van Nuys, California, sued under the Tucker Act, 28 U.S.C. § 1346(a)(2), claiming $10,000 for breach of contract. He appeals a summary judgment in favor of the government.

In an effort to recruit experienced medical practitioners, the military services offer incentive payments in addition to the statutory pay and allowances scheduled for various military pay grades. A recruiting officer, whose authority is not in issue at this stage of the case, negotiated with Dr. Jablon on behalf of the Air Force. Dr. Jablon agreed to accept a commission as a Lieutenant Colonel in the Air Force for a period of three years at an annual salary of approximately $37,000 and a bonus of $27,000 to be payable in installments beginning upon entry on active duty.

Dr. Jablon completed the necessary paperwork and received a commission as a Lieutenant Colonel in the Air Force Reserve on December 1, 1975. Shortly after he was commissioned, he received orders to report for active duty on February 5, 1976. He sold both his medical practice and his house.

Early in January 1976, Dr. Jablon was arrested by California officers for an alleged violation of local laws regulating prescription drugs. On January 20, the Air Force revoked Dr. Jablon's active duty orders. The Air Force later advised him that active duty orders would not be forthcoming. Sometime in June 1976, the state charges were dismissed. The Air Force did not reinstate the active duty orders.

Dr. Jablon commenced an action in state court for damages he claimed to have sustained in consequence of the criminal charges. He also commenced this action in the district court for damages flowing from his change of position in reliance on his expectation of active duty. Dr. Jablon first sued on a tort theory but, after preliminary motions, filed an amended complaint and attached the papers that are now before the court. He now asserts a contract claim, with all damages in excess of $10,000 waived in order to remain in district court. In addition to his contract theory, Dr. Jablon is also asserting a right of recovery based upon promissory estoppel. The government moved for summary judgment. The district court granted the motion and Dr. Jablon appeals. ¹

I. The Contract Claim.

Dr. Jablon's contract claim does not fit easily into a contract theory. A soldier's entitlement to pay depends upon statutes and regulations rather than upon ordinary contract principles. See United States v. Larionoff, 431 U.S. 864, 869, 97 S.Ct. 2150, 2154, 53 L.Ed.2d 48 (1977); Bell v. United States, 366 U.S. 393, 401, 81 S.Ct. 1230, 1235, 6 L.Ed.2d 365 (1961). The district court granted the summary judgment against Dr. Jablon's contract claim on the basis of the cited cases. The applicable statutes and regulations did not confer on Dr. Jablon any entitlement to Variable Incentive Pay. ²

On the other hand, neither the parties nor the trial court mentioned cases applying modern contract principles to some enlistment contracts. ³ But none of the enlistment contract cases we have found involved a claim for damages. The plaintiffs all sought to be discharged from the armed services; i. e., to rescind the contract.

The district court correctly held that Dr. Jablon is not entitled to his Variable Incentive Pay and cannot recover it in an action upon a contract. See generally, Larionoff, supra, 431 U.S. 864, 97 S.Ct. 2150, 53 L.Ed.2d 48. Dr. Jablon's Variable Incentive Pay agreement is part of his enlistment contract and would be governed by contract principles were Dr. Jablon seeking release from the Air Force Reserves because of the alleged misrepresentation. See generally, Shelton v. Brunson, 465 F.2d 144 (5th Cir. 1972). The question we have before us, however, is whether Dr. Jablon is entitled to money damages resulting from the breach of his Variable Incentive Pay agreement.

We have examined the cases and underlying policy considerations and have concluded that money damages are not an available remedy for the government's breach of an enlistment contract. Larionoff and Bell reflect the Supreme Court's determination that Congress did not intend for the United States to be liable for money awards to soldiers unless Congress specifically so provided. A soldier is not paid on contract principles, i. e., representations of officers upon which the soldier relied. Instead, authorization for money paid to soldiers must come directly from Congress or its duly authorized agency. See generally, Larionoff, supra, 431 U.S. 864, 97 S.Ct. 2150, 53 L.Ed.2d 48.

There is a significant difference between the court's power to order the armed services to discharge a soldier because the military has breached the conditions under which he or she enlisted and the power to order the government to pay damages for breach of a contract which the court would have no authority to enforce. ⁴ The traditional distinction between negative and mandatory action may be eroding, but in this case the distinction is important.

An additional consideration is that the armed services should not be encouraged to assign soldiers or to base active duty calls upon considerations of potential liability. Currently, such essentially military decisions are entirely discretionary and are not subject to review by the courts. See 10 U.S.C. § 672(d) and Orloff v. Willoughby, 345 U.S. 83, 73 S.Ct. 534, 97 L.Ed. 842, reh. denied, 345 U.S. 931, 73 S.Ct. 779, 97 L.Ed. 1360 (1953). Military administrative decisions are subject to review only where there is a statutory entitlement to compensation or where there is a court martial conviction or discharge which was not accomplished in accordance with the Constitution, military law or statute. Schlanger v. United States, 586 F.2d 667 (9th Cir. 1978), cert. denied, 441 U.S. 943, 99 S.Ct. 2161, 60 L.Ed.2d 1045 (1979); Covington v. Anderson, 487 F.2d 660 (9th Cir. 1973).

If we were to hold the armed services liable for damages when administrative decisions are in conflict with enlistment agreements, the military decision-making process would be reviewed by civilian judges. Civilian review of military pay claims is inconsistent with the policy which allows Congress to raise armies and then to delegate to the military wide discretion within the enabling legislation. Dr. Jablon is not entitled to damages in a civilian court for breach of his recruitment agreement.

II. The Estoppel Claim.

The estoppel theory raised by Dr. Jablon also presented the district court with a difficult question. Dr. Jablon has alleged, and offered to prove, that the recruiter promised him that the incentive pay was payable upon his taking the oath of office (rather than upon his entry on active duty). It is virtually undisputed that Dr. Jablon changed his position in reliance upon the promised incentive payment. It is also virtually undisputed that the recruiter expected Dr. Jablon to rely on the promise. Dr. Jablon accordingly contends that he satisfies the requirements for estoppel against the government, as stated by this circuit:

"(1) The party to be estopped must know the facts;

"(2) He must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended;

"(3) The latter must be ignorant of the true facts; and

"(4) He must rely on the former's conduct to his injury." United States v. Ruby Co., 588 F.2d 697, 703 (9th Cir. 1978), cert. denied, 442 U.S. 917 (99 S.Ct. 2838, 61 L.Ed.2d 284) (1979) (and cases cited therein).

But see Cooper v. Bell, 628 F.2d 1208 (9th Cir. 1980) (requiring that the ignorance be reasonable). ⁵

At first blush, Dr. Jablon's argument is attractive. The cases he cites have allowed estoppel to be employed against the government, despite a longstanding tradition against estopping the government. ⁶ See Morris v. Andrus, 593 F.2d 851 (9th Cir. 1978), cert. denied, 444 U.S. 863, 100 S.Ct. 133, 62 L.Ed.2d 86 (1979) (held, although estoppel sometimes can be available against the government, there was no such misrepresentation as to entitle plaintiff to government land); United States v. Wharton, 514 F.2d 406 (9th Cir. 1975) (held, plaintiffs are entitled to the land in an ejectment action because they had been given false information as to whether they could file for it under the Desert Land Entry Act); United States v. Lazy FC Ranch, 481 F.2d 985 (9th Cir. 1973) (held, that appellees were entitled to retain funds paid them pursuant to a government contract even though the contract was prohibited by regulations).

Dr. Jablon's argument does not distinguish between equitable estoppel and promissory estoppel. The cases he cites are equitable estoppel cases, although his theory of recovery is based upon promissory estoppel.

Black's Law Dictionary (5th ed. 1980) defines "equitable estoppel" as:

"The doctrine by which a person may be precluded by his act or conduct, or silence when it is his duty to speak, from asserting a right which he otherwise would have had...." p. 483 (Emphasis added.)

"Promissory estoppel," in contrast, is defined as:

"That which arises when there is a promise which promisor should reasonably expect to induce action or forbearance of a definite and substantial character on part of promisee, and...