Midland Nat. Bank v. Conlogue
| Decision Date | 04 August 1989 |
| Docket Number | No. 83-1707-K.,83-1707-K. |
| Citation | 720 F. Supp. 878 |
| Parties | MIDLAND NATIONAL BANK, Plaintiff, v. Walter R. CONLOGUE, and American Aircraft, Inc., Intervening Plaintiffs, v. PURITAN INSURANCE COMPANY, Defendant and Third Party Plaintiff, v. UNITED STATES of America, Third Party Defendant. |
| Court | U.S. District Court — District of Kansas |
David C. Burns, Newton, Kan., for plaintiff.
F.C. McMaster, McMaster & McMaster, Wichita, Kan., Priscilla Budeiri, Trial Lawyers for Public Justice, Washington, D.C., and Ted M. Warshafsky, Warshafsky, Rotter, Tarnoff, Gesler, Reinhardt & Bloch, Milwaukee, Wis., and Andrew Hutton, Michaud & Hutton, Wichita, Kan., Gene E. Schroer, Schroer, Rice, P.A., Topeka, Kan., for intervening plaintiffs.
James J. McGannon, Regan & McGannon, Wichita, Kan., for defendant and third party plaintiff.
Stephen K. Lester, Asst. U.S. Atty., Wichita, Kan., for third party defendant.
The factual background of the case has been discussed on two previous occasions by this court. Midland National Bank v. Conlogue, No. 83-1707-K (D. Kan. Mar. 22, 1989) (1989 WL 31439), and slip op. (D. Kan. July 29, 1986). The relevant facts may be briefly recounted here.
The intervening plaintiff, American Aircraft, Inc., was the owner of a Beechcraft King Air 90 airplane. Conlogue was the chief executive officer of American. In December, 1982, Conlogue was contacted by Ormie Blanton, an agent of the United States Customs Service. Blanton told Conlogue that the Customs Service needed the airplane for special undercover work. The plane would be flown only by a qualified pilot, and would be returned within a week or two. Conlogue was also cautioned not to disclose the government's involvement to anyone, since a leak could result in the deaths of investigating agents.
Conlogue leased the airplane to Frank Raia, whom Blanton introduced as another customs agent, on December 21, 1982. On January 3, 1983, the airplane was crash-landed in the sea off Grand Cayman Island. No customs agents were aboard the airplane. The pilot of the airplane and a passenger were charged by the local police with illegal possession and importation of marijuana. The airplane was a total loss.
The plaintiff, Midland National Bank, held a security interest in the airplane. The defendant/third party plaintiff, Puritan Insurance Company, is the insurer of the airplane. Conlogue, Midland, and Puritan each present claims against the United States arising from the destruction of the airplane. This court has previously found Blanton to be immune from suit.
The United States has now moved to dismiss the claims against it, contending both that it is immune and that the court is without jurisdiction. Although the United States presents additional arguments which also will be addressed, it founds its present motion on two main arguments. First, it argues that the claims against it involve tort claims arising from misrepresentation, for which it retains immunity under 28 U.S.C. § 2680(h). Second, it argues that the claims are essentially contractual in nature, and that the court is therefore without jurisdiction to address the claims under 28 U.S.C. § 1346(a)(2).
28 U.S.C. § 2674.
The United States has now moved to dismiss the claims against it, contending that the claims arise out of alleged misrepresentations and are therefore barred through the operation of § 2680(h). In its brief, the United States correctly notes that misrepresentation under subsection (h) includes both intentional and negligent misrepresentation. United States v. Neustadt, 366 U.S. 696, 702, 81 S.Ct. 1294, 1298, 6 L.Ed.2d 614 (1961). To the extent that claims contained in the complaints filed against the United States in the present case represent actions for misrepresentation, whether intentional or negligent, the United States has retained its immunity, and those claims must be dismissed. However, the other claims contained in the complaints, to the extent that they represent tort claims separate from any governmental misrepresentations, must be retained.
In Block v. Neal, 460 U.S. 289, 103 S.Ct. 1089, 75 L.Ed.2d 67 (1983), the Court concluded that subsection (h) did not apply where the government has violated a duty of due care separate from any alleged misrepresentations. As in Neustadt, the plaintiff was a homeowner dissatisfied with the quality of the house constructed for him through the assistance of a federal agency. In Neustadt, the plaintiff had sued the agency, contending it had negligently inspected and appraised the house, and that he had been injured when he justifiably relied on the appraisal in purchasing the house. In Block, the plaintiff argued that the government agency, under the circumstances of the case, had violated a Good Samaritan duty to supervise the construction of the house.
The Court in Block held that the plaintiff's claims were not barred by Subsection (h). This provision provides protection for the government where the claim is grounded in misrepresentation, the essence of which, "whether negligent or intentional, is the communication of misinformation on which the recipient relies." 460 U.S. at 296, 103 S.Ct. at 1093. The Court concluded, however, that subsection (h) "does not bar negligence actions which focus not on the Government's failure to use due care in communicating information, but rather on the Government's breach of a different duty." Id., at 297, 103 S.Ct. at 1093. The Court then held that the plaintiff's assertion of a Good Samaritan undertaking to supervise the construction of the house provided such an independent duty.
Nor was a different result compelled by the presence in the case of governmental misstatements which, in the absence of subsection (h), might have supported a claim for negligent misrepresentation in addition to the negligent supervision claim.
But the partial overlap between these two tort actions does not support the conclusion that if one is excepted under the Tort Claims Act, the other must be as well. Neither the language nor history of the Act suggests that when one aspect of the Governments's conduct is not actionable under the "misrepresentation" exception, a claimant is barred from pursuing a distinct claim arising out of other aspects of the Government's conduct.
460 U.S. at 298, 103 S.Ct. at 1094.
In this court's memorandum order of March 22, 1989, it noted the possible application of Leaf v. United States, 661 F.2d 740 (9th Cir.1981), cert. denied, 456 U.S. 960, 102 S.Ct. 2036, 72 L.Ed.2d 484 (1982). Upon review, it is clear that Leaf provides no bar to the maintenance of the negligence claims against the United States in the present case. In Leaf, a DEA informant had leased an airplane from the plaintiffs with the approval of supervising DEA agents. The informant told the plaintiffs "a totally false story that the plane was to be used by a rock music group for recreational purposes, and never told the plaintiffs of its true intended use...." 661 F.2d at 741. When the airplane was destroyed during a drug smuggling operation, the plaintiffs brought an action against the United States for the value of the airplane.
The Ninth Circuit held that the plaintiffs' claim was barred by the "misrepresentation" provision contained in 28 U.S.C. § 2680(h), even though the plaintiffs had couched their claim in the language of negligence. The court found that a claim for misrepresentation lay "at the heart of plaintiffs' complaint, however deftly they have attempted to avoid using the word." Id., at 742.
Unlike the present case, the allegations of negligence in Leaf were directed solely at the failure to use due care in conveying accurate information to the plaintiffs in arranging for the lease of the airplane. The reported facts of the case fail to indicate any allegations by the plaintiffs of governmental negligence in the care and handling of the aircraft after the lease was signed. Leaf simply stands for the proposition recognized earlier in Neustadt that "misrepresentation" under § 2680(h) includes both the intentional and negligent varieties of the beast. To the extent that Leaf would suggest that a negligence action cannot be maintained where a misrepresentation by the government is also present, it is inconsistent with Block and retains no authority.
The "misrepresentation exception" of 28 U.S.C. § 2680(h) has no application where the plaintiff is "pursuing a distinct claim arising out of other aspects of the Government's conduct." Block, 460 U.S. at 298, 103 S.Ct. at 1094. When the government violates a duty of care independent of its obligation to avoid conveying false information, it may incur liability under the Tort Claims Act. See Sowell v. United States, 835 F.2d 1133, 1135 (5th Cir.1988); Keir v. United States, 853 F.2d 398, 411 (6th Cir. 1988). The plaintiff's action...
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Wolf v. US
...as a breach of a duty imposed by law. In such a case, either tort or contract remedies may be pursued. E.g., Midland National Bank v. Conlogue, 720 F.Supp. 878 (D.Kan.1989) (duty of bailee to use due care in use or maintenance of bailed property). The presence of a contract remedy does not ......