Mullens v. US, Civ. No. 91-0140-B.

• Citation: 785 F. Supp. 216
• Decision Date: 12 February 1992
• Docket Number: Civ. No. 91-0140-B.
• Parties: Ronald MULLENS, et al., Plaintiffs, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Maine

785 F. Supp. 216

Ronald MULLENS, et al., Plaintiffs, v. UNITED STATES of America, Defendant.

Civ. No. 91-0140-B.

United States District Court, D. Maine.

February 12, 1992.

Marvin H. Glazier, Vafiades, Brountas & Kominsky, Bangor, Me., for plaintiffs.

George T. Dilworth, Asst. U.S. Atty., Bangor, Me., Stephen E. Handler, U.S. Dept. of Justice, Washington, D.C., for defendant.

ORDER AND MEMORANDUM OF OPINION

BRODY, District Judge.

This matter is before the Court on the Defendant United States of America's Motion to Dismiss the Plaintiffs' Amended Complaint or, in the Alternative, for Summary Judgment. The United States argues that several counts of the Plaintiffs' amended complaint should be dismissed for lack of subject matter jurisdiction, Fed. R.Civ.P. 12(b)(1), and that the remaining counts should be dismissed for failure to state a claim upon which relief can be granted, Fed.R.Civ.P. 12(b)(6). The United States supported its motion with a single affidavit, a brief Statement of Undisputed Material Facts, and copies of claim forms and correspondence between the United States and the Plaintiffs' former attorney. The Plaintiffs submitted a memorandum of law in opposition to the United States' motion together with a short Statement of Undisputed Material Facts.

Consideration of material in addition to the pleadings on a motion to dismiss is discretionary. Rather than consider the additional material and convert the United States' 12(b)(6) motion into a motion for summary judgment, the Court elects to exclude it. For the reasons set forth below, the Court GRANTS the motion to dismiss.

I. Background

On June 23, 1988, Ronald and Valerie Mullens purchased a home in Milo, Maine from the Farmer's Home Administration ("FmHA"), a division of the United States Department of Agriculture ("USDA"). The home contained lead-based paint. Their infant daughter, Kendra Mullens, developed lead poisoning and was hospitalized.

According to the Mullens, the USDA agreed to pay them $31,000 to settle their claim. The Mullens further allege that the USDA reneged on that "Agreement." Attached to the Mullens' amended complaint is a copy of an order issued by a Maine state court in an ex parte proceeding purporting to affirm a $15,000 settlement on behalf of Kendra Mullens. Also appended to the Mullens' amended complaint is a letter from the USDA indicating that the USDA's request for the authority to settle the claim for $31,000 was considered and denied by the Department of Justice ("DoJ").¹

After the Mullens' claim was denied, they filed this action seeking to recover on the grounds of negligence, negligent misrepresentation, breach of contract, estoppel and res judicata.

II. Standard of Review

When considering a motion to dismiss under Rule 12(b)(6), the Court takes the complaint's allegations as true, Knight v. Mills, 836 F.2d 659, 664 (1st Cir.1987), and construes the entire complaint in the light most favorable to the plaintiff. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). Material attached to the amended complaint may be considered without converting the motion to dismiss into a motion for summary judgment. In re Lane, 937 F.2d 694, 696 (1st Cir.1991). The Court need not accept conclusory allegations concerning the legal effect of events which do not reasonably follow from more specific facts alleged to have occurred. Kadar Corp. v. Milbury, 549 F.2d 230, 235 (1st Cir.1977).

III. Discussion

A. Negligence and Negligent Misrepresentation

The Plaintiffs' first two counts seek recovery for negligence and negligent misrepresentation respectively. The Mullens' negligence claim alleges that the United States knew or should have known that the home contained lead-based paint; that the United States had a statutory obligation to notify prospective purchasers of the presence of lead-based paint; and that the United States failed to notify them that the home contained lead-based paint.² In sum, the Mullens allege that the United States negligently failed to warn them of a hazardous condition. The Mullens' negligent misrepresentation claim is also based on the United States' failure to warn and further alleges that the Mullens "relied on this negligent misrepresentation" when they purchased the home. Amended Cmplt. ¶ 16.

Claims for negligence and negligent misrepresentation asserted against the United States fall within the ambit of the FTCA. The FTCA is a limited waiver of the United States' sovereign immunity. Under the FTCA, the United States accepts liability for "injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office of employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." 28 U.S.C. § 1346(b). Among the FTCA's many exclusions, however, are claims "arising out of ... misrepresentation...." 28 U.S.C. § 2680(h).

The United States argues that the Mullens' negligence and negligent misrepresentation claims must be dismissed for two reasons. First, the United States contends that both counts are barred by the misrepresentation exception to the FTCA. Second, the United States argues that both claims are barred because a private person would not be liable to the claimant for failure to warn under Maine law. Because the Court is persuaded that the misrepresentation exception applies, it is not necessary to determine whether Maine law permits a lawsuit for failure to warn under these circumstances.

The misrepresentation exception to the FTCA bars suits based on negligent as well as deliberate misrepresentations, United States v. Neustadt, 366 U.S. 696, 81 S.Ct. 1294, 6 L.Ed.2d 614 passim (1961), whether based on "false statements or a failure to provide information which the government had a duty to provide," Green v. United States, 629 F.2d 581, 584-85 (9th Cir.1980).

The First Circuit dealt with the misrepresentation exception at length in Jimenez-Nieves v. United States, 682 F.2d 1 (1st Cir.1982). The First Circuit wrote:

In determining the proper scope of the § 2680(h) exceptions, we must turn to the "traditional and commonly understood definition of the tort." United States v. Neustadt, 366 U.S. 696, 706 81 S.Ct. 1294, 1300, 6 L.Ed.2d 614 (1961). To accomplish this task, we refer, as did the Supreme Court in Neustadt, to the Restatement (Second) of Torts, and to federal cases construing the exception.

. . . . .

While the Restatement indicates that the tort of misrepresentation involves the dissemination of information generally and not only in commercial contexts, it makes clear that one essential element of misrepresentation remains reliance by the plaintiff himself upon the false information that has been provided.

Id. at 3-4 (emphasis in original).

Whether the misrepresentation exception applies, then, depends on whether the Mullens' claims for negligence and negligent misrepresentation involve reliance by the Mullens on the Government's failure to notify them that the home contained lead-based paint. Substance rather than form guides this Court's inquiry. "In examining a complaint we are bound to look beyond the literal meaning of the language used to ascertain the real cause of the complaint." Id. at 6.

The negligent misrepresentation count explicitly alleges that the "Plaintiffs, in reliance on this negligent misrepresentation, purchased the home from the Defendant." Amended Cmplt. ¶ 16. The negligence count implicitly alleges that the Plaintiffs relied on the information they received from the United States. Clearly, if the Plaintiffs did not rely on the failure to warn—if they did not deem the information which they did not receive material to their decision to purchase—then the failure to warn could not logically have been a cause of their injuries. Thus, at their core, both claims involve reliance by the Plaintiffs upon information which the United States had a duty to disclose and are therefore barred by the misrepresentation exception to the FTCA.

The Mullens argue that this Court should not apply the misrepresentation exception because of the nature of the statements upon which they relied. The line of cases upon which the Mullens rely, however, is inapposite. See generally, Jimenez-Nieves, 682 F.2d at 5 (discussing "operational" statements by the Government where the element of reliance is necessarily lacking) (citing the principal cases relied upon by the Plaintiffs).

The Mullens also argue that the misrepresentation exception should not apply because they suffered only personal rather than economic injury. The Plaintiff's revisionist interpretation of their own amended complaint ignores the plain language of the damages claim that "Ronald and Valerie Mullens suffered financial loss ... in terms of what will be required to repair their home to remove said lead-based paint." Amended Cmplt. ¶ 10, 17. In any event, "the misrepresentation exception is just as applicable to actions involving personal injury and wrongful death as it is to those involving only financial or commercial loss...." Diaz Castro v. United States, 451 F.Supp. 959 (D.P.R.1978) (Toruella, J.). See also Hamre v. United States, 799 F.2d 455, 459 (8th Cir.1986) (applying misrepresentation exception to personal injuries in case premised on negligent inspection by FmHA). The Plaintiffs' claims for Kendra Mullens' personal injuries and for "pain, suffering, emotional distress, anxiety and other financial loss" experienced by the elder Mullens are also barred.

The Mullens also argue that the misrepresentation exception does not apply because the injury they suffered did not occur in a commercial setting. Even if the Court accepted the argument that the sale of a home is not a commercial transaction, it is clear in this circuit that "the tort...