Muniz-Rivera v. U.S.

• Citation: 204 F.Supp.2d 305
• Decision Date: 20 May 2002
• Docket Number: No. CIV.98-2001 (HL).,CIV.98-2001 (HL).
• Court: U.S. District Court — District of Puerto Rico
• Parties: Rufino MUÑIZ RIVERA, et al, Plaintiffs, v. UNITED STATES of America, Defendant.

204 F.Supp.2d 305

Rufino MUÑIZ RIVERA, et al, Plaintiffs, v. UNITED STATES of America, Defendant.

No. CIV.98-2001 (HL).

United States District Court, D. Puerto Rico.

May 20, 2002.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Ruth Santiago, Salinas, PR, for Rufino Muniz-Rivera, Carmen Rentas, Conjugal Partnership Muniz-Rentas, Ramon Baez, Carmen Rosado, Conjugal Partnership Baez-Rosado, Calle AF, Manases Vega, Margarita Alvarado-Gonzalez, plaintiffs.

Lisa E. Bhatia-Gautier, U.S. Attorney's Office, San Juan, PR, Federico Freytes-Mont, Santurce, Gloria Robison-Guarch, Department of Justice of PR, Federal Litigation Division, San Juan, PR, for USA, Rural Development, Formerly Farmers Home Administration, United States Department of Agriculture, Federal Housing Administration, Department of Housing and Urban Development, Dan Glickman, in his capacity as Secretary of the Department of Agriculture, Jill Long-Thompson, in her capacity as Under Secretary for Rural Development, Andrew Cuomo, in his capacity as Secretary of the Department of Housing and Urban Development, Emelda P. Johnson, in her capacity as Deputy Assistant Secretary for Single Family Housing, Aida Luz Colon, in her capacity as Lead Single Family Representative, Federal Housing Administration, Ileana Echegoyen, in her capacity as State Director of Rural Development, Estado Libre Asociado De Puerto Rico, Commonwealth of Puerto Rico, Danniel Pagan, in his capacity as Secretary of the Puerto Rico Department of Natural and Environmental Resources, Carlos Pesquera, in his capacity as Secretary of the Puerto Rico Department of Transportation and Public Works, defendants.

OPINION AND ORDER

LAFFITTE, Chief Judge.

Before the Court is a motion to dismiss by the United States of America. Plaintiffs are home-owners residing in the La Margarita and Extensión La Margarita housing developments in Salinas, Puerto Rico.¹ There are 108 plaintiffs who own a total of 67 properties.² They bring this action against the Government pursuant to the Federal Tort Claims Act ("FTCA").³

At the outset, the Court must determine what standard of review is required for this motion. The motion before the Court is a motion to dismiss for lack of subject matter jurisdiction which challenges the validity of the FTCA claim. Accordingly, the Court credits Plaintiffs' well-pleaded allegations in both the complaint and in the sworn statement appended to their opposition to the Government's motion and draws all reasonable inferences in their favor. See Valentin v. Hospital Bella Vista, 254 F.3d 358, 363 (1st Cir.2001).

Plaintiffs bought their homes between 1973 and 1995.⁴ They purchased these homes with loans obtained through the federal Farmers Home Administration ("FmHA"), the U.S. Department of Agriculture, the Federal Housing Administration ("FHA"), and the Department of Housing and Urban Development. They allege that these homes were built in accordance with specifications approved by these federal agencies; that the sellers of the homes issued builder's warranties for the purpose of inducing these agencies to make loans for the purchase of the properties; that the deeds provided that the federal agencies had the right to inspect the properties; and that the plaintiffs were obligated to make repairs that the agencies requested and to obtain fire and earthquake insurance. The homeowners were obligated to obtain flood insurance only when the federal agencies so required it.

The two developments are located in the Nigua River "floodway zone." It has been the site of "major flooding" in 1928, 1933, 1956, 1970, 1975, 1985, 1992, and 1996. Flooding also occurred in the community in 1992, 1997, and 1998. Additionally, the sewer and drainage systems are inadequate: they back up when the river's level rises. As a result, Plaintiffs allege that their homes are subject to "substantial flooding" and soil movement; that their properties have sustained damage to their land as well as to the foundations, walls, roofs, and floors of their homes; and that this recurrent flooding makes the properties unfit for their intended use.

Plaintiffs claim that their damages were caused by the negligence of government agents. Specifically, they allege that these agents were negligent in their duty to inspect Plaintiffs' properties; that they were negligent in their duty to warn Plaintiffs of the area's conditions; that they failed to inform Plaintiffs of the need for flood insurance; that they failed to take measures to protect Plaintiffs' properties; that they were negligent in their duty to supervise the construction of the homes; that they were negligent in their duty to detect the developments' susceptibility to flooding and the inadequacies of the sewer and drainage systems; that they were negligent in their duty to require or take measures to protect Plaintiffs' properties from flood damages; and that they failed to build retaining levees or take other appropriate measures to stop rising flood waters.

In its motion to dismiss, the Government argues that Plaintiffs' claims are time-barred and that they are precluded by the misrepresentation and discretionary function exceptions to the FTCA. Plaintiffs have opposed the motion to dismiss. For the reasons set forth below, the Court grants the motion to dismiss.

DISCUSSION

As the sovereign, the United States may not be sued without its consent. Lehman v. Nakshian, 453 U.S. 156, 160, 101 S.Ct. 2698, 2701, 69 L.Ed.2d 548 (1981); Day v. Mass. Air Nat'l Guard, 167 F.3d 678, 681 (1st Cir.1999). The FTCA is a limited waiver of the United States' sovereign immunity from liability. Dynamic Image Technologies v. United States, 221 F.3d 34, 39 (1st Cir.2000); Day, 167 F.3d at 681. The limits of that waiver define a federal court's jurisdiction. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980). It is a waiver, however, that must be strictly construed in favor of the government. Library of Congress v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 2963, 92 L.Ed.2d 250 (1986); Ruckelshaus v. Sierra Club, 463 U.S. 680, 685, 103 S.Ct. 3274, 3278, 77 L.Ed.2d 938 (1983); Dynamic Image, 221 F.3d at 39; Weldon v. United States, 70 F.3d 1, 4 (2nd Cir.1995). Under the FTCA, the government is liable to the same extent that a private individual would be under similar circumstances in accordance with the law of the place where the act occurred. 28 U.S.C.A. § 1346(b)(1); Abreu-Guzman v. Ford, 241 F.3d 69, 75 (1st Cir.2001); Dynamic Image, 221 F.3d at 39.

The FTCA is replete with exceptions. See 28 U.S.C.A. § 2680. In its motion, the Government claims that it is protected by the exception which precludes claims of misrepresentation. See id. § 2680(h). The essence of a misrepresentation claim is that there be a "communication of misinformation" upon which the plaintiff has relied. Block v. Neal, 460 U.S. 289, 296, 103 S.Ct. 1089, 1093, 75 L.Ed.2d 67 (1983). The Government will not be liable for an injury resulting from a commercial decision made by plaintiff in reliance on a misrepresentation by a government agent. Saraw Partnership v. United States, 67 F.3d 567, 570 (5th Cir. 1995); Jimenez-Nieves v. United States, 682 F.2d 1, 4-5 (1st Cir.1982). This exception applies to more than mere affirmative statements; a claim based on a failure to warn or to communicate will also be barred. See JBP Acquisitions v. United States, 224 F.3d 1260, 1265-66 (11th Cir. 2000); Green v. United States, 629 F.2d 581, 584-85 (9th Cir.1980); Preston v. United States, 596 F.2d 232, 238-39 (7th Cir.1979); Mullens v. United States, 785 F.Supp. 216, 219-20 (D.Me.1992), aff'd, 976 F.2d 724 (1st Cir.1992) (Unpublished table text); Harrah v. Miller, 558 F.Supp. 702, 706 (S.D.W.Va.1983).

In the present case, Plaintiffs' allege, among other things, that government agents were negligent (1) in their duty to warn Plaintiffs of the area's propensity to flooding and (2) in their failure to inform Plaintiffs of the need for flood insurance. These are claims, in effect, that the Plaintiffs suffered an injury because they relied on a communication of misinformation by government agents. That is, they bought their homes because they were never warned of any risk of flooding and they neglected to obtain adequate flood insurance because they were never told to do so. Even though Plaintiffs do not use the word "misrepresentation" in their allegations, these claims are still barred by that exception. In determining whether one of the FTCA exceptions comes into play, a court must look beyond the literal meaning of the complaint and ascertain the true nature of the cause of action. United States v. Neustadt, 366 U.S. 696, 703-04, 81 S.Ct. 1294, 1297, 6 L.Ed.2d 614 (1961). The claims regarding the failure to warn of the risk of flood and the failure to advise Plaintiffs that they should obtain flood insurance are claims that Plaintiffs relied on a communication of misinformation and that as a result they suffered an injury. See Mullens, 785 F.Supp. at 219-20; Harrah, 558 F.Supp. at 706. Thus, they are barred by the misrepresentation exception.

Plaintiffs also assert that the Government is liable based on alleged negligence in the duty to inspect the properties and the duty to detect the problems in drainage, sewage, and flooding. The mere failure to inspect and detect, by itself, is not sufficient to impose liability. A negligent inspection could not have caused Plaintiffs' injuries, for any defects would already have been present in the houses. See Hamre v. United States, 799 F.2d 455, 457 (8th Cir.1986). Any faulty inspection, therefore, must be accompanied by some other conduct sufficient to create liability. If Plaintiffs are arguing that government agents were negligent in inspecting the property and that they informed Plaintiffs that the property did not suffer from defects and that Plaintiffs purchased their homes in reliance on this information, then this claim...