Ove Gustavsson Contracting Co. v. Floete

• Decision Date: 05 February 1962
• Docket Number: No. 70,Docket 26814.,70
• Citation: 299 F.2d 655
• Parties: OVE GUSTAVSSON CONTRACTING CO., Inc., Plaintiff-Appellant, v. Franklin G. FLOETE, as Administrator of General Services Administration, Michael Brennan, individually and as Contracting Officer of General Services Administration, and William A. Boyd, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

299 F.2d 655 (1962)

OVE GUSTAVSSON CONTRACTING CO., Inc., Plaintiff-Appellant, v. Franklin G. FLOETE, as Administrator of General Services Administration, Michael Brennan, individually and as Contracting Officer of General Services Administration, and William A. Boyd, Defendants-Appellees.

No. 70, Docket 26814.

United States Court of Appeals Second Circuit.

Argued November 9, 1961.

Decided February 5, 1962.

Anthony B. Cataldo, New York City, for plaintiff-appellant.

Ann B. Miele, Asst. U. S. Atty., Brooklyn, N. Y. (Joseph P. Hoey, U. S. Atty., Eastern Dist. of New York, Brooklyn, N. Y., on the brief), for defendants-appellees.

Before LUMBARD, Chief Judge, and MEDINA and WATERMAN, Circuit Judges.

MEDINA, Circuit Judge.

Plaintiff, Ove Gustavsson Co. Inc., a New York corporation, appeals from an order and summary judgment in an action against certain officials of the federal Government, in their individual capacity, for damages caused by the alleged wilful and malicious acts of these officials in filing allegedly false reports concerning Gustavsson's performance of a Government construction contract, as a result of which reports the contract was cancelled. While the complaint was dismissed in its entirety, the appeal brings up for review only the summary judgment for defendants on the second claim for relief set forth in the complaint. Gustavsson also appeals from the order, made simultaneously with the granting of the summary judgment, denying Gustavsson's motion to sever the action and remand the second claim for relief to the New York Supreme Court, Queens County, where the action was commenced and from which it was removed to the United States District Court for the Eastern District of New York, pursuant to the provisions of 28 U.S.C. § 1442(a) (1). The opinion of Judge Zavatt is reported at 187 F.Supp. 839. We affirm.

The United States needed a dehumidification hutment at Burlington, New Jersey, for the protection and storage of precision machinery, and on May 28, 1958 Gustavsson entered into a contract with the Government for the construction of the required hutment. A hutment is an enclosed area in a warehouse built by joining panels of sheet metal together, and the one contracted for was to be equipped with dehumidification units. The contracting agency for the Government was the General Services Administration; defendant Brennan was the Contracting Officer and defendant Boyd was his Assistant. Floete, a defendant in the first claim for relief only, was Administrator of the General Services Administration. The original completion date was October 2, 1958, ninety days after Gustavsson received notice to proceed. Although some equipment had arrived at the job site by October 2, the work was far from completion and the contracting office of the General Services Administration had granted Gustavsson an extension. While the cause of further delay is a matter of dispute between the parties, it is clear that even as late as January 12, 1959, Gustavsson had failed to complete the construction work called for by the terms of the contract.

The contract contained the general provisions of a standard Government construction contract, and it included the following clauses:

"If the Contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in this contract, or any extension thereof, or fails to complete said work within such time, the Government may, by written notice to the Contractor, terminate his right to proceed with the work or such part of the work as to which there has been delay.

* * * * *

"If the Contractor fails to proceed at once with the replacement of rejected material and/or the correction of defective workmanship the Government may terminate the right of the Contractor to proceed * * *."

Boyd, after investigating the facts and communicating with the contractor, recommended to his superior, Brennan, that the contract be terminated because of plaintiff's unsatisfactory performance. Brennan agreed, and a report was sent to the Washington office of the General Services Administration. The Washington office approved the report, authorized the termination, and on January 12, 1959 Gustavsson was notified that the contract had been terminated.

On February 6, 1959 Gustavsson appealed the termination to the Administrator of the General Services Administration in accordance with the "disputes" clause of the contract, and this appeal is still pending. Gustavsson also commenced an action in the United States District Court for the Southern District of New York against Franklin G. Floete, Administrator of General Services Administration, Michael Brennan, Contracting Officer, and William A. Boyd, Assistant Contracting Officer, in their official capacities. The relief prayed for in this first action was for an injunction, restraining defendants from awarding the contract to another contractor to complete the work on the as yet useless hutment, to review the decision terminating Gustavsson's contract, and for damages. This action was dismissed for lack of jurisdiction. Ove Gustavsson Contracting Co. Inc. v. Floete, S.D.N.Y., 1959, 176 F.Supp. 544, aff'd, 2 Cir., 1960, 278 F.2d 912, cert. denied, 364 U.S. 894, 81 S.Ct. 225, 5 L.Ed.2d 188.

On June 26, 1959, while its appeal in the first action was still pending, Gustavsson commenced a second action, the subject of this appeal, in the New York State Supreme Court, Queens County. This second action was removed to the United States District Court for the Eastern District of New York, pursuant to 28 U.S.C. § 1442(a) (1), and Gustavsson's motion to remand was denied, 176 F.Supp. 841. The complaint alleged two claims for relief. The first, against the defendants Floete and Brennan "in their representative capacities," was dismissed because the same plaintiff was seeking the same relief against the same defendants in the then still pending Southern District action. As Gustavsson no longer contests the propriety of the dismissal of the first claim for relief in the second action, it need concern us no longer.

The gist of the second claim for relief in the second action, asserted against defendants Brennan and Boyd "individually," is that said defendants, with intent to harm and injure the plaintiff, knowingly, intentionally, wilfully, and maliciously made untruthful reports concerning the performance of the contract by Gustavsson, and by reason of such untruthful reports caused the contract to be cancelled. Defendants' motion to dismiss the complaint pursuant to Federal Rule Civ.Proc. rule 12(b), 28 U.S.C. was granted also as to this second claim for relief in the second action, the District Judge very properly treating the motion as one for summary judgment, as voluminous affidavits were submitted and considered in support of and in opposition to the motion. At the same time the District Court denied Gustavsson's cross-motion to sever the claims and to remand the second claim for relief, which the court treated as a motion for reconsideration of its prior order denying the original motion to remand the case.

The court below properly held defendants were entitled to summary judgment, because officials of the federal Government are not personally liable for alleged torts based upon acts, done within the scope of their duties, which necessarily involved the exercise of a judgment or discretion which public policy requires be made without fear of personal liability. See, e. g., Barr v. Matteo, 1959, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434; Howard v. Lyons, 1959, 360 U.S. 593, 79 S.Ct. 1331, 3 L.Ed.2d 1454; Spalding v. Vilas, 1896, 161 U.S. 483, 16 S.Ct. 631, 40 L.Ed. 780; Gregoire v. Biddle, 2 Cir., 1949, 177 F.2d 579. The reason for this rule was stated in his own persuasive and inimitable fashion by Judge Learned Hand in Gregoire v. Biddle, supra, at page 581:

"It does indeed go without saying that an official, who is in fact guilty of using his powers to vent his spleen upon others, or for any other personal motive not connected with the public good, should not escape liability for the injuries he may so cause; and, if it were possible in practice to confine such complaints to the guilty, it would be monstrous to deny recovery. The justification for doing so is that it is impossible to know whether the claim is well founded until the case has been tried, and that to submit all officials, the innocent as well as the guilty, to the burden of a trial and to the inevitable danger of its outcome, would dampen the ardor of all but the most resolute, or the most irresponsible, in the unflinching discharge of their duties. Again and again the public interest calls for action which may turn out to be founded on a mistake, in the face of which an official may later find himself hard put to it to satisfy a jury of his good faith. There must indeed be means of punishing public officers who have been truant to their duties; but that is

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