Plaza Speedway Inc. v. U.S.

Decision Date27 November 2002
Docket NumberNo. 01-3186.,01-3186.
Citation311 F.3d 1262
PartiesPLAZA SPEEDWAY INC., Plaintiff-Appellee, v. UNITED STATES of America; Department of the Army, Defendants-Appellants.
CourtU.S. Court of Appeals — Tenth Circuit

Adam Bain, Trial Attorney, Tort Branch, Washington, DC, United States Department of Justice, Washington, DC (Robert McCallum, Jr., Assistant Attorney General, Civil Division and J. Patrick Glynn, Director, Torts Branch, Civil Division, United States Department of Justice, Washington, DC; James E. Flory, United States Attorney and Robin B. Moore, Assistant United States Attorney, District of Kansas, with him on the briefs), for Defendants-Appellants.

Randall K. Rathbun, Depew & Gillen, L.L.C., Wichita, KS, for Plaintiff-Appellee.

Before LUCERO, PORFILIO and MURPHY, Circuit Judges.

JOHN C. PORFILIO, Senior Circuit Judge.

Plaintiff Plaza Speedway, Inc. (Speedway), operator of a dirt racetrack adjacent to the Marshall Army Airfield at Fort Riley, Kansas, brought this Federal Tort Claims Act (FTCA) and Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) action against the United States contending the Army had contaminated Speedway's groundwater and soil. The suit was based upon activities at the airfield which the Government admitted resulted in the discharge of contaminants. The sole issue on appeal is whether the district court erred in finding Speedway timely filed its administrative claim under the FTCA's two-year statute of limitations. Concluding the district court misapplied the statute, we reverse.

The Government admits from the 1960's through 1984, the Army used a shallow 35 to 40 foot wide fire pit on the premises of the airfield to train its civilian firefighter force. Firefighters poured flammable liquids into the pit, ignited them, and extinguished the flames. Although the Speedway racetrack is located on a large parcel of open land adjacent to Marshall Airfield, it is uncontested that the fire pit was not visible from Speedway's property because a sizable berm concealed the pit from view.

When the current owners of the track, brothers Roger and Doug Thompson, acquired the property in February 1989, they knew the Army had used jet fuels and various chemicals in the course of its operations at the nearby airfield for some years. Nonetheless, at the time of the purchase, the Thompsons did not test the wells on their property or otherwise obtain an environmental assessment of the land.

Historically, water from the nearby Kansas River was used at the racetrack for personal consumption, but track patrons did not like its taste. Although the Thompsons and others nearby believed there was no health risk from drinking the water, and did so themselves, they had municipal water hauled to the premises for their customers' use. To change this system, the brothers applied for a public water permit.

On April 9, 1993, following the application, the Kansas Department of Health and Environment (KDHE) sampled well water on Speedway's property and detected the presence of solvents linked to cancer. The initial contamination report stated, "investigation needed to see if the contamination is a result of on site activities, such as the use of solvents to clean auto parts, or if it could arise from nearby military operations at Fort Riley." (emphasis added). The Thompsons did not see the written report until January or February of 1995.

After the first inspection, on approximately August 23, 1993, Randolph Brown, an Environmental Geologist in the remedial section of KDHE, called the Thompsons to discuss the chemical contamination on Speedway's premises. At trial, Mr. Brown did not remember which Thompson brother he spoke to; neither brother recalled speaking with Mr. Brown. Notwithstanding, in its Memorandum and Findings of Fact and Conclusions of Law, the district court found the August 23, 1993 telephone call:

focused on the test results and concerned the possibility that Plaza Speedway activities were the source of the contamination. Brown told Thompson that he was going to send a list of questions, and he may have told him that one of the [three] wells at the track had "VOCs" (volatile organic compounds) in it. This information was not necessarily alarming because there are VOCs in Wichita's public drinking water. Brown did not inform Thompson that the contaminated water was unfit for human consumption or that water use should be restricted in any way. Brown did not recall telling Thompson anything that would have put him on notice that Fort Riley or some third party might have injured them. The purpose of the telephone contact was to identify "potentially responsible parties" and to question the Speedway's own activities at the track.

In the district court's view, the first formal information the Thompsons received concerning contamination was a letter from Mr. Brown dated October 18, 1993. The letter indicated hazardous substances were present in the groundwater and soil at Speedway, and Speedway was considered a potentially responsible party. The Thompsons received a second letter from KDHE, dated November 12, 1993, which requested answers to questions concerning the use and storage of motor oils, fuels, and solvents on Speedway property. Question 7 asked:

At the time you acquired the property on which your Facility is located, did you know or have reason to know of any hazardous substances, pollutants, contaminants, or hazardous wastes disposed of, or stored or released on, or at your Facility?

In response, Doug Thompson stated, in part:

We were aware that the United States Army had conducted numerous operations at Marshall Airfield in a close proximity to our area whereby jet fuel, solvents and various chemicals were employed in a number of exercise activities over the years.

Mr. Thompson further explained that he and his brother had been familiar with the racetrack since its construction and that there had never been any hazardous substances at the facility.

On October 13, 1995, Speedway filed an administrative claim with the Army, alleging the Army's fire training contaminated Speedway's property. The Army never acted upon this claim; nonetheless, the Government maintains Speedway's filing of the instant case constitutes Speedway's election to deem the Army's non-action a final disposition of the claim within the context of 28 U.S.C. § 2675(a).1

Speedway filed its complaint in the district court on August 15, 1997. Prior to trial, the Government moved for partial summary judgment, contending the court lacked subject matter jurisdiction because Speedway filed its administrative claim outside the FTCA's two-year statute of limitations. The district court denied the motion, finding a "serious dispute [exists] about when the plaintiff knew, or should have known, the circumstances surrounding the contamination of its property."

Following a bench trial, the district court concluded the Army's negligent operation of the fire pit was the source of Speedway's contamination. The court awarded Speedway $150,000 damages for diminished property value and granted Speedway declaratory judgment in its CERCLA claim.

The Government appealed, challenging only the district court's subject matter jurisdiction. In its view, the date upon which the statute of limitations began to run was August 23, 1993, when Mr. Brown first called the Thompsons. Therefore, Speedway's October 13, 1995 administrative claim exceeded the two-year limitation period.

"The determination of the district court's subject matter jurisdiction is a question of law which we review de novo." Hart v. Dep't of Labor ex rel. United States, 116 F.3d 1338, 1339 (10th Cir.1997) (citation omitted). "We also review de novo a district court's ruling regarding the applicability of a statute of limitations." Indus. Constructors Corp. v. United States Bureau of Reclamation, 15 F.3d 963, 967 (10th Cir.1994) (citation omitted). Failure to file an FTCA claim within the two-year statute of limitations period is a matter we review de novo. Hart, 116 F.3d at 1338.

We will not, however, disturb the district court's factual findings unless they are clearly erroneous. Manning v. United States, 146 F.3d 808, 812 (10th Cir.1998) (citation omitted). "A finding of fact is `clearly erroneous' if it is without factual support in the record or if ..., after reviewing all the evidence, [we are] left with a definite and firm conviction that a mistake has been made." Id. (citation omitted). "[W]e view the evidence in the light most favorable to the district court's ruling and must uphold any district court finding that is permissible in light of the evidence." Id. at 813. (citation omitted).

Through the FTCA, the United States waives its sovereign immunity from tort claims, making itself liable "in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. § 2674. However, "[a] tort claim against the United States shall be forever barred unless it is presented to the appropriate Federal agency within two years after such claim accrues." 28 U.S.C. § 2401(b). "The purpose behind 28 U.S.C. § 2401(b) — the limitations provision of the FTCA — is to require the reasonably diligent presentation of tort claims against the government." Arvayo v. United States, 766 F.2d 1416, 1418 (10th Cir.1985) (citing United States v. Kubrick, 444 U.S. 111, 100 S.Ct. 352, 62 L.Ed.2d 259 (1979)). Furthermore:

Section 2401(b), like statutes of limitations generally, represents a legislative judgment that it is unjust to fail to put the adversary on notice to defend within a specified period of time, and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.

Id. at 1418-19 (citations omitted).

Both § 2401(b) and its legislative history are "silent as to the meaning of `accrues.'" Id. at 1419. Federal law controls the issue of when a federal...

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