Preferred Insurance Company v. United States

• Decision Date: 09 May 1955
• Docket Number: No. 13889.,13889.
• Parties: PREFERRED INSURANCE COMPANY, a Corporation; Michigan Surety Company, a Corporation; Midstates Insurance Company, a Corporation; and The Mercantile Insurance Company of America, a Corporation, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

222 F.2d 942 (1955)

PREFERRED INSURANCE COMPANY, a Corporation; Michigan Surety Company, a Corporation; Midstates Insurance Company, a Corporation; and The Mercantile Insurance Company of America, a Corporation, Appellants, v. UNITED STATES of America, Appellee.

No. 13889.^*

United States Court of Appeals Ninth Circuit.

May 9, 1955.

William H. Levit, Long & Levit, Los Angeles, Cal., for appellant.

Asst. Atty. Gen. Warren E. Burger, Paul A. Sweeney, Chief, Appellate Section, Dept. of Justice, Morton Hollander, Atty., Dept. of Justice, Washington, D. C., Lloyd H. Burke, U. S. Atty., San Francisco, Cal., for appellee.

Before HEALY and BONE, Circuit Judges, and BOLDT, District Judge.

BOLDT, District Judge.

Appellee's motion to dismiss Appellants' complaints for lack of jurisdiction was heard and considered on the allegations of the complaints, an affidavit supporting the motion and a written stipulation of facts. The motion was granted and these appeals are from the judgments of dismissal.

At 10:00 p. m. on August 5, 1950 an Air Force B-29 airplane crashed at the Fairfield-Suisun Air Force Base in California a few seconds after takeoff. The plane exploded near a trailer park on the Base extensively damaging 17 trailers and property therein owned and used for residence by enlisted men and officers in active duty status and assigned to the Base at the time. Appellant insurers in the several cases consolidated on this appeal, pursuant to the terms of insurance policies issued to the owners of the trailers, paid them a total of $49,661 for the damage to the trailers. The insureds had no uninsured losses with respect to the fully insured trailers; however, other property damage was suffered by the insureds as a result of the same crash for which claims were submitted to the Air Force under the Military Personnel Claims Act of 1945, 31 U.S.C.A. § 222c, and paid, except for the property covered by insurance as provided by regulations under the Act.

The complaints, praying recovery against the United States in the amount referred to and asserting jurisdiction in the federal district court under the Federal Tort Claims Act, 28 U.S.C. § 1346, alleged that the crash resulted from negligent maintenance and operation of the plane and that by payment of the insurance policy claims the insurers became subrogated to the rights of their respective insureds to the extent of the payments.

The stipulation of facts shows: The trailers were the private property of the servicemen and the government had no interest therein. There were not sufficient public quarters on the Base to house the personnel assigned to the Base and in the surrounding area there was a critical housing shortage. The owners of the trailers were free to live off the Base and could leave it on the same basis as other personnel, but for the convenience and accommodation of personnel and for the mutual benefit of personnel and the Air Force the trailer park on the Base was established. The trailer park was not required in the operation of the Base, no one was required to use it and those who did so made voluntary application at their discretion for permission to park their trailers therein. Personnel using the park were required to pay rental to the government for the space assigned and also to pay for utilities furnished. The servicemen using the trailer park were entitled to and drew regular quarters allowance paid to personnel not furnished government quarters and who lived off the Base. The owners of the damaged trailers had no duties whatever with respect to the maintenance, servicing, loading, operation, dispatch or control of the plane which crashed. At the time of the crash the owners of the trailers, while in active duty status and assigned to the Base, were variously located both on and off duty in the trailer park, at other places on the Base, in neighboring communities and at other military installations in the United States and overseas.

The stipulation further shows: Detailed procedures controlling the operation and maintenance of the trailer park within the confines of the Base were prescribed in a Base regulation. Only Air Force personnel and their families assigned to the Base were allowed to use the trailer park facilities. Specific assignments and termination of trailer space were made by the Base billeting officer. Assignment of trailer park space automatically terminated when the Base ceased to be the permanent station of the individual concerned. The trailer park was operated as a nonprofit activity, with occupants charged a monthly fee determined by the billeting officer and a council of park occupants appointed by the Base commander. Repairs and removal of government property could be made by Air Force installation personnel only. The trailer park area was under military protection and subject to the jurisdiction of military police. Each of the damaged trailers had been permanently placed in position by jacks or other means for the duration of the owner's permanent assignment to the Base.

In the District Court opinion, 111 F. Supp. 899, it was held that the property damage sustained by appellants' insureds was incident to their military service within the meaning of the Military Personnel Claims Act; that claim under said Act is the exclusive remedy of a serviceman for service incident property damage; and that neither servicemen nor their insurers by subrogation have a right of action under the Federal Tort Claims Act for property damage so sustained. The two general questions presented on this appeal are: (1) Can one in active military duty status maintain a claim against the United States under the Tort Claims Act for property damage occurring incident to military service? (2) Was the property damage for which subrogation recovery is sought in the present cases incident to the service of appellants' insureds?

In Brooks v. U. S., 1949, 337 U.S. 49, 69 S.Ct. 918, 93 L.Ed. 1200, the Supreme Court held that a serviceman injured while on leave and away from his duty station by the negligent operation of an army truck driven by a civilian employee could maintain an action under the Federal Tort Claims Act. Thereafter in Feres v. U. S., 1950, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152, the Court held:

"We conclude that the Government is not liable under the Federal Tort Claims Act for injuries to servicemen where the injuries arise out of or are in the course of activity incident to service." 340 U.S. at page 146, 71 S.Ct. at page 159.

In Johansen v. U. S., 1952, 343 U.S. 427, 440, 72 S.Ct. 849, 857, 96 L.Ed. 1051, the Court said:

"This Court accepted the principle of the exclusive character of federal plans for compensation in Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152. Seeking so to apply the Tort Claims Act to soldiers on active duty as `to make a workable, consistent and equitable whole,\' 340 U.S. at page 139, 71 S.Ct. at page 156, we gave weight to the character of the federal `systems of simple, certain, and uniform compensation for injuries or death of those in armed services.\' 340 U.S. at page 144, 71 S.Ct. at page 158."

Recently both Feres and Brooks have been approved in U. S. v. Brown, 1954, 348 U.S. 110, 112, 75 S.Ct. 141, 143:

"The Feres decision did not disapprove of the Brooks case. It merely distinguished it, holding that the Tort Claims Act does not cover `injuries to servicemen where the injuries arise out of or are in the course of activity incident to service.\' 340 U.S. 135, 146, 71 S.Ct. 153, 159. The peculiar and special relationship of the soldier to his superiors, the effects of the maintenance of such suits on discipline, and the extreme results that might obtain if suits under the Tort Claims Act were allowed for negligent orders given or negligent acts committed in the course of military duty, led the Court to read that Act as excluding claims of that character. * * * We adhere also to the line drawn in the Feres case between injuries that did and injuries that did not arise out of or in the course of military duty."

Since the rule of Feres denying action under the Tort Act for service incident personal injuries has been so emphatically reaffirmed, whether the same rule applies to service incident property damage claims will depend on whether or not the rationale of the Feres decision is valid as to such claims.

The Feres opinion, after pointing out considerations persuasive of liability under the language of the Tort Act, the inadequacy of legislative history and the uncertainty or confusion created by the legislation, stated: "Under these circumstances, no conclusion can be above challenge, but if we misinterpret the Act, at least Congress possesses a ready remedy." 340 U.S. at page 138, 71 S.Ct. at page 155. The decision was unanimous and in the more than four years since it was rendered Congress has not amended the Tort Claims Act. Accordingly, the opinion must be accepted as dispelling any doubt as to congressional intent in the adoption of the Act. The four general considerations cited in the opinion as supporting the decision are indicated by the following quotations:

(1) "This Act, however, should be construed to fit, so far as will comport with its words, into the entire statutory system of remedies against the Government to make a workable, consistent and equitable whole." 340 U.S. at page 139, 71 S.Ct. at page 156.

(2) "The primary purpose of the Act was to extend a remedy to those who had been without; if it incidentally benefited those already well provided for, it appears to have been unintentional. Congress was suffering from no plague of private bills on the behalf of military and naval personnel, because a comprehensive system of relief had been authorized for them and their dependents by statute." 340 U.S. at page 140, 71 S.Ct. at page 156.

(3) "One obvious shortcoming in these claims is that plaintiffs can point to no liability of a `private individual\' even

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