United States v. Limbs

• Decision Date: 08 March 1973
• Docket Number: Civ. No. 72-307.
• Citation: 356 F. Supp. 1004
• Parties: UNITED STATES, Plaintiff, v. Lee A. LIMBS, Jr., et al., Defendants.
• Court: U.S. District Court — District of Arizona

356 F. Supp. 1004

UNITED STATES, Plaintiff, v. Lee A. LIMBS, Jr., et al., Defendants.

Civ. No. 72-307.

United States District Court, D. Arizona.

March 8, 1973.

William C. Smitherman, U. S. Atty., Joseph R. Keilp, Asst. U. S. Atty., Phoenix, Ariz., and Leavenworth Colby, Special Asst. Atty. Gen., U. S. Dept. of Justice, Washington, D. C., for plaintiff.

Karl N. Stewart, in pro. per., and Lawrence J. Marks, of Kanne & Bickart, Phoenix, Ariz., for defendants.

OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

HAUK,^* District Judge.

These cross motions for summary judgment on the Complaint came on for hearing in Phoenix, Arizona, on Saturday, February 3, 1973. The Counterclaim of the Limbs was not argued for the reasons we later recite.

The facts are not in dispute. The parties stipulated to them in a statement filed on September 15, 1972, which recites the following incidents:

The defendants, Lee A. Limbs, Sr., and Lee A. Limbs, Jr., were a Deputy U. S. Marshal and a guard and are employees of the United States Department of Justice. Karl N. Stewart has been their attorney. On Sunday, May 2, 1965, the two Limbs were involved in an automobile accident at a point two miles east of Cunningham, Kansas. Both individuals were performing their official duties at the time of the accident, and so they filed claims for compensation under the Federal Employees Compensation Act, 5 U.S.C. § 8101 et seq. (1966), formerly 5 U.S.C. § 751 et seq. (1964). The San Francisco District Office of the Bureau of Employees' Compensation, United States Department of Labor, received the Limbs' applications on June 18, 1965. The Bureau approved Limbs, Sr.'s claim on July 19, 1965, and approval for Limbs, Jr., followed on August 11.

Meanwhile Mr. Limbs, Sr., and Mr. Limbs, Jr., retained one Karl N. Stewart of Phoenix as their attorney to prosecute their claim against the driver of the car that hit them in Kansas. Stewart did not try to conceal his employment, and on March 25, 1966, he wrote a letter to the Solicitor of the United States Department of Labor confirming his participation in the case. (See Appendix A).

The Solicitor replied to Stewart one month later (Appendix B). In his letter he referred to two certain provisions of the Federal Employees Compensation Act, 5 U.S.C. §§ 8131 and 8132,¹ promised to send a current statement of disbursements made to the Limbs', and then asked Mr. Stewart to "keep us advised of the status of the cases from time to time and . . . notify us before distributing the proceeds of any third party recovery or settlement."

The Bureau did supply Mr. Stewart with itemized disbursement figures in two letters dated June 10, 1966 (Appendices C & D).

Although the Bureau of Employees' Compensation alluded to the Employees' Compensation Act in their first letter to Stewart, the stipulated facts show that the United States never "required" either Defendant to "assign" to the government their respective rights of action, or any part thereof, nor did the United States "require" either Mr. Limbs, Sr., or Mr. Limbs, Jr., to "prosecute the action in his own name," whether under the Plaintiff's direction or otherwise. And, finally, the United States did not intervene or seek to intervene in the third party tort actions brought by Lee Limbs, Jr., or Lee Limbs, Sr.

Karl Stewart was successful in obtaining a settlement. By May 26, 1966, he received from the State Farm Insurance Company $45,000 for Lee A. Limbs, Jr., and $25,000 for Lee A. Limbs, Sr.² The Government admits in the stipulated facts that it had notice of this settlement on December 6, 1966. One day later the Office of the Solicitor, Department of Labor wrote to Stewart, again calling his attention to the Federal Employees Compensation Act and requesting that he reimburse the Bureau of Employees Compensation accordingly (Appendix F). The Bureau provided Stewart with their disbursement figures (Appendices G & H). Before that time, however, Mr. Stewart already had paid over to his clients the settlement proceeds.³

Stewart answered the Solicitor's letter of December 27, 1966, by letter and legal memorandum dated January 25, 1967. He flatly refused to reimburse the United States "in that a substantial part of the amount recovered will be used for future medical expenses." "It is clear," he continued, "based upon points and authorities cited in my enclosed memorandum, that the United States does not have a right to recover for compensation and medical expense of either of the above named individuals (Lee A. Limbs., Jr., and Sr.) in this case." (Appendix I).

The Government answered this letter by citing cases in support of its claim (Appendix J). Then in another note, (Appendix K), the Plaintiff noted that with respect to future medical expenses, the Limbs' should not be concerned because their "third party recoveries have not permanently ended their rights to benefits from the Bureau of Employees Compensation. From the recoveries which they obtained, a credit is established at the Bureau. This credit is the net amount remaining after the deduction of the attorney's fees and the reimbursement to the Bureau." In separate letters to Mr. Limbs, Jr., and Mr. Limbs, Sr., the Government reiterated its position and offered to continue paying them if only they would reimburse the Bureau (Appendices L & M).

The Limbs' did not repay the Bureau. A little more than five years later, on June 13, 1972, the United States finally filed a complaint in Arizona Federal Court not only against the two Limbs', but against their attorney Karl Stewart for wrongfully having distributed the proceeds which he allegedly knew were owing to the Government. Plaintiff demanded judgment of $6,768.32 against Lee Limbs, Jr.; $6,624.80 against Lee Limbs, Sr.; and $13,393.12 against Stewart. A month later the Defendants answered and counterclaimed for the medical payments which the Bureau had terminated.

Since no factual dispute exists, the Court must confine its consideration solely to the legal significance of the facts set forth above. Specifically, it is the question whether under Rule 56, F.R.Civ.P., any party in this action is "entitled to a judgment as a matter of law." Before moving into a discussion of the issues generated by this action, we hold that Defendants are entitled to judgment on the main complaint and Plaintiffs are entitled to judgment on the counterclaim. Therefore the Court orders that the motions for summary judgment by the Defendants, and each of them, be granted and that judgment be entered accordingly in favor of Defendants denying to Plaintiff any and all relief sought in the Complaint. By the same token, and by their own stipulations as hereinafter appears, Defendants Limbs' shall take nothing by way of their Counterclaim and that shall also appear in the judgment.

HAS THE STATUTE OF LIMITATIONS EXPIRED IN THIS ACTION?

The cause of action attempted to be alleged in the Complaint is now over six and a half years stale. More precisely, the United States waited six years and 18 days from the time of the settlement — and five years, six months, and seven days from the time they had notice of the settlement — to commence this lawsuit.

No statute of limitations appears in the Federal Employees' Compensation Act, supra. The relevant statute, if any, is the general limitations act, appearing in Title 28 of the United States Code, Section 2415. It provides:

§ 2415. Time for commencing actions brought by the United States

(a) Subject to the provisions of section 2416 of this title, and except as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon any contract express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues or within one year after final decisions have been rendered in applicable administrative proceedings required by contract or by law, whichever is later: Provided, That in the event of later partial payment or written acknowledgment of debt, the right of action shall be deemed to accrue again at the time of each such payment or acknowledgment.

(b) Subject to the provisions of section 2416 of this title, and except as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon a tort shall be barred unless the complaint is filed within three years after the right of action first accrues: Provided, That an action to recover damages resulting from a trespass on lands of the United States, including trust or restricted Indian lands; an action to recover damages resulting from fire to such lands; an action to recover for diversion of money paid under a grant program; and an action for conversion of property of the United States may be brought within six years after the right of action accrues.

A careful reading of this language reveals that if this statute applies to the Employees' Compensation Act, and if the Government's action against the Limbs' and their attorney is founded upon a tort, then the United States cannot recover. Those two conditionals are the most important issues in this case.

FIRST ISSUE:

Does 28 U.S.C. § 2415(b) apply to the Federal Employees' Compensation Act, supra?

This question has not been answered by the Judiciary. No decision has been called to the Court's attention. It apparently is a matter of first impression.⁴

The only cases that deal with the scope of this Federal 3-year statute of limitations appear in connection with the Medical Care Recovery Act, 42 U.S.C. §§ 2651-2653.⁵ United States v. Gera, 409 F.2d 117 (3d Cir. 1969) held that the tort section of 28 U.S.C. § 2415 does apply to actions under the Medical Care Recovery Act, and that conclusion was upheld in Forrester v. United States (United States...