United States v. Reilly

• Decision Date: 09 November 1967
• Docket Number: No. 9476.,9476.
• Parties: UNITED STATES of America, Appellant, v. John M. REILLY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

385 F.2d 225 (1967)

UNITED STATES of America, Appellant, v. John M. REILLY, Appellee.

No. 9476.

United States Court of Appeals Tenth Circuit.

November 9, 1967.

Jack H. Weiner, Washington, D. C. (J. William Doolittle, Acting Asst. Atty. Gen., John Quinn, U. S. Atty., and David L. Rose, Atty., Dept. of Justice, Washington, D. C., were with him on the brief), for appellant.

Joseph A. Sommer, Santa Fe, N. M. (Thomas F. McKenna, Sr., Santa Fe, N. M., was with him on the brief), for appellee.

Before LEWIS and HICKEY, Circuit Judges, and STANLEY, District Judge.

LEWIS, Circuit Judge.

This is a suit by the government for indemnity or in the alternative, contribution, for the cost of settling five tort actions brought against the United States under the Federal Tort Claims Act, 28 U.S.C. § 1346(b). The tort actions were instituted by representatives of five minor children seeking total damages of $2,210,500 for injuries and death caused by the accidental explosion of a 2.36-inch rocket launcher round or "bazooka shell." The amount paid in settlement was $350,000. The government looks to appellee John M. Reilly for indemnity on grounds that his negligence was the sole cause of the accident, or that his negligence was primary and active while the negligence of the United States was merely secondary and passive. The alternate remedy of contribution is sought on grounds that Reilly was a joint tortfeasor and that his liability to the injured parties, as well as the government's, was extinguished by the settlement. The United States District Court for the District of New Mexico dismissed the government's complaint and action for failure to state a claim upon which relief could be granted. This appeal is from that order of dismissal.

The relevant facts as pleaded may be summarized. On Saturday July 14, 1962, John M. Reilly and his ten-year-old nephew went picnicking on government-owned property outside Los Alamos, New Mexico. The property was at the time being used by the United States and the University of California under contract with the Atomic Energy Commission for the operation of the Los Alamos Scientific Laboratory. Reilly was an employee of the Los Alamos Scientific Laboratory. During an earlier period, from approximately July 1947 through December 1947, the property had been used by a United States Provisional Military Police Battalion as an impact area for shells fired from 2.36-inch rocket launchers or bazookas. While exploring the area, Reilly and his nephew found an old bazooka shell which they placed in Reilly's automobile and transported to Reilly's home in the town of Los Alamos. The shell was removed from the automobile by the nephew and introduced into the play of several children. The shell was dropped, it exploded, and one child was killed. Four other children, including Reilly's nephew, were seriously injured.

In the complaints filed under the Federal Tort Claims Act by representatives of the five children it was alleged, among other things, that the United States had inadequately searched and cleared the area where the unexploded bazooka shell was found, that the United States had failed to erect and maintain appropriate warnings along its newly constructed public highway near the area, and that agencies or agents of the United States had in fact caused information to be published in a weekly newsletter to employees of Los Alamos Scientific Laboratory regarding the attractiveness of the area for hikes, picnics, and discovery of Indian artifacts. The contested issues of law and fact arising out of these allegations were never tried, for on October 23, 1964 the compromise settlement of $350,000 was accepted by the Attorney General of the United States and submitted to the trial court for approval pursuant to 28 U.S.C. § 2677.¹ As submitted and approved, the settlement provided for release from further liability of "the defendant, the United States of America, and its agents, contractors and employees." It also provided:

"That this agreement shall not constitute an admission of liability or fault on the part of the defendant, the United States of America, or on the part of its agents, namely, the Atomic Energy Commission, the United States Army and any and all agents and employees of any and all other Government departments, agencies, employees or contractors."

On October 29, 1964, a supplemental stipulation was filed purporting to "clarify and specify the intent of the parties with respect to the release" in the settlement. It provided for release of "the defendant, the United States of America, its agents and employees and its contractors and their agents and employees, John M. Reilly, and any and all other persons." The supplemental stipulation was neither seen nor approved by the trial court.

On April 12, 1965, the United States filed the instant suit against Reilly in the same district court that had approved the compromise settlement. In addition to the facts previously set forth, the complaint alleged that Reilly was negligent in removing the bazooka shell from government property, transporting it to his home in a residential area, and permitting children to play with it without adult supervision. The apparent conclusions of the trial court which premised the dismissal of the action were (1) that the United States was an active tortfeasor and therefore not entitled to indemnity, and (2) that neither the settlement itself nor the supplemental stipulation effected a valid release of John M. Reilly and therefore the United States was not entitled to contribution.² We affirm the district court's dismissal of the second count in the government's complaint for contribution and remand the case for trial on the single issue of indemnity.

Assuming the premise plea, that Reilly was at least a joint tortfeasor, the parties agree that under New Mexico law Reilly's liability for contribution depends solely upon whether his liability in tort to the injured children was extinguished by the settlement between the children's representatives and the United States.³ The same district court that approved the settlement in the first instance apparently believed that Reilly's tort liability had not been so extinguished, and we think both the law and the facts amply support that interpretation. With the interests of minors at stake, the trial judge had a special obligation to see that they were properly represented, not only by their own representatives but also by the court itself. See Bonds v. Joplin's Heirs, 64 N.M. 342, 344, 328 P.2d 597, 598-599. Additional precautions of course had to be taken where the rights of those minors were made subject to a contract of settlement. And when problems of interpretation arise out of such contracts, we would be very hesitant to upset the legal interpretation placed by the trial judge as to the effect and meaning of his own order. Here the injured parties asked for total damages in excess of two million dollars. The government was able to negotiate a settlement for about one-sixth of that amount with a release which, as approved by the court, failed to mention specifically a very significant participant in the incident, John M. Reilly. It is quite reasonable to infer that under these circumstances court approval was granted with the understanding that the release ran only to the United States and its agents, contractors and employees; and not to Reilly. Such an understanding is certainly reflected by the summary dismissal of the government's complaint.

The government suggests that we impose an interpretation upon the first release which would bring the appellee within the broad class of parties listed. Aside from the...