United States v. Thurber, Civ. A. No. 73-143.

• Decision Date: 22 May 1974
• Docket Number: Civ. A. No. 73-143.
• Citation: 376 F. Supp. 670
• Court: U.S. District Court — District of Vermont
• Parties: UNITED STATES of America v. Gordon L. THURBER et al.

376 F. Supp. 670

UNITED STATES of America v. Gordon L. THURBER et al.

Civ. A. No. 73-143.

United States District Court, D. Vermont.

May 22, 1974.

COPYRIGHT MATERIAL OMITTED

Jerome F. O'Neill, Asst. U. S. Atty. (George W. F. Cook, U. S. Atty., District of Vermont) for plaintiff.

Vermont Legal Aid, Inc., by Patrick R. Berg, Rutland, Vt., for defendants.

MEMORANDUM AND ORDER

HOLDEN, Chief Judge.

Plaintiff, United States of America, instituted this action to foreclose a mortgage executed by the defendants and mortgagors, Gordon L. Thurber and his former wife, Barbara A. Thurber Prentice. The Government amended their complaint to request a shortened redemption period. The defendant mortgagor, Gordon L. Thurber, admits that the plaintiff loaned him money in 1967 to build a house under section 235 of the National Housing Act; further, that there came a time when he ceased making the payments and this suit to foreclose the mortgage resulted. However, the defendant Thurber has presented a counterclaim against the Government asking for a rescission of the loan agreement between the United States of America and for damages in the amount of $5,000.00.

The defendant's counterclaim asserts these allegations: The Farmers Home Administration represented it would make periodic inspections of the construction of defendant Thurber's home. The defendant Gordon Thurber relied upon such representations as a safeguard against faulty construction. The inspections were negligently performed and, as a result of the negligent inspections, the house was constructed in a faulty manner which caused the cellar of the premises to become flooded, damaging defendant's property.

Defendants Frederick L. Fowler and Ruth Fowler are junior mortgagees. They are also named as defendants in a cross-claim asserted against them by their co-defendant Gordon Thurber. Defendants Barbara A. Thurber Prentice,¹ Beneficial Finance Company and Raymond L. Copping have not answered the Government's complaint.

The United States of America has presented a motion for summary judgment for foreclosure as to the mortgagors and the dismissal of defendant Gordon Thurber's counterclaim.

Conclusions of Law and Order

A. The Foreclosure

Both V.R.C.P. 56(c) and Fed.R.Civ.P. 56(c) provided in common:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

V.R.C.P. 80.1(c) provides that a defendant must file an affidavit disclosing facts constituting a defense to a motion for summary judgment in an action to foreclosure of a mortgage. Defendant Gordon L. Thurber has presented no defense, factual or legal,² to the petition for foreclosure. The record is clear and uncontradicted that the defendant Gordon Thurber obtained a loan from the Farmers Home Administration in the principal amount of $12,150.00. The loan was evidenced by a promissory note and secured by a mortgage. An uncontested affidavit on the record shows that the payments on this promissory note are in arrears in the principal amount of $18,022.28, with accrued interest of $2245.48.³ Since there appears to be no genuine issue as to any material fact and the defendant Gordon Thurber has presented no defense to the petition for foreclosure, the United States is entitled to summary judgment on its motion for foreclosure.

B. The Counterclaim

Ordinarily the United States of America may waive its sovereign immunity (1) by statutory consent, usually by operation of the Tucker Act, 28 U.S.C. § 1346(a)(2) et seq. (1971) or by way of the Tort Claims Act, 28 U.S.C. § 2671 et seq. (1971) or (2) by filing its complaint in a matter in which the defendant can assert matters in recoupment. In Frederick v. United States, 386 F.2d 481, 488 (5th Cir. 1967), the Court considered waiver of sovereign immunity by force of the Government's complaint:

Our conclusion is that when the sovereign sues it waives immunity as to the claims of the defendant which assert matters in recoupment — arising out of the same transaction or occurrence which is the subject matter of the government's suit, and to the extent of defeating the government's claim but not to the extent of a judgment against the government which is affirmative in the sense of involving relief different in kind or nature to that sought by the government or in the sense of exceeding the amount of the government's claims; ....

Accord, United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888 (1940).

In the instant case the counterclaim of the defendant Gordon Thurber, although compulsory under Fed.R. Civ.P. 13(a), is affirmative in the sense that it seeks relief of a different nature and subject matter than the Government's petition to foreclose the defendant's interest in the mortgaged property. As such, a waiver of immunity is required to confer jurisdiction on this court.

The counterclaim alleges misrepresentation and a negligent performance of duty owed by the plaintiff to the defendant. In either aspect, the allegations fail to assert a valid claim for rescission despite the defendants' complaint that he did not have the full benefit of his bargain. See Enequist v. Bemis, 115 Vt. 209, 212, 55 A.2d 617 (1947), reargument denied 115 Vt. 215, 56 A.2d 5. One seeking to rescind a contract must act with reasonable dispatch to return what he has received in the transaction. Howard v. Howard, 122 Vt. 27, 33, 163 A.2d 861 (1960). Ordinarily one may not enjoy the fruits of his contract and at the same time repudiate his undertaking on the ground that he was wrongfully induced to make it. Irish v. Central Vt. Ry., 164 F.2d 837, 840 (2d Cir. 1947) (appeal from D. Vt.).

In the field of torts, in certain cases the United States has waived its soverign immunity. 28 U.S.C. § 2671 et seq. Whether this is a case where immunity has been waived need not be decided. When an injury is suffered as the result of a negligent act and some damage is discernable at the time, the two year statute of limitations begins to run on a tort claim against the United States. 28 U.S.C. § 2401(b). Defendant Thurber's counterclaim makes it clear that the injury he is alleging was discernable in the spring of 1967. Defendant Thurber's counterclaim for any affirmative relief based on tortious conduct is barred by the statute of limitations. See Mendiola v. United States, 401 F.2d 695 (5th Cir. 1968).

A counterclaim against the United States otherwise barred by Section 2401(b) may be asserted by way of set-off or recoupment only if it is founded on the same transaction as the Government's claim. See Bull v. United States, 295 U.S. 247, 261, 55 S.Ct. 695, 79 L.Ed. 1421 (1935).

To the same effect, the Tucker Act, 28 U.S.C. § 1346(a)(2) provides a waiver of sovereign immunity in certain instances for contract and other civil actions. However, the Second Circuit has consistently held that under the Tucker Act no...