Vaughn v. United States, DC6552.

• Decision Date: 15 September 1966
• Docket Number: No. DC6552.,DC6552.
• Citation: 259 F. Supp. 286
• Parties: James O. VAUGHN, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Northern District of Mississippi

259 F. Supp. 286

James O. VAUGHN, Plaintiff, v. UNITED STATES of America, Defendant.

No. DC6552.

United States District Court N. D. Mississippi, Delta Division.

September 15, 1966.

Brewer, Brewer & Luckett, Clarksdale, Miss., for plaintiff.

H. M. Ray, U. S. Atty., Oxford, Miss., for defendant.

OPINION OF THE COURT

CLAYTON, Chief Judge.

Plaintiff seeks to recover damages from the United States under the Federal Tort Claims Act, 28 U.S.C. §§ 1346 (b), 2171 et seq., for personal injuries he claims were sustained on November 9, 1963, when the bucket of the dragline which he was operating as an employee of Vaughn & Black, contractors, struck a 30-inch natural gas pipeline. Plaintiff's employers had contracted with the Soil Conservation Service, United States Department of Agriculture, to construct certain channel improvements on the Beartail Creek and its tributary, Buttermilk Creek, in Tate County, Mississippi. The injury is said to have occurred while the plaintiff was working for his employers on this particular job.

A location map, consisting of five separate drawings, which was prepared by the Soil Conservation Service in 1962, was a part of the contract between Vaughn & Black and the United States. A copy of the plan and location map was attached to and made a part of the complaint. These documents showed that the gas pipeline was located to the southeast of the work area covered by the contract.

Plaintiff's only allegations of negligence¹ are in essence that the plans and drawings failed to show that the gas pipeline was within the area in which the work undertaken pursuant to this contract was to be done and in a failure on the part of defendant to advise Vaughn & Black and their employees before and in the course of construction of the actual location of said pipeline.

Defendant moved to dismiss for failure of the complaint to state a cause of action upon which relief could be granted and upon the basis that defendant has not consented to be sued upon the claims made in the complaint.

Defendant's basic theory is that the claim is bottomed on misrepresentation or negligent misrepresentation, and that such an action is excluded from the Federal Tort Claims Act by 28 U.S.C. § 2680. In response to defendant's brief advancing its theory, plaintiff argues that the action is based, not on misrepresentation, but on the negligent breach of a duty to warn of the existence of a dangerous condition.

In reply, defendant cited many cases analogous to the one at bar and in addition filed copies of the contracts and specifications and an affidavit of the project engineer showing, inter alia, that although the location of the pipeline was misrepresented on the plans, its actual location was below the lowest elevation of the planned cut, so that the sole cause of the injury was plaintiff's negligent failure to follow the plans. With these materials, defendant suggested that its motion might be treated as one for summary judgment under the provisions of Rules 12(b) and 56, Federal Rules of Civil Procedure. Accordingly, plaintiff was then given reasonable opportunity to submit evidentiary materials cognizable under Rule 56, if he desired to do so. However, no counter-affidavits or other evidentiary materials were filed by plaintiff, but he did file another brief which in effect restated his previous arguments but also suggested that plaintiff's case was entirely different from the case stated in the complaint. But with the view taken by this court with respect to the issues properly tendered, it is not necessary to consider the evidentiary materials offered by defendant, and plaintiff will have opportunity to present, for such later consideration as may be proper, the claim which is so different from the claims advanced in the complaint which is now before the court.

The Federal Tort Claims Act is a waiver of the sovereign immunity of the United States, but there are certain well defined exceptions with respect to which such waiver does not apply. In 28 U.S.C. § 2680, it is stated that:

The provisions of this chapter and section 1346(b) of this title shall not apply to * * *

(h) Any claim arising out of * * * misrepresentation, deceit, or interference with contract rights.

One of the leading cases under this exception is Jones v. United States, 207 F.2d 563 (2nd Cir. 1953) cert. denied, 347 U.S. 921, 74 S.Ct. 518, 98 L.Ed. 1075, which involved a statement issued to plaintiffs by the U. S. Geological Survey, which erroneously estimated the oil producing capacity of certain land. In reliance upon that statement, plaintiffs sold securities representing oil and gas rights in the land for less than their actual value, and later sought to recoup their loss from the government under a complaint alleging negligent misrepresentation. The court held that the exception was an absolute defense, stating that 28 U.S.C. § 2680(h) applied both to "misrepresentation" and to "deceit". It was further emphasized that "misrepresentation meant negligent misrepresentation". In National Manufacturing Company, et al. v. United States, 210 F.2d 263 (8th Cir. 1954), cert. denied, 347 U.S. 967, 74 S.Ct. 778, 98 L.Ed. 1108, where plaintiff claimed that certain government employees "carelessly and negligently disseminated misinformation respecting the course and action of the flood waters;" that "as a direct result of negligent assurances" the plaintiffs "`were misinformed'; and that the employees negligently and carelessly assured the plaintiffs that the river would not overflow." It was declared that the alleged negligent dissemination of misinformation constituted a misrepresentation within the meaning of section 2680(h) and dismissed the case against the government. Those two cases and Clark v. United States, 218 F.2d 446 (9th Cir. 1954); Miller Harness Co. v. United States, 241 F.2d 781 (2nd Cir. 1957); Anglo-American and Overseas Corp. v. United States, 242 F.2d 236 (2nd Cir. 1957) and Hall v. United States, 274 F.2d 69 (10th Cir. 1959), all of the same purport, were reviewed and approved by the Supreme Court in United States v. Neustadt, 366 U.S. 696, 81 S.Ct. 1294, 6 L.Ed.2d 614 (1961), in which the purchaser of a home, the loan for which was insured by the Federal Housing Administration, claimed that a negligent appraisal by the F. H. A. resulted in payment of more for the home than it was worth. After the purchase serious cracks had appeared in the walls and ceiling. In reviewing the aforementioned cases, the court in Neustadt, stated:

Throughout this line of decisions, the argument has been made by plaintiffs, and consistently rejected by the courts, until this case, that the bar of § 2680(h) does not apply when the gist of the claim lies in negligence underlying the inaccurate representation, i. e., when the claim is phrased as one "arising out of" negligence rather than "misrepresentation." But this argument, as was forcefully demonstrated by the Tenth Circuit in Hall v. United States, 274 F.2d 69 supra, is nothing more than an attempt to circumvent § 2680(h) by denying that it applies to negligent misrepresentation. In the Hall case, it was alleged that agents of the Department of Agriculture had negligently inspected the plaintiff's cattle and, as a result, mistakenly reported that the cattle were diseased. Relying upon that report, plaintiff sold the cattle at less than their fair value, and sought recovery from the Government of his loss on the ground that it had been caused by the negligent inspection underlying the agents' report, rather than by the report itself. The Tenth Circuit rejected the claim, stating:

"We must then look beyond the literal meaning of the language to ascertain the real cause of complaint. * * * Plaintiff's loss came about when the Government agents misrepresented the condition of the cattle, telling him they were diseased when, in fact, they were free from disease. * * * This stated a cause of action predicated on a

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