Wilkinson v. U.S.

• Decision Date: 06 May 2009
• Docket Number: No. 08-1212.,08-1212.
• Citation: 564 F.3d 927
• Parties: Virgil WILKINSON, Charles Wilkinson, Alva Rose Hall, Wilbur D. Wilkinson, for themselves and as heirs of Ernest Wilkinson, Mollie Wilkinson, Harry Wilkinson and Virginia Wilkinson, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

564 F.3d 927

Virgil WILKINSON, Charles Wilkinson, Alva Rose Hall, Wilbur D. Wilkinson, for themselves and as heirs of Ernest Wilkinson, Mollie Wilkinson, Harry Wilkinson and Virginia Wilkinson, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.

No. 08-1212.

United States Court of Appeals, Eighth Circuit.

Submitted: November 12, 2008.

Filed: May 6, 2009.

John Samuel Koppel, argued, Mark B. Stern, on the brief, Washington, DC, for appellant.

John Mahoney, argued, Center, ND, appellees.

Before MELLOY, BOWMAN, and SMITH, Circuit Judges.

MELLOY, Circuit Judge.

The United States appeals from several of the district court's adverse holdings following a bench trial on claims against the Government under the Federal Tort Claims Act ("FTCA"). Specifically, the Government appeals the district court's holding on conversion, its award of prejudgment interest, and its determination of non-economic damages based on intentional infliction of emotional distress. We reverse with respect to liability and damages on the conversion claim and the award of prejudgment interest; we affirm the emotional-distress damages award.

I.

This case has been before us once before, and its earlier history can be found in more detail in our prior opinion, Wilkinson v. United States, 440 F.3d 970 (8th Cir. 2006). Briefly, the facts are as follows. Ernest and Mollie Wilkinson¹ owned several descendable possessory interests on allotted Indian land held in trust by the Bureau of Indian Affairs ("BIA"). During the 1970s and 1980s, the Wilkinsons mortgaged their allotments to what is now known as the Farm Service Administration ("FSA"). The Wilkinsons defaulted, and in 1990 the FSA wrote down their debt to the fair market value of the land. The Wilkinsons defaulted again and stopped making payments in 1992.

Mollie died in 1991, Ernest suffered a heart attack and a stroke in 1993, and one of their sons died in 1994. As a result, the Wilkinsons were generally unable to continue farming their land. In 1996, the FSA sent a letter to the BIA asking for aid in collecting on the Wilkinsons' debt. In response, the BIA advertised for lease bids for the Wilkinsons' land in February 1997. The Wilkinsons, however, asked the BIA not to lease the land because they intended to resume farming it that year. The BIA refused and leased out 315 of the Wilkinsons' 750 acres on five-year terms. With nearly half of their land leased against their will, the Wilkinsons abandoned their remaining land and their farm equipment.² At no point did the BIA take possession of the farm equipment or of the particular land upon which it was located.

The Wilkinsons had appealed the decision to lease their lands to the BIA's Superintendent for the Reservation, but their appeal had been denied. The Wilkinsons appealed further, and in July 1998 the Interior Board of Indian Appeals ("IBIA") concluded that the BIA lacked authority to lease the allotments. The BIA and the local superintendent ignored this ruling, however, and took no action to effectuate the IBIA's decision. In 2002, the BIA leased out the allotments again, this time for two-year terms.

The Wilkinsons sued, claiming trespass, conversion, intentional infliction of emotional distress, and wrongful death of Ernest, who had died in 1998. The district court granted summary judgment for the United States, holding that the Wilkinsons did not have standing to sue. We reversed and outlined two issues for remand: "whether the initial actions of BIA personnel, taken without legal authority, comprised a federal tort or constitutional violation, and whether those actions remained devoid of authority for the entire term of the BIA's seizure." Id. at 976 n. 6.

After a bench trial on remand, the district court held that the BIA was without authority and that it trespassed from 1997 to 2003.³ Although there was some evidence that the BIA leased the land again after 2003, the district court found that the land was not leased and that it sat idle in 2004, 2005, and 2006. The district court held, however, that the BIA's trespass continued through 2006, because even though the land may not have been leased after 2003, there was no evidence that the BIA informed the Wilkinsons of this fact, and thus it was the BIA's fault the land remained idle. The district court also determined that lands the BIA never leased were not trespassed on. The district court further held that the BIA had converted the farm equipment through its trespass on the leased farm lands and the consequent "paralyzing" of the Wilkinsons' farming operations.

The district court also held that the BIA intentionally inflicted emotional distress on the Wilkinsons through its "extreme and outrageous disregard for our government's conflict resolution system" and by its continued defiance of the IBIA and of the Wilkinsons' rights, even while seeing the "great emotional angst" the BIA's actions caused the Wilkinsons. Finally, however, the district court found that the BIA was not responsible for the death of Ernest Wilkinson.

The district court assessed damages on the successful claims and adjusted the trespass and conversion damages to "present value" by using a 5% rate of return, resulting in a sum of $232,407.⁴ The district court then reduced the total amount by $4,838 that the BIA had already paid to the Wilkinsons, resulting in a sum of $227,569 in economic damages. In determining non-economic damages for the intentional infliction of emotional distress claim, the district court awarded an additional "$232,407 for their emotional distress, an amount equal to the economic damages the Wilkinsons have endured."

II.

We note at the outset that the Government does not appeal the district court's finding that the BIA trespassed on the Wilkinsons' property. Nor does it appeal the district court's holding that the court should assess non-economic damages for intentional infliction of emotional distress. The district court's finding as to the fair rental value for the trespass is not at issue, but the Government has appealed the adjustment of that amount to present value, contending that it is a prohibited award of prejudgment interest. In addition, the Government appeals the finding of conversion of the Wilkinsons' personal property as well as the amount of noneconomic emotional-distress damages the court awarded.

A. Conversion

The district court concluded that the BIA's leasing of the Wilkinsons' allotments "had a paralyzing effect on their farming operation" and was therefore a conversion of the Wilkinsons' farming equipment. Under North Dakota law, "the trial court's determination about whether a conversion has been committed is a finding of fact." Paxton v. Wiebe, 584 N.W.2d 72, 79 (N.D.1998). We review the district court's factual findings for clear error. Fed.R.Civ.P. 52(a)(6); Chapa v. United States, 497 F.3d 883, 889 (8th Cir. 2007).

"Conversion consists of a tortious detention of personal property from the owner, or its destruction, or a wrongful exercise of dominion or control over the property inconsistent with or in defiance of the rights of the owner." Paxton, 584 N.W.2d at 78 (quotation omitted); see also Restatement (Second) of Torts § 222A(1) (1965) ("Conversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel."). North Dakota courts have long recognized that conversion does not require that the defendant assert dominion over the property for his own benefit; rather, the defendant need only interfere with the owner's interests to a sufficient degree. See, e.g., Christensen v. Farmers State Bank of Richardton, 157 N.W.2d 352, 357 (N.D.1968) ("The gist of conversion is not in acquiring the complainant's property, but in wrongfully depriving him of it ... and it is of little [relevance] that the converter received no benefit from such deprivation."). "[I]t is the degree of such interference which makes a conversion," William L. Prosser, The Nature of Conversion, 42 Cornell L.Q. 168, 172 (1956-57), and there is no conversion without "interfere[nce] with an owner's use to an actionable degree." Harwood State Bank v. Charon, 466 N.W.2d 601, 603 (N.D.1991) (emphasis added). To reach an actionable degree, the interference must be "of such a degree as to require a forced sale of the plaintiff's interest in the goods to the defendant." Dairy Dep't v. Harvey Cheese, Inc., 278 N.W.2d 137, 144 (N.D.1979).

As the underlying facts are not contested, the question before us is whether the BIA's leasing of the Wilkinsons' allotments, alone, was sufficient to constitute an "actionable degree" of interference rising to the level of a "forced sale" of the farm equipment to the BIA. The Restatement (Second) of Torts informs us that:

In determining the seriousness of the interference and the justice of requiring the actor to pay the full value, the following factors are important: (a) the extent and duration of the actor's exercise of dominion or control; (b) the actor's intent to assert a right in fact inconsistent with the other's right of control; (c) the actor's good faith; (d) the extent and duration of the resulting interference with the other's right of control; (e) the harm done to the chattel; (f) the inconvenience and expense caused to the other.

Restatement (Second) of Torts § 222A(2). Here, the BIA exercised no control over the farm equipment; the BIA did not assert any right over the farm equipment; the BIA did no harm to the farm equipment; and the BIA did not detain or directly interfere with the farm equipment, either physically or through the legal process. The inconvenience and expense caused were limited to the Wilkinsons' inability to use the equipment on the leased farm land. Even accepting the district court's conclusion that leasing half of the land "paralyzed"...