Wittmann v. US, 4:93cv2024JCH.

• Decision Date: 23 August 1994
• Docket Number: No. 4:93cv2024JCH.,4:93cv2024JCH.
• Citation: 869 F. Supp. 726
• Parties: William WITTMANN, Plaintiff, v. UNITED STATES of America, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

869 F. Supp. 726

William WITTMANN, Plaintiff, v. UNITED STATES of America, et al., Defendants.

No. 4:93cv2024JCH.

United States District Court, E.D. Missouri, Eastern Division.

August 23, 1994.

Charles Oldham, St. Louis, MO, for plaintiff.

Tamera Fine-Trail, U.S. Dept. of Justice, Washington, DC, for defendants.

MEMORANDUM AND ORDER

HAMILTON, District Judge.

This matter is before the Court pursuant to Plaintiff's Motion for Preliminary Injunction; the federal Defendants' Motion to Dismiss Plaintiff's original Complaint, and Motion to Dismiss Plaintiff's First Amended Complaint; and the United States' Motion for Substitution.

Plaintiff William Wittmann is a Missouri resident. He purchased certain real property for $45,000 at a tax sale on March 31, 1993. The property, formerly owned by delinquent taxpayers Mark and Cindy Mirth, is located at 1380 Leisure Drive, St. Louis, Missouri. Mr. Wittmann alleges that Defendant Debra Dufek, an employee of the Internal Revenue Service (IRS), misrepresented to him that a second deed of trust on the property had been discharged in bankruptcy. Specifically, Ms. Dufek supposedly advised potential bidders orally and in writing that bankruptcy trustee Joel Kuhin had informed her that a second deed of trust had been discharged and that he would be willing to provide a deed of release. In fact, the second deed of trust had not been discharged. Plaintiff asserts that he would not have paid $45,000 for the property had he known this fact. Plaintiff made a written demand on the IRS that the tax sale be set aside and the purchase price refunded. IRS employee Glenda Rice denied his request for relief.

Plaintiff filed his Complaint to Rescind Tax Sale and for a Preliminary and Permanent Injunction on September 13, 1993. On January 3, 1994, Plaintiff was granted leave to file a First Amended Complaint. He names as Defendants Ms. Dufek and Ms. Rice; Ralph Shilling, Director of the St. Louis District of the IRS; Lloyd Bentsen, Secretary of the Treasury; the United States of America; and Mark and Cindy Mirth. Mr. Shilling, Ms. Rice, and Ms. Dufek are sued in their individual and official capacities. Mr. Bentsen is sued only in his official capacity. Nowhere in the First Amended Complaint does Plaintiff allege any personal involvement by Defendants Bentsen or Shilling in the tax sale. He merely asserts that Mr. Bentsen and Mr. Shilling supervise IRS activities in St. Louis.

Plaintiff's First Amended Complaint is in two counts. In Count I, Plaintiff seeks relief from the United States under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., for the negligence of its IRS officers.¹ In Count II, pleaded in the alternative, Plaintiff asserts a Fifth Amendment claim against Defendants Dufek, Rice, and Shilling in their individual capacities for taking his property without just compensation. See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). Plaintiff requests an injunction directing Defendants to rescind the tax sale and refund his $45,000, and compensatory and punitive damages.

The Court notes preliminary that Defendants Mark and Cindy Mirth have never been served with the original Complaint or the First Amended Complaint. Nor does Plaintiff even appear to assert a cause of action against the Mirths. Rule 4(m) of the Federal Rules of Civil Procedure requires that an action be dismissed for failure to serve within 120 days, absent good cause. Fed.R.Civ.P. 4(m). The Court will order Plaintiff to show cause within ten (10) days of the date of this Memorandum and Order why his claims against the Mirths should not be dismissed for failure to serve.

PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

At the time Plaintiff filed this lawsuit, he requested a preliminary injunction enjoining Defendants from distributing the proceeds of the disputed tax sale. The IRS voluntarily agreed not to distribute the sale proceeds until the case is resolved. (Defts' brief in support of Motion to Dismiss First Amended Complaint, at 8 n. 2). Therefore the Motion for Preliminary Injunction is moot.

DEFENDANTS' MOTION TO DISMISS ORIGINAL COMPLAINT

Because Plaintiff was granted leave to file a First Amended Complaint, the federal Defendants' Motion to Dismiss Plaintiff's original Complaint is moot.

DEFENDANTS' MOTION TO DISMISS FIRST AMENDED COMPLAINT

The federal Defendants make the following arguments in support of their Motion to Dismiss Plaintiff's First Amended Complaint: 1) the Court lacks personal jurisdiction over Lloyd Bentsen, 2) the Anti-Injunction Act bars injunctive relief, 3) the Court lacks subject matter jurisdiction, 4) the First Amended Complaint fails to state a claim, 5) Plaintiff's Bivens claim is barred by alternate remedies, 6) the individual federal Defendants are entitled to qualified immunity, 7) Plaintiff is not entitled to attorney's fees, and 8) an award of interest is barred by the doctrine of sovereign immunity. The Court need only address Defendants' third and fourth grounds for dismissing Plaintiff's claims against them.

Lack of Subject Matter Jurisdiction

Defendants move to dismiss Count I for lack of subject matter jurisdiction, presumably pursuant to Federal Rule of Civil Procedure 12(b)(1). A motion to dismiss under Rule 12(b)(1) may challenge either the facial sufficiency or the factual truthfulness of the plaintiff's jurisdictional allegations. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). When passing on a facial challenge, a court must presume that all of the plaintiff's jurisdictional allegations are true. Id. The motion must be granted if the plaintiff has failed to allege a necessary element supporting jurisdiction. Id. A court confronted with a factual challenge must weigh the conflicting evidence concerning jurisdiction, without presuming the truthfulness of the plaintiff's allegations. Land v. Dollar, 330 U.S. 731, 735 n. 4, 67 S.Ct. 1009, 1011 n. 4, 91 L.Ed. 1209 (1947); Osborn v. U.S., 918 F.2d 724, 730 (8th Cir.1990). Defendants in the present case challenge Plaintiff's jurisdictional allegations on their face.

The doctrine of sovereign immunity bars any suit against the United States, its agencies, or its officers acting in their official capacities, unless Congress has specifically consented to waive such immunity. U.S. v. Baden Plaza Associates, 826 F.Supp. 294, 297 (E.D.Mo.1993); 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1212 (1990); 14 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure §§ 3654, 3655 (1985). Without a statutory waiver of sovereign immunity, this Court has no jurisdiction over Count I of Plaintiff's First Amended Complaint. U.S. v. Johnson, 853 F.2d 619, 622 n. 7 (8th Cir.1988).

Section 1346(b) of Title 28, United States Code, gives the district courts jurisdiction and waives the government's sovereign immunity as to Federal Tort Claims Act claims.² 28 U.S.C. § 1346(b). The Federal Tort Claims Act (FTCA) subjects the United States to tort liability to the same extent as a private individual, with several notable exceptions. 28 U.S.C. §§ 2674, 2680. One of the exceptions for which Congress refused to waive sovereign immunity is the tort of misrepresentation. 28 U.S.C. § 2680(h). The term "misrepresentation," as used in § 2680(h), refers to an intentional or negligent breach of "the duty to use due care in obtaining and communicating information upon which a party may reasonably be expected to rely in the conduct of his economic affairs...." U.S. v. Neustadt, 366 U.S. 696, 706, 81 S.Ct. 1294, 1300, 6 L.Ed.2d 614 (1961).

Plaintiff alleges that Defendant Debra Dufek "negligently and carelessly provided written information concerning prior liens," and that she orally advised potential bidders that the second deed of trust had been discharged, when in fact that information was false. (First Am.Compl., ¶¶ 13-14). In his responsive brief, Plaintiff explicitly characterizes Count I as a misrepresentation claim. (Pltf's Mem. in Opp. to Defts' Mtn. to Dismiss, at 6). Instead of attempting to distinguish his FTCA claim from a traditional misrepresentation claim, Plaintiff asserts without any authority that § 2680(h) "exempts from the waiver of immunity any action based on misrepresentation (related to the collection or, sic assessment of taxes or detention of property)." (Id). He then argues that Ms. Dufek's misrepresentations did not relate to the collection or assessment of taxes.

As the cases demonstrate, § 2680(h) applies to all misrepresentation claims, not merely those related to tax collection or assessment. See, e.g. Neustadt, 366 U.S. 696, 81 S.Ct. 1294 (United States immune from home purchaser's claim for negligent inspection and appraisal by Federal Housing Administration); Farmers State Sav. Bank v. Farmers Home Admin., 891 F.2d 200 (8th Cir.1989) (FTCA bars bank's claim against Farmers Home Administration for misrepresenting that it would make loan to bank customers); City & County of San Francisco v. U.S., 615 F.2d 498 (9th Cir.1980) (FTCA precludes claim by unsuccessful bidders on lease of naval property that Navy failed to correct false statements by the successful bidder); Scanwell Laboratories, Inc. v. Thomas, 521 F.2d 941 (D.C.Cir.1975) (United States immune from claim that unsuccessful bidders on federal contract relied on Federal Aviation Administration's representations when preparing their bid), cert. denied, 425 U.S. 910, 96 S.Ct. 1507, 47 L.Ed.2d 761 (1976); United States v. Baden Plaza Associates, 826 F.Supp. 294 (E.D.Mo.1993) (FTCA barred housing developers's claim that it borrowed money in reliance on misrepresentations by the Department of Housing and Urban Development that certain housing subsidies would be available). Count I of Plaintiff's First Amended Complaint clearly asserts a misrepresentation claim, as to which the United States is immune. Therefore the Court...