Wood v. U.S.

• Decision Date: 14 April 1992
• Docket Number: No. 91-1233,91-1233
• Citation: 961 F.2d 195
• Parties: Michael R. WOOD, Plaintiff-Appellant, v. The UNITED STATES, U.S. Customs Service, Northrop Worldwide Aircraft Services, Inc., Federal Aviation Administration, Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

Page 195

961 F.2d 195

Michael R. WOOD, Plaintiff-Appellant, v. The UNITED STATES, U.S. Customs Service, Northrop Worldwide Aircraft Services, Inc., Federal Aviation Administration, Defendants-Appellees.

No. 91-1233.

United States Court of Appeals Federal Circuit.

April 14, 1992.

Rehearing Denied July 13, 1992.

Michael R. Wood, pro se.

Constance A. Wynn, Atty., Dept. of Justice, Washington, D.C., argued, for defendants-appellees. With her on the brief were Stuart M. Gerson, Asst. Atty. Gen., Dexter W. Lehtinen, U.S. Atty., and Barbara C. Biddle, Atty.

John R. Kelso, Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., Miami, Fla., argued, for defendants-appellees, Northrop Worldwide Aircraft Services, Inc.

Before NIES, Chief Judge, MAYER, and LOURIE, Circuit Judges.

MAYER, Circuit Judge.

Michael R. Wood appeals from an order of the United States District Court for the Southern District of Florida, No. 90-1628-CIV-RYSKAMP (S.D.Fla. Jan. 8, 1991), granting the motion of the United States and Northrop Worldwide Aircraft Services, Inc., to transfer Wood's case to the United States Claims Court. We affirm. He also appeals an order transferring the case from the United States District Court for the Northern District of California to the Southern District of Florida. We dismiss that appeal.

Background

Although the facts are in dispute, for the purposes of this appeal we accept the allegations in the amended complaint as true and construe them favorably to Wood. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). The controversy arose in the aftermath of a forfeiture auction of airplanes seized by the United States Customs Service conducted by Northrop on November 5, 1986, in Miami, Florida. At the auction, Wood attempted to purchase two 1975 Piper Embraer airplanes.

According to Wood, before the auction, Richard W. Dewees, the auctioneer, and John Bolding, a Northrop employee, represented that both had current certificates of airworthiness and were cleared for operation within the United States. Twenty minutes before the sale, Bolding warranted that the airplanes would be issued Federal Aviation Administration (FAA) airworthiness certificates. And at all times, Northrop and Bolding were agents of the government.

Wood's was the highest bid ($38,000) for one of the airplanes, and he tendered a bid deposit of $5,000. One Najman Eisenman bid $37,000 for the other craft, and Wood alleges that Eisenman assigned this bid to him. Northrop refused to accept a deposit on that airplane from Wood.

On February 10, 1987, Northrop informed Wood that the FAA would not be issuing a certificate of airworthiness for the Piper on which he had made a deposit. Instead, it would issue a one-time flight certificate for export from the United States or to a facility where the aircraft would be dismantled. Northrop told Wood that he had ten days to either pay the $33,000 balance or accept a refund of his deposit. On February 19, 1987, Wood placed $33,000 in a trust fund and notified Northrop that the money would not be transferred to Northrop until FAA clearances were obtained.

In March 1987, Wood travelled to Brazil, where the planes had been assembled with American parts, to examine documents concerning their airworthiness. Wood alleges that Brazilian certificates of airworthiness had issued on the planes. With certificates of airworthiness, Wood asserts the airplanes' value is no less than $140,000 each, but without the certificates, their value is not more than $5,000 each. The FAA has not yet issued certificates of airworthiness, and Wood has not taken possession of either airplane.

On November 14, 1989, Wood filed this suit in the United States District Court for the Northern District of California. The complaint contains eighteen claims for relief, nine for each airplane. By count in the complaint, they are:

(1-2) Specific performance;

(3-4) Damages for breach of express warranty;

(5-6) Replevin;

(7-8) Declaratory relief as to ownership of the airplanes;

(9-10) Declaratory relief as to the airworthiness of the airplanes;

(11-12) Quiet title;

(13-14) Damages under the Federal Tort Claims Act for negligence of the Customs Service and Northrop;

(15-16) Damages under the Federal Tort Claims Act for negligence of FAA; and

(17-18) Conversion.

The United States and Northrop jointly moved to transfer the case to the more convenient Southern District of Florida. The motion was granted on July 15, 1990. They then moved separately that the Southern District of Florida court transfer the case to the Claims Court because of the absence of subject matter jurisdiction. The court granted their motions on January 8, 1991, stating:

In the instant case, plaintiff attempts to characterize his claim as a tort claim for negligence. As is evident from the complaint, plaintiff's claim is based upon a contract in which defendants allegedly agreed to sell two Piper airplanes to plaintiff. Where the claim is essentially for breach of contract and the liability depends on the government's alleged promise, jurisdiction is based on the Tucker Act not on the Federal Tort Claims Act. Woodbury v. United States, 313 F.2d 291, 296 (9th Cir.1963).

Under authority of 28 U.S.C. § 1292(d)(4)(A) (1988), Wood appeals the order of transfer to the Claims Court as well as the transfer from California to the Southern District of Florida.

Discussion

I.

Section 1292(d)(4)(A) was enacted in 1988 to provide for appellate review of transfers between the federal district courts and the Claims Court. These transfers are inevitable because of the confusing split jurisdiction over claims against the United States based on the Constitution, federal statutes and regulations, and contracts with the United States: the Claims Court has jurisdiction over all such claims, 28 U.S.C. § 1491(a)(1), while the district courts have concurrent jurisdiction over claims for $10,000 or less, id. § 1346(a)(2), and exclusive jurisdiction over tort claims for any amount if they fall within the Federal Tort Claims Act, id. § 1346(b).

Before 1988, transfers from the district courts to the Claims Court were unappealable as interlocutory orders. Therefore, the transfer order would be reviewable only after a final judgment issued. This was considered to be wasteful of judicial resources if the appellate court ultimately concluded the trial court lacked jurisdiction. See Commentary on 1988 Revision, following 28 U.S.C.A. § 1292 (West Supp.1991). Section 1292(d)(4)(A) solves this problem by providing for immediate review of transfer orders in this court The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction of an appeal from an interlocutory order of a district court of the United States, the District Court of Guam, the District Court of the Virgin Islands, or the District Court for the Northern Mariana Islands, granting or denying, in whole or in part, a motion to transfer an action to the United States Claims Court under section 1631 of this title.

II.

Wood alleges that defendants breached their express warranty that the airplanes would have FAA certificates of airworthiness, and requests damages and specific performance. These claims clearly are contractual. He also sues for the negligence of the United States and Northrop under the Federal Tort Claims Act, for replevin, and for conversion of personal property. These claims arise from the same facts as the contractual claims and in fact, are mere surplusage to the primary claim for breach of contract.

"If contractual relations exist, the fact that the alleged breach is also tortious does not foreclose Tucker Act jurisdiction." Fountain v. United States, 192 Ct.Cl. 495, 427 F.2d 759, 761 (1970). If an action arises "primarily from a contractual undertaking," jurisdiction lies in the Claims Court "regardless of the fact that the loss resulted from the negligent manner in which defendant performed its contract." San Carlos Irrigation and Drainage Dist. v. United States, 877 F.2d 957, 960 (Fed.Cir.1989) (quoting H.F. Allen Orchards v. United States, 749 F.2d 1571, 1576 (Fed.Cir.1984)). Thus, since the primary thrust of Wood's complaint is breach of contract, even if a negligence cause would lie, the Claims Court would retain jurisdiction over the suit. By merely adding a negligence count to his contract action, he does not escape the Tucker Act. Olin Jones Sand Co. v. United States, 225 Ct.Cl. 741, 745 (1980) ("Where ... a claim is based on breach of contract it is properly within the jurisdiction of this court even though it also alleges that defendant engaged in tortious conduct in breaching the contract.")

Wood's attempt to align his case with Love v. United States, 871 F.2d 1488 (9th Cir.1989), is in vain. In Love, a contract was only an "underlying element of the tort," id. at 1493, while here, the alleged contract establishes the cause of action. Our case is more akin to Woodbury v. United States, 313 F.2d 291, 295 (9th Cir.1963):

Many breaches of contract can also be treated as torts. But in cases such as this, where the "tort" complained of is based entirely upon breach by the government of a promise made by it in a contract, so that the claim is in substance a breach of contract claim, and only incidentally and conceptually also a tort claim, we do not think that the common law or local state law right to "waive the breach and sue in tort" brings the case within the Federal Tort Claims Act.

This is precisely what we have; Wood's primary complaint is that the government and Northrop promised to provide a certificate of airworthiness and reneged. The other claims flow from this broken promise. Because Wood's claim is "essentially for breach of a contractual undertaking, and the liability, if any, depends wholly upon the government's alleged promise, the action must be under the Tucker Act, and cannot be under the Federal Tort Claims Act." Id. at...