Builders Corporation of America, a Corporation, and Herlong Sierra Homes, Inc., a Corporation v. United States

FEE, DENMAN, Before POPE and Judges. Circuit FEE, Judge. JAMES ALGER Circuit whereby This is an action Builders Corporation Herlong of America1and Homes, Inc.,2 Sierra which built series dwelling adjacent houses to Sierra- Depot,3 military installation, Ordnance points in an isolated location far from development, of urban personnel Depot, and civilian damaged by claimed to have been negligence agents acts certain States, who, contrary the United or ders, prevented from oc dwellings.4 cupying Judgment against Builders and Homes was entered by the trial court after a motion to dis appeal miss had been sustained.5 This followed.

The sole is whether the mo- tion to dismiss have should been sustain- ed developed facts should been further judgment before entered. allegations sets out which are here summarized. through government, Depart- Defense, operates ment of the Sierra- Depot Ordnance ain desolate and isolated region of California. officers in charge thereof are of the United Housing States. Federal Adminis- tration under authorized federal law mortgages housing insure built for rent for residential use for civilian brought pro- 1. Hereinafter called “Builders.” This action was under the visions the Federal Tort Claims Act. “Herlong.” 2. Hereinafter referred to as 1346(b), seq. §§ 28 U.S.C.A. 2671 et “Depot.” Designated herein Corporation Builders America v. States, D.C., F.Supp. Housing or Fed- Administration Federal Federal military personnel. The and Housing Mortgage Association. National eral a constituent Administration Commanding the Sixth Housing General of Finance agency Home Army, by positive orders different government. three It Agency federal Commanding housing Officerof the con- Sierra- encourages improvements in Depot, a coordi- Ordnance directed that system mutual provides a ditions and aggressive program (the de- nated and mortgage hous- rental Where insurance. developed alleged) be tails which enterprise on ing by or private is built dwelling occupation mortgage to attain of the full reservations, military near may Notwithstanding Housing houses so constructed. Federal be insured Commanding Secretary fact Officer of that the only when the Administration government agents Depot and other designee cer- his shall of Defense or knew there were available ten- necessary provide ade- that tified it ants in virtue of the isolated situation of housing personnel, that quate plaintiffs the base and re- would be part permanent of the installation is quired money spend payments in the Establishment, Military there and mortgages, operation taxes and and activi- intention curtail is no they property, maintenance of the did Federal at installation. ties not follow these directions. direct- It Mortgage fed- ais National Association ly alleged government agents, that these effecting agency these which aids in eral purposes by damaging plaintiffs, “with intention secondary mar- providing deliberately, intentionally, wilfully and mortgages approved or for insured ket carry failed and refused to the orders Housing Administration. the Federal issued as aforesaid and failed and refus- Because location of isolated implement any program ed to initiate or Depot, Department Sierra-Ordnance occupancy to assure maximum of the temporary of Defense had constructed dwelling by plaintiffs; units constructed housing person- military and for civilian failed and refused to establish income there, inadequate. had become nel which occupy for those limitations who were to Department into entered Defense operated by the houses owned and the de- Housing negotiations the Federal fendant, America, United States agen- federal Administration and other Depot; of the fail- Sierra-Ordnance insuring finance, by cies and to obtain any ed and refused to take action to mortgages thereon, the construction of any temporary demolish of the and sub- dwelling adequately houses to house housing; standard and failed and personnel The Secre- mentioned. above specified fused to notices issue to those Army require- tary of the certified in said orders to vacate hous- also certified above mentioned and ments ing day Septem- not later than the 1st expected that the occupy who were ber, 1954.” dwelling these units would proposed. capable paying up rentals It is further set that these Housing Administration, government, Federal purpose of the for certification, agreed delaying insure preventing and mil- civilian dwelling mortgages on these units. itary personnel occupying from these dwelling houses to circumvent the Plaintiffs, thereupon, relying recited, orders and directives above made rulings Department administrative Commanding false statements Gen- and the commitment of of Defense Housing Army, eral of the Federal Sixth Housing to in- Administration Federal Housing mortgages, Administration and and Home undertook to con- sure concerning Company, dwelling Finance structural houses. The dwell- these struct houses, charged defects in these ing and were all houses were constructed August, improperly occupancy by plaintiffs ready constructed alleged negotiated mortgages privately further were same. “acting ¿gents government, purchased by within insured and were advantage employ- authority prospective falls scope ence with a their statutory exception. ment, by and within the The trial intimidation threats and held, however, authority court applied vested in them that the abuse of the respective positions, as to count their one. virtue sought prevent preclude and did ground There is another personnel from said and civilian argued before which was this Court but moving dwelling con- units into said presented in the of the Dis- up by plaintiffs.” set Plaintiffs structed expressly trict Court. The excludes Act they were income and lost rental coverage torts mis- of deceit and damaged three a sum over otherwise in representation.8 It is claimed that both dollars. million negli- upon counts are based willful or gent misrepresentation of where the There is a second cause action condition of dwelling alleged, personnel, these the of a similar of is but units the state facts to government agents preventing occupying thus to acted them are said have from failing carelessly negligently opinion these and to units. This is of gist carry complaint that the phase of the orders and directives the as to out making any event, the is different. the false as to In statements holding nearly dwelling of of the houses. the trial is construction court more analysis. accurate in interposed on A to motion dismiss was grounds: complaint (1) two the that two, As to count the trial held court action, (2) to of failed state a cause upon that no was claim stated which jurisdiction the over court lacked granted. lief could be The basis of this subject the matter action under of the ruling negligence charged, was that the Tort Claims Act. duty upon part but that no the the upon predicated States could be The count as first alleged. the facts goes ground complaint of the the by Congress, Act, did not the Tort Claims The trial court did the not consider immunity surrender the traditional of question of whether facts recited the the United States from certain suit complaint showed the action specific areas there one of outlined. In by discretionary was barred function these, recovery no can be had for the exception, since dis- matter had been rights.6 tort of interference with contract upon grounds posed of above recited. The trial court held that the law of Cal validity position The of the of the trial applied. position ifornia agree.7 With this we question- court as to count one cannot be analysis law of that ed, once it that there is admitted clearly state indicates interfer both attempt by pleader to state a cause rights ence of contract and interference upon of action based in tort interference prospective advantage depend upon with rights with actual contract with members principles. the same There is doubt no Depot. of the analysis of the trial court thorough ground If correct. the claim of chosen the trial court plaintiffs upon alleged jurisdiction is based will was that there was no government agents allegations ful interference of the count one because the stated with the actual rental a claim for the tort of contracts with interference with rights. military personnel, civilian and An it must contract in the Act may exempts liability fail. There be doubt that interfer- from provisions chapter “The of this & Insurance Co. v. United 1346(b) section of this 1 L.Ed.2d title not 77 S.Ct. shall * * (cid:127) apply Any (h) to— claim aris- chapter provisions of this “The and sec- * * * ing out of interference with 1346(b) apply tion this title shall not rights.” contract 28 U.S.C.A. § 2680. * * * (h) Any arising to— claim out * * * misrepresentation Sutro, 7. United States v. [and] 235 F. de- * * Bonding 2d 500. Cf. § Massachussetts 28 U.S.C.A. ceit *.” justification, but him interference, seen. afford self we have damaging plaintiff. power is the factor to rather gist But the to agents refused failed any event, which the cause of action govern- obligations perform plaintiffs attempt fall to state does of contracts virtue ment had assumed in statutory exceptions. within either of the agencies. and commitments of other two, As to based count which is charge against negligence the same alleges misrepresenta- duty agents, no found trial court personnel as to made tions were infringed owing plaintiffs dwelling houses. the condition of the acts or omissions of the explanation adequate There is government. have allegations. purpose seems repre- negative may duty plaintiffs a defense. Whether a been of- the condition sentations as dwelling be found on the alleged carry been ficers to houses orders out received alleged Department Defense, made false. these were issued falsity, knowledge agencies, agents, carry of other commitments * * * jus- purpose of, presented. “for raises a never the sole before * * * attorneys government tifying disobedience of con- their for the However, plain that, existed, the duty that orders.” it is tend if such a it misrepresentations the do not constitute owed the United and not States gravamen claims, plaintiffs. the but of of either alleged arbitrary action rather the unjustified immunity The removal of the bar by a disobedience sovereign given from the has tremendous purpose of commander of orders for the scope to suits of this under the character disregard injuring plaintiffs of com- duty primarily Act. Even where the is government. mitments the sovereign, duty in- owed to the a injured dividual is at times established resulting failure The loss recognized a the courts. If the state pay rental personnel to move into and general requiring doctrine due care dwellings only minor is a dealings individuals, between the United damages alleged for the of the bases though liable, has States been held even allegations make clear claimed. particular parallel occurrence had no properly defendants the failure of these dealings private parties.9 in Likewise, between carry made commitments out the government has where officer government obligations assumed perform duty statutory commenced to agencies through its or States, he has been held prop- value of the loss in the resulted in a duty per- same a third toward erty. as if he had son been a volunteer.10 allegations with the taken If be these governmental responsi- In the area Commanding knowledge Officer agents, bility of its law for the acts post con- almost absolute legislation of such a has This is of flux. in state living field, abolishing on the trol over the heralded maxim,11 medieval King wrong,” misrepresentation may can “The do no plain that is it 48; Incorporated, Rayonier, Seafood Co. v. United v. United Somerset 9. See States, 374, 315, States, 4 193 F.2d 631. 1 77 S.Ct. L. 352 Lines, Inc., 354; Eastern Air Ed.2d peccare.” King potest “non Le 11. The U.S.App.D.C. Company, 95 Trust Union Gards, Court 2 Case le Rolle Grand 62, 75, per 189, affirmed curiam Eng.Rep. 809, 294, 304, 81 815. Case nom., United States v. Union Trust sub 32, LXXXIV, 2 Jac. 7 Co. the case of 192, 907, Co., S.Ct. L. 350 U.S. King, Perogative, Tenant in Tail. Ed. Eng.Rep. Pardon, Tail, Judges, 224, Towing Co. v. United Indian 76 S.Ct. 100 L.Ed. 350 U.S.

77X government. respect But to modern it seems that the courts are bound vastly Recently, interpretation en to find facts, has whether the actual larged pleaded sphere responsibility “facts,” bring the cause within government. field, sub where statute no. unsettled, advisable stantive is law it position the announced Of- be to hold should not fice of Attorney General cases absolutely held without it is merit unless against disposed will be clear that no cause action could of on the merits rather than on technical given facts,12 especially stated the actual interpretations pleadings. Here, statutory relied where a however, a motion to dismiss was relied upon. upon as if the Federal Rules Civil Pro- cedure, 28 danger sustaining adopt- U.S.C.A. had never been a motion ed. Tort dismiss to under the beautifully Claims illustrated Act is spirit of the Rules is that Towing Company case. There Indian requirements technical are abolished and light the claim was the failure of a judgments founded facts and navigation was maintained as aid not on formalistic defects. con Pretrial negligence due to the of members of ferences carry have been authorized to maintaining servic- Coast Guard objectives. Controlled dis ing light grounded whereby tug covery proper expand admissions can cargo on her wetted. The tow was the field of established fact. District Court sustained a motion Complete acceptance of this doctrine Appeals dismiss.13 The and, need not truth, eliminate in does Towing not Fifth Circuit affirmed. Indian eliminate the formulation of issue ac- States, Cir., F.2d Co. 5 211 pleading. But, curate present under the Supreme 886. Court of the United Rules, pleadings present the must at equally States first divided affirmed a least semblance of the truth. The doc- court, 575, 902, 349 U.S. 75 L.Ed. S.Ct. 99 complaint trine that a should reargu- state a 1239, then restored case cause action has not been discarded. ment, 926, 769, 349 U.S. L.Ed. 75 S.Ct. 99 disposition But the rule such man- Finally, by decision, 1257. five to four complaint ner that no claim, can state a judgment Appeals of the facts, whatever has vanished. was there reversed and the cause great this emphasis case must be laid manded to the District Court for further upon that, the obvious fact if we view proceedings, 122, 61, 350 U.S. 76 S.Ct. this as filed an individual 100 L.Ed. 48. against another defendant, individual as emphasis Great has been laid a cause of action under the law of Cali- rule that the clauses of this statute cir- fornia, impregnable against motion to jurisdiction. cumscribe field dismiss, statutory excep- is stated. The basis of the doctrine is that the enact- tions should be therefore treated as af- derogation ment is in of the common law. firmative defenses to be determined subject The United States cannot be the facts. of suit unless the cause falls within the laid is boundaries down. No It doubt this true motion to dismiss principle applies pleading pleader can still be sustained where the is compelled by applied. certain clearcut facts cases can be to base the com- Cir., 288, reading 5 courts Other have dealt with motions 296. “A * * * [act] dismiss unsettled areas law indicates the neces sity having Tort the facts before under Act. the court Claims “In the proper ruling application for a relatively on the fluid and uncertain Spohn States, D.C., the Act.” v. United law, certainly of the this is state 240, 16 F.R.D. dispose case on motion to dismiss complaint.” Opinion Fair apparently unreported. v. United theory sphere plaint upon an unmistakable universal. action is attorneys times The A motion dismiss is at obstacles for the of the action. government fly properly claims under the can in from all directions sustained to theory. is if to abolish the Tort Claims Act the basis thereof These circum- il An stances motivated of the unmistakable unsustainable. example pretrial Fish court as to whether a lustrative is Mid Central conference F.Supp. might States, D.C., 112 have been Co. v. United held. nom., Manu National affirmed sub knowing We have no means of what facturing States, 8 Co. v. United say con- the California courts would if 210 F.2d 967, certiorari denied fronted are with a situation which we How 98 L.Ed. 74 S.Ct. private person about to outline. A owned ever, been the entire area theretofore great manufacturing plant on a desert by pretrial confer defined and delimited isle, communication, isolated from where cases, where ences and orders in other employed. He hundreds of men were arranged judgments trial.15 had followed after millions with another invest housing there, upon the affirmations repre- inquired of When court employees all these would be driven why government sentatives of the existing housing and thus would pretrial held, answer conference was dwellings in obtain the new units. unnecessary. procedure was housing prepared other built arguments super- group to receive tenants. A jurisdiction to were had no court visory employees factory owner, (1) count the action because entertain acting authority, scope within the of their of interference constituted a claim one contrary cause and to the orders without gist rights (2) that the contract owner, employees told misrepresentation. of both counts they they would be fired if went into proposi- complete answer to both housing. new As a result the investment say impossible tions is that it housing was a total loss. in the as- the face of the alleged here As whether the facts sumptions one true. Much less is in con- could found an action in tort or facts, say that, if one knew the able to subsidiary inor tort with a basis tract granted judgment could be thereon. no contract, expressed. opinion If a in ordinary in an ac- It is to noted that be pleaded, it of in contract is cause action private party a tion defenses such might jurisdiction well be within the necessarily be in the answer. would Therefore, any in Court. District nega- plaintiff must mere accident that event, judgment of dismissal should grounds complaint. in the tive prejudice. without have been circumstances, problem cannot be remains whether it But the Under complaint complaint of action does not state stated a cause said that the If the court that the or a cause suit. law sufficient so claim under California allega- dealing Supreme rec with and not Court would were facts United States government.16 against tions, ognize In clarified. the matter would be it 15. Clark 14. Fire v. United 342. States, subsequently Supp. 213. Clark v. United For other pretrial Insurance holdings States, D.C., 9 v. United Cir., States, Cir., procedure, affirmed Clark v. eases 218 F.2d in Co. of States, 9 the Clark States, D.C., indicating 111 see 446, F.Supp. 899, D.C., 232 F.2d 511. Fidelity-Phenix New and Tillman ease were 13 the value York 109 F.R.D. United af- F. v. 16. The v. United firmed sub if liability Cf. “make the United States tions U.S. F.2d onier, [state] Archer v. United 315, 548, under similar circumstances.” Incorporated, provisions 318, States, nom., private persons * * * 77 Preferred Insurance S.Ct. 9 v. United Cir., States, 374, 376, law Tort liable 222 F.2d 942. would 9 Claims 1 L.Ed.2d Cir., 217 corpora- * ^[*] impose Ray- Act 352 Co. ^[*]

773 again expressed complaint m frank dis- alone was with conferences Pretrial 45, Conley Gibson, 41, 78 S.Ct. 355 U.S. closures give 99, 102, appraising the probably 2 L.Ed.2d 80: “In plaintiffs would well as follow, sufficiency judgment. we and for for trial firmer basis course, accepted rule that a Reversed. failure to should dismissed for not be beyond appears state a claim unless it Judge (concurring). POPE, Circuit plaintiff prove no set can doubt that about I some reservations While support facts in of his claim suggestion court’s in the 1 would entitle him to relief.” statutory exceptions “treated be should defenses”, yet I hearti- am as affirmative constantly expanding In area of Judge ly state- FEE’S in accord appear the Tort Claims Act it would spirit is that Rules ment: “The Supreme trying to follow Court is requirements are abolished technical spirit giving a liberal in- it Act judgments facts and founded on be terpretation. case, if facts In this I think formalistic defects.” not on fully developed may we find a cause importance, field where in a case of this Supreme of action which will Court ought unsettled, law remains any exception hold Act. not within dis- disposed motion to a mere me Let illustrate. One assert- develop opportunity what miss without ed here is “h” that under subdivision precise facts are. relating “any 2680 of Title 28 claim § * * * Kennedy point v. Silas is the arising That out of interference 1031, Co., 68 334 U.S. S.Ct. Mason rights.” Supreme with contract If the followed L.Ed. This court tendency Court follows the indicated Fisheries v. American case in Pacific give opinion may the court’s it well Mullaney, exception a strict construction. noting case, it was Mason the Silas plaintiff, case, Ias understand the one, Supreme important government employees no contracts with dispose motion for of it fused base, on the but he did have certain le- notwithstanding summary judgment gally recognizable rights which in ordi- technically may correct. have been motion nary subject cases are to enforcement or (334 page at Said Court: protection. plaintiff What the had here 1034) page “No conclusion at right negotiate S.Ct. leases; was a prudently rested on should such a case right customers; right seek of ex- Also, factual foundation.” an indefinite dealings pectation of business with those page page 257, (334 68 S.Ct. at U.S. at strictly people. speaking This was not good 1034): consider it the “We right a contract because no such contracts judicial deci- administration to withhold made. had been See our questions ultimate involved sion Westover, Beacon Theatres v. 252 F.2d record shall until this or another this case 866, discussing “right so [to] findings a more solid basis negotiate”. Tortious conduct destructive litigation comprehensive or on a on based “right negotiate” appellant’s agreed facts.” statement may something well be tenants not with- exception relating case in the stated of the Silas Mason to “con- The attitude rights”. rulings sufficiency tract based toward only Dioguardi Durning, complaint, reeled to the face of the 1. The court cited ju- “It and that here is another would instance 775: enough long seem, however, dicial which in run has stated haste makes that he motion, mere formal di- waste.” to withstand

Case Details

Case Name: Builders Corporation of America, a Corporation, and Herlong Sierra Homes, Inc., a Corporation v. United States

Court Name: Court of Appeals for the Ninth Circuit

Date Published: May 6, 1958

Citation: 259 F.2d 766

Docket Number: 15533_1

Court Abbreviation: 9th Cir.