Opinion
No. 5:02-cv-3296 RS.
September 13, 2004
ORDER GRANTING THE MOTION BY THE UNITED STATES TO DISMISS AND FOR SUMMARY JUDGMENT
I. INTRODUCTION
Defendant United States of America moves to dismiss for lack of subject matter jurisdiction the claims brought by plaintiffs Emilie Antelline and Louis Scaglione ("plaintiffs") for negligence (slander of title) and violations of their constitutional rights. The United States also seeks summary judgment on plaintiffs' remaining claims on the grounds that they are barred by the applicable statutes of limitations and by the doctrines of res judicata and collateral estoppel. The motion by the United States was fully briefed and heard by the Court on August 25, 2004. In addition, the Court permitted plaintiffs to file a supplemental brief addressing solely the issue of equitable tolling of the statute of limitations. Based on all papers filed to date, the Court grants the motion for the reasons set forth below.
II. BACKGROUND
Plaintiffs, doing business as Scaglione Orchards, borrowed money in May, 1978 from the United States Department of Agriculture acting through the Farmers Home Administration ("FHA"). See Complaint at ¶ 15. At that time, a neighbor of Scaglione Orchards, the Salinas Brothers, desired to borrow money from the FHA, but was hindered by a lack of collateral. Therefore, the FHA and the Salinas Brothers approached Scaglione Orchards about the possibility of using their land as collateral to secure a loan to the Salinas Brothers. Id. at ¶ 19. In order to secure a deed of trust on the Scaglione land for use as collateral on the Salinas Brothers' loan, a partnership was created between Salinas Brothers and Scaglione Orchards, known as S S Farms. Id. at ¶ 21. Following the formation of S S Farms, the FHA lent money to Scaglione Orchards, Salinas Brothers and S S Farms, all secured by a deed of trust on Scaglione Orchards' land. Id. at ¶ 22. Plaintiffs allege that the FHA, without the knowledge or consent of Scaglione Orchards, also lent additional sums of money to Salinas Brothers, using the deed of trust as collateral.Plaintiffs contend that, as a result of the additional loans to Salinas Brothers, liens were placed on their property and they were unable to secure necessary financing and loans needed to run their business. Therefore, they filed an action to quiet title to their property against the United States in May of 1985 in this Court. That action was decided in favor of the United States in a summary judgment order issued on March 1, 1991 by Judge Williams. The judgment was affirmed by the Ninth Circuit.
The government has provided copies of both the district court's and the Ninth Circuit's decisions and requests that that the Court take judicial notice of these documents. See Exh. B to Zerger Declaration. Plaintiffs do not oppose the request. Pursuant to Fed.Evid. 201, the request is granted.
Nonetheless, plaintiffs argue that the issue of an accounting was "left open" by the courts in the prior decisions and that, therefore, they now seek an accounting against the FHA with respect to certain crop proceeds and equipment to which they claim entitlement. Specifically, plaintiffs' complaint alleges claims for relief based on: (1) accounting; (2) declaratory judgment; (3) negligence (slander of title); and, (4) civil conspiracy regarding plaintiffs' constitutional rights.
As noted above, the United States moves to dismiss plaintiffs' claims for negligence (slander of title) and conspiracy (alleged violations of their constitutional rights) based on the contention that it has not waived sovereign immunity as to either of these claims. The United States also seeks summary judgment on the basis that plaintiffs' claims are barred by the applicable statutes of limitations and by the doctrines of res judicata and collateral estoppel.
III. LEGAL STANDARDS
A. Motion to Dismiss
In ruling on a motion to dismiss, the court must accept as true all allegations of material fact and must construe those allegations in the light most favorable to the non-moving party.Western Reserve Oil Gas Co. v. New, 765 F.2d 1428, 1430 (9th Cir. 1985). Any existing ambiguities must be resolved in favor of the pleading. Walling v. Beverly Enterprises, 476 F.2d 393, 396 (9th Cir. 1973).
A complaint may be dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory or (2) insufficient facts stated under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir. 1984). In order to grant a motion to dismiss, it must appear to a certainty that a plaintiff would not be entitled to relief under any set of facts which could be proved. Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1439 (9th Cir. 1987).
B. Motion for Summary Judgment
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The purpose of summary judgment "is to isolate and dispose of factually unsupported claims or defenses." Celotex v. Catrett, 477 U.S. 317, 323-324 (1986).
The moving party "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. If he meets this burden, the moving party is then entitled to judgment as a matter of law when the non-moving party fails to make a sufficient showing on an essential element of his case with respect to which he bears the burden of proof at trial. Id. at 322-23.
The non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The non-moving party cannot defeat the moving party's properly supported motion for summary judgment simply by alleging some factual dispute between the parties. To preclude the entry of summary judgment, the non-moving party must bring forth material facts, i.e., "facts that might affect the outcome of the suit under the governing law. . . . Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 588 (1986).
The court must draw all reasonable inferences in favor of the non-moving party, including questions of credibility and of the weight to be accorded particular evidence. Masson v. New Yorker Magazine, Inc., 111 S.Ct. 2419, 2434-35 (1991) (citingAnderson, 477 U.S. at 255); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 588 (1986); T.W. Elec. Service v. Pacific Elec. Contractors, 809 F.2d 626, 630 (9th Cir. 1987). It is the court's responsibility "to determine whether the `specific facts' set forth by the nonmoving party, coupled with undisputed background or contextual facts, are such that a rational or reasonable jury might return a verdict in its favor based on that evidence." T.W. Elec. Service, 809 F.2d at 631. "[S]ummary judgment will not lie if the dispute about a material fact is `genuine,' that is if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. However, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita, 475 U.S. at 587.
IV. DISCUSSION
A. Motion to Dismiss Based on Sovereign Immunity
1. Negligence (Slander of Title) Claim
The United States correctly argues that the Court lacks jurisdiction over plaintiffs' claim for negligence, based on slander of title, since Congress has not waived sovereign immunity for tort claims against the United States arising out of slander, misrepresentation or deceit. 28 U.S.C. § 2680(h). Plaintiffs' attempt to avoid the application of Section 2680(h) to their claim by arguing that it is a tort wholly distinct from the common law tort of slander ignores the federal and California state court decisions which have held that the tort of slander of title is a subset of the general tort of slander or defamation. See e.g., Art Metal-U.S.A., Inc. v. United States, 753 F.2d 1151, 1155-1156 (D.C. Cir. 1985); United States v. Drinkwater, 434 F. Supp. 457, 462 (E.D. Va. 1977); Howard v. Schaniel, 113 Cal.App.3d 256 (1980); Fearon v. Fodera, 169 Cal. 370, 379-380 (1915). Accordingly, this claim must be dismissed with prejudice based on the doctrine of sovereign immunity.
2. Constitutional Claims
Similarly, the United States has not waived sovereign immunity for constitutional torts against the federal government and, therefore, the Court lacks jurisdiction over a claim seeking to recover damages from the United States or a federal agency for an alleged constitutional tort. See e.g., Cato v. United States, 70 F.3d 1103, 1110 (9th Cir. 1995); Rivera v. United States, 924 F.2d 948, 951 (9th Cir. 1991). Moreover, plaintiffs' untimely attempt to amend their complaint to add "Doe" defendants to support this claim must fail since, as discussed below, plaintiffs' claims for relief are barred by the statute of limitations. Therefore, plaintiffs' fourth claim for relief must be dismissed with prejudice.
Plaintiffs' motion to amend, presently scheduled for hearing on September 15, 2004, is untimely since it was noticed for hearing after the cut-off date of August 4, 2004, as ordered by the Court.
B. Motion for Summary Judgment
The United States also moves for summary judgment based on its argument that plaintiffs' remaining claims, seeking declaratory relief and an accounting, are barred by the doctrine of res judicata and the applicable statutes of limitations. Under the doctrine of res judicata, an earlier adjudication must: (1) involve the same claim as the subsequent lawsuit; (2) have reached a final judgment on the merits; and, (3) involve the same parties or their privies. Nordhorn v. Ladish Co., Inc., 9 F.3d 1402, 1404 (9th Cir. 1993). The Ninth Circuit has established the following guidelines for determining whether successive lawsuits involve the "same claim:"
(1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action;
(2) whether substantially the same evidence is presented in the two actions;
(3) whether the two suits involve infringement of the same right; and,
(4) whether the two suits arise out of the same transactional nucleus of facts.
Id. at 1405, quoting Harris v. Jacobs, 621 F.2d 341, 343 (9th Cir. 1980).
Although plaintiffs argue that their current claim for an accounting was not presented in the prior action, their contention is refuted by the record. Plaintiffs' complaint in the prior action, at ¶ 29, alleged a claim for improper accounting proceeds. Indeed, plaintiffs' argument here includes the contention that the courts "left open" the accounting issue in the prior decisions, thereby confirming that such issue had been previously presented.
Moreover, the prior action was resolved on a motion for summary judgment and the plaintiffs appealed, but lost, that decision. Finally, there is no dispute that the prior action was brought against the same entity named in this case. Accordingly, plaintiffs' claims for an accounting, and a declaratory judgment based thereon, are clearly barred by the doctrine of res judicata.
Even assuming that such doctrine did not operate to bar plaintiffs' remaining claims, the record is equally clear that such claims are time-barred. By their own admissions, plaintiffs learned of the existence of these claims in 1990. See Plaintiffs' Memorandum at p. 12. Yet they waited until over a decade later to seek relief on these claims based on their contention that they were attempting to negotiate the terms of their debt and, therefore, the statute of limitations should be equitably tolled.
In the Ninth Circuit, equitable tolling may be applied where plaintiff establishes: (1) fraudulent conduct by the defendant resulting in concealment of the operative facts; (2) failure of the plaintiff timely to discover the operative facts; and, (3) due diligence by the plaintiff leading to the discovery of those facts. Federal Election Commission v. Williams, 104 F.3d 237 (9th Cir. 1996). Plaintiffs contend that the United States kept them ignorant of the facts giving rise to their present claims until 1990. Moreover, from 1990 through June of 2001, plaintiffs assert that they were actively attempting to resolve this matter with the FSA. Although they concede that a "final" denial letter was issued on November 17, 1999, they contend that, nevertheless, the FmHA state office contacted them and asked them to resubmit their offer. Accordingly, they argue that they were "actively misled" by the defendant from filing this action, believing that their claims would be resolved through the administrative process. None of the authorities cited by plaintiffs support the contention, however, that a party may refrain from filing a lawsuit against an entity simply because that party is simultaneously negotiating with such entity, absent the existence of a fiduciary relationship; one which is not present in this action. Rather, the cases cited by plaintiffs support the proposition that, unless an agency actively misleads a claimant to believe that it is still considering an administrative claim, the agency decision is final. Woirhaye v. United States, 609 F.2d 1303, 1306 (9th Cir. 1979). Plaintiffs fail to submit any evidence that a government representative misled them into believing that their administrative claim was still pending. Therefore, the United States is entitled to summary judgment on plaintiffs' claims for an accounting and declaratory relief based on both the doctrine of res judicata as well as on the expiration of the statute of limitations.
V. CONCLUSION
For the reasons stated, the motion by the United States to dismiss and for summary judgment is granted. Based on this order, plaintiffs' motion to amend their complaint, presently set to be heard by the Court on September 15, 2004 is vacated and denied as moot.