Opinion
CIVIL ACTION NO. 1:02-CV-2461-BBM
August 6, 2003
ORDER
This action is before the court on the motion by defendants the United States of America and unnamed officers and employees of the United States (hereinafter collectively referred to as the "defendants") to dismiss the plaintiff's amended complaint [Doc. No. 31-1] and the motion by plaintiff Hirsch Friedman (hereinafter "Mr. Friedman" or the "plaintiff") "to enforce settlement agreement or rescind same" [Doc. No. 33-1]. Factual and Procedural Background
The instant action was filed by Mr. Friedman on September 5, 2002. The essence of the complaint filed on such date (hereinafter the "Original Complaint") was that the United States, by and through the actions of certain employees of the United States Department of Veterans Affairs (hereinafter the "DVA") and the United States Internal Revenue Service (hereinafter the "IRS"), breached a settlement agreement Mr. Friedman had entered into with the DVA. According to this settlement agreement (hereinafter the "Settlement Agreement"), a copy of which was attached to the Original Complaint, Mr. Friedman was to receive $200,000.00 (hereinafter the "Settlement Amount") "in full settlement and satisfaction" of certain claims for personal injury Mr. Friedman had asserted against the DVA arising out of treatment he received at a DVA-administered hospital. According to the Original Complaint, the IRS assessed a jeopardy levy on the check representing such funds (hereinafter the "Settlement Check"), notwithstanding a provision in the Settlement Agreement which stated that the Settlement Amount was "without set off or claim of any nature thereon by, the United States of America, its agents, servants and employees." The IRS apparently claimed the Settlement Check in order to satisfy, in part, certain outstanding tax deficiencies owed by Mr. Friedman for prior tax years.
In consequence of this action by the IRS, Mr. Friedman's Original Complaint enumerated claims for relief under ten separate counts: (1) "for equitable relief for an order requiring specific performance" of the United States' alleged obligation to pay Mr. Friedman the Settlement Amount under the terms of the Settlement Agreement, plus prejudgment interest at a rate of 12% per annum; (2) for "damages incurred as a result of the [d]efendant's [sic] intentional or negligent breach of the Settlement [A]greement/ including costs of litigation"; (3) for "damages arising out of the [p]laintiff's personal and bodily injuries incurred as a result of the [d]efendant's [sic] misconduct and breach of the Settlement [A]greement"; (4) "for general damages together with such other damages authorized by law directed against such employees of the I.R.S. in their individual capacities as are shown to have acted intentionally, with malicious intent, who are without the privilege of immunity"; (5) for "injunctive relief directed against such employees of the I.R.S. in their individual and official capacities who have begun an intentional course of harassment and intimidation in order to frighten [p]laintiff into not filing this action"; (6) for "damages caused by the acts of the Individual Defendants whose names shall be added by amendment upon obtaining same for their negligent and intentional infliction of emotional distress and other tortuous [sic] conduct"; (7) for "damages caused by the intentional acts of the Individual Defendants whose names shall be added by amendment upon obtaining same for their violations of the [p]laintiff's rights under the State and Federal Constitutions for their misconduct"; (8) because "[d]efendants have acted in bad faith[, for] . . . an award of costs and attorneys fees under state law to be rendered against the IRS and [D]VA and as provided by the provisions of 28 U.S.C. § 2412"; (9) for unspecified "injunctive relief" pending the court's determination of whether the jeopardy levy imposed upon the Settlement Check (hereinafter the "Levy") was reasonable under the circumstances; and (10) "that the [d]efendants are estopped from denying the terms of the [S]ettlement [A]greement pursuant to the theory of promissory estoppel."
On September 19, 2002, pursuant to a motion made by Mr. Friedman, the court convened a hearing to consider the parties' evidence and arguments regarding the reasonableness of the Levy. At such hearing (hereinafter the "September 19 hearing"), the court heard testimony from Robert A. Stack, a revenue officer of the IRS (hereinafter "Mr. Stack"), indicating that Mr. Friedman had outstanding tax deficiencies totaling approximately $316,000 for the 1986, 1987, 1988 and 1990 tax years and that he had not filed tax returns for eight of the preceding nine years. Mr. Friedman also testified at the September 19 hearing, and both the United States and Mr. Friedman moved several documents into evidence for the court's consideration. On September 24, 2002, having considered all such testimony and evidence, the court issued a written order reflecting its determination that the IRS's imposition of the Levy was "reasonable under the circumstances." This determination was final and nonreviewable, 26 U.S.C. § 7429(f), and conclusively adjudicated the claims set forth in the ninth count of the Original Complaint.
On November 4, 2002, the defendants moved to dismiss the remaining counts of the Original Complaint. On November 18, 2002, the court afforded Mr. Friedman an extension of time during which to respond to such motion, until December 2, 2002. On December 1, 2002, Mr. Friedman responded to the defendants' motion and moved for leave to amend the Original Complaint. On January 31, 2003, the court granted Mr. Friedman's motion, ordering him to file his amended complaint within 10 days, and denied without prejudice the United States' motion to dismiss.
In its order dated January 31, 2003, the court also ruled on several other procedural motions by the United States.
On February 18, 2003, Mr. Friedman filed his amended complaint (hereinafter the "Amended Complaint"). In addition to the defendants named in the Original Complaint, the Amended Complaint named as defendants Mr. Stack as well as DV A employees William Thigpen, Carl Boyer and Ellen Hastings. The Amended Complaint also added, in addition to the ten counts enumerated in the Original Complaint, an eleventh count alleging that "[a]s a consequence of [d]efendants' wilful and wanton negligence in the treatment of [p]laintiff, [p]Iaintiff sustained serious and permanent injuries/ has endured and will endure severe pain/ suffering and limitations for the rest of his life." This last count apparently referred to the personal injuries Mr. Friedman was alleged to have sustained in the course of his treatment at the DVA-administered hospital. However, according to other allegations set forth in the Amended Complaint, Mr. Friedman had conclusively settled any claims he had in connection with such alleged injuries by virtue of his execution of the Settlement Agreement.
The Amended Complaint restated the ninth count of the Original Complaint, although the court had already made a final determination with regard to the claims described therein.
On March 20, 2003, the defendants again filed a motion to dismiss/ this time to dismiss Mr. Friedman's Amended Complaint. On April 25, 2003/ Mr. Friedman responded to such motion and filed his own motion "to enforce [the S]ettlement [A]greement or to rescind same."
The court now considers the defendants' motion to dismiss. Discussion
The defendants have moved to dismiss the Amended Complaint for lack of subject matter jurisdiction. According to the defendants, the remaining claims set forth in the Amended Complaint are grounded in, arise out of and/or turn on the interpretation of the Settlement Agreement. The defendants argue that the United States Court of Federal Claims (hereinafter the "Court of Claims"), and not this court, possesses the exclusive jurisdiction to consider such claims. The court agrees with this argument.
As noted above, the court has already made a final and nonreviewable determination as to the claims made in the ninth counts of Mr. Friedman's Original Complaint and Amended Complaint.
United States district courts have jurisdiction to consider claims "founded . . . upon any express or implied contract with the United States" so long as such claims do not exceed $10,000. 28 U.S.C § 1346(a)(2); Grant v. Henegar, 640 F.2d 732, 734th Cir. March 1981). As to claims exceeding $10,000, 28 U.S.C. § 1491 provides, in relevant part, as follows:
The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.28 U.S.C § 1491(a)(1). This latter provision (known as the `Tucker Act") requires that claims against the United States for amounts in excess of $10,000 founded on contracts with the United States must be brought in the Court of Claims. Mark Dunning Indus., Inc. v. Cheney, 934 F.2d 266, 269 (11th Cir. 1991); Grant, 640 F.2d at 734.
Exceptions to this genera! rule exist only where Congress has explicitly granted another forum authority to hear claims that would otherwise fall within the purview of the Tucker Act. See, e.g., Amin v. Merit Sys. Prot. Bd., 951 F.2d 1247 (Fed. Cir. 1991) (holding that Merit Systems Protection Board had exclusive jurisdiction to enforce settlement agreement in action covered by the Civil Service Reform Act of 1978). No such exception applies in this case
A plaintiff cannot avoid these jurisdictional restrictions by artful pleading. "In determining whether a claim falls within the exclusive jurisdiction of the Court of Federal Claims, courts must look to the true nature of the action, instead of merely relying on the plaintiff's characterization of the case." Roberts v. United States, 242 F.3d 1065, 1068 (Fed. Cir. 2001). Accordingly, "a plaintiff whose claims against the United States are essentially contractual should not be allowed to avoid the jurisdictional (and hence remedial) restrictions of the Tucker Act by casting its pleadings in terms that would enable a district court to exercise jurisdiction under a separate statute." Megapuise, Inc. v. Lewis, 672 F.2d 959, 967 (D.C. Cir. 1982). In other words, "[i]t is well established that where a tort claim stems from a breach of contract, the cause of action is ultimately one arising in contract, and thus is properly within the exclusive jurisdiction of the Court of Federal Claims to the extent that damages exceed $10,000." Awad v. United States, 301 F.3d 1367, 1372 (Fed. Cir. 2002); see also Massie v. United States. 166 F.3d 1184 (Fed. Cir. 1999) (enforcing settlement agreement arising out of personal injury claims asserted against hospital administered by the United States Department of the Navy).
There can be no doubt that Mr. Friedman's primary object in this action is the award of money damages arising from an alleged breach of the Settlement Agreement, and that his claims lack any basis independent thereof. Virtually every count enumerated in the Amended Complaint seeks "damages" for the conduct of United States employees in relation to the Settlement Agreement. Of those counts that do not, i.e., the pleas for "equitable" or "injunctive" relief, the court notes that (1) the first count indirectly requests an award of money, i.e., the Settlement Check, under the terms of the Settlement Agreement; (2) the fifth count is patently frivolous, as unsupported by factual allegations in the complaint; (3) the ninth count has already been adjudicated; and (4) the tenth count is a legal argument couched as a claim for legal recovery. Mr. Friedman's additional claim for personal injury stated in the eleventh count of the Amended Complaint likewise turns on the interpretation of the Settlement Agreement: if the Settlement Agreement is valid and enforceable, such claim has been fully settled and compromised, and Mr. Friedman has received the value represented by the Settlement Check by virtue of the offset made to Mr. Friedman's tax liabilities.
The monetary nature of this plea for relief is evident in light of Mr. Friedman's request for "prejudgment interest" on the amount represented by the Settlement Check.
The sole factual allegations forming the apparent basis for this claim are set forth in paragraphs 135 through 140 of the Amended Complaint, which recount the course of a single telephone conversation between Mr. Friedman and an unnamed IRS employee which allegedly took place on August 7, 2002. The allegations set forth in these paragraphs, however, even if true, do not rise to the level of "an intentional course of harassment and intimidation in order to frighten [p]laintiff into not filing this action."
Accordingly, the court concludes that, aside from Mr. Friedman's claims regarding the reasonableness of the Levy, which claims the court has already fully adjudicated, the claims stated in the Amended Complaint come within the exclusive purview of the contract provisions of the Tucker Act. This court therefore lacks subject matter jurisdiction to hear such remaining claims. For these reasons, the court will hereinafter DISMISS Mr. Friedman's remaining claims. Summary
Mr. Friedman asserts that this court has jurisdiction to hear his claims pursuant to 28 U.S.C. § 1346(a)(1), which provides, in relevant part, that United States district courts have original jurisdiction, concurrent with the Court of Claims, of "[a]ny civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally . . . collected." As noted in Roberts, however, there are three additional jurisdictional prerequisites in order to maintain an action under this provision:
First, the taxpayer must fully pay the tax in question. Second, the taxpayer must file a proper and timely administrative claim for a refund with the IRS. Third, the administrative claim must be either disallowed or not acted upon within six months after it was filed with the IRS.Roberts, 242 F.3d at 1067 (citations omitted). Notably, Mr. Friedman does not argue or otherwise indicate that he has satisfied any of these additional jurisdictional prerequisites.
For the reasons stated above, the defendants' motion to dismiss [Doc. No. 31-1] is hereby GRANTED. The plaintiff's motion to enforce settlement agreement or rescind same [Doc. No. 33-1] is hereby DENIED AS MOOT. This case is hereby DISMISSED.
IT IS SO ORDERED.