because (1) it was not properly planned, in that zoning requirements, the need for structural changes, and the like were not adequately taken into account, (2) neither Apex nor Coleman had previous experience with this kind of project, (3) Coleman lacked the requisite financial ability, and Apex, through its president Juggins, was dishonest, and (4) the job was not properly monitored. The witness stated that, in his opinion, there was nothing plaintiff could have done to avert the failure of the project, and that she acted as any other prudent homeowner would have acted.
In August 1974, plaintiff filed an administrative claim against the United States in the amount of $ 90,370.37. That claim was denied, and on October 12, 1976, she filed the instant action in this Court.
The government raises three defenses: (1) contributory negligence, (2) plaintiff's action is based on a claim of misrepresentation and involves a discretionary government function and is for those reasons not covered by the Federal Tort Claims Act, and (3) the acts of James Greenleaf were beyond the scope of his employment and are therefore not binding on the government.
Defendant's claim of contributory negligence may be quickly dismissed. The evidence shows that the government's agents assumed complete control both for the award of the contracts and for monitoring the work after the contracts had been signed. While on paper plaintiff may have had the option to reject the government-selected contractors, as a practical matter she was so tied by government regulations and procedures to RLA's choices that her rejection of those choices would have meant no rehabilitation contract at all. Similarly, it was RLA through its rehabilitation specialist and that individual's supervisor which monitored and supervised the work and which had to be satisfied with its progress, not plaintiff. RLA's officials retained all real authority with respect to the contractors' performance, they were on the scene, and they vouched for the progress of the work in writing before any new expenditures could be made.
It would be exalting form over substance to hold that plaintiff was contributorily negligent because she did not conduct her own investigation to make certain that RLA's conclusions were actually supported by the facts. As the plaintiff, whom the Court finds to be a most credible witness, quite properly stated, "I was dealing with my government and they were to protect me." On this issue of fact, the Court finds that the evidence does not establish contributory negligence.
The Federal Tort Claims Act was enacted in 1948 as a waiver of the sovereign immunity of the United States from suit
with respect to tort claims "in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. §§ 1346(b), 2674. The Act does not apply, however, to intentional torts, including inter alia, claims arising out of "misrepresentations" (28 U.S.C. § 2680(h)), nor does it apply to performance or failure to perform a "discretionary function." 28 U.S.C. § 2680(a).
The government vigorously argues that this case is a misrepresentation case as distinguished from one involving negligence, and for that reason it is excluded from the scope of the Federal Tort Claims Act. In support of this contention, reliance is had upon a number of decisions
exemplified and led by United States v. Neustadt, 366 U.S. 696, 81 S. Ct. 1294, 6 L. Ed. 2d 614 (1961). But an analysis of these cases reveals that they have only a superficial similarity to the instant situation.
The Supreme Court held in Neustadt that section 2680(h) takes out of the Federal Tort Claims Act any claim based on false representation, irrespective of whether that representation is intentional or negligent. Accordingly, it is quite true that, as the government contends, it makes no difference whether any misrepresentations RLA's agents may have made to plaintiff were negligent or intentional, for she is not entitled to recover under either hypothesis. But that analysis misconceives the real issue. The crucial difference between this case and the Neustadt line of decisions is that the gravamen in all of them was misrepresentation of some sort;
here the government's wrong is something else entirely.
Plaintiff is not suing on account of the false representations made to her by the RLA officials. She is suing because of the failure of those officials to exercise due care in the selection of the rehabilitation contractors and the supervision of their work. To be sure, misrepresentations were made to her regarding the competence of the contractors and the progress of the work on the project, but these representations were incidental
to the real fault ascribed to the government the acts of selecting incompetent contractors and supervising them in a careless manner. These are acts of negligence pure and simple, and they are not beyond the jurisdictional reach of the Federal Tort Claims Act. See Ingham v. Eastern Air Lines, 373 F.2d 227, 239 (2d Cir. 1967); Beech v. United States, 345 F.2d 872 (5th Cir. 1965); United Air Lines, Inc. v. Wiener, 9 Cir., 335 F.2d 379; Hicks v. United States, 167 U.S.App.D.C. 169, 511 F.2d 407 (D.C.Cir.1975); In re Franklin National Bank Securities Litigation, 445 F. Supp. 723 supplemented 449 F. Supp. 574 (S.D.N.Y.1978); In re Air Crash Near Silver Plume, Colorado, 445 F. Supp. 384 (D.Kan.1977).
Similarly, plaintiff's claim does not fall within the "discretionary function" exception codified in section 2680(a) of Title 28. The exercise of such a function which is protected from suits under the statute must be distinguished from mere operational decisions which are not. A series of decisions holds that the award of contracts constitutes the exercise of a discretionary function within the meaning of the statute. See, e.g., Scanwell Laboratories, Inc. v. Thomas, 172 U.S.App.D.C. 281, 521 F.2d 941 (D.C.Cir.1975); Toole v. United States, 443 F. Supp. 1204 (E.D.Pa.1977); Gowdy v. United States, 412 F.2d 525 (6th Cir. 1969). But in these cases the exercise of a discretionary function was found to exist essentially because "relatively high level choices"
were being made or because the government officials involved "undoubtedly considered a number of "policy factors' in arriving at their decision."
While the government traditionally clings to the discretionary function exception in a great variety of situations, it is now generally recognized by the courts that this exception is limited to true policy formulation and does not protect purely routine operational matters.
See Downs v. United States, 522 F.2d 990 (6th Cir. 1975); Driscoll v. United States, 525 F.2d 136 (9th Cir. 1975); Seaboard Coast Line R. Co. v. United States, 473 F.2d 714 (5th Cir. 1973); United States v. Hunsucker, 314 F.2d 98 (9th Cir. 1902); Cruikshank v. United States, 431 F. Supp. 1355 (D.Hawaii 1977).
As the record shows, the instant case did not involve the kind of high policy judgments that are and properly should be immune from second-guessing by way of a tort action in the courts. Contractors were apparently placed on the list of eligibles in a routine manner, depending upon whether they had home improvement licenses and the requisite financial and management capabilities,
and when a specific contract was to be awarded, it automatically went to the lowest bidder on the list.
There is thus on the facts no basis for applying the discretionary function exception to plaintiff's claim that the government was negligent in selecting the contractors who were to perform the rehabilitation work.
As for the second aspect of plaintiff's action the negligent supervision of the contractors the exception has no application at all. Certainly, such supervision cannot by any stretch of the imagination be regarded as constituting an exercise of judgment at a planning level. Seaboard Coast Line R. Co. v. United States, supra; S. Schonfeld Company, Inc. v. SS Akra Tenaron, 363 F. Supp. 1220 (D.S.C.1973); Swanson v. United States, 229 F. Supp. 217 (D.Cal.1964); see also, Dalehite v. United States, supra, 346 U.S. at 42, 73 S. Ct. at 971; Indian Towing Company v. United States, supra. One or more relatively low-level employees simply failed to carry out with due care what their job descriptions required them to do. See American Exchange Bank of Madison v. United States, 257 F.2d 938 (7th Cir. 1958); McNamara v. United States, 199 F. Supp. 879 (D.D.C.1961).
The Federal Tort Claims Act renders the United States liable for negligent acts or omissions of an employee done "within the scope of his office or employment under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." 28 U.S.C. § 1346(b). Since James Greenleaf, the rehabilitation specialist assigned to plaintiff's project, was convicted of bribery in that connection, the question arises whether he could be considered as having acted within the scope of his employment under traditional agency principles, and if not, whether he bound his employer, the United States, to pay for his wrongdoing.
It is clear that an act may be within the scope of employment even though it is criminal or tortious. See Restatement (Second) of Agency, § 231, p. 512 (1958); M. J. Uline Company v. Cashdan, 84 U.S.App.D.C. 58, 171 F.2d 132 (D.C. Cir. 1948) (hockey player may be advancing the interests of his employer even though he committed an assault during the game); Neary v. Hertz Corp., 231 F. Supp. 480 (D.D.C.1946) (assault by employee-motorist on another motorist involved in auto accident which occurred while pursuing business of the employer was within scope of employment); Dilli v. Johnson, 71 App. D.C. 139, 107 F.2d 669 (D.C. Cir. 1939). On the other hand, if the employee committing the crime is acting solely for his own benefit, his employer is not liable. Penn Central Transportation Co. v. Reddick, 398 A.2d 27 (D.C.App.1979); Park Transfer Co. v. Lumbermens Mutual Cas. Co., 79 U.S.App.D.C. 48, 142 F.2d 100 (D.C. Cir. 1944).
Upon consideration of the record herein, the Court concludes that Greenleaf's criminal activity was not within the scope of his employment. Under no persuasive theory can his involvement in a bribery scheme be regarded as furthering his employer's interests, and the government accordingly does not bear any direct responsibility for his actions regarding plaintiff and her project.
That does not end the matter, however, for the government is liable to plaintiff on two other, somewhat interrelated, bases. In the first place, it is responsible in tort for failing to exercise due care in supervising Greenleaf. See International Distributing Corporation v. American District Telegraph Company, 186 U.S.App.D.C. 305, 569 F.2d 136 (D.C. Cir. 1977). Ronald A. Russo, direct supervisor of Greenleaf, should have been, and, in fact, was aware of the mismanagement of the Melton project by Greenleaf, yet he failed to take remedial action. Littlejohn, also a supervisor of Greenleaf, who approved and signed certifications as to the amount and quality of work completed, should have, but did not, confront inconsistencies between Greenleaf's report and information from other sources that the work was unfinished.
Secondly, Greenleaf was not the only government agent responsible for the debacle that occurred with respect to plaintiff's rehabilitation project. Employees other than Greenleaf prepared the list of contractors from which Apex and Coleman were selected, and the evidence demonstrates that they failed to exercise due care in performing that responsibility. In a significant sense, the preparation of that list was a principal proximate cause of the injury to plaintiff's interests, because, but for that negligence, the incompetent and fraudulent contractors would not have been hired, and it is unlikely that any of the remaining difficulties including the bribery would have arisen. Beyond that, Greenleaf's various supervisors, as well as his successor in the job of rehabilitation specialist, were equally responsible with him for the negligent performance of the work on the project itself. None of these persons committed any criminal offense, and all of them were fully acting within the scope of their respective employments.
The events surrounding the rehabilitation of Ms. Melton's property, instead of achieving their original aim
of bringing credit to social programs of benefit to the inner city,
ended up lending comfort to those hostile to such efforts.
The depressing saga of confusion and inefficiency began when the government, through one of its agencies, determined that housing code violations existed on plaintiff's property and demanded that she take remedial action. Another agency promptly offered and granted her a loan under a widely-publicized rehabilitation program, but to implement its action it selected contractors who were incompetent, corrupt, or both. For over a year thereafter, a number of public employees induced plaintiff to authorize payments at regular intervals, falsely assuring her that the work on the project was being carefully monitored and was proceeding on schedule. Eventually, the project ran out of funds,
but even then the situation could still have been saved by a relatively small $ 17,000 grant, but another agency of government adamantly refused to approve this expenditure.
Not unexpectedly, after construction on the by now unoccupied premises ceased, vandals began their work, and it was decided that the property had to be boarded up. Instead of paying for the barricading job, or at least allowing plaintiff's still solvent loan account to be charged for the necessary amount,
the government, to add insult to injury, assessed her $ 1,145 for securing the premises at a time when they had already been gutted.
Finally, yet another arm of government proclaims that all of this is truly unfortunate
but that for a variety of reasons, it is not the government but Ms. Melton who must bear the loss.
The Court disagrees, and finds for the plaintiff. Judgment will be entered in the amount of $ 121,411.