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MELTON v. UNITED STATES

March 12, 1980

Beatrice MELTON, Plaintiff,
v.
UNITED STATES of America, Defendant.



The opinion of the court was delivered by: GREENE

This is an action under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., alleging that the government negligently selected contractors to rehabilitate real property plaintiff owns in the District of Columbia and negligently supervised the rehabilitation project after it was started. The case was tried by the Court, and this Opinion incorporates the Court's findings of fact and conclusions of law.

I

 Plaintiff, a resident of Jamaica, New York, is the owner of a small house located at 1812 9th Street, N.W., in the District of Columbia, given to her by her father. In June 1972, she was warned by the D.C. Department of Building, Housing, and Zoning that an inspection of the property which then contained three rental apartments had revealed 98 violations of the housing code and that she was required to abate these violations. Shortly thereafter, plaintiff was contacted by the Redevelopment Land Agency (RLA) *fn1" which advised her that, because her property was located in the Shaw Urban Renewal Area, she was entitled to a so-called section 312 housing and urban development loan, 42 U.S.C. § 1452b, designed to enable her to comply with the government's requirements in regard to the housing violations, and to permit her to remodel the property so as to provide four apartments instead of three. Through the efforts and with the assistance of the RLA, plaintiff was awarded a $ 40,600 loan to be used for the rehabilitation and renovation work. *fn2"

 In February 1973, RLA personnel completed, and plaintiff approved, a detailed work-up, describing the plans and specifications for the project. Two months later, the Agency, on the basis of sealed bids *fn3" submitted by contractors on an Agency-maintained list, *fn4" selected Apex Modernizing Co. (Apex) to perform the work called for by the plans.

 Plaintiff herself had no voice in selecting the contractor, *fn5" except that she did sign a form on which Apex had tentatively been preselected by RLA. In fact, Ms. Melton did not meet representatives of Apex until August 1973, when together they attended a settlement conference with RLA. At that conference, plaintiff signed another RLA form representing the agreement with Apex for the performance of the rehabilitation work, a promissory note for the amount of the loan, and a deed of trust securing that note. Under the agreement, Apex was to be paid in installments in accordance with a specific formula as the work progressed.

 Thereafter, plaintiff at various times *fn6" received forms forwarded or submitted to her, signed both by James Greenleaf, rehabilitation specialist in charge of plaintiff's project for RLA, *fn7" and his supervisors, *fn8" evidencing progress in accordance with the terms of the agreement. Upon receipt of these forms, and in accordance with RLA advice, plaintiff signed the forms which authorized the disbursement of funds and the corresponding checks on her loan account. *fn9"

 In the meantime, various problems arose. In December 1973, plaintiff was notified by the D.C. Department of Building, Housing, and Zoning that work on the project would have to be halted for lack of a building permit, and in February 1974, she was advised that a zoning variance was necessary if the project was to proceed further. However, RLA's employees continued to assure her that these were essentially technicalities peculiar to the way of doing business in the District of Columbia, that there was no cause for concern, and that these matters were being taken care of. *fn10" Plaintiff had no reason to doubt these assurances, for the agreement explicitly provided that the responsibility for obtaining all permits and licenses rested with the contractor. *fn11"

 Plaintiff was also advised that the RLA was monitoring and supervising the work on a continuing basis, *fn12" and accordingly she did not, except on two or three occasions, travel to Washington to review the progress of construction. She did, however, fill in the appropriate blank on RLA's progress report forms whenever called upon to do so, evidencing that the work done was of an acceptable quality. *fn13"

 In July 1974, by a letter signed by Claude N. Juggins, its president, Apex withdrew from the project, and RLA awarded the contract to J. Coleman Masonry & Concrete Work. Coleman likewise failed to perform, and in March 1975, plaintiff was informed that the funds were exhausted, *fn14" and that, although the project had not been completed, all work had ceased.

 In the meantime, Greenleaf had been replaced as the rehabilitation specialist in charge of the Melton project by Gerard E. Rogers. Rogers estimated that it would cost $ 17,000 to finish the job, but by then the balance remaining in plaintiff's account was far below that amount. RLA sought a grant *fn15" from the U.S. Department of Housing and Urban Development to complete the job but this was not approved. HUD also turned down a plan to use the remaining funds in plaintiff's escrow account to board up the property to protect it from vandalism.

 No additional progress has been made on the project since the funds ran out in January 1975. Instead, through vandalism and neglect, the property has been essentially gutted. In February 1977, the D.C. Department of Finance and Revenue issued a special assessment to plaintiff, charging her $ 1,145 for the cost of barricading the premises and for removing trash and debris. In March 1975, Greenleaf, the rehabilitation specialist assigned by RLA to plaintiff's project, pleaded guilty to receipt of a $ 2,000 bribe from Apex' president Juggins in connection with that project (and possibly others), and he was sentenced by Judge George L. Hart, Jr. to imprisonment for a term of six to eighteen months. *fn16"

 Plaintiff's account of the history of the rehabilitation project and her understanding of her responsibilities and those of RLA's agents was corroborated both by the documentary evidence and by a former RLA official. James Littlejohn, the rehabilitation officer in charge of the Shaw Urban Renewal Area between 1974 and 1979, testified that his office was giving technical advice and assistance to owners in the Shaw area, providing them with data, helping them to process applications, and the like. His officers and specialists also prepared surveys and work write-ups, and selected the contractors to perform the work. If the cost of any particular project exceeded $ 10,000, the contract was awarded by competitive bidding, but the bidding was limited to contractors on RLA's list of eligible companies. That list was prepared and maintained by RLA officials at an administrative or supervisory level. Neither Apex nor Coleman should have been on the list at all, for they lacked both the requisite experience and the necessary home improvement licenses. Littlejohn further explained that jobs were awarded by RLA to the lowest bidder from those on the list, the homeowner himself having no effective influence on the selection process. After a contract was signed, an RLA rehabilitation specialist had the duty to monitor the job. Payments were made in installments as the job progressed, the progress to be measured by the rehabilitation specialist and his supervisors.

 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. ...


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