F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
AUG 27 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
STANLEY B. BOEHME;
SYLVIA T. BOEHME,
Plaintiffs-Appellants,
v. No. 02-1443
UNITED STATES POSTAL
SERVICE, as successor to the
United States Post Office Department
of the United States of America and
All Other Occupants of the property
located at 2641 E. Uintah, Colorado
Springs, Colorado 80909,
Defendant-Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 01-N-1237 (CBS))
Submitted on the briefs:
John Randolph Torbet, Colorado Springs, Colorado, for Plaintiffs-Appellants.
John W. Suthers, United States Attorney, Kathleen L. Torres, Assistant United
States Attorney, Elizabeth A. Weishaupl, Assistant United States Attorney,
Denver, Colorado, for Defendant-Appellee.
Before EBEL , PORFILIO , and McCONNELL , Circuit Judges.
EBEL , Circuit Judge.
Plaintiffs Stanley B. Boehme and Sylvia T. Boehme appeal from the district
court’s dismissal of their complaint under Fed. R. Civ. P. 12(b)(1) for lack of
subject matter jurisdiction. Our jurisdiction arises under 28 U.S.C. § 1291, and
we review a dismissal for lack of subject matter jurisdiction de novo. King v.
United States , 301 F.3d 1270, 1273 (10th Cir. 2002), cert. denied , 123 S. Ct. 2572
(2003). We affirm. 1
I.
Defendant United States Postal Service (Postal Service) operates a post
office facility in Colorado Springs, Colorado, in a building that it leases from
plaintiffs. The lease contains a “Tax Rider Clause” which provides that the Postal
Service has the duty to pay the real property taxes due on the leased property as
additional rent. This case involves a dispute between the parties regarding the
payment of real property taxes allegedly due on the leased property, and plaintiffs
alleged the following in their complaint:
1
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
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10. That the Plaintiffs gave due notice of the amount of real
property taxes due for the year 2000 to the [Postal Service].
However, the [Postal Service] failed and refused to pay such taxes.
11. That on or about May 23, 2001 a demand for rent or
possession of premises on behalf of Plaintiffs was duly served upon
the [Postal Service] . . . .
12 . That said demand provided, pursuant to the law of the
State of Colorado, specifically [Colo. Rev. Stat. §] 13-40-106, that
the [Postal Service] would have three (3) days to either comply with
the demand (i.e., pay Plaintiffs the taxes) or surrender possession of
the premises by virtue of the Plaintiffs’ termination of the lease.
13. That the [Postal Service] failed and refused to tender or
pay the amount of the taxes due as rent within said period.
14. That pursuant to the law of the State of Colorado,
specifically [Colo. Rev. Stat. §] 13-40-104(1)(d) the continued
possession of the [Postal Service] amounts to an unlawful detainer of
the real property described above.
15. That the Plaintiffs are entitled to a judgment of this Court
finding and determining that the Plaintiffs are entitled to possession
of the above described real property.
Aplt. App. at 10-11, ¶¶ 10-15. In their request for relief, plaintiffs then sought
the following relief:
Plaintiffs demand judgment against the Defendants finding and
concluding that the Lease . . . has been duly terminated . . . .; that the
continued occupation of the premises by the [Postal Service] is
unlawful; and for an order granting the right of possession to said
premises to the Plaintiffs; and further for additional orders awarding
the Plaintiffs damages in the form of the fair market value of the
possessory interest in such property together with attorney’s fees,
costs and interest . . . .
Id. at 12.
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The Postal Service filed a motion to dismiss plaintiffs’ complaint under
Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. Relying on this
court’s decision in Three-M Enterprises, Inc. v. United States , 548 F.2d 293,
294-95 (10th Cir. 1977) (holding, in case involving alleged default by government
in payment of rent for property leased for use as a post office, that district court
lacked subject matter jurisdiction over statutory unlawful detainer action brought
against the United States under Utah law because the landlord plaintiff had failed
to exhaust its administrative remedies under the Federal Tort Claims Act), the
Postal Service argued that plaintiffs’ statutory action for unlawful detention under
Colo. Rev. Stat. § 13-40-104(1)(d) sounds in tort and is thus subject to the
Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b)(1), 2671-80. According
to the Postal Service, plaintiffs were therefore required by 28 U.S.C. § 2675(a) to
exhaust their administrative remedies against the Postal Service before filing
a district court action against the United States under 28 U.S.C. § 1346(b)(1),
which they failed to do. Because the FTCA’s administrative exhaustion
requirement is jurisdictional and cannot be waived, Three-M Enterprises ,
548 F.2d at 294, the Postal Service requested that the district court dismiss
plaintiffs’ unlawful detention action for lack of subject matter jurisdiction.
At a hearing before the district court on the Postal Service’s motion to
dismiss, the court granted the motion and dismissed plaintiffs’ complaint. The
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district court gave two reasons for its ruling. First, because this court decided
Three-M Enterprises several years after Congress enacted the Postal
Reorganization Act (PRA), 39 U.S.C. § 101, et seq. , (effective 1971), the court
rejected plaintiffs’ argument that the general grant of jurisdiction provided to the
district courts by 39 U.S.C. § 409(a) “over all actions brought by or against the
Postal Service” implicitly overruled this court’s decision in Three-M Enterprises .
Aplt. App. at 67. Second, the court noted that § 409(c) expressly provides that
the requirements of the FTCA apply to tort claims arising out of activities of the
Postal Service. Id. at 68. Without analyzing the issue of whether plaintiffs’
statutory claim for unlawful detention under Colorado law was a tort or contract
claim, the court then determined that it was bound by this court’s decision in
Three-M Enterprises because it “is on point, has not been overruled, and is
controlling.” Id.
II.
“It is well settled that the United States, as sovereign, is immune from suit
except as it consents to be sued and that the terms of its consent to be sued in any
court define the court’s jurisdiction to entertain the action.” Three-M
Enterprises , 548 F.2d at 294. In this case, the sovereign immunity issues turn on
two provisions in the PRA. The first provision is 39 U.S.C. § 401(1), and it
provides that the Postal Service has the general power “to sue and be sued in its
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official name.” In Kennedy Elec. Co. v. United States Postal Serv. , 508 F.2d 954,
955, 957 (10th Cir. 1974), a case involving a breach of contract action brought by
a private subcontractor against the Postal Service, we recognized that § 401(1)
grants the Postal Service the power to sue and be sued, and that “it must be
presumed that when Congress launched a governmental agency into the
commercial world and endowed it with authority to ‘sue or be sued,’ that agency
is not less amenable to judicial process than a private enterprise under like
circumstances would be.” (quoting FHA v. Burr , 309 U.S. 242, 245 (1940)).
Further, both the Supreme Court and several of our sister circuits have made it
clear that § 401(1) constitutes a general waiver of the Postal Service’s sovereign
immunity. See Loeffler v. Frank , 486 U.S. 549, 554-56 (1988); Davric Maine
Corp. v. United States Postal Serv. , 238 F.3d 58, 61 (1st Cir. 2001); Global Mail
Ltd. v. United States Postal Serv. , 142 F.3d 208, 210 (4th Cir. 1998); United
States v. Q Int’l Courier, Inc. , 131 F.3d 770, 775 (8th Cir. 1997). We also note
that the waiver in § 401(1) “must be liberally construed and . . . the Postal
Service’s liability must be presumed to be the same as that of any other business.”
Loeffler , 486 U.S. at 556; see also Davric , 238 F.3d at 61 (noting that “the PRA
established the Postal Service as a quasi-public entity that was to compete on
essentially level ground with private enterprise”).
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The second provision of the PRA relating to sovereign immunity is
39 U.S.C. § 409(c), and it provides that “[t]he provisions of [the FTCA] and all
other provisions of Title 28 relating to tort claims shall apply to tort claims
arising out of activities of the Postal Service.” Although this court has not
previously had an occasion to address the interplay between §§ 401(1) and 409(c),
we agree with our sister circuits that Ҥ 409(c) of the PRA limits the scope of the
more general waiver of sovereign immunity contained in § 401(1),” Davric ,
238 F.3d at 62, and that “[f]or state tort claims arising out of the activity of the
Postal Service, § 409(c) compels the application of the FTCA and its attendant
provisions,” id. ; accord Global Mail , 142 F.3d at 215 (holding that § 409(c)
“restrict[s] § 401(1)’s general waiver of sovereign immunity . . . by requiring
claimants to follow FTCA procedures for those claims cognizable under the
FTCA”); Q Int’l Courier , 131 F.3d at 775 (same); see also 28 U.S.C. § 2679(a)
(providing that claims against “sue and be sued” federal agencies must be brought
under the FTCA if the claims are “cognizable” under the FTCA).
Consequently, the dispositive issue in this case is whether plaintiffs’
unlawful detention action under Colo. Rev. Stat. § 13-40-104(1)(d) must be
treated as a state-law tort claim, in which case, under § 409(c), the FTCA’s
administrative exhaustion requirement would apply, or, alternatively, whether the
action must be treated as a state-law breach of contract claim, in which case,
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under § 401(1), there would be a general waiver of sovereign immunity and the
Postal Service could be sued directly without any exhaustion requirement.
Because the source of the government’s substantive liability under the FTCA
is state law, FDIC v. Meyer , 510 U.S. 471, 477-78 (1994) (construing former
28 U.S.C. § 1346(b), which is now codified at 28 U.S.C. § 1346(b)(1)), the
determination of how to characterize Colorado’s statutory unlawful detention
action for purposes of §§ 401(1) and 409(c) is likewise a matter of state law.
Unfortunately, our research has not uncovered any Colorado decisions that
provide a definitive answer as to whether § 13-40-104(1)(d) sounds in tort or
contract. As a result, we must predict how the Colorado Supreme Court would
rule. FDIC v. Schuchmann , 235 F.3d 1217, 1225 (10th Cir. 2000). In doing so,
“we are free to consider all resources available, including decisions of [Colorado]
courts, other state courts and federal courts, in addition to the general weight and
trend of authority.” Id. Having thoroughly analyzed the relevant authorities, we
predict that the Colorado Supreme Court, if faced with the issue, would determine
that § 13-40-104(1)(d) sounds in tort.
As noted above, the district court concluded that our decision in Three-M
Enterprises conclusively determined that state-law unlawful detention actions
such as the one here sound in tort. However, we agree with plaintiffs that our
decision in Three-M Enterprises did not specifically address the issue of whether
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Utah’s statutory unlawful detention action sounded in tort or contract, and it
appears that both the parties and this court simply assumed that the action
sounded in tort. Nonetheless, while not dispositive, we believe our decision in
Three-M Enterprises is persuasive given the similarities between the Utah statute
at issue in that case and the Colorado statute at issue in this case. Compare Utah
Code Ann. § 78-36-3(3) (1953), with Colo. Rev. Stat. § 13-40-104(1)(d) (2002).
Moreover, we note that our decision in Three-M Enterprises is over twenty-five
years old, and, to our knowledge, not a single court or commentator has
questioned the necessary assumption underlying the decision that Utah’s statutory
unlawful detention action sounds in tort.
We need not rely exclusively on our decision in Three-M Enterprises ,
however, because the Colorado Supreme Court’s en banc decision in City &
County of Denver v. Desert Truck Sales, Inc. , 837 P.2d 759 (1992) convinces us
that the Colorado Supreme Court would determine that § 13-40-104(1)(d) sounds
in tort. In Desert Truck , the court determined that a replevin action under
Colo. R. Civ. P. 104 to obtain possession of personal property that was initially
obtained by a third party lawfully, but that had been wrongfully detained, sounds
in tort and is therefore subject to Colorado’s Governmental Immunity Act if
asserted against a state entity. Desert Truck , 837 P.2d at 763-65. In reaching its
holding, the court emphasized that “[t]he object of a replevin action is to
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determine the right of possession,” id. at 764, and the court rejected decisions
from other jurisdictions that “have refused to identify replevin as a tort,” id. ,
concluding instead that a “claim that . . . property is ‘wrongfully’ detained sounds
in tort and is or could be a tort,” id. at 765.
Colo. Rev. Stat. § 13-40-104(1)(d) is part of Colorado’s Forcible Entry and
Detainer statute. While the statute provides for monetary claims for past due rent,
present and future damages, and reasonable costs and attorney’s fees, see
Colo. Rev. Stat. §§ 13-40-110(1), 13-40-115(2), and 13-40-123, the primary
purpose of the statute is to restore possession of disputed real property to
the person or entity with the superior right to possess the property. See
Colo. Rev. Stat. § 13-40-110(1) (providing that “[a]n action under this article is
commenced by filing with the court a complaint in writing describing the property
with reasonable certainty, the grounds for recovery thereof, the name of the
person in possession or occupancy, and a prayer for recovery of possession”);
Colo. Rev. Stat. § 13-40-115(2) (providing that, after issue of whether defendant
committed an unlawful detention is tried and determined adversely to defendant,
“court shall enter judgment for the plaintiff to have restitution of the premises and
shall issue a writ of restitution”); see also Petry v. City & County of Denver ,
233 P.2d 867, 870 (Colo. 1951) (en banc) (discussing prior version of Colorado’s
unlawful detainer statute and noting that proceedings thereunder “involve solely
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the right to possession”). Further, the Colorado Supreme Court has recognized
that § 13-40-104(1)(d) is “designed to provide landlords with an expeditious
method of gaining possession of their premises following a . . . breach of a lease.”
Francam Bldg. Corp. v. Fail , 646 P.2d 345, 348 (Colo. 1982) (en banc).
For purposes of this case, the only material difference under Colorado law
between a replevin action and an unlawful detention action is that the former
involves personal property, while the latter involves real property. Accordingly,
based on its decision in Desert Truck , and the similarities between a replevin
action under Colo. R. Civ. P. 104 and an unlawful detention action under
Colo. Rev. Stat. § 13-40-104(1)(d), we predict that the Colorado Supreme Court
would conclude that an unlawful detention action sounds in tort. That said, we
must emphasize that, as the paragraphs quoted above from plaintiffs’ complaint
demonstrate, plaintiffs relied exclusively on § 13-40-104(1)(d) and the related
provisions under Colorado’s Forcible Entry and Detainer statute for their cause of
action in this case. See Aplt. App. at 10-11, ¶¶ 10-15, 12. Our holding in this
case is thus quite limited, and we do not by this decision intend to comment in
any way concerning what the outcome of this case would have been if plaintiffs
had asserted a common law breach of contract claim or some other type of
non-tort remedy under Colorado law.
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Finally, plaintiffs argue that subjecting their unlawful detention claim to
the FTCA violates Colorado’s economic loss rule. The Colorado Supreme
Court’s “formulation of the economic loss rule is that a party suffering only
economic loss from the breach of an express or implied contractual duty may not
assert a tort claim for such breach absent an independent duty of care under tort
law.” Grynberg v. Agri Tech, Inc. , 10 P.3d 1267, 1269 (Colo. 2000) (en banc).
The Colorado Supreme Court has also recognized, however, “that certain common
law claims that sound in tort and are expressly designed to remedy economic loss
may exist independent of a breach of contract claim.” Town of Alma v. Azco
Constr., Inc. , 10 P.3d 1256, 1263 (Colo. 2000) (en banc) (citing Brody v. Bock ,
897 P.2d 769, 776 (Colo. 1995) (holding that common law fraud claim is based on
violation of a duty independent of contract); Keller v. A.O. Smith Harvestore
Prods., Inc. , 819 P.2d 69, 73 (Colo. 1991) (holding that negligent
misrepresentation is a tort claim based “not on principles of contractual obligation
but on principles of duty and reasonable conduct”)). According to the court:
In these situations where we have recognized the existence of a duty
independent of any contractual obligations, the economic loss rule
has no application and does not bar a plaintiff’s tort claim because
the claim is based on a recognized independent duty of care and thus
does not fall within the scope of the rule.
Town of Alma, 10 P.3d at 1263.
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In this case, there is no question that plaintiffs’ unlawful detention claim is
based on the Postal Service’s alleged breach of the parties’ lease agreement. It is
also undisputed that plaintiffs have suffered only economic losses as a result of
the alleged breach. Nonetheless, we conclude that Colorado’s economic loss rule
has no application to this case. By enacting Colorado’s Forcible Entry and
Detainer statute and, more specifically, Colo. Rev. Stat. § 13-40-104(1)(d), the
Colorado legislature has provided a statutory remedy to landlords that “exist[s]
independent of a breach of contract claim.” Town of Alma, 10 P.3d at 1263. And,
while the statutory remedy has not necessarily created a tort “duty” that exists
independent of any contractual obligations, as is the case, for example, with
common law fraud and negligent misrepresentation claims, the principle is the
same. Specifically, there is no question that, under Colorado law, a landlord may
simultaneously pursue both his statutory and his contract remedies to recover the
same economic losses, and this is true regardless of whether the statutory remedy
is characterized as a tort or a contract action. Thus, the question of whether to
characterize the statutory remedy as being in tort or contract is only germane to
the issue of how the remedy is to be treated for purposes of the FTCA, and the
economic loss rule has no application to this case.
The judgment of the district court is AFFIRMED.
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