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Dureiko v. United States

Citation: 30 ELR 20524
No. No. 99-5043, 209 F.3d 1345/(Fed. Cir., 04/14/2000)

The court holds that the Court of Federal Claims improperly held that the Stafford Act, collateral estoppel, and a contract release barred a South Florida trailer park owner's breach of contract claim against the federal government, but the owner's taking and inverse condemnation claims were appropriately dismissed. The owner and the Federal Emergency Management Agency (FEMA) entered into a contract under which FEMA would clean up damage at a trailer park caused by Hurricane Andrew in exchange for leases at the park. The owner conditioned the contract on the government's compliance with several requirements. The owner subsequently alleged that the government's contractor violated the terms of the contract.

The court first holds that the owner's contract claim is not barred by the discretionary function exception of the Stafford Act. The Stafford Act immunizes the federal government from liability arising out of its performance of a discretionary function while conducting disaster relief. An action is not discretionary if it cannot appropriately be the product of judgment or choice. Here, once FEMA entered into a contract with the owner, its acts pursuant to the contract no longer involved an element of judgment or choice. Rather, the contract mandated that FEMA's cleanup of the park comply with the agreed upon terms, and FEMA's failure to do so breached this contract. Further, although FEMA's initial decision to contract with the owner involved an element of choice, FEMA's subsequent compliance with the contract did not.

The court next holds that collateral estoppel did not bar the owner's claims. The critical issue in a previous action that the owner filed against the contractor and the government involved the application of the discretionary function exception of the Stafford Act to a tort claim against FEMA. The district court in that action would have lacked jurisdiction over the owner's contract claim against the government. Therefore, that district court could not have decided the application of the Stafford Act to the owner's contract claim, since this issue would have been irrelevant to the question of the adjudication of the owner's tort claims. The court then holds that the Court of Federal Claims improperly dismissed the owner's claims as barred by a release signed by the owner's agent. If the owner's allegations are true, the release only bars claims arising from FEMA's demolition of the mobile homes and removal of the mobile homes and their contents from the park. It does not bar the owner's claims for breach of contract, takings, or inverse condemnation to the extent that such claims are predicated on conduct outside the demolition of the park tenants' property. Moreover, although the release may not bar the owner's claims, it is not unenforceable because the owner failed to establish that the agent signed the release under duress or influence. The court next holds that the owner's takings and inverse condemnation claims were legally inadequate. The owner did not allege that FEMA unilaterally intended to take the owner's property. Further, FEMA's conduct here would not give rise to a Fifth Amendment claim.

Counsel for Plaintiffs
James W. McDonald Jr.
McDonald & Associates
15600 SW 288th St., Homestead FL 33033
(305) 248-1200

Counsel for Defendant
Matthew P. Reed
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Rader and Schall, JJ.