United States District Court, Northern District of Illinois, E.D
February 20, 1981
AETNA LIFE & CASUALTY INSURANCE COMPANY, AS SUBROGEE OF CLEO DANIELS, PLAINTIFF,
UNITED STATES OF AMERICA, DEFENDANT.
The opinion of the court was delivered by: Flaum, District Judge:
This matter comes before the court on the defendant's motion
for summary judgment on the complaint pursuant to Federal Rule of
Civil Procedure 56. For the reasons set forth below, the motion
for summary judgment is granted.
The facts of the case are as follows. The plaintiff Aetna Life
and Casualty Insurance Company ("Aetna"), as subrogee of one Cleo
Daniels ("Daniels"), filed suit against the defendant United
States of American ("United States") based upon the Federal Tort
Claims Act ("FTCA"), 28 U.S.C. § 1346(b), 2679(a) (1978). Aetna
alleges that it was the insurer of certain property owned by
Daniels located in Chicago, Illinois. Aetna further alleges that
the United States, through the Secretary of the United States
Department of Housing and Urban Development ("HUD"), was the
owner of the property adjacent to Daniels' property. According to
Aetna, the United States, by and through its agents and
employees, had a duty to inspect and maintain its property. Aetna
further alleges that, on or about June 10, 1976, the United
States was guilty of one or more of the following acts and
omissions: failure to secure its vacant property so as to prevent
the entry of unauthorized persons whom the United States knew or
should have known were vandalizing the property; failure to post
a guard or watchman on the premises between 4:00 p.m. and 8:00
a.m. as required by the Chicago Municipal Code;*fn1 and failure to
retain a qualified contractor to perform all services required
for the property. As a direct result of these alleged acts and
omissions by the United States, Aetna contends that a fire of
unknown origin was caused to occur upon the United States
property which destroyed the Daniels' property. Aetna seeks to
recover $28,995.93 in insurance payments made to Daniels plus
The United States filed a motion for summary judgment on the
complaint pursuant to Federal Rule of Civil Procedure 56. In its
motion, the United States first contends that HUD assigned
possession and control of the property in March 1975 to an
independent contractor, the South Austin Realty Association
("South Austin"). South Austin is the area management broker
("AMB") in the area where the property is
located.*fn3 Thus, the United States contends that, even assuming
negligent conduct in maintaining the property, no federal
government employee was involved in such conduct. As a second
ground in support of its motion for summary judgment, the United
States contends that its choice of an AMB to manage certain
HUD-owned property is a discretionary act exempt from FTCA
liability. Thus, the United States contends that its actions fall
within the so-called "discretionary function" exception to the
FTCA. Finally, the United States contends that the alleged
violation of the Chicago Municipal Code does not create a private
right of action for Aetna against the United States.
Federal Rule of Civil Procedure 56(c) provides that summary
judgment may be entered in a case "if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." Fed.R.Civ.P. 56(c). The burden is
upon the moving party to establish the lack of a triable issue of
fact, and all doubts must be resolved against that party. Adickes
v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26
L.Ed.2d 142 (1970); Joseph v. Brierton, 431 F. Supp. 50, 52
(N.D.Ill. 1977). The court, however, "has the power to penetrate
the allegations of fact in the pleadings and look at any
evidential source to determine whether there is an issue of fact
to be tried." Kirk v. Home Indemnity Co., 431 F.2d 554, 559 (7th
Pursuant to the doctrine of sovereign immunity, the United
States may not be sued without its consent. C. Wright, Handbook
of the Law of Federal Courts 82 (3d ed. 1976). The FTCA provides
a limited waiver of sovereign immunity for recovery in tort
actions against the United States. The FTCA permits an action
against the United States:
for injury or loss of property, or personal injury or
death caused by the negligent or wrongful act or
omission of any employee of the Government while
acting 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
28 U.S.C. § 1346(b) (1978). Thus, a valid cause of action against
the United States under the FTCA is predicated upon the liability
of a private person under applicable state law. See Emch v.
United States, 630 F.2d 523
, 526 (7th Cir. 1980).
For the purposes of the FTCA, a federal employee is defined as
"officers or employees of any federal agency, members of the
military or naval forces of the United States, and persons acting
on behalf of a federal agency in an official capacity. . . ."
28 U.S.C. § 2671 (1978). A federal agency for FTCA purposes is
defined as "the executive departments, the military departments,
independent establishments of the United States, and corporations
primarily acting as instrumentalities or agencies of the United
States, but does not include any contractor with the United
States." Id. Whether an individual is an employee of the United
States under the FTCA is determined by federal law. Brooks v.
A.R. & S. Enterprises, Inc., 622 F.2d 8, 10 (1st Cir. 1980). The
United States Supreme Court held in United States v. Orleans,
425 U.S. 807, 814, 96 S.Ct. 1971, 1976, 48 L.Ed.2d 390 (1976), that
the critical element in distinguishing an agency from a
contractor is the power of the United States to control the
detailed physical performance of the contractor. See Logue v.
United States, 412 U.S. 521, 528, 93 S.Ct. 2215, 2219, 37 L.Ed.2d
In Harris v. United States, 424 F. Supp. 627, 629 (D.Mass.
1976), the court held that an AMB is an independent contractor
for FTCA purposes. In Harris, the plaintiff, a
tenant in the HUD-owned apartment building which was managed by
an AMB, was injured in a fall caused by a defective stairway on
the premises. Id. 629-30. The plaintiff filed suit against the
United States under the FTCA. Id. at 630. The Harris court noted
that, while HUD owned the property, the AMB had primary
responsibility for the management of the premises under the AMB
Under the terms of the contract between HUD and
AMB, the AMB is responsible for rentals and
evictions; collection of rents and paying of
operating expenses; continuing maintenance of
buildings and grounds, and supervision of all repair,
maintenance, and operating activities.
HUD, in turn, is responsible for "supervisory
inspection, examination and instruction; [and]
over-all assistance in treating the basic problems
incident to the responsibilities of the [AMB]. . . ."
Thus, supervision is not on a day to day basis, but
only if major difficulties arise to insure that the
contract is being carried out according to its terms.
Id. at 629 (citations omitted). Under the rationale enunciated in
United States v. Orleans, 425 U.S. 807, 814, 96 S.Ct. 1971, 1976,
48 L.Ed.2d 390 (1976), the Harris court concluded that the AMB is
an independent contractor not within the purview of the FTCA. 424
F. Supp. at 629. See Perez v. United States, 594 F.2d 280, 284
(1st Cir. 1979).
Applying the law to the facts of the instant case before this
court, the court concludes that South Austin was an independent
contractor of the United States for FTCA purposes. As in Harris,
the AMB contract between South Austin and HUD provided that South
Austin supervise all repair, maintenance, and operating
activities on the property. (Area Management Broker Contract art.
3, § d.) The contract further provided that South Austin arrange
for and supervise "[s]ecuring the properties against unauthorized
entry . . . at the outset and thereafter as needed." (Id. at art.
5, § c.) Moreover, the contract provided that:
It shall be the duty of [South Austin] to obtain the
services of qualified employees in all instances, and
[South Austin] shall be responsible for the actions
and omissions of such employees in the performance of
the contract. All employees engaged in the
performance of the contract shall be hired by [South
Austin] and shall be the employees of [South Austin]
and not employees of the Government.
(Id. at General Provisions § 4.) As in Harris, HUD was
responsible for "[s]upervisory inspection, examination and
instruction; [and] overall assistance in treating with basic
problems incident to the responsibilities of [South
Austin]. . . ." (Id. at Contract Articles, art. 2, § a.) Under
the Orleans rationale, HUD did not control the detailed physical
performance of South Austin in maintaining and securing the
property. Thus, the court concludes that South Austin was an
independent contractor for FTCA purposes.
Aetna apparently contends that, even if South Austin was
responsible for maintaining and securing the property under the
AMB contract with HUD, HUD should not be relieved of its common
law, nondelegable duty to neighboring property owners. The court
rejects this argument. Assuming arguendo that Illinois law
recognizes such a nondelegable duty, this duty cannot impose
liability upon the United States under the FTCA. The FTCA is a
limited waiver of sovereign immunity for the negligent acts or
omissions of federal employees. See 28 U.S.C. § 1346(b) (1978).
Liability for the acts of independent contractors is specifically
excluded by the FTCA. See 28 U.S.C. § 2671 (1978); Dumansky v.
United States, 486 F. Supp. 1078, 1093 (D.N.J. 1980). But see
Emelwon, Inc. v. United States, 391 F.2d 9, 12 (5th Cir. 1968).
Accordingly, the motion for summary judgment is granted.*fn4
It is so ordered.