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Sanders v. United States

October 21, 2008


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


Carl Sanders has filed suit under the Federal Tort Claims Act (FTCA) against the United States Department of Housing and Urban Development, HUD Secretary Alfonzo Jackson, and two HUD employees, Veronica Coleman and Kenneth R. Donohue, for tortious interference with employment relationships. Sanders seeks compensatory damages for lost wages and expenses, along with punitive damages. The government has moved to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) or in the alternative for summary judgment.

The Court takes the following facts from the allegations in Sanders' second amended complaint. Sanders, a property manager with experience in HUD housing developments, worked for PM One Limited Management Company. In 1998 Sanders began managing South Pointe Tower, a PM One property consisting entirely of Section 8 subsidized housing. A dispute arose in 2000 between Englewood Terrace Limited Partnership, South Pointe Tower's owner, and HUD over the validity of a Housing Assistance Payment contract. During the dispute, Veronica Coleman, the HUD Director of Management, concluded that Sanders mismanaged the property. Coleman never visited South Pointe Tower, and her opinion was based on reports by her staff. That dispute eventually led to a lawsuit. Later, in 2007, the United States Court of Federal Claims found HUD liable for breach of contract.

In October 2003 Mercy Housing, Inc. hired Sanders as area supervisor of its Chicago properties. A month later, during a meeting between Mercy and HUD, Coleman stated that Sanders had "messed up" the PM One portfolio and that Mercy was making a mistake in hiring him. 2nd Am. Compl. ¶ 24. Sanders alleges that Mercy had additional contact with Coleman during which Coleman made other untrue statements about him. Mercy subsequently terminated Sanders' $85,000 employment contract.

Sanders sought employment with American Apartment Management Company in 2005. However, during its reference check of Sanders' experience, American received a negative review from Coleman. American did not hire Sanders.

Sanders sent a letter to HUD Inspector General, Kenneth Donohue in August 2005. The letter stated that Coleman was "Illegally, Maliciously, Defaming my Character and Blackballing [Sanders] in the Industry." Id., Ex. A. The letter also laid out the sequence of events, including Sanders' lost work opportunities. It concluded by asserting that "Coleman/HUD should be liable for slandering my name, defaming my character and blackballing me in the industry." Id. (emphasis in original). Sanders sent a second letter to HUD in February 2007 enclosing the original 2005 letter, stating that he had been "severely damaged by HUD," and asking for a response in 30 days. Id., Ex. B. Sanders likewise sent letter to his congressional representatives. HUD finally sent a response to Sanders in 2007. That response came from the Program Integrity Division; it stated that the issues Sanders raised did not come under the jurisdiction of the Inspector General and that his claims had been referred to the appropriate division. Sanders sent a third letter to HUD in 2008, asking Donohue to institute "a renewed and more careful/serious investigation of my claims." Id., Ex. C. He received no response.

On March 21, 2008, Sanders filed suit against HUD, Coleman, Donohue and HUD Secretary Alfonzo Jackson for tortious interference with employment relationships. He later filed an amended complaint, naming only the United States as a defendant. Sanders' second amended complaint identifies HUD, Coleman, Donohue, and Jackson in the caption but seeks relief only against the United States.*fn1

The government has moved to dismiss the case for lack of subject matter jurisdiction or in the alternative, for summary judgment. As part of that motion, the Attorney General filed a certification that all three employees were acting within the scope of their employment" at the time of the incidents out of which the claims arose." Def. Mot., Ex. A.

1. Administrative Claim

The government first asserts that Sanders has not met the jurisdictional prerequisites to a suit under the FTCA because he failed to first file an administrative claim with HUD. Sanders counters that he sent three letters to HUD between August 30, 2005 and March 7, 2008 detailing his complaints; he contends that these letters constitute a claim under the statute.

The FTCA provides that a tort action against the United States can proceed only if the claimant has first presented the claim to the appropriate administrative agency and the agency has finally denied the claim. 28 U.S.C. § 2675(a). The administrative claim must be filed within two years after the claim accrues, or a suit under the FTCA is "forever barred." Id. § 2401(b). The agency's failure to resolve the claim within six month is treated as a final denial. Id. § 2675(a). A plaintiff's failure to exhaust administrative remedies in an FTCA case divests a court of jurisdiction over the action. McNeil v. United States, 508 U.S. 106, 111-13 (1993); Murrey v. United States, 73 F.3d 1448, 1451 (7th Cir. 1996).

The Seventh Circuit has held that 28 C.F.R. § 14.2(a) controls the requirements of an FTCA administrative claim. United States v. Kanar, 118 F.3d 527, 528 (7th Cir. 1997). That regulation states that "a claim shall be deemed to have been presented when a Federal agency receives from a claimant... an executed Standard Form 95 or other written notification of an incident, accompanied by a claim for money damages in a sum certain." 28 C.F.R. § 14.2(a).

The government notes that Sanders failed to submit a Standard Form 95, but that point by itself does not carry the day. Although section 14.2(a) states that the filing of a properly executed Standard Form 95 is sufficient to present a claim, that is not the only way to satisfy the statutory requirement of presenting a claim to the relevant agency. The regulation says that any "other written notification of the incident accompanied by a claim for money damages in a sum certain" will suffice. Id.

Because Sanders' 2005 letter clearly sets out a description of the incidents that form the basis of his claim-his contention that Ms. Coleman and other HUD employees were preventing him from getting and keeping a job-the issue is whether the letters satisfy the requirement of a demand for money damages in a sum certain. None of Sanders' letters to HUD assert any demand for damages. In fact, the letters do not mention any dollar amount at all. As a result, the letters cannot constitute a "claim" under section 2675. See Kanar, 118 F.3d at 531 (holding that the absence of one of ...

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