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Bull v. United States Department of Housing and Urban Development

filed*fn*: January 10, 1994.


Appeal from the United States District Court for the District of Montana. D.C. NO. CV-91-46-JDS. Jack D. Shanstrom, District Judge, Presiding

Before: Tang, Farris, and Rymer, Circuit Judges.


This action arises out of a tragic incident in which appellants lost family members and their home in a fire. Morton Other Bull, Sr., as personal representative for decedents Alonzo, Margaret, and Loudall Other Bull, and Raynard Other Bull appeal the district court's grant of two motions to dismiss their amended complaint for its failure to state a claim upon which relief can be granted. The motions to dismiss addressed appellants' claims against the United States and the Crow Tribal Housing Authority ("CTHA") for the alleged negligent design and construction of appellants' home.

The Government argues that the Federal Torts Claims Act ("FTCA"), 28 U.S.C. § 2671 et seq., fails to provide a waiver of sovereign immunity for claims arising from Department of Housing and Urban Development ("HUD") construction oversight activities. The CTHA points out that it is a tribal entity and argues that appellants fail to allege a statutory basis for federal jurisdiction. The CTHA concludes, therefore, that appellants' claims against it must be decided first by a tribal court.

A dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) is a ruling on a question of law and as such is reviewed de novo. Oscar v. University Students Co-Operative Ass'n, 965 F.2d 783, 785 (9th Cir.) (en banc), cert. denied, U.S. , 121 L. Ed. 2d 581, 113 S. Ct. 655 (1992); Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir. 1989), cert. denied, 496 U.S. 937, 110 L. Ed. 2d 664, 110 S. Ct. 3217 (1990). Review is limited to the contents of the complaint. Buckey v. Los Angeles, 968 F.2d 791, 794 (9th Cir.), cert. denied, U.S. , 121 L. Ed. 2d 536, 113 S. Ct. 599 (1992). All allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Id. A complaint should not be dismissed unless it appears beyond doubt that plaintiff can prove no set of facts in support of his or her claim which would entitle him or her to relief. Id.


To recover against the United States under the FTCA, appellants must show that their injuries were due to the "negligent or wrongful act or omission of any employee of the Government." 28 U.S.C. § 1346(b). The FTCA waives, with certain exceptions, the Government's traditional sovereign immunity from suit for common law torts committed by government agents, 28 U.S.C. § 2674, but the source of the claim for relief must be the law of the state where the act or omission complained of occurred. 28 U.S.C. § 1346(b); Lutz v. United States, 685 F.2d 1178, 1182 (9th Cir. 1982). Here, appellants must either show negligence on the part of HUD or its employees, or establish that the CTHA was in fact, if not in name, a federal agency and that its employees were negligent. Appellants refrain, however, from pursuing the latter theory.*fn1 The United States argues that appellants failed to state a viable claim against it for negligence on the part of HUD or its employees.

Appellants claim that the United States is liable for the alleged negligence of HUD's architect in approving the design and construction of the Other Bull home; that is, for the architect's approval of the design and construction of allegedly defective windows.*fn2 The district court excluded this possibility on the ground that appellants merely alleged that HUD's architect acted to oversee the project to ensure that it met governmental standards. The court found no suggestion in the complaint that HUD or its employee intervened in the design or construction of the house to such an extent as to create the defective windows.

For appellants to prevail on their theory that HUD's architect acted negligently, they must establish that the alleged design defect in the windows resulted from a breach of a duty owed by HUD to the occupants of the home under state law. Appellants first suggest that HUD had an affirmative duty, arising out of its contractual right to review and approve the plans and construction of the home, to ensure that the home was safe. We reject this contention.

The United States neither owned nor was in possession of the appellants' home during its construction. HUD was merely a financier with rights to review and inspect the plans and construction of the home. HUD's interest in inspecting was to ensure compliance with the applicable contracts; "its employees were not conducting general safety inspections, but rather were at the site to ensure that the project was built according to plans and to protect HUD's financial interests." Perez v. United States, 594 F.2d 280, 287 (1st Cir. 1979); see Wright v. United States, 599 F.2d 304, 305 (9th Cir. 1979) (Government, as lender of money to recreation association through federal lending agency, could not be liable for damages caused by alleged negligence of borrowing corporation in management of its swimming pool, despite contention that there was negligent supervision of borrower.)

Furthermore, appellants fail to point to some act of intervention by HUD in the design or construction process "that could meaningfully be said to have caused the [windows to be unsafe], thereby increasing the risk of harm to the [home occupants]." Perez, 594 F.2d at 288. As it was that the CTHA had ultimate responsibility for designing and building the project, "it would not be enough to show that the allegedly unsafe [windows were] a remote consequence of [the CTHA's] efforts to deal with HUD's objections to another feature of the original plans." Id. HUD was entitled to request improvements in the CTHA's design without assuming responsibility for all changes the CTHA thereafter might make in response to its requests. "Only if HUD, as distinct from [the CTHA], could be said to have been the proximate, rather than merely the incidental, cause of [appellants' injuries] could the United States be held liable." Id. Thus, appellants would have to prove that HUD either required the windows to be designed the way they were or unreasonably insisted on some change that made the defective design unavoidable. None of appellants' allegations in the complaint suggest, however, that the United States intervened in the design or construction of the home in such a way as to create the defective windows.

Finally, "there is no Montana case law that would hold a private person in the same position as the Government in this case (for example, a bank or savings and loan which had lent money to build a home and had inspected the construction) responsible for negligent construction on the part of the person or company building the home." Trombetta v. United States, 613 F. Supp. 169, 170 (D. Mont. 1985). Therefore, without a duty owed by HUD to appellants, there can be no breach of duty and thus no claim for relief. Appellants, however, vigorously challenge this last point.

Appellants argue that the United States' liability is established via its architect's alleged negligence under the Good Samaritan Doctrine.*fn3 Appellants rely on the form of this doctrine described in § 324A, Restatement of Torts, Second, which provides:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his ...

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