Gonos v. United States of America et al

Filing 50

ORDER OF DISMISSAL : the Defendant USA's motion to dismiss 40 is granted and this action is dismissed without prejudice for lack of subject matter jurisdiction, by Judge Richard P. Matsch on 2/24/2014. (rpmcd)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior District Judge Richard P. Matsch
Civil Action No. 13-cv-01880-RPM
JAMES GONOS,
Plaintiff,
v.
UNITED STATES OF AMERICA;
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;
THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT;
ELIST REALTY, LLC;
STACY HAYDEN;
MASTERS REALTY, LLC, d/b/a KELLER WILLIAMS AND KELLER WILLIAMS REALTY
DTC LLC;
THE HOMESMITHS TEAM, INC. d/b/a THE HOMESMITHS;
PHIL PHISTRY;
ASSET MANAGEMENT SPECIALISTS, INC.;
MATT MARTIN REAL ESTATE MANAGEMENT, LLC; and
AND JOHN DOE (whose true name is unknown),
Defendants.

ORDER OF DISMISSAL

Plaintiff James Gonos (“Gonos” or “the Plaintiff”) alleges that he was injured on July 17,
2011, when he fell down a flight of stairs in a home located at 2372 South Troy Street, Aurora,
Colorado (“the property”). The property was at that time owned by the United States
Department of Housing and Urban Development (“HUD”). As discussed more fully below,
during the relevant time period, Asset Management Specialist, Inc. (“AMS”), a Pennsylvania
corporation, provided property maintenance and preservation services for HUD pursuant to a
written contract that encompassed the subject property. In addition, Matt Martin Real Estate
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Management, LLC (“Matt Martin”), a Virginia corporation, provided asset management services
for HUD pursuant to a written contract that encompassed the subject property.
The property was listed for sale by eList Realty, LLC, a Colorado limited liability
company, and its agent, Stacy Hayden. The Plaintiff visited the property on July 17, 2011 for the
purpose of accompanying a relative who was interested in assessing the property for potential
purchase. The complaint alleges that the “showing agents” were Phil Phistry, Masters Realty,
LLC (d/b/a Keller Williams and Keller Williams Realty DTC LLC) and The Homesmiths Team,
Inc. (d/b/a The Homesmiths).
During the showing, the Plaintiff reached into what he believed was a pantry and fell
down a set of stairs. The Plaintiff alleges that the stairway was dark and dangerous due to poor
natural and artificial lighting and because the power was turned off or not working properly.
The Plaintiff alleges that the was not warned about the dark stairway and flashlights were not
provided.
On July 15, 2013, the Plaintiff filed this action for damages, asserting a claim under the
Colorado Premises Liability Act, C.R.S. § 13-21-115, and a claim of negligence against the
following defendants: the United States of America (“USA”); HUD and its Secretary; eList
Realty, LLC; Stacy Hayden; Masters Realty, LLC d/b/a Keller Williams and Keller Williams
Realty DTC LLC; the Homesmiths Team, Inc. d/b/a The Homesmiths; Phistry; AMS; Matt
Martin, and unknown John Doe defendants.
The complaint alleges federal jurisdiction on the basis of the Federal Tort Claims Act,
28 U.S.C. §§ 2671-2680 (“FTCA”), and 28 U.S.C. § 1346(b).

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The USA, HUD and the Secretary (collectively, “the USA”) moved for dismissal
pursuant to Fed.R.Civ.P. 12(b)(1), arguing that HUD hired AMS and Matt Martin as independent
contractors and therefor the independent contractor exception to the FTCA’s waiver of sovereign
immunity deprives this Court of jurisdiction over tort claims against the USA arising out of the
condition of the property.
The FTCA provides that “[t]he United States shall be liable, respecting the provisions of
this title relating to tort claims, in the same manner and to the same extent as a private individual
under like circumstances ....” 28 U.S.C. § 2674. However, in the FTCA, contractors are
excluded from the definition of “federal agency,” see 28 U.S.C. § 2671, and in 28 U.S.C.
§ 1346(b), the term “employee of the government” does not include any contractor with the
United States. The FTCA’s waiver of sovereign immunity does not authorize suits against the
United States based on vicarious liability for the acts of independent contractors or their
employees. Curry v. United States, 97 F.3d 412, 414 (10th Cir. 1996).
“The critical determination in distinguishing a federal employee from an independent
contractor is the power of the federal government ‘to control the detailed physical performance
of the contractor.’” Lilly v. Fieldstone, 876 F.2d 857, 858 (10th Cir.1989) (quoting Logue v.
United States, 412 U.S. 521, 528, 93 S.Ct. 2215, 2219, 37 L.Ed.2d 121 (1973)). The key inquiry
is whether the Government supervises the day-to-day operations of the individual or entity.
Lilly, 876 F.2d at 858. In this circuit, that inquiry involves consideration of the following
factors:

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(1) the intent of the parties; (2) whether the United States controls only the end
result or may also control the manner and method of reaching the result;
(3) whether the person uses his own equipment or that of the United States;
(4) who provides liability insurance; (5) who pays social security tax; (6) whether
federal regulations prohibit federal employees from performing such contracts;
and (7) whether the individual has authority to subcontract to others.
Tsosie v. United States, 452 F.3d 1161, 1163-64 (10th Cir. 2006) (quoting Lilly, 876 F.2d at
859).
The USA has provided an affidavit of Eric R. Cobb, the Director of the Real Estate
Owned Division (“REO”) of HUD’s Denver Homeownership Center. Cobb states that in June
2010, HUD entered into a written contract with AMS to be the Field Service Manager for REO
single-family properties located within the jurisdiction of the Denver Homeownership Center.
(Cobb. aff. ¶¶ 12 & 15). Cobb also states that in June 2010, HUD entered into a written contract
with Matt Martin to be the Asset Manager for REO single-family properties located within the
Denver area. (Cobb aff. ¶¶ 12 & 16). Cobb states that HUD acquired the subject property on
June 23, 2011, as a result of the mortgagor’s default on a HUD-insured mortgage, and thereafter
the management, marketing, and disposition of this property were governed by the terms and
conditions of the contract between HUD and AMS and the contract between HUD and Matt
Martin. (Id. ¶¶ 20-22). The two written contracts are attached as exhibits A and B to Cobb’s
affidavit.
Under the AMS contract, that entity had responsibility for property maintenance and
preservation services, including day-to-day maintenance matters. Cobb states that AMS had the
authority to address health and safety issues and engage in day-to-day operations without HUD’s
supervision or approval. (Cobb. aff. ¶ 23).

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Under the Matt Martin contract, HUD delegated responsibility for all marketing and
sales functions to that entity. Cobb states that Matt Martin had authority to utilize the services of
real estate professionals, without HUD’s supervision or approval. (Cobb aff. ¶ 25).
The contracts and Cobb’s description of HUD’s relationship with AMS and Matt Martin
demonstrate that HUD hired AMS and Matt Martin as independent contractors. That intent is
implicit in the scope of the duties and authority delegated by HUD to the contractors.
With respect to other Lilly factors, both contracts address equipment costs and generally
place responsibility for such costs on the contractor. Specific “pass-through expenses” are
identified as such. Both contracts obligate the contractor to furnish a performance bond and a
payment bond. Both contracts contain an explicit prohibition against the use of government
employees. Both contracts permit subcontracting.
Contrary to the Plaintiff’s argument, the contract language does not show HUD’s
supervision of day-to-day operations of AMS or Matt Martin. The fact that Field Managers and
Asset Managers must abide by the terms of their contracts and meet certain general or regulatory
criteria does not mean that HUD supervises their day-to-day operations.
The Plaintiff argues that the independent contractor exception should not apply because
under Colorado law, an owner of real property has a nondelegable duty to maintain the property.
That argument fails. “[T]he concept of nondelegable duty is a species of vicarious liability.”
Reid v. Berkowitz, 315 P.3d 185,193 (Colo. Ct. App. 2013). State common law principles of
vicarious liability do not override the FTCA’s independent contractor exemption. Logue, 412
U.S. at 528-29; Flynn v. United States, 631 F.2d 678, 681 (10th Cir. 1980); see also Roditis v.
United States, 122 F.3d 108, 111 (2d Cir. 1997)(“[A]ny state law nondelegable duty cannot, on

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its own, override the United States’ sovereign immunity from suits for injuries caused by its
independent contractors.”)
The FTCA’s independent contractor exception does not shield the USA from liability for
the negligence of its own employees, see Logue, 413 U.S. at 532-33, but no such negligence has
been alleged or shown. The Plaintiff offers an Inspection Report dated July 7, 2011. That report
is not evidence of negligence on the part any employee of the USA. The Inspection Report was
prepared by Stacy Hayden, and she is not a federal employee. The USA had no direct
contractual relationship with her employer.
Because the USA has not waived its sovereign immunity this court lacks jurisdiction
under the FTCA and 28 U.S.C. § 1346(b). In the absence of such jurisdiction, the court declines
to continue supplemental jurisdiction over the plaintiff’s claims against the remaining defendants
and thus does not address the Showing Agent Defendants’ motion to dismiss pursuant to
Fed.R.Civ.P. 12(b)(6).
Based on the foregoing, it is
ORDERED that the Defendant USA’s motion to dismiss [#40] is granted and this action
is dismissed without prejudice for lack of subject matter jurisdiction.
Date: February 24, 2014
BY THE COURT:
s/Richard P. Matsch

Richard P. Matsch, Senior District Judge

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