State Farm Mutual Auto Insurance Company v. United States Postal Service et al

Filing 27

Findings & Recommendation: Defendant's motion to dismiss 21 should be granted. Objections to the Findings and Recommendation are due by 4/4/2011. Signed on 3/15/11 by Magistrate Judge Dennis J. Hubel. (kb)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF OREGON

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PORTLAND DIVISION

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STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, as
subrogee of Ruth E Mullin,

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Plaintiff,
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v.
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UNITED STATES OF AMERICA,
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Defendant.
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Eric Virshbo
MACMILLAN, SCHOLZ & MARKS, PC
900 SE Fifth Ave., Suite 1800
Portland, OR 97204
Attorney for Plaintiff
Dwight Holton
Ronald Silver
UNITED STATES ATTORNEY'S OFFICE
1000 SW Third Ave, Suite 600
Portland, OR 97204
Attorneys for Defendants

No. CV-10-207-HU
FINDINGS & RECOMMENDATION

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HUBEL, Magistrate Judge:
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Plaintiff

State Farm

Mutual

Automobile

Insurance

Company

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("State Farm") brings this negligence action on behalf of its
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insured subrogee, Ruth Mullen, against the United States Postal
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Service ("USPS").

Before the court is USPS' motion to dismiss for

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lack subject matter jurisdiction. For the reasons set forth below,
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I recommend granting the motion.
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FACTS
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On August 12, 2008, Mullen was walking across the street when
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a USPS employee, driving a mail truck, allegedly struck Mullen.
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Compl. ¶ 3.

State Farm insured Mullen at the time and allegedly

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paid $2,019.69 in medical costs associated with the accident.
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Compl. ¶ 6.

State Farm demanded payment from USPS, and on April

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29, 2009, USPS sent State Farm a letter denying liability, and
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telling State Farm it could file suit within six months of the date
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the letter was sent.

Decl. Ronald Silver Ex. 1, at 1.

State

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Farm's law firm received the letter on May 4, 2009.

Id. Ex. 2, at

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1.

State Farm filed this action on February 23, 2010, more than

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nine months after the USPS denial letter.
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In the meantime, Mullen had filed a claim against USPS.

See

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Second Decl. Eric Virshbo Ex. 3.

Mullen's attorneys accepted

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USPS's offer to settle the claim for $10,000, but wrote,
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I want to clarify that this settlement does not include
a release from the person injury protection (PIP)
benefits paid by my client's insurer, State Farm.

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Second Virshbo Decl. Ex. 3, at 1.

USPS responded by sending a

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check and a letter which read,
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Pursuant to 28 U.S.C. § 2672 and 39 C.F.R. § 912.14,
acceptance of this check operates as a complete release
2 - FINDINGS AND RECOMMENDATIONS

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and bars recovery
against the United
any employee . . .
any outstanding
incident, must be
check.

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of any additional or future claims
States, the U.S. Postal Service, or
. Any subrogation claims, liens, or
indebtedness resulting from this
satisfied from the proceeds of this

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Second Virshbo Decl. Ex. 2, at 1. Mullen's husband later confirmed
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that she received the compensation.

First Virshbo Decl. at ¶ 2.

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STANDARDS
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A motion to dismiss brought pursuant to Federal Rule of Civil
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Procedure

12(b)(1)

addresses

the

court's

subject

matter

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jurisdiction. The party asserting jurisdiction bears the burden of
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proving that the court has subject matter jurisdiction over his
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claims.

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,

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377 (1994).
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A

Rule

12(b)(1)

motion

may

attack

the substance

of

the

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complaint's jurisdictional allegations even though the allegations
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are formally sufficient. See Corrie v. Caterpillar, Inc., 503 F.3d
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974,

979-80

(9th

Cir.

2007)

(court

treats

motion

attacking

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substance of complaint's jurisdictional allegations as a Rule
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12(b)(1) motion); Dreier v. United States, 106 F.3d 844, 847 (9th
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Cir. 1996) ("[U]nlike a Rule 12(b)(6) motion, a Rule 12(b)(1)
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motion can attack the substance of a complaint's jurisdictional
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allegations

despite

their

formal

sufficiency[.]")

(internal

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quotation omitted).

Additionally, the court may consider evidence

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outside the pleadings to resolve factual disputes.

Robinson v.

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United States, 586 F.3d 683, 685 (9th Cir. 2009); see also Dreier,
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106

F.3d

at

847

(a

challenge

to

the

court's

subject

matter

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jurisdiction under Rule 12(b)(1) may rely on affidavits or any
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other evidence properly before the court).
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3 - FINDINGS AND RECOMMENDATIONS

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DISCUSSION

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According to USPS, State Farm's suit is barred under the

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Federal Tort Claims Act ("FTCA") because it did not initiate the

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suit

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liability.

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"advance payment" under Oregon law that tolled the FTCA's 180-day

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statute of limitations.

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limitations is not subject to tolling by Oregon statutes.

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within

180

days

of

USPS'

letter

to

State

Farm

denying

State Farm argues that USPS' payment to Mullen was an

USPS responds that the FTCA's statute of

The general rule is that a court looks to state law to define

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the time limitation

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"Congress has failed to provide a statute of limitations for a

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federal cause of action." Lampf, Pleva, Lipkind, Prupis & Petigrow

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v. Gilbertson, 501 U.S. 350, 111 S.Ct. 2773, 2778 (1991); see also

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Poindexter v. United States, 647 F.2d 34, 36 (9th Cir. 1981).

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Under the FTCA, however, the statute of limitations is explicit,

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A tort claim against the United States shall be forever
barred unless it is presented in writing to the
appropriate Federal agency within two years after such
claim accrues or unless action is begun within six months
after the date of mailing, by certified or registered
mail, of notice of final denial of the claim by the
agency to which it was presented.

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applicable

to

a

federal

claim

only

when

28 U.S.C. § 2401(b).

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In Poindexter, the leading case on a state statute's effects

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on the FTCA's statute of limitations, the Ninth Circuit addressed

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two cases where the injured plaintiffs filed FTCA claims, but were

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denied relief because district courts held they were time-barred

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under an Arizona statute.

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provided that a worker injured by a third party who elects to

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receive workers' compensation could also file a common law tort

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action, but if such an action was not brought within one year of

647 F.2d at 35.

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The Arizona statute

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the injury, the claim would be assigned by operation of law to the

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party who paid the compensation benefits, usually an insurer.

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(citing Ariz. Rev. Stat. § 23-1023).

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alleging that the FTCA's statute of limitations, not the Arizona

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statute, governed the timeliness of their claims.

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Circuit Court of Appeals agreed with the plaintiffs, and reversed.

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Id.

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Id.

The plaintiffs appealed,

Id.

The Ninth

The Ninth Circuit explained,

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A court must look to state law for the purpose of
defining the actionable wrong for which the United States
shall be liable, but to federal law for the limitations
of time within which the action must be brought. Ariz.
Rev. Stat. § 23-1023 B cannot bar appellants' claims if
it is a statute of limitations and not a substantive
provision.

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Id. at 36. The Ninth Circuit acknowledged that "[a]lthough some of

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the provisions of Ariz. Rev. Stat. § 23-1023 are 'substantive' and

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must be given effect in a Federal Tort Claims action, the provision

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cutting off the injured worker's cause of action after one year is

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a statute of limitations and is preempted by 28 U.S.C. § 2401(b)."

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Id. (emphasis added).

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Here, State Farm argues that USPS' payment to Mullen was an

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"advance payment" under ORS 31.550 and ORS 31.560.

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State Farm, under ORS 12.155 the "advance payment" tolled the

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FTCA's statute of limitations.

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Chapter

12

of

the

According to

This argument is unavailing.

Oregon

Revised

Statutes

is

titled

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"Limitations of Actions and Suits." The specific statute at issue,

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ORS 12.155, entitled "Effect of notice of advance payment on

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running of period of limitation," reads,

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(1) If the person who makes an advance payment referred
to in ORS 31.560 or 31.565 gives to each person entitled
to recover damages for the death, injury or destruction,
not later than 30 days after the date the first of such
advance payments was made, written notice of the date of
5 - FINDINGS AND RECOMMENDATIONS

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expiration of the period of limitation for the
commencement of an action for damages set by the
applicable statute of limitations, then the making of any
such advance payment does not suspend the running of such
period of limitation. . . .

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(2) If the notice required by subsection (1) of this
section is not given, the time between the date the first
advance payment was made and the date a notice is
actually given of the date of expiration of the period of
limitation for the commencement of an action for damages
set by the applicable statute of limitations is not part
of the period limited for commencement of the action by
the statute of limitations.

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(emphasis added).

There is no question that the Oregon statute

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pertains exclusively to the time by which an action must be
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brought, and is not substantive law.

On the contrary, it alters

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the amount of time a party has to bring a claim.

Therefore,

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insofar as the statute alters the amount of time a plaintiff has to
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bring a claim under the FTCA, it is preempted by 28 U.S.C. s
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2401(b).
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The USPS mailed State Farm its notice of final denial of the
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claim on April 29, 2009.

Under 28 U.S.C. s 2401(b), State Farm had

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until October 29, 2009, to file a claim under the FTCA.

It did not

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file the claim until February 23, 2010.
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Accordingly,

I

recommend

holding

that

this

court

lacks

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jurisdiction, and the case should be dismissed.
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CONCLUSION
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Defendant's motion to dismiss [doc. #21] should be granted.
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6 - FINDINGS AND RECOMMENDATIONS

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SCHEDULING ORDER

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The Findings and Recommendation will be referred to a district

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judge. Objections, if any, are due April 4, 2011. If no objections

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are filed, then the Findings and Recommendation will go under

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advisement on that date.

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If objections are filed, then a response is due April 21,

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2011.

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earlier, the Findings and Recommendation will go under advisement.

When the response is due or filed, whichever date is

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IT IS SO ORDERED.
Dated this 15 day of March, 2011.

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/s/ Dennis J. Hubel

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Dennis James Hubel
United States Magistrate Judge

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7 - FINDINGS AND RECOMMENDATIONS