Diaz v. United States

United States Court of Federal Claims

No. 18-286C

Filed: December 19, 2018

______________________________________

)

NICOLE DIAZ, )

)

Plaintiff, ) Motion to Dismiss; Failure to State a

) Claim; Motion for Summary

v. ) Judgment; Statute of Limitations;

) Breach of Contract

THE UNITED STATES, )

)

Defendant. )

______________________________________ )

Michael A. Moulis, Moulis Aviation Law Office, Fort Lauderdale, FL, counsel for plaintiff.

Jessica Lee Cole, U.S. Department of Justice, Civil Division, Washington, D.C., counsel for

defendant.

OPINION AND ORDER

SMITH, Senior Judge

This matter comes before the Court on defendant’s Motion to Dismiss. Plaintiff, Nicole

Diaz (“Ms. Diaz”), alleges that the government breached its contractual duty by wrongfully

neglecting to change her Standard Form 50 (“SF-50”) in accordance with the parties’ settlement

agreement. See generally Complaint (hereinafter “Compl.”). Ms. Diaz seeks monetary relief in

the form of past and future economic damages flowing from the breach, plus costs and fees. See

Compl. at 5–6. The government argues that plaintiff’s Complaint must be dismissed because

plaintiff fails to show that the breach of the settlement agreement was the proximate cause of her

damages, and thus plaintiff fails to state a claim upon which relief can be granted, pursuant to

Rule 12(b)(6) of the Rules of the Court of Federal Claims (“RCFC”). See Defendant’s Motion to

Dismiss (hereinafter “Mot. to Dismiss”) at 6. After careful review and for the reasons that

follow, the Court grants defendant’s Motion to Dismiss.

I. Background

A. Factual History

Plaintiff was employed by the Federal Aviation Administration (“FAA”) as an Airway

Transportation Safety Specialist from September of 2001 until August of 2005. See Compl. at 2.

On August 24, 2005, the FAA discharged Ms. Diaz from her position. Id. At the time of her

termination, she had reached grade GS-11 and her salary was $50,234. Id. Upon her

termination, she timely appealed her removal with the United States Merit Systems Protection

Board (“MSPB”). Id. Ms. Diaz and the FAA reached a settlement prior to the MSPB hearing.

Id. On October 26, 2006, the parties signed and entered into the original settlement agreement,

which required the FAA to pay Ms. Diaz $1,800.00 in damages. See id. In addition to monetary

damages, the agreement mandated that the FAA remove Ms. Diaz’s SF-50 form citing

“termination” as the cause of her departure and replace it with an SF-50 form citing

“resignation” as the cause of her departure. See Plaintiff’s Exhibit (hereinafter “Pl.’s Ex.”) 1 at

2. The removal and replacement of the SF-50 form was to be completed within 30 days of the

signing of the agreement. See id. at 2.

In 2007, Ms. Diaz applied for a position with the City of Atlanta Government Agency at

the Atlanta-Hartsfield Airport. Pl.’s Ex. 3. The application for the job required her to submit a

current copy of her SF-50. Compl. at 2. Upon plaintiff’s request, the FAA gave Ms. Diaz a copy

of her SF-50 still citing “termination” instead of “resignation,” and thereby showed the FAA’s

noncompliance with the settlement agreement. Id. at 3. Ms. Diaz notified the FAA on May 15,

2007, of the noncompliance and filed a “Petition for Enforcement” with the MSPB. See id.

Before the hearing, the parties entered into a second settlement agreement, in which the FAA

paid $6,000.00 in damages to Ms. Diaz for breach of the original settlement agreement and

agreed to amend the personnel record to reflect resignation. Id. The agreement required the

FAA to amend the SF-50 by June 6, 2007, but the FAA again failed to correct plaintiff’s

personnel record. Id.

In 2016, Ms. Diaz applied for a FAA Telecommunication position, which required either

a copy of her SF-50 or a copy of her Official Personnel File (“OPF”) records. See Pl.’s Ex. 3. In

November of 2016, the National Personnel Records Center sent Ms. Diaz a copy of her paper

SF-50 from her OPF after she submitted a request. See Pl.’s Ex. 4. Upon receipt, Ms. Diaz

discovered the FAA never changed the paper OPF to reflect “resignation.” See Compl. at 4. The

National Personnel Records Center indicated that her personnel record had not been requested

for change by the FAA during the past ten years, and no federal or civilian employers had

reviewed her personnel file for the last ten years. Pl.’s Ex. 4. On November 7, 2016, Ms. Diaz

sent notice to the FAA of its noncompliance with the second settlement agreement and filed her

third petition for enforcement of the settlement agreement. Compl. at 4. Prior to the hearing, the

FAA offered settlement in the amount of $42,500 with assurances that it would amend Ms.

Diaz’s record. Id. Ms. Diaz declined this offer and submitted a counter-offer. Id. Ultimately,

the FAA declined Ms. Diaz’s counter-offer without any further proposals for settlement. Id.

On December 18, 2017, Administrative Law Judge (“ALJ”) Richard Vitaris heard the

matter and ruled that the FAA’s failure to amend Ms. Diaz’s SF-50 constituted a material breach

of the settlement agreement. See id. at 4–5. The ALJ stated, however, that one party’s material

breach of a settlement agreement merely entitles the non-breaching party to either enforce the

settlement agreement or rescind the agreement. See Pl.’s Ex. 5 at 4–5. Pursuant to this choice,

Ms. Diaz elected not to rescind the settlement agreement. See id. at 5. The Agency, the ALJ

found, replaced Ms. Diaz’s paper SF-50 to indicate “resignation” prior to the administrative

hearing. See id. at 4. Therefore, the ALJ ruled that no relief could be granted to Ms. Diaz

because the FAA had already updated her personnel file, thereby satisfying the conditions of the

earlier settlement agreement. See id.

2

B. Procedural History

On February 23, 2018, Ms. Diaz filed her Complaint with this Court, seeking damages

similar to the amount she would have earned from the date of her resignation until the FAA

changed her SF-50, had she engaged in federal employment at her prior GS level. Compl. at 5–

6. On April 23, 2018, the government filed its Motion to Dismiss, arguing that the Court should

dismiss plaintiff’s Complaint for failure to state a claim upon which relief could be granted,

pursuant to RCFC 12(b)(6). Mot. to Dismiss at 1. Alternatively, the government asks the Court

to grant Summary Judgment in its favor, pursuant to RCFC 56. Id. On May 21, 2018, plaintiff

filed her Response to defendant’s Motion to Dismiss. See generally Plaintiff’s Response to

Defendant’s Motion to Dismiss (hereinafter “Pl.’s Resp. to Def.’s Mot. to Dismiss”).

Additionally, Ms. Diaz filed an affidavit in support of her Response, detailing her failure to

secure employment from the City of Atlanta Government Agency in 2007, the FAA in 2011,

Norfolk Southern Railroad in 2013, and the FAA again in 2016. See Pl.’s Aff. ¶¶ 6, 9, 10.

Defendant filed its Reply on June 1, 2018. See generally Defendant’s Reply in Support of its

Motion to Dismiss (hereinafter “Def.’s Reply”). The Court held Oral Argument on defendant’s

Motion to Dismiss, or in the alternative, for Summary Judgment on August 15, 2018. After Oral

Argument, plaintiff filed its Supplemental Brief on October 23, 2018. See generally Plaintiff’s

Supplemental Brief. (hereinafter “Pl.’s Supp. Brief”). On November 13, 2018, defendant filed

its Response to plaintiff’s Supplemental Brief. See generally Defendant’s Supplemental Brief

(hereinafter “Def.’s Supp. Brief”). Defendant’s Motion is fully briefed and ripe for review.

II. Standard of Review

This Court’s jurisdictional grant is found primarily in the Tucker Act, which provides the

Court of Federal Claims with the power “to render judgment upon any claim against the United

States founded either upon the Constitution, or any Act of Congress or any regulation of an

executive department, or upon any express or implied contract with the United States . . . in cases

not sounding in tort.” 28 U.S.C. § 1491(a)(1) (2012). Although the Tucker Act explicitly

waives the sovereign immunity of the United States against such claims, it “does not create any

substantive right enforceable against the United States for money damages.” United States v.

Testan, 424 U.S. 392, 398 (1976). Rather, to fall within the scope of the Tucker Act, “a plaintiff

must identify a separate source of substantive law that creates the right to money damages.”

Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in relevant part).

It is well-settled that a complaint should be dismissed for failure to state a claim upon

which relief can be granted “when the facts asserted by the claimant do not entitle him [or her] to

a legal remedy.” Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002) (citing Boyle v.

United States, 200 F.3d 1369, 1372 (Fed. Cir. 2000)). When considering a motion to dismiss

brought under RCFC 12(b)(6), “the court must accept as true the complaint’s undisputed factual

allegations and should construe them in a light most favorable to plaintiff.” Bristol Bay Area

Health Corp. v. United States, 110 Fed. Cl. 251, 259 (2013). Still, the Court must inquire

whether the complaint meets the “plausibility” standard, which ascertains whether the complaint

adequately states a claim and provides a “showing [of] any set of facts consistent with the

allegations in the complaint.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 560, 563 (2007). “To

3

survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true,

to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Twombly, 550 U.S. at 570).

In the alternative, defendant requests summary judgment be granted in its favor, pursuant

to RCFC 56. The Court shall grant summary judgment “if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of

law.” RCFC 56(a). The moving party has the burden of establishing that no genuine issue of

material fact exists. Celotex Corp. v. Catrett, 477 U.S. 242, 247–49 (1986). A fact is material if

it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986). An issue is genuine if it “may reasonably be resolved in favor of

either party.” Id. at 250. In determining the propriety of summary judgment, the Court will not

make credibility determinations and will draw all inferences in the light most favorable to the

nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88

(1986).

III. Discussion

A. Amendment of Complaint

The Court must first determine whether plaintiff’s new factual allegations presented in

plaintiff’s Affidavit and Supplemental Brief warrant further consideration. See generally Pl.’s

Supp. Brief; Pl.’s Aff. Rule 15(a)(1) of the RCFC allows parties to amend a pleading once as a

matter of course within twenty-one days after service of the pleading, or “if the pleading is one to

which a responsive pleading is required, 21 days after service of a responsive pleading or 21

days after service of a motion under RCFC 12(b), (e), or (f).” RCFC 15(a)(1). Rule 15(a)(1) is

inapplicable in this case, as plaintiff filed her Affidavit more than twenty-one days after service

of the responsive pleading. In other cases, RCFC 15(a)(2) states “a party may amend its

pleading only with the opposing party’s written consent or the court’s leave. The court should

freely give leave when justice so requires.” RCFC 15(a)(2). “In the absence of any apparent or

declared reason—such as . . . futility of amendment, etc.—the leave sought should, as the rules

require, be ‘freely given.’” A & D Auto Sales, Inc. v. United States, 748 F.3d 1142, 1158 (Fed.

Cir. 2014) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). “This court has found that

granting leave to amend a pleading would be futile if the amended complaint would fail to state a

claim upon which relief can be granted.” Chapman v. United States, 130 Fed. Cl. 216, 219

(2017) (citing Marchena v. United States, 128 Fed. Cl. 326, 330 (2016)). Additionally, “[a]

claim that is barred by the statute of limitations would be futile.” See Chapman, 130 Fed. Cl. at

219. Here, defendant argues that if the Court were to consider plaintiff’s additional allegations,

the arguments would be futile because plaintiff’s facts indicate that her claim is barred by the

statute of limitations. See Def.’s Reply at 1. The Court agrees with defendant’s argument.

1. Plaintiff’s Affidavit

In her Affidavit, Ms. Diaz acknowledges that she knew of the breach in August of 2009.

See Pl.’s Aff. ¶ 8. Every claim over which this Court has jurisdiction is subject to a six-year

statute of limitations from the date such claim first accrues. 28 U.S.C. § 2501. Pursuant to the

4

Tucker Act, a claim accrues when a claimant knew or should have known that his or her claim

existed. 28 U.S.C. § 1491(a)(1); Banks v. United States, 741 F.3d 1268, 1279–80 (Fed. Cir.

2014). In other words, “[a] cause of action cognizable in a Tucker Act suit accrues as soon as all

events have occurred that are necessary to enable the [claimant] to bring suit, [i.e.,] when ‘all

events have occurred to fix the government’s alleged liability, entitling the claimant to demand

payment and sue [to recover] his money.’” Martinez v. United States, 333 F.3d 1295, 1303 (Fed.

Cir. 2003) (en banc) (quoting Nager Elec. Co. v. United States, 368 F.2d 847, 851 (Ct. Cl.

1966)).

Here, plaintiff asserts a breach of contract claim. Compl. at 5. “Claims for breach of

contract generally accrue at the time of the breach.” Patton v. United States, 64 Fed. Cl. 768,

774 (2005) (citing Brighton Vill. Assocs. v. United States, 52 F.3d 1056, 1060 (Fed. Cir. 1995)).

“A claim does not accrue, however, ‘unless the claimant knew or should have known that the

claim existed.’” Patton, 64 Fed. Cl. at 774 (citing Kinsey v. United States, 852 F.2d 556, 557 n.1

(Fed. Cir. 1988)). The FAA was required to amend the SF-50 by June 6, 2007, and the failure to

amend the document after this date constituted a breach of the settlement agreement. Compl. at

3. The claim, however, did not accrue until plaintiff knew of the breach, which occurred in

August 2009, as shown by plaintiff’s Affidavit. See Pl.’s Aff. ¶ 8. Accordingly, amending

plaintiff’s Complaint by adding Ms. Diaz’s Affidavit would be futile as the Court finds that

plaintiff must have filed her Complaint with this Court by, at the latest, August 2015, due to her

knowledge of the breach in August 2009.

2. Plaintiff’s Supplemental Brief

Additionally, plaintiff provides no basis for this Court’s jurisdiction in her Supplemental

Brief. See generally Pl.’s Supp. Brief. In her brief, plaintiff alleges fraud and claims she did not

become aware of the fraudulent conduct until 2016 or 2017. See Pl.’s Supp. at 7. Defendant

argues that the Court cannot consider plaintiff’s fraud allegations due to the jurisdiction of this

Court. See Def.’s Supp. Brief at 2. Fraud has long been considered a tort. Brown v. United

States, 105 F.3d 621, 623 (Fed. Cir. 1997); L’Enfant Plaza Properties, Inc. v. United States, 645

F.2d 886, 892 (Ct. Cl. 1981); Kant v. United States, 123 Fed. Cl. 614, 616 (2015). Importantly,

this Court does not have jurisdiction over tort claims. Rick’s Mushroom Serv., Inc. v. United

States, 521 F.3d 1338, 1343 (Fed. Cir. 2008) (“The plain language of the Tucker Act excludes

from the Court of Federal Claims jurisdiction claims sounding in tort.”). However, “[i]f

contractual relations exist, the fact that the alleged breach is also tortious does not foreclose

Tucker Act jurisdiction.” Fountain v. United States, 192 Ct. Cl. 495, 498 (1970) (citing Burtt v.

United States, 176 Ct. Cl. 310, 314 (1966)). Therefore, this Court retains jurisdiction over

breaches of contract actions where the alleged breach is tortious. See Olin Jones Sand Co. v.

United States, 225 Ct. Cl. 741, 745 (1980) (“[A] claim is based on breach of contract it is

properly within the jurisdiction of this court even though it also alleges that defendant engaged in

tortious conduct in breaching the contract.”). Here, plaintiff’s primary claim is a breach of

contract action. See generally Compl. However, “damages arising from defendant’s alleged

breach must still be limited to compensation for those injuries directly related to completion of

the contract in question.” Olin Jones Sand Co., 225 Ct. Cl. at 745. Therefore, while plaintiff’s

allegations of fraud do not divest this Court of jurisdiction over plaintiff’s breach of contract

claim, this Court does not retain jurisdiction to hear plaintiff’s separate claims of fraud.

5

Additionally, plaintiff argues that the continuing claim doctrine should apply. See Pl.’s

Supp. Brief at 8. In order to fall within the scope of the continuing claim doctrine, “plaintiff’s

claim must be inherently susceptible to being broken down into a series of independent and

distinct events or wrongs, each having its own associated damages.” Brown Park Estates-

Fairfield Dev. Co. v. United States, 127 F.3d 1449, 1456 (Fed. Cir. 1997). Conversely, “[w]here

‘plaintiffs really only pointed to one alleged wrong by the government . . . even though it may

have had later adverse effects,’ the continuing claim doctrine will not apply and the statute of

limitations will begin to accrue on the date of that single event.” Dalles Irrigation Dist. v.

United States, 71 Fed. Cl. 344, 351 (2006) (quoting Brown Park, 127 F.3d at 1457). In the case

at bar, plaintiff merely cites potential employment opportunities as distinct and independent

events stemming from the government’s breach of the settlement agreement. See Pl.’s Supp.

Brief at 10.

Defendant responds by arguing that the continuing claim doctrine does not apply in this

case, as there was only one distinct event that occurred—the failure of the government to update

Ms. Diaz’s paper OPF. See Def.’s Supp. Brief at 4. The Court agrees with that assessment and

finds that the continuing claim doctrine does not apply. As stated above, the continuing claim

doctrine only applies when plaintiff’s claim may be broken down into a series of independent

and distinct events. See Brown Park, 127 F.3d at 1456. Here, the government’s failure to

correct plaintiff’s SF-50 is the only distinct event leading to damages. Ms. Diaz’s failure to

secure employment from various potential employers are not distinct events that warrant the

application of the continuing claim doctrine. Accordingly, plaintiff failed to file her Complaint

within the applicable six-year statute of limitations. As such, any amendment to plaintiff’s

Complaint would be futile. Therefore, the Court denies plaintiff’s motion to amend the

Complaint.

B. Breach of Contract Claim

Pursuant to the Tucker Act, this Court has jurisdiction to hear claims brought against the

government based upon “express or implied contract[s].” 28 U.S.C. § 1491(a)(1); see also

Mendez v. United States, 121 Fed. Cl. 370, 378 (2015). In order for plaintiff to recover damages

for a breach of contract claim, plaintiff “must allege and establish: (1) a valid contract between

the parties; (2) an obligation or duty arising out of that contract; (3) a breach of that duty; and (4)

damages caused by the breach.” Westover v. United States, 71 Fed. Cl. 635, 640 (2006) (quoting

San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 957, 959 (Fed. Cir. 1989)).

Moreover, “[a] complaint fails to state a claim upon which relief can be granted ‘if the facts

asserted by the claimant do not entitle him to a legal remedy.’” Westover, 71 Fed. Cl. at 640.

Plaintiff asserts that the FAA violated the settlement agreement for ten years and, as a

result, materially breached the contract. Compl. at 5. In response, the government argues that

Ms. Diaz failed to allege and establish damages resulting from any breach of the settlement

agreement and, therefore, cannot recover from a breach of contract action. Mot. to Dismiss at 6–

7 (citing Westover v. United States, 71 Fed. Cl. 635, 640 (2006) (quoting San Carlos Irrigation

& Drainage Dist. v. United States, 877 F.2d 957, 959 (Fed. Cir. 1989))). Plaintiff argues that the

specific damages she claimed in her Complaint stem from the fact that she was required to

6

submit paper copies of her SF-50 to potential employers. Pl.’s Opp’n to Def.’s Mot. to Dismiss

at 5 (hereinafter “P’s Resp.”). Plaintiff concludes that potential future employers requesting

copies of her SF-50 deterred her from seeking employment from federal government agencies or

private employers that might request this information. Id. The Court is not persuaded by that

argument.

Neither party raises an argument concerning the validity of the settlement agreement

between Ms. Diaz and the FAA. See generally Compl.; Mot. to Dismiss. Additionally, the

parties agreed that an obligation arose out of the settlement agreement, which required the FAA

to change Ms. Diaz’s SF-50, and the FAA breached the settlement agreement when it failed to

change Ms. Diaz’s status. Id. Plaintiff, however, fails to show the causal link between the

breach of the settlement agreement and the damages she seeks. A representative of the U.S.

National Archives and Records Administration (“NARA”) told Ms. Diaz that no potential

employers had requested a copy of her OPF in the last ten years. See Pl.’s Ex. 4. Additionally,

while plaintiff lists various positions that allegedly denied her employment, plaintiff presents no

evidence that she submitted her deficient SF-50 to any of these potential employers. See Pl.’s

Ex. 3. Plaintiff proffers no evidence showing the FAA’s breach of the settlement agreement had

an impact on her failure to secure employment. Absent any evidence of a causal relationship

between the deficient SF-50 and Ms. Diaz’s failure to obtain employment, the Court cannot find

that the failure of the FAA to correct Ms. Diaz’s SF-50 resulted in plaintiff’s alleged harm.

Accordingly, plaintiff fails to adequately assert a claim for breach of contract, and the Court

must dismiss plaintiff’s Complaint for failure to state a claim upon which relief can be granted,

pursuant to RCFC 12(b)(6).

IV. Conclusion

Construing the facts in the light most favorable to Ms. Diaz, the nonmoving party, the

Court finds that plaintiff failed to show that the FAA’s failure to update her paper SF-50 caused

the damages plaintiff seeks. Accordingly, plaintiff has failed to state a claim upon which relief

can be granted, pursuant to RCFC 12(b)6.

For the reasons set forth above, defendant’s MOTION to Dismiss is GRANTED. The

Court directs the Clerk of Court to enter judgment in favor of defendant, consistent with this

Order.

IT IS SO ORDERED.

s/ Loren A. Smith

Loren A. Smith,

Senior Judge

7