Hahnenkamm, LLC v. United States

CourtUnited States Court of Federal Claims
DecidedDecember 7, 2017
Docket17-855
StatusPublished

This text of Hahnenkamm, LLC v. United States (Hahnenkamm, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hahnenkamm, LLC v. United States, (uscfc 2017).

Opinion

In the United States Court of Federal Claims No. 17-855C

(Filed: December 7, 2017)

********************************** ) HAHNENKAMM, LLC, ) Statutory and contractual claims; ) jurisdiction; Santini-Burton Act; Southern Plaintiff, ) Nevada Public Land Management Act; ) alleged breach of contractual terms sufficient v. ) to state a claim for relief under the Tucker ) Act UNITED STATES, ) ) Defendant. ) ) **********************************

Roger J. Marzulla, Marzulla Law, LLC, Washington, DC, for plaintiff. With him on the briefs and at the hearing was Nancie G. Marzulla, Marzulla Law, LLC, Washington, DC.

Geoffrey Martin Long, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, for defendant. With him on the briefs were Chad A. Readler, Acting Assistant Attorney General, Civil Division, Robert E. Kirschman, Jr., Director, and Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, United States Department of Justice, Washington DC.

OPINION AND ORDER

LETTOW, Judge.

Hahnenkamm, LLC seeks damages against the United States, alleging a breach of contract and contravention of two federal statutes, the Santini-Burton Act, Pub. L. No. 96-586, 94 Stat. 3381 (1980) (not codified in relevant part in the United States Code), and the Southern Nevada Public Land Management Act, Pub. L. No. 105-263, 112 Stat. 2343 (1998) (“Southern Nevada Land Act”) (not codified in relevant part in the United States Code). Hahnenkamm’s claims stem from a land transaction by which the United States Forest Service’s Lake Tahoe Basin Management Unit acquired “Cave Rock Summit,” a 39.25 acre tract of land overlooking Lake Tahoe in Douglas County, Nevada. The transaction occurred under an Option Agreement entered between Hahnenkamm and the Forest Service. Compl. at 1-2 & ¶ 6.

Hahnenkamm alleges that the statutes, which authorize the Forest Service to acquire “environmentally sensitive lands” in the Lake Tahoe region, require the Forest Service to pay fair market value for those acquisitions, and that the Option Agreement that governed the transaction likewise obligated the Forest Service to pay fair market value and obtain an appraisal that conformed to certain federal land appraisal standards—standards with which the Forest Service allegedly did not comply. Compl. at 1 & ¶ 34. Hahnenkamm asserts that the fair market value of Cave Rock Summit is approximately $20,000,000, and seeks damages in the amount of the difference between the purchase price provided in the Option Agreement and the fair market value as determined by an appraisal conducted in conformity with federal land appraisal standards. Compl. at 1 & ¶ 34.

Pending before the court is the government’s motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Rules of the Court of Federal Claims (“RCFC”) and for failure to state a claim upon which relief may be granted under RCFC 12(b)(6). Def.’s Mot. to Dismiss (“Def.’s Mot.”), ECF No. 5. This motion has been fully briefed by the parties and is ready for disposition.

BACKGROUND1

Cave Rock Summit was acquired in 1909 and passed down to family members through several generations. Compl. ¶ 6. In 2004, the family formed Hahnenkamm, a Nevada limited liability company, to hold title to Cave Rock Summit, intending to develop it as a “luxury residential estate compound.” Compl. ¶¶ 1, 6. From 2004 to 2014, Hahnenkamm satisfied various prerequisites to developing Cave Rock Summit, including securing building permits from the Tahoe Regional Planning Agency and rights-of-way for access from the Forest Service. Compl. ¶¶ 7-8. Also during this time, Hahnenkamm was in talks to sell Cave Rock Summit to the government for conservation purposes. See Compl. ¶¶ 17-23.

The Forest Service issued preliminary approval to purchase Cave Rock Summit in 2008, earmarking $11,686,950 for the acquisition. Compl. ¶ 17. In late 2013, the Service retained Daniel Leck, a local-appraiser to perform an appraisal of the property. Compl. ¶ 19. Cave Rock Summit was initially appraised at $4 million, which Hahnenkamm did not accept and instead requested a second opinion. Compl. ¶¶ 19-20. The Forest Service permitted a second appraisal to be done at Hahnenkamm’s expense, but subjected the second appraisal to a Valuation Services Protocol that restricted Hahnenkamm’s authority to participate in the appraiser’s work. Compl. ¶¶ 20-21. The second appraisal, by the Doré Group, determined the value of Cave Rock Summit to be $5.03 million. Compl. ¶ 22 & Ex. 3. The government adopted the $5.03 million valuation as the appropriate price for Cave Rock Summit, and declined to negotiate further with Hahnenkamm as to price. Compl. ¶ 22. Hahnenkamm takes issue with several aspects of the Doré appraisal that served as the basis for the eventual purchase price of Cave Rock Summit. Among other things, Hahnenkamm alleges that “[t]he appraisal inaccurately described the subject property as having no legal or physical access and no entitlements,” even though it “had both TRPA approval for road construction and a commitment from the Forest Service to provide access,” ignored the “land coverage entitlement of 319,066 square feet, a transferable development right that c[ould] be sold to other landowners,” and “mistakenly identifie[d] the

1 The recitations that follow do not constitute findings of fact but rather are drawn from allegations in the complaint and documentary materials appended to the complaint.

2 highest and best use . . . ‘AS VACANT: Rural residential or recreational land uses.’” Compl. at ¶ 26; see also Compl. Ex. 3, at 6-10 (Doré Group Appraisal).2

On June 28, 2015, after unsuccessfully attempting to negotiate a higher price for the sale of Cave Rock Summit to the Forest Service, Hahnenkamm granted the Forest Service a 24- month option to purchase the property for the $5.03 million appraised value. See Compl. ¶ 23 & Ex. 1. The Option Agreement is set out on a form used by the Forest Service. See Compl. Ex. 1 (Option Agreement), at 1 (showing USDA Forest Service form FS-5400-36 (09/2008)). The government exercised the option on July 7, 2015, and purchased Cave Rock Summit for $5.03 million. See Compl. at 23; Def.’s Mot. at 4. Hahnenkamm filed the instant complaint on June 23, 2017.

STANDARDS FOR DECISION

A. Rule 12(b)(1)

The Tucker Act provides this court with jurisdiction over “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, or for liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). Although the Tucker Act waives sovereign immunity and allows a plaintiff to sue the United States for money damages, United States v. Mitchell, 463 U.S. 206, 212 (1983), it does not provide a plaintiff with substantive rights, United States v. Testan, 424 U.S. 392, 398 (1976). To perfect jurisdiction in this court, “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) (citing Mitchell, 463 U.S. at 216; Testan, 424 U.S. at 398). That is, the plaintiff must identify a source of substantive law that “can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained”—commonly referred to as a money-mandating provision of law. Testan, 424 U.S. at 400 (quoting Eastport S.S.

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