Kalos v. United States

368 F. App'x 127
CourtCourt of Appeals for the Federal Circuit
DecidedMarch 4, 2010
Docket2009-5101
StatusUnpublished
Cited by6 cases

This text of 368 F. App'x 127 (Kalos v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kalos v. United States, 368 F. App'x 127 (Fed. Cir. 2010).

Opinions

PROST, Circuit Judge.

Peter and Veron Kalos (collectively, “Kalos”) appeal the dismissal of their amended complaint for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. We affirm.

The following facts are taken from Ka-los’s complaint. Because we are reviewing the dismissal of the complaint under Rule 12(b)(1) and Rule 12(b)(6), we assume that the complaint’s well-pleaded allegations of fact are true. Bradley v. Chiron Corp., 136 F.3d 1317, 1321 (Fed.Cir.1998). Our decision does not rely on any of the judicially noticed facts.1

Prior to filing this action, a company owned by Kalos, Brickwood Contractors (“Brickwood”), entered into a contract with the Federal Bureau of Prisons. On behalf of Brickwood, Kalos obtained a payment and performance bond from a corporation called Greenwich. The bond named Brick-wood as the principal, Greenwich as the surety, and the United States as the obli-gee. After the Bureau of Prisons terminated its contract with Brickwood for default, it sought to collect from Greenwich on the bond. Collection on the bond was resolved by a settlement agreement between the Bureau of Prisons and Greenwich, whereby Greenwich agreed to pay the full amount of the bond in full satisfaction of its obligations. Kalos was not a party to the settlement agreement, which expressly provided that “[n]othing contained in this Agreement shall be deemed to affect, impact or modify any or all rights, claims, demands, lawsuits or other actions that Brickwood [Kalos] or the Government may have against each other.” The agreement released Greenwich and the Bureau of Prisons from any liability, actions, debts, claims or demands against each other. It further stated that the agreement did not create “any third-party beneficiaries.”

After this settlement agreement was executed, Greenwich sought to recover from Brickwood by foreclosing on the liens burdening Kalos’s property, which secured the bonds. Kalos subsequently lost title to their real property in Great Falls, Virginia and Manassas, Virginia. Both before and after losing title to their property, Kalos asked the U.S. Attorney’s Office to confirm that the bonds issued by Greenwich were forgeries and to initiate criminal proceedings. The U.S. Attorney’s Office confirmed that the bonds were forgeries, but declined to open a criminal investigation.

Kalos then filed this action in the U.S. Court of Federal Claims. The amended complaint states two different claims. [130]*130First, Kalos alleges a taking in violation of the Fifth Amendment. According to the complaint, “[a]s a direct result of the actions of the Government, the Plaintiffs [Kalos] lost title to both of their real properties in Great Falls, Virginia and in Ma-nassas, Virginia.” Specifically, Kalos points to the settlement agreement between Greenwich and the Bureau of Prisons as preventing them from obtaining compensation for them lost properties. Second, Kalos alleges that the Bureau of Prisons illegally exacted $769,998, the amount Greenwich paid to the Bureau of Prisons pursuant to the settlement agreement. According to Kalos, this settlement agreement “imposed ... financial liability on [them] without statutory or regulatory authority to do so.” Kalos appears to argue that the Bureau of Prisons could not take any action regarding the bonds because the bonds were counterfeit, and thus entering into a settlement agreement regarding the bonds violated 18 U.S.C. § 494 and 31 C.F.R. § 223.13(d).

The Court of Federal Claims dismissed Kalos’s takings claim under Rule 12(b)(6) for failure to state a claim upon which relief could be granted. It found that Kalos had not — and could not — establish a “government action” that amounted to a compensable taking of their property interest. The trial court explained that the Bureau of Prison’s settlement agreement with Greenwich was not a physical invasion or regulatory action (such as a zoning ordinance) that might qualify as “government action.”

The Court of Federal Claims also dismissed Kalos’s illegal exaction claim under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. It found that Kalos failed to cite any statute or regulation that could provide a basis for their illegal exaction claim, explaining that it lacked jurisdiction over criminal matters that might be brought under 18 U.S.C. § 494, and that 31 C.F.R. § 223.10 limits the surety’s power to underwrite bonds, not the Bureau of Prison’s power to enter into settlement agreements.

On appeal, Kalos argues that the Court of Federal Claims erred in multiple ways. We address each of these arguments below.

First, Kalos argues that the trial court’s decision was based on an erroneous reading of the facts and improperly relied on public records. Even giving the complaint the liberal construction Kalos is entitled as a pro se litigant, dismissal was still proper. Despite the dissent’s suggestion to the contrary, this is not a suit on a surety contract, because the surety bond is not the basis for Kalos’s takings or illegal exaction claims. Cf. Dissent at 3. Instead, the claims are based, respectively, on Greenwich’s foreclosure of its (private) lien on Kalos’s properties and on the settlement agreement between Greenwich and the government. As explained below, however, Kalos has no standing to sue the government based on either Greenwich’s foreclosure or the settlement agreement. When a complaint fails to state a cognizable claim, we cannot adjudicate the case further — we lack authority to remand the case for additional fact finding or clarification. See Kontrick v. Ryan, 540 U.S. 443, 454-55, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004); Larson v. Correct Craft, Inc., 569 F.3d 1319, 1325 (Fed.Cir.2009).

To allege a cognizable taking under the Fifth Amendment, a person suing for the loss of his property must show that the loss, or “taking,” was the result of government action. Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206, 1213 (Fed. Cir.2005). Kalos’s takings claim was properly dismissed because Kalos has not identified a “government action” entitling them [131]*131to compensation under the Fifth Amendment. Huntleigh USA Corp. v. United States, 525 F.3d 1370, 1381-82 (Fed.Cir. 2008); see also Air Pegasus, 424 F.3d at 1215-16. Kalos’s two properties in Virginia were both sold to satisfy liens placed on the property by Greenwich, a private corporation, and purchased by private third parties, not the government.

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368 F. App'x 127, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kalos-v-united-states-cafc-2010.