Oak Forest, Inc. v. United States

26 Cl. Ct. 1397, 1992 U.S. Claims LEXIS 472, 1992 WL 289547
CourtUnited States Court of Claims
DecidedOctober 15, 1992
DocketNo. 90-102L
StatusPublished
Cited by8 cases

This text of 26 Cl. Ct. 1397 (Oak Forest, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oak Forest, Inc. v. United States, 26 Cl. Ct. 1397, 1992 U.S. Claims LEXIS 472, 1992 WL 289547 (cc 1992).

Opinion

OPINION

BRUGGINK, Judge.

Pending are motions of Whitfield Engineers Co., Inc. (“Whitfield”), and Sur-Tech, Inc. (“Sur-Tech”) to quash notice. The motions raise a question as to the application of RUSCC 14, dealing with third-party practice. The question arises in the context of a claim for the taking of real property, specifically, the Oak Forest subdivision of Myrtle Beach, South Carolina. The claim is asserted by plaintiffs, Oak Forest, Inc., J. Bice Ward, Carl J. Ward, William E. Ward, Carl J. Ward & Sons, Inc., Richard Ward, and William E. Ward & Sons, Inc., against the United States Government acting through Myrtle Beach Air Force Base. Third-party plaintiff, Peoples Federal Savings and Loan Association of South Carolina, holds mortgages on certain lots within Oak Forest.

On April 26, 1991, we denied the government’s motion to dismiss for lack of jurisdiction, finding that there was jurisdiction to consider a claim either of a temporary taking of the land directly affected by the surveys, or of a taking due to loss of access to other land. Because a contemporaneous quiet title action involving Oak Forest real estate was then pending in the District Court of South Carolina, these proceedings were suspended until the district court acted, in the hope that its decision would resolve some of the factual issues present here.1 Unfortunately, no resolution occurred, because the parties to the district court litigation agreed to a consent [1399]*1399order that specifically precluded its application to any issue pending in this case. Proceedings were resumed in this court thereafter.

Pursuant to RUSCC 14(a)(1),2 defendant moved to send notice of the present action to Whitfield and Sur-Tech, the respective contractor and subcontractor responsible for surveying the property on the government’s behalf. Defendant alleged that the surveys prepared and recorded by SurTech are the same surveys complained of by plaintiffs and third-party plaintiffs. Moreover, the government contended that it is “presently considering pursuing claims against” Whitfield and Sur-Tech. The court granted the government’s motion and notice was served on the two companies on July 6, 1992.

Whitfield and Sur-Tech have filed motions to quash, contending, in effect, that notice serves no purpose. They argue that persons merely noticed and not joined in a cause of action cannot be bound by the judgment resulting therefrom despite their knowledge of the suit and opportunity to intervene. They support this argument with references to Martin v. Wilks, 490 U.S. 755, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989), and RSH Constructors, Inc. v. United States, 20 Cl.Ct. 1 (1990), in which Judge Futey applied Martin to Rules 14(a)(1) and 14(c)(1).3 Judge Futey held that these two RUSCC provisions are not fully compatible with Martin. RSH Constructors, 20 Cl.Ct. at 7. The government opposes these motions. It contends that notice was proper under Rule 14(a)(2),4 that Martin is distinct from and inapplicable to the procedure at issue here, and that if Martin does apply, then this case falls within an exception recognized in Martin.

DISCUSSION

At the outset, the court notes that although defendant’s primary support for service of notice is premised on the applicability of Rule 14(a)(2), notice was sought and effected only under Rule 14(a)(1). Rules 14(a)(1) and 14(a)(2) share some superficial similarities and appear within the same subsection to the same Rule, but they do not describe the same procedure. Rule 14(a)(1) provides for mere notification of nonparties on motion of either party so that the nonparty might have formal awareness of the proceedings and come forward to participate in them, if the non-party wishes. See Hardin County Sav. Bank v. United States, 102 Ct.Cl. 815, 821 (1945). Rule 14(a)(2) provides for the court’s issuance of a summons, whereby an entity against whom the United States has a claim is made a third-party defendant. Under Rule 14(a)(1), the noticed entity remains a nonparty until it appears voluntarily before the court and asserts its rights in some party capacity. Under Rule 14(a)(2), however, the nonparty becomes a party immediately upon issuance of notice and service of summons. The government’s attempt to recast its previous motion as one made pursuant to RUSCC 14(a)(2) is therefore incorrect, as is its ref[1400]*1400erence to Whitfield and Sur-Tech as third-party defendants.

[1399]*1399On motion of the United States, the court may summon any third person against whom the United States may be asserting a claim or contingent claim for the recovery of money paid by the United States in respect of the transaction or matter which constitutes the subject matter of the suit to appear as a party and defend the third party's interest, if any, in such suit.

[1400]*1400A brief overview of the modern development of third-party practice in the Claims Court will be helpful. Rules 14(a)(1) and 14(a)(2) had their genesis in the Contract Settlement Act of 1944, ch. 358, § 14, 58 Stat. 663 (current version at 41 U.S.C. § 114(b) (1987)) (“§ 114(b)”). Section 114(b), while not a model of clarity, appears to draw a distinction between the third party practice available to both parties, and that available only to the United States. The first sentence of § 114(b) allows either the plaintiff or the defendant to “summon” third persons by notifying them of the existence of the suit:

The Court of Claims, on motion of either of the parties, or on its own motion, may summon any and all persons with legal capacity to be sued to appear as a party or parties in any suit or proceeding of any nature whatsoever pending in said court to assert and defend their interests, if any, in such suits or proceedings—

Contract Settlement Act of 1944 § 14(b), see also 41 U.S.C. § 114(b).5 The Act goes no further to spell out the implications of this type of summons.

In the third and fourth sentences, § 114(b) provides for a related device that can be invoked only by the United States. This device contains two parts. The first part permits notice to third persons potentially having claims against the United States while the second permits a summons to be served on third persons against whom the United States potentially has a claim:

The United States Claims Court may, upon motion of the Attorney General, in any suit or proceeding where there may be any number of persons having possible interests therein, notify such persons to appear to assert and defend such interests. Upon failure so to appear, any and all claims or interests in claims of any such person against the United States, in respect of the subject matter of such suit or proceeding, shall forever be barred and the court shall have jurisdiction to enter judgment pro confesso upon any claim or contingent claim asserted on behalf of the United States against any person who, having been duly served with summons,

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Bluebook (online)
26 Cl. Ct. 1397, 1992 U.S. Claims LEXIS 472, 1992 WL 289547, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oak-forest-inc-v-united-states-cc-1992.