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Cowans v. United States

United States District Court, W.D. Wisconsin

September 13, 2017

SEPHONIA COWANS Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY DISTRICT JUDGE

         This federal lawsuit stems from a state court action that plaintiff Sephonia Cowans filed in Washburn County Small Claims Court against defendant Cora Schultz, former Director of the Spooner area USDA Rural Development Office. As Schultz was a federal employee at the time, the defendant removed the action to this court and substituted the United States of America as the sole defendant under the Federal Tort Claims Act (“FTCA”) § 2671, et seq. Specifically, section 2679(b)(1) provides that the United States shall be the defendant in any suit “for injury or loss of property, or personal injury or death arising or resulting from the negligent or wrongful act or omission of any employee of the Government while acting within the scope of [her] office or employment”.[1]

         In her small claims complaint, plaintiff alleges that Schultz intentionally made false statements to the Spooner Police Department to cause plaintiff's wrongful arrest and incarceration. While plaintiff also alleges that Schultz mishandled plaintiff's loan with the Rural Development Office, slandered plaintiff and misrepresented information related to her loan to both plaintiff and others, her complaint primarily seeks damages related to the seven days plaintiff alleges that she was wrongfully incarcerated in the Polk County Jail.

         Pending before the court for some time is the government's motion to dismiss for failure to state a claim upon which relief can be granted. For the following reasons, the court will convert this motion to a motion for summary judgment and grant it.

         ALLEGATIONS OF FACT[2]

Cowans received a mortgage and construction loan from the Spooner USDA Rural Development Office (“Office”), where Cora Schultz served as the director. Cowans became dissatisfied with multiple aspects of the Office's service related to her loan. As an initial matter, the Office improperly debited her bank account for a mortgage payment that she already made. The Office also failed to follow procedure to ensure that the contractor in receipt of Cowan's loan was properly credentialed. When the same contractor then allegedly failed to perform satisfactory work, Cowans claims that Schultz declined to investigate or try to recoup the $4, 110.00 paid to him and responded with resistance and hostility to Cowans' own attempts to investigate. In particular, Schultz allegedly: (1) made derogatory comments to Cowans and actively tried to prevent contractors from working with her; (2) falsely told contractors that they could not receive advance payment for costs until the job was complete; and (3) tried to discourage contractors from working with Cowans by telling them that she was a drunk and drug addict.

         According to Cowans, Schultz further threatened her over the phone on April 27, 2010. Later that day, the Polk County Sheriff's Department arrested Cowans. She was held in the Polk County Jail, based on statements that Schultz had made to the police regarding Cowans “threaten[ing] to blow up Rural Development.” (Compl. ¶ 1, dkt. #1-1.) Cowans was released after seven days.

         The criminal complaint and police report filed in State v. Sephonia T. Cowans, describe the lead-up to her arrest in greater detail. Washburn Co. Case No. 2010-CM-97.[3] According to statements recited in the report, Cowans began calling the Rural Development Office multiple times a day and threatening employees. In particular, Cowans reportedly called the Office on the morning of April 28, 2010, [4] and she told a secretary, Jocelyn Ford, that she was on her way to Spooner and was going to “kick [her] ass.” The report further indicates that the responding officer spoke to Schultz, who informed the officer that she was concerned because Cowans “had once made the comment to her that she had driven by her home, and asked her if her residence was insured.” Schultz also indicated that she had received many calls from Cowans regarding her home loan.

         In supplemental affidavits submitted in response to defendants' motion, Cowans avers further that she continued to investigate the status of her loan after she was released from Polk County Jail, including by attempting to involve a newspaper and other USDA offices, but was thwarted by Schultz's behavior at the Spooner Office. Cowans states that Schultz led her to believe that she was working on recouping the wrongfully paid portion of her loan up until the time of her retirement. As a result, the construction portion of Cowans' loan allegedly remained unused for four years, despite her desire and attempts to use it, and she never received full access to all of the approved funds in her loan.

         OPINION

         If “[m]atters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). To prevent surprise, district courts normally give the parties notice upon conversion of a motion to dismiss to a motion for summary judgment. See Burick v. Edward Rose & Sons, 18 F.3d 514, 516 (7th Cir. 1994). However, such notice is unnecessary where, as here, there is no actual surprise and no disputed material facts are represented or appear to exist. Id.

         Construed broadly, plaintiff's complaint and affidavits assert claims for false imprisonment, slander, and intentional misrepresentation related to her loan. Taking all of plaintiff's factual allegations in her complaint and supplemental affidavits as true, defendant is entitled to judgment as a matter of law as to each of these claims. Fed.R.Civ.P. 56(a) (summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movement is entitled to judgment as a matter of law”). Specifically, dismissal is appropriate because the United States has not waived its sovereign immunity for these claims, and as to each claim, Schultz was acting within the scope of her employment.[5]

         While the FTCA waives the United States' sovereign immunity for claims arising from acts committed by federal employees, 28 U.S.C. § 1346(b)(1), that waiver is not absolute. Instead, the statute sets forth exceptions to which the waiver does not apply, including “any claims arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.” 28 U.S.C. § 2680(h). Therefore, plaintiff's claims for false imprisonment, slander, and misrepresentation against the United States are barred by sovereign immunity.

         Ultimately, plaintiff does not dispute this. Rather, she asserts that these claims were intended to be against Schultz in her personal capacity, rather than against the United States, because Schultz was not acting within the scope of her employment and that plaintiff should therefore be able to proceed. While the U.S. Attorney for the Western District asserted otherwise in certifying that Schultz was acting within the scope of her employment at the time of the incident giving rise to this suit, certification alone is not conclusive: “when a review of the scope certification is requested, as it was ...


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