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MODULAR TECHNICS CORP. v. SOUTH HAVEN HOUSES HOUS.

November 18, 1975

MODULAR TECHNICS CORP., Plaintiff,
v.
SOUTH HAVEN HOUSES HOUSING DEVELOPMENT FUND COMPANY, INC., CHEMICAL BANK, UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, and FEDERAL HOUSING ADMINISTRATION, Defendants



The opinion of the court was delivered by: PLATT

OPINION and ORDER

 PLATT, D.J.

 This is an action arising out of a contract between plaintiff, a building contractor, and defendant South Haven Houses Housing Development Fund Company, Inc. Plaintiff agreed to construct certain buildings in Bronx County for South Haven. Defendant Chemical Bank appears to have agreed to loan moneys to South Haven. The federal defendants, the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA), allegedly agreed to insure the loan.

 Plaintiff has set out in its complaint eleven causes of action, and apparently seeks judgment against HUD and FHA on five of them. Two causes of action (numbers two and three in the complaint) claim that plaintiff performed certain work, labor, and services and furnished materials at the special instance and request of defendants, and has not received compensation.

 The fourth cause of action alleges that FHA represented and warranted that plaintiff could successfully perform its obligations in certain ways; that plaintiff relied on the existence of conditions as warranted; that the conditions were not as warranted; and that, as a result, plaintiff suffered uncompensated losses.

 The ninth cause of action suggests that FHA acted as an agent or quasi-agent for South Haven; that FHA represented that certain additional compensation would be paid to plaintiff; that these representations induced plaintiff to enter the contract; that FHA knew extra compensation would not be forthcoming; that HUD and FHA caused, by duress, plaintiff to fail to submit applications for extra compensation; and that plaintiff has thereby been damaged.

 The tenth cause of action alleges that FHA was a quasi-agent of South Haven; that FHA knew material facts concerning certain expenses; that FHA by non-disclosure of these facts to plaintiff represented the non-existence of these facts; that plaintiff relied on these representations in deciding to enter the contract; and that plaintiff has been damaged because of the false representations.

 Defendants HUD and FHA have made a motion to dismiss pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, on the grounds that sovereign immunity bars this action. The Court agrees, and finds it unnecessary to consider the government's contention that in any event the Secretary of HUD, not HUD or FHA, is the proper party to represent the federal government in a suit of this nature. Nor need we decide whether this suit was properly brought in this Court, see 28 U.S.C. §§ 1346 and 1491.

 I

 It appears at first blush that plaintiff's fourth, ninth and tenth causes of action speak in tort, not in contract. All three allege that certain representations or warranties were made by representatives of the government; that these representations were false; and that as a consequence of the misrepresentations plaintiff suffered injury. We note at the outset that plaintiff cannot maintain a cause of action in tort against the government under these circumstances.

 We start with the axiom that the United States as sovereign may not be sued without its consent, e.g., Honda v. Clark, 386 U.S. 484, 18 L. Ed. 2d 244, 87 S. Ct. 1188 (1967); Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 83 L. Ed. 784, 59 S. Ct. 516 (1939); Minnesota v. Hitchcock, 185 U.S. 373, 386, 46 L. Ed. 954, 22 S. Ct. 650 (1902). When consent is given, limitations and conditions upon that consent must be strictly observed, Honda v. Clark, supra; Soriano v. United States, 352 U.S. 270, 1 L. Ed. 2d 306, 77 S. Ct. 269 (1957); United States v. Sherwood, 312 U.S. 584, 85 L. Ed. 1058, 61 S. Ct. 767 (1941).

 The government has waived immunity against some tort claims in the Federal Tort Claims Act. But the Act is of no help to plaintiff, since one section (28 U.S.C. § 2680) exempts from its coverage:

 
"h). Any claim arising out of . . . misrepresentation, deceit, or interference with contract rights."

 If plaintiff's claims are read to speak in tort, they are barred as a consequence of these exceptions to the waiver of ...


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