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Estate of Earl v. Veteran's Administration Medical Center

November 1, 2011

ESTATE OF EARL CLARENCE GEORGE, PLAINTIFF,
v.
VETERAN'S ADMINISTRATION MEDICAL CENTER, DEFENDANT. UNITED STATES OF AMERICA, THIRD-PARTY PLAINTIFF,
v.
JAMIE L. DE GAUGH, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: David G. Larimer United States District Judge

DECISION AND ORDER

This action was commenced by the estate ("Estate" or "plaintiff") of Earl Clarence George ("decedent") against the Veteran's Administration Medical Center ("VAMC" or "Government") in Canandaigua, New York, in New York State Supreme Court, Ontario County.*fn1 The VAMC removed the action to this Court on September 9, 2010, pursuant to 28 U.S.C. § 1442(a)(1), on the ground that the action is one for money damages against an agency of the United States.

The Government has now moved to dismiss the complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, on the ground that the Court lacks subject matter jurisdiction over plaintiff's claims. The basis for that assertion is plaintiff's alleged noncompliance with the exhaustion requirements of the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 1346(b), 2671-2680.

BACKGROUND

According to the complaint, at the time of his death on April 11, 2008, decedent was a resident of the VAMC. On or about May 22, 2008, the VAMC transferred over $35,000 that had belonged to decedent to one Jamie DeGaugh. Complaint ¶¶ 6, 10.

In a letter dated March 12, 2009, the Estate's then-attorney, John P. Morell, wrote to Craig S. Howard, the director of the VAMC, asserting that "the VA wrongly turned over the decedent's personal property and funds to Jamie DeGaugh," and "demand[ing] that the Estate be immediately given $35,331.09 plus the value of the [decedent's] personal property." Def. Ex. A.*fn2 Morell indicated that the decedent (who apparently died intestate) had several living heirs, one of whom, a niece, was the administrator of the Estate. Id. Morell further stated that the estate had commenced an action against DeGaugh, but had been informed by her attorney that DeGaugh had spent the entire $35,000 and had no assets. Id. Morell concluded the letter by asking Howard to call him, adding, "We would like to resolve this matter in an amicable manner without litigation and going to the media." Id.

In a letter to Morell dated April 3, 2009, Howard stated that he had "forwarded [Morell's] letter" to the Regional Counsel Office for the Department of Veterans Affairs ("VA"). Det. Ex. B. Howard added that he "believed [that the VAMC] acted appropriately" regarding the disposition of the decedent's property, however. Id.

On April 20, 2009, Morell wrote to Sheila Weimer, an attorney with the VA, stating, "I spoke to you last week regarding [the disposition of the decedent's property] and you requested that I forward to you the letter that I sent to the Director of the Canandaigua VA Medical Center." Morell stated that he was enclosing a copy of that letter and Howard's April 3 response. Def. Ex. B.

In a letter dated April 27, 2009, Weimer informed Morell that "it is the position of [the VA] that the funds and effects of the late Earl C. George were disposed of in accordance with VA regulations," because the decedent "had previously named Jaime DeGaugh as his designee for purposes of disposition of his personal funds and effects." Def. Ex. C. Weimer concluded that "[t]his matter is one for the Surrogate's Court to resolve," and that should that court determine that the decedent's next of kin were entitled to inherit the property at issue, "their recourse for recovery of the funds and effects is to bring an action against Ms. Jaime DeGaugh." Id.

In September 2009, plaintiff's current attorney, Keith R. Lord, replaced Morell as counsel in this matter. On January 3, 2010, Lord submitted to the VA a Form SF-95, which is a government-issued form for making a "claim for damage, injury, or death." Dkt. #9-2 at 5. The stated basis for the claim was that "[t]he VA Medical Center in Canandaigua released all assets of the claiming estate to a non-distributee in violation of law and their fiduciary duties to the estate of the decedent." The claim (which included losses for both money and personal property that had been transferred to DeGaugh) was stated to total $58,332.*fn3

In a letter dated January 25, 2010, Weimer stated to Lord, "We [i.e. the VA] are compelled to return the form and enclosures to you as it fails to perfect a claim against the United States under the Federal Tort Claims Act." Dkt. #9-2 at 8. Weimer explained that Lord had not included with his submission any letters of administration evidencing Lord's authority to act on behalf of the Estate. Weimer added that Lord "[was], of course, free to resubmit a claim on behalf of the Estate," though she "remind[ed him] that the limitation period of submission of a claim under the FTCA is two years from the date of act or omission given rise [sic] to same, after which any such claim would be barred by operation of the statute." Id.

On or about March 9, 2010, the Estate submitted another SF-95, signed by the decedent's niece, Marlene Keirsbilck, accompanied by documentation showing that she had been appointed administrator of the Estate. Dkt. #9-2 at 10-15. The form stated that the Estate's losses totaled $58,332.

Plaintiff commenced the instant action in state court on April 28, 2010. The complaint asserts claims for negligence and breach of fiduciary duty. As stated, defendant removed the action to federal court on September 9, 2010.

When plaintiff commenced this action, then, the Estate's administrative claim that had been presented to the VA in the March 2010 SF-95 was still pending. Not until November 9, 2010 did the VA, by letter to plaintiff's attorney, issue a written "final administrative action" denying the Estate's claim. Dkt. #9-2 at 17. The letter further advised Lord that if he and the Estate were dissatisfied with the VA's decision, they had the option of either filing a request for reconsideration with the VA General Counsel, or filing suit under the FTCA. The letter also ...


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