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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

JOHN CLANCY, a single man; EDWARD 

MCMULLEN, a single man; and LAS 

CIEN CASAS, LLC., an Arizona company, 

Plaintiffs, 

v. 

UNITED STATES OF AMERICA; and 

UNITED STATES AIR FORCE, 

Defendants. 

Case No.: 4:18-CV-00011-LCK

ORDER 

 Defendants United States of America and United States Air Force move to dismiss 

the Complaint filed by Plaintiffs John Clancy, Edward McMullen, and Las Cien Casas, 

LLC for lack of subject matter jurisdiction. (Doc. 12.) Plaintiffs filed an Objection to 

Motion to Dismiss and Defendants replied. (Docs. 13-2, 16.) Plaintiffs filed and later 

withdrew their response to Defendants’ Reply. (Docs. 17, 18.) Plaintiffs filed a Motion 

to Supplement, and the motion was granted.1

 (Docs. 19, 25.) Defendants replied to the 

supplementary documents. (Doc. 26.) Both parties consented to Magistrate Judge 

Kimmins’s authority to render a final judgment. (Doc. 23.) For the reasons discussed 

below, the Court grants in part and denies in part the Motion to Dismiss. 

 

1

 In their Motion to Supplement, Plaintiffs also requested oral argument on the Motion to Dismiss. (Doc. 19.) The Court determines that it does not require oral argument to resolve the pending motion. 
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FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs filed a complaint against Defendants, asserting the Federal Tort Claim 

Act (the “FTCA”), 28 U.S.C. §§ 1346(b), 2671-2680, as the basis for the Court’s 

jurisdiction. (Doc. 1.) The following facts are taken from Plaintiffs’ Complaint. Plaintiffs 

allege that, on or about February 8, 2016, an airman of the United States Air Force 

inadvertently started a fire on the real property known as Parcel number 302-24-007 (the 

“Property”) and caused damage to the Property. On March 9, 2016, Plaintiffs filed an 

administrative claim with Defendants pursuant to the FTCA. On April 13, 2016, 

Defendants offered Plaintiffs $2,500 to settle the claim. Plaintiffs requested 

reconsideration. On July 13, 2017, Plaintiffs’ administrative claim was denied. Plaintiffs 

sue for negligence and seek damages. The Property is owned by Las Cien Casas, LLC. 

Mr. Clancy and Mr. McMullen are the sole owners of Las Cien Casas, LLC. 

DISCUSSION 

 Defendants moved to dismiss for lack of subject matter jurisdiction. First, 

Defendants argue that, because the Property is owned by Las Cien Casas, LLC, Mr. 

Clancy and Mr. McMullen have not been injured and do not have standing to sue. 

Second, Defendants contend that, although Las Cien Casas, LLC owns the Property, it 

failed to file an administrative claim with Defendants pursuant to the FTCA. 

Plaintiffs submitted to the Court: (1) a copy of the SF-95 Claim Form as originally 

submitted to Defendants; (2) a copy of the deed of the Property submitted along with the 

SF-95 Claim Form; and (3) Defendants’ settlement offer. (Doc. 25.) 

 Plaintiffs Mr. Clancy and Mr. McMullen

 Because the Property is owned by Las Cien Casas, LLC, Mr. Clancy and Mr. 

McMullen have not been injured and do not have standing to sue. It is a “fundamental 

rule” that even though a stockholder owns all of the stock in a corporation, he cannot sue 

as an individual for injury to the corporation. Erlich v. Glasner, 418 F.2d 226, 228 (9th 

Cir. 1969); Sherman v. British Leyland Motors, Ltd., 601 F.2d 429, 439-40 (9th Cir. 
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1979); Shell Petroleum, N.V. v. Graves, 570 F. Supp. 58, 62 (N.D. Cal), aff’d, 709 F.2d 

593 (9th Cir. 1983). In responding to the Motion to Dismiss, Plaintiffs Mr. Clancy and 

Mr. McMullen did not dispute Defendants’ argument based on standing. (Doc. 13-2.) 

Mr. Clancy and Mr. McMullen will be dismissed. 

 Plaintiff Las Cien Casas, LLC 

 The FTCA provides that “[a]n action shall not be instituted . . . unless the claimant 

shall have first presented the claim to the appropriate Federal agency and his claim shall 

have been finally denied by the agency in writing and sent by certified or registered 

mail.” 28 U.S.C. ' 2675(a). Administrative exhaustion is a jurisdictional prerequisite to 

filing a FTCA suit. McNeil v. United States, 508 U.S. 106, 113 (1993). Federal Courts are 

courts of limited jurisdiction, and the burden of establishing such jurisdiction rests upon 

the party bringing the case to federal court. Kokkonen v. Guardian Life Ins. Co. of Am., 

511 U.S. 375, 377 (1994). 

 Defendants argue that Las Cien Casas, LLC failed to file an administrative claim 

and the Court should enforce strict adherence with the exhaustion requirement. 

See McNeil, 508 U.S. at 113 (“[E]xperience teaches that strict adherence to the 

procedural requirements specified by the legislature is the best guarantee of evenhanded 

administration of the law.” (quoting Mohasco Corp. v. Silver, 447 U.S. 807, 826 (1980))). 

Defendants note that Box 2 on the SF-95 Claim Form asks for “claimant’s personal 

representative if any” and directs the filer to the instructions on the reverse, which state 

that “[a] claim presented by the agent or legal representative must be presented in the 

name of claimant” and that “[i]f the incident involves more than one claimant, each 

claimant should submit a separate claim.” (Doc. 25-1.) The SF-95 Claim Form at issue 

only listed Mr. McMullen as the Claimant, with no indication that he was filing on behalf 

of the LLC or any evidence of his authority to act on behalf of the company. When asked 

for the name and address of the owner, if other than the claimant, Mr. McMullen wrote 
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“same as claimant.” Therefore, Defendants allege that the administrative claim was filed 

on behalf of Mr. McMullen personally, not on behalf of Las Cien Casas, LLC. 

 Plaintiffs counter that Mr. McMullen, at all times, was acting on behalf of Las 

Cien Casas, LLC, and Defendants were aware that the administrative claim was filed on 

behalf of the LLC. The deed that Plaintiffs submitted to Defendants with the SF-95 Claim 

Form states that the Property is owned by Las Cien Casas, LLC. The Court also reviewed 

a copy of Defendants’ settlement letter to Mr. McMullen. The relevant part of 

Defendants’ offer states: “I note that the property is actually owned by Las Cien Casas, 

LLC. Therefore, an authorized officer will have to sign the settlement agreement even if 

that officer is you, and the payment will be made to Las Cien Casas.” 

 The Court finds that Plaintiff Las Cien Casas, LLC met its burden with respect to 

the exhaustion requirement. The exhaustion requirement serves two general purposes: to 

avoid unnecessary litigation by making it possible for the government to “expedite the 

fair settlement” of the claims, and to provide for a “more fair and equitable treatment” of 

private parties when they have claims against the government. Shipek v. United States, 

752 F.2d 1352, 1354 (9th Cir. 1985). These two purposes are served when the claim 

gives the government sufficient notice to commence investigation, and the claimant 

places a value on the claim. Id. The Ninth Circuit held that only “minimal notice” is 

required to satisfy the exhaustion requirement. Id.; Avery v. United States, 680 F.2d 608, 

611 (9th Cir. 1982) (reasoning that requiring more than minimal notice would be an 

inefficient use of judicial resources and also inconsistent with the congressional purpose 

of providing for a “more fair and equitable treatment” of private parties). 

 The Court recognizes that the FTCA is a limited waiver of sovereign immunity 

and the exhaustion requirement must be interpreted strictly. McNeil, 508 U.S. at 113; 

Vacek v. U.S. Postal Serv., 447 F.3d 1248, 1250 (9th Cir. 2006). However, the facts here 

show that, as far as Las Cien Casas, LLC’s claim is concerned, the congressional 

purposes for enacting the exhaustion requirement were well served and the “minimal 
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notice” requirement was satisfied. Therefore, Las Cien Casas, LLC sufficiently 

exhausted its claim. 

 First, despite Mr. McMullen’s failure to list Las Cien Casas, LLC in the SF-95 

Claim Form, Defendants were aware that the Property was owned by Las Cien Casas, 

LLC and made a settlement offer to the company. Thus, the congressional purpose of 

facilitating settlement was well served. The deed submitted along with the SF-95 Claim 

Form was an indication of Las Cien Casas, LLC’s claim and Mr. McMullen’s 

representative capacity. Defendants’ settlement offer unequivocally stated, “I note that 

the property is actually owned by Las Cien Casas, LLC,” and Defendants offered to pay 

the LLC rather than Mr. McMullen. Las Cien Casas, LLC provided Defendants with 

sufficient information to investigate its claim and to make a settlement offer to it. In fact, 

Defendants were able to do so quickly. The administrative claim was filed in March 

2016, and Defendants made an offer to Las Cien Casas, LLC in April 2016. 

 Second, to hold otherwise would be inconsistent with the congressional purpose of 

providing for a “more fair and equitable treatment” of private parties and the “minimal 

notice” requirement. A lay person need provide only a “general description of the time, 

place, cause and general nature of the injury and the amount of compensation 

demanded.” Goodman v. United States, 298 F.3d 1048, 1055 (9th Cir. 2002); see also 

Avery, 680 F.2d at 610-11. Las Cien Casas, LLC satisfied that requirement. Although the 

information was available in the instructions, Mr. McMullen may not have known that he 

needed to list the LLC as the claimant in the SF-95 Claim Form. Forfeiture of the LLC’s 

claim for that oversight would undermine Congress’s intent to provide fair treatment to 

private parties. The deed indicated Las Cien Casas, LLC’s claim and Mr. McMullen’s 

representative capacity, and it was submitted to Defendants along with the SF-95 Claim 

Form. To establish jurisdiction, Mr. McMullen was not required to submit to Defendants 

evidence of his authority to act on behalf of the LLC. See Blair v. IRS, 304 F.3d 861, 865 

(9th Cir. 2002); Kinlichee v. United States, 929 F. Supp. 2d 951, 960 (D. Ariz. 2013) 
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(finding that evidence of authority is only instructional not jurisdictional). In addition, to 

find that the administrative claim was filed on behalf of Las Cien Casas, LLC is not 

unfair to Defendants: Defendants received the deed at the outset, were aware of the 

LLC’s claim, and made a settlement offer to the LLC rather than Mr. McMullen. 

CONCLUSION 

 Based on the above assessment, the Court will grant in part and deny in part 

Defendants’ Motion to Dismiss. Because the Property is owned by Las Cien Casas, LLC, 

Mr. Clancy and Mr. McMullen have not been injured and do not have standing to sue. 

The Court will dismiss Plaintiffs Mr. Clancy and Mr. McMullen. However, the Court will 

deny the motion to dismiss Las Cien Casas, LLC, as the Court finds that Las Cien Casas, 

LLC satisfied the exhaustion requirement pursuant to the FTCA and the Court has proper 

jurisdiction over its claim. 

 When a court grants dismissal, it “should grant leave to amend even if no request 

to amend the pleading was made, unless it determines that the pleading could not 

possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe, Inc. v. N. Cal. 

Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990). Plaintiffs did not contest dismissal of 

Mr. Clancy or Mr. McMullen, nor did they request leave to amend their claims. Because 

the dismissal as to Mr. Clancy and Mr. McMullen is based on their lack of standing and 

the defect cannot be cured by allegation of additional facts, the Court will not grant 

amendment at this time. 

 Accordingly, 

IT IS ORDERED that Defendants’ Motion to Dismiss (Doc. 12) is GRANTED 

IN PART and DENIED IN PART. 
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IT IS FURTHER ORDERED that Plaintiffs Clancy and McMullen are 

DISMISSED. 

 Dated this 25th day of July, 2018.