## F I L E D United States Court of Appeals Tenth Circuit 

### AUG 27 2003 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

STANLEY B. BOEHME; SYLVIA T. BOEHME,

Plaintiffs-Appellants,

v. UNITED STATES POSTAL SERVICE, as successor to the United States Post Office Department of the United States of America and All Other Occupants of the property located at 2641 E. Uintah, Colorado Springs, Colorado 80909,

Defendant-Appellee. No. 02-1443

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO (D.C. No. 01-N-1237 (CBS))

Submitted on the briefs: John Randolph Torbet, Colorado Springs, Colorado, f or Plaintiffs-Appellants. John W. Suthers, United States Attorney, Kathleen L . Torres, Assistant United States Attorney, Elizabeth A. Weishaupl, Assistant United States Attorney, Denver, Colorado, for Defendant-Appellee.

Before EBEL , PORFILIO , and McCONNELL , Circuit Judges.1 After examining the briefs and appellate record, th is panel has determined

unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. -2- EBEL , Circuit Judge.

Plaintiffs Stanley B. Boehme and Sylvia T. Boehme appeal from the district court’s dismissal of their complaint under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. Our jurisdiction aris es under 28 U.S.C. § 1291, and we review a dismissal for lack of subject matter jurisdiction de novo. King v. United States , 301 F.3d 1270, 1273 (10th Cir. 2002), cert. denied , 123 S. Ct. 2572 (2003). We affirm. 1

I. Defendant United States Postal Service (Postal Serv ice) operates a post office facility in Colorado Springs, Colorado, in abuilding that it leases from plaintiffs. The lease contains a “Tax Rider Clause ” which provides that the Postal Service has the duty to pay the real property taxes due on the leased property as additional rent. This case involves a dispute betw een the parties regarding the payment of real property taxes allegedly due on the leased property, and plaintiffs alleged the following in their complaint:-3- 10. That the Plaintiffs gave due notice of the amo unt of real property taxes due for the year 2000 to the [Postal Service]. However, the [Postal Service] failed and refused to pay such taxes. 11. That on or about May 23, 2001 a demand for ren t or possession of premises on behalf of Plaintiffs was duly served upon the [Postal Service] . . . . 12 . That said demand provided, pursuant to the law of the State of Colorado, specifically [Colo. Rev. Stat. § ] 13-40-106, that the [Postal Service] would have three (3) days to e ither comply with the demand (i.e., pay Plaintiffs the taxes) or surr ender possession of the premises by virtue of the Plaintiffs’ terminati on of the lease. 13. That the [Postal Service] failed and refused t o tender or pay the amount of the taxes due as rent within said period. 14. That pursuant to the law of the State of Color ado, specifically [Colo. Rev. Stat. §] 13-40-104(1)(d) t he continued possession of the [Postal Service] amounts to an un lawful detainer of the real property described above. 15. That the Plaintiffs are entitled to a judgmentof this Court finding and determining that the Plaintiffs are ent itled to possession of the above described real property. Aplt. App. at 10-11, ¶¶ 10-15. In their request fo r relief, plaintiffs then sought the following relief: Plaintiffs demand judgment against the Defendants f inding and concluding that the Lease . . . has been duly termi nated . . . .; that the continued occupation of the premises by the [Postal Service] is unlawful; and for an order granting the right of po ssession to said premises to the Plaintiffs; and further for additio nal orders awarding the Plaintiffs damages in the form of the fair mark et value of the possessory interest in such property together with attorney’s fees, costs and interest . . . . Id. at 12.-4-

The Postal Service filed a motion to dismiss plaint iffs’ complaint under Fed. R. Civ. P. 12(b)(1) for lack of subject matterjurisdiction. Relying on this court’s decision in Three-M Enterprises, Inc. v. United States , 548 F.2d 293, 294-95 (10th Cir. 1977) (holding, in case involving alleged default by government in payment of rent for property leased for use as apost office, that district court lacked subject matter jurisdiction over statutory u nlawful detainer action brought against the United States under Utah law because th e landlord plaintiff had failed to exhaust its administrative remedies under the Fe deral Tort Claims Act), the Postal Service argued that plaintiffs’ statutory ac tion for unlawful detention under Colo. Rev. Stat. § 13-40-104(1)(d) sounds in tort and is thus subject to the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b )(1), 2671-80. According to the Postal Service, plaintiffs were therefore re quired by 28 U.S.C. § 2675(a) to exhaust their administrative remedies against the P ostal Service before filing a district court action against the United States u nder 28 U.S.C. § 1346(b)(1), which they failed to do. Because the FTCA’s admini strative exhaustion requirement is jurisdictional and cannot be waived, Three-M Enterprises , 548 F.2d at 294, the Postal Service requested that the district court dismiss plaintiffs’ unlawful detention action for lack of s ubject matter jurisdiction. At a hearing before the district court on the Posta l Service’s motion to dismiss, the court granted the motion and dismissedplaintiffs’ complaint. The-5-

district court gave two reasons for its ruling. Fi rst, because this court decided Three-M Enterprises several years after Congress enacted the Postal Reorganization Act (PRA), 39 U.S.C. § 101, et seq. , (effective 1971), the court rejected plaintiffs’ argument that the general gran t of jurisdiction provided to the district courts by 39 U.S.C. § 409(a) “over all act ions brought by or against the Postal Service” implicitly overruled this court’s decision in Three-M Enterprises

. Aplt. App. at 67. Second, the court noted that § 4 09(c) expressly provides that the requirements of the FTCA apply to tort claims a rising out of activities of the Postal Service. Id. at 68. Without analyzing the issue of whether pla intiffs’ statutory claim for unlawful detention under Colora do law was a tort or contract claim, the court then determined that it was bound by this court’s decision in Three-M Enterprises because it “is on point, has not been overruled, a nd is controlling.” Id.

II. “It is well settled that the United States, as sove reign, is immune from suit except as it consents to be sued and that the terms of its consent to be sued in any court define the court’s jurisdiction to entertain the action.” Three-M Enterprises , 548 F.2d at 294. In this case, the sovereign imm unity issues turn on two provisions in the PRA. The first provision is 39 U.S.C. § 401(1), and it provides that the Postal Service has the general po wer “to sue and be sued in its-6-

official name.” In Kennedy Elec. Co. v. United States Postal Serv. , 508 F.2d 954, 955, 957 (10th Cir. 1974), a case involving a breac h of contract action brought by a private subcontractor against the Postal Service, we recognized that § 401(1) grants the Postal Service the power to sue and be s ued, and that “it must be presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to ‘ sue or be sued,’ that agency is not less amenable to judicial process than a pri vate enterprise under like circumstances would be.” (quoting FHA v. Burr , 309 U.S. 242, 245 (1940)). Further, both the Supreme Court and several of our sister circuits have made it clear that § 401(1) constitutes a general waiver of the Postal Service’s sovereign immunity. See Loeffler v. Frank , 486 U.S. 549, 554-56 (1988); Davric Maine Corp. v. United States Postal Serv. , 238 F.3d 58, 61 (1st Cir. 2001); Global Mail Ltd. v. United States Postal Serv. , 142 F.3d 208, 210 (4th Cir. 1998); United States v. Q Int’l Courier, Inc. , 131 F.3d 770, 775 (8th Cir. 1997). We also note that the waiver in § 401(1) “must be liberally cons trued and . . . the Postal Service’s liability must be presumed to be the same as that of any other business.” Loeffler , 486 U.S. at 556; see also Davric , 238 F.3d at 61 (noting that “the PRA established the Postal Service as a quasi-public entity that was to compete on essentially level ground with private enterprise”).-7-

The second provision of the PRA relating to soverei gn immunity is 39 U.S.C. § 409(c), and it provides that “[t]he pro visions of [the FTCA] and all other provisions of Title 28 relating to tort claim s shall apply to tort claims arising out of activities of the Postal Service.” Although this court has not previously had an occasion to address the interplaybetween §§ 401(1) and 409(c), we agree with our sister circuits that “§ 409(c) of the PRA limits the scope of the more general waiver of sovereign immunity contained in § 401(1),” Davric , 238 F.3d at 62, and that “[f]or state tort claims a rising out of the activity of the Postal Service, § 409(c) compels the application of the FTCA and its attendant provisions,” id. ; accord Global Mail , 142 F.3d at 215 (holding that § 409(c) “restrict[s] § 401(1)’s general waiver of sovereignimmunity . . . by requiring claimants to follow FTCA procedures for those claim s cognizable under the FTCA”); Q Int’l Courier , 131 F.3d at 775 (same); see also 28 U.S.C. § 2679(a) (providing that claims against “sue and be sued” fe deral agencies must be brought under the FTCA if the claims are “cognizable” underthe FTCA). Consequently, the dispositive issue in this case is whether plaintiffs’ unlawful detention action under Colo. Rev. Stat. § 13-40-104(1)(d) must be treated as a state-law tort claim, in which case, u nder § 409(c), the FTCA’s administrative exhaustion requirement would apply, or, alternatively, whether the action must be treated as a state-law breach of con tract claim, in which case,-8-

under § 401(1), there would be a general waiver of sovereign immunity and the Postal Service could be sued directly without any e xhaustion requirement. Because the source of the government’s substantive liability under the FTCA is state law, FDIC v. Meyer , 510 U.S. 471, 477-78 (1994) (construing former 28 U.S.C. § 1346(b), which is now codified at 28 U. S.C. § 1346(b)(1)), the determination of how to characterize Colorado’s statutory unlawful detention action for purposes of §§ 401(1) and 409(c) is like wise a matter of state law. Unfortunately, our research has not uncovered any C olorado decisions that provide a definitive answer as to whether § 13-40-1 04(1)(d) sounds in tort or contract. As a result, we must predict how the Col orado Supreme Court would rule. FDIC v. Schuchmann , 235 F.3d 1217, 1225 (10th Cir. 2000). In doing s o, “we are free to consider all resources available, i ncluding decisions of [Colorado] courts, other state courts and federal courts, in a ddition to the general weight and trend of authority.” Id. Having thoroughly analyzed the relevant authorities , we predict that the Colorado Supreme Court, if faced w ith the issue, would determine that § 13-40-104(1)(d) sounds in tort. As noted above, the district court concluded that our decision in Three-M Enterprises conclusively determined that state-law unlawful de tention actions such as the one here sound in tort. However, we ag ree with plaintiffs that our decision in Three-M Enterprises did not specifically address the issue of whether-9-

Utah’s statutory unlawful detention action sounded in tort or contract, and it appears that both the parties and this court simplyassumed that the action sounded in tort. Nonetheless, while not dispositiv e, we believe our decision in Three-M Enterprises is persuasive given the similarities between the U tah statute at issue in that case and the Colorado statute at issue in this case. Compare Utah Code Ann. § 78-36-3(3) (1953), with Colo. Rev. Stat. § 13-40-104(1)(d) (2002). Moreover, we note that our decision in Three-M Enterprises is over twenty-five years old, and, to our knowledge, not a single court or commentator has questioned the necessary assumption underlying the decision that Utah’s statutory unlawful detention action sounds in tort. We need not rely exclusively on our decision in Three-M Enterprises , however, because the Colorado Supreme Court’s en banc decision in City & County of Denver v. Desert Truck Sales, Inc. , 837 P.2d 759 (1992) convinces us that the Colorado Supreme Court would determine that § 13-40-104(1)(d) sounds in tort. In Desert Truck , the court determined that a replevin action under Colo. R. Civ. P. 104 to obtain possession of person al property that was initially obtained by a third party lawfully, but that had be en wrongfully detained, sounds in tort and is therefore subject to Colorado’s Gove rnmental Immunity Act if asserted against a state entity. Desert Truck , 837 P.2d at 763-65. In reaching its holding, the court emphasized that “[t]he object of a replevin action is to-10-

determine the right of possession,” id. at 764, and the court rejected decisions from other jurisdictions that “have refused to identify replevin as a tort,” id. , concluding instead that a “claim that . . . property is ‘wrongfully’ detained sounds in tort and is or could be a tort,” id. at 765. Colo. Rev. Stat. § 13-40-104(1)(d) is part of Color ado’s Forcible Entry and Detainer statute. While the statute provides for m onetary claims for past due rent, present and future damages, and reasonable costs and attorney’s fees, see Colo. Rev. Stat. §§ 13-40-110(1), 13-40-115(2), and13-40-123, the primary purpose of the statute is to restore possession of disputed real property to the person or entity with the superior right to possess the property. See Colo. Rev. Stat. § 13-40-110(1) (providing that “[a ]n action under this article is commenced by filing with the court a complaint in w riting describing the property with reasonable certainty, the grounds for recoverythereof, the name of the person in possession or occupancy, and a prayer forrecovery of possession”); Colo. Rev. Stat. § 13-40-115(2) (providing that, af ter issue of whether defendant committed an unlawful detention is tried and determ ined adversely to defendant, “court shall enter judgment for the plaintiff to have restitution of the premises and shall issue a writ of restitution”); see also Petry v. City & County of Denver , 233 P.2d 867, 870 (Colo. 1951) (en banc) (discussin g prior version of Colorado’s unlawful detainer statute and noting that proceedin gs thereunder “involve solely-11-

the right to possession”). Further, the Colorado S upreme Court has recognized that § 13-40-104(1)(d) is “designed to provide land lords with an expeditious method of gaining possession of their premises foll owing a . . . breach of a lease.” Francam Bldg. Corp. v. Fail , 646 P.2d 345, 348 (Colo. 1982) (en banc). For purposes of this case, the only material differ ence under Colorado law between a replevin action and an unlawful detention action is that the former involves personal property, while the latter involv es real property. Accordingly, based on its decision in Desert Truck , and the similarities between a replevin action under Colo. R. Civ. P. 104 and an unlawful d etention action under Colo. Rev. Stat. § 13-40-104(1)(d), we predict thatthe Colorado Supreme Court would conclude that an unlawful detention action so unds in tort. That said, we must emphasize that, as the paragraphs quoted above from plaintiffs’ complaint demonstrate, plaintiffs relied exclusively on § 13- 40-104(1)(d) and the related provisions under Colorado’s Forcible Entry and Deta iner statute for their cause of action in this case. See Aplt. App. at 10-11, ¶¶ 10-15, 12. Our holding inthis case is thus quite limited, and we do not by this d ecision intend to comment in any way concerning what the outcome of this case wo uld have been if plaintiffs had asserted a common law breach of contract claim or some other type of non-tort remedy under Colorado law.-12-

Finally, plaintiffs argue that subjecting their unl awful detention claim to the FTCA violates Colorado’s economic loss rule. T he Colorado Supreme Court’s “formulation of the economic loss rule is that a party suffering only economic loss from the breach of an express or impl ied contractual duty may not assert a tort claim for such breach absent an indep endent duty of care under tort law.” Grynberg v. Agri Tech, Inc. , 10 P.3d 1267, 1269 (Colo. 2000) (en banc). The Colorado Supreme Court has also recognized, how ever, “that certain common law claims that sound in tort and are expressly des igned to remedy economic loss may exist independent of a breach of contract claim.” Town of Alma v. Azco Constr., Inc. , 10 P.3d 1256, 1263 (Colo. 2000) (en banc) (citing Brody v. Bock , 897 P.2d 769, 776 (Colo. 1995) (holding that commonlaw fraud claim is based on violation of a duty independent of contract); Keller v. A.O. Smith Harvestore Prods., Inc. , 819 P.2d 69, 73 (Colo. 1991) (holding that neglig ent misrepresentation is a tort claim based “not on pri nciples of contractual obligation but on principles of duty and reasonable conduct”)) . According to the court: In these situations where we have recognized the ex istence of a duty independent of any contractual obligations, the economic loss rule has no application and does not bar a plaintiff’s t ort claim because the claim is based on a recognized independent duty of care and thus does not fall within the scope of the rule. Town of Alma, 10 P.3d at 1263.-13-

In this case, there is no question that plaintiffs’ unlawful detention claim is based on the Postal Service’s alleged breach of the parties’ lease agreement. It is also undisputed that plaintiffs have suffered only economic losses as a result of the alleged breach. Nonetheless, we conclude that Colorado’s economic loss rule has no application to this case. By enacting Color ado’s Forcible Entry and Detainer statute and, more specifically, Colo. Rev. Stat. § 13-40-104(1)(d), the Colorado legislature has provided a statutory remedy to landlords that “exist[s] independent of a breach of contract claim.” Town of Alma, 10 P.3d at 1263. And, while the statutory remedy has not necessarily created a tort “duty” that exists independent of any contractual obligations, as is t he case, for example, with common law fraud and negligent misrepresentation cl aims, the principle is the same. Specifically, there is no question that, und er Colorado law, a landlord may simultaneously pursue both his statutory and his co ntract remedies to recover the same economic losses, and this is true regardless o f whether the statutory remedy is characterized as a tort or a contract action. T hus, the question of whether to characterize the statutory remedy as being in tort or contract is only germane to the issue of how the remedy is to be treated for pu rposes of the FTCA, and the economic loss rule has no application to this case. The judgment of the district court is AFFIRMED.