Court Opinion

ID: 9399695
Source: CourtListenerOpinion
Date Created: 2023-06-06 12:02:11.871594+00
Date Added: 2024-06-11T17:19:18.019885
License: Public Domain

In the United States Court of Federal Claims
                                No. 21-1492C
                             (Filed: June 5, 2023)

**********************

JOHN MURRAY et al.,

                     Plaintiffs,

v.

THE UNITED STATES,

                     Defendant.

***********************

        Kevin R. Garden, The Garden Law Firm, P.C., Alexandria, VA, for
plaintiffs.

       Christopher L. Harlow, Trial Counsel, United States Department of
Justice, Civil Division, Commercial Litigation Branch, Washington, DC,
with whom were Franklin E. White, Jr., Assistant Director, Patricia M.
McCarthy, Director, and Brian M. Boynton, Principal Deputy Assistant
Attorney General, for defendant. Aaron Buzawa, Attorney-Advisor, United
States Department of Agriculture, Office of the General Counsel, Portland,
OR, of counsel.

                                   OPINION

BRUGGINK, Judge.

       This is an action for breach of contract against the United States in
which plaintiffs allege that the United States Forest Service (“the Forest
Service”) breached its duty under the permit it issued plaintiffs to operate a
ski resort on Forest Service land. Plaintiffs in this case are John and Nancy
Murray, who operated a ski area known as the Spout Springs Mountain

                                      1
Resort (“Spout Springs”) on federal land. 1 The Murrays allege that the Forest
Service’s authorization of snowmobile-related activities in the Spout Springs
parking lot was a breach of its duty to not authorize third-party uses that
would “materially interfere” with the Murrays’ operation of Spout Springs.

       The complaint was filed on June 21, 2021. After the conclusion of
discovery, defendant filed a motion to dismiss, or alternatively, for summary
judgment, on December 9, 2022. The motion has been fully briefed, and oral
argument was held on April 12, 2023. For reasons stated below, we grant
defendant’s motion to dismiss for lack of jurisdiction under Rule 12(b)(1) of
the Rules of the United States Court of Federal Claims (“RCFC”).

                                      FACTS

      I.      The Murrays’ Purchase of Spout Springs and Beginning of
              Operations

       Spout Springs is a ski area and operation located in the Umatilla
National Forest in Oregon. Compl. ¶ 4, 5. Although the ski area is located on
federal land, the improvements at the ski area are privately owned. Id. at ¶
10. John and Nancy Murray purchased the improvements at Spout Springs
on June 30, 1999. Def.’s Appx. (“DA”) at 15.

       Before beginning operations at Spout Springs, the Murrays first
entered into a Snow Removal Agreement (“SRA”) with the State of Oregon
on November 8, 1999. 2 DA at 23. Under the SRA, the Oregon Department
of Transportation (“ODOT”) designated the Spout Springs parking lot as a
Sno-Park—a winter recreation parking area where Sno-Park permit holders
could park their vehicles at no additional charge. See id. at 19, 30. The
designation required Spout Springs to install “Sno-Park Permit Required”
signs in the parking lot and “allow equal access to said area for all winter
recreational purposes to both patrons and members of the public with no
additional charge for parking in said area.” Id. at 20. In exchange, the ODOT
would provide snow removal service for the Spout Springs parking lot. Id. at
19.

           On December 31, 1999, the Forest Service issued John and Nancy

1
    Spout Springs is also a named plaintiff to this action.
2
 The 1999 Agreement was then superseded by a new Snow Removal
Agreement on October 13, 2009, and again on April 24, 2014. DA at 18, 25.
The terms were not materially different.
                                         2
Murray a Ski Area Term Special Use Permit (“the Permit”) that would expire
on December 31, 2039. DA at 1, 2. Under the Permit, the Murrays were
authorized to use land within the Umatilla National Forest “for the purposes
of constructing, operating, and maintaining winter sports resort . . . known as
the Spout Springs Mountain Resort ski area.” Id. at 1. The Permit required
the Murrays to exercise their use of the land “at least 90 days each year or
season,” and to “maintain the improvements and premises to standards of
repair, orderliness, neatness, sanitation, and safety acceptable to the [Forest
Supervisor].” Id. at 3.

        At the same time, the Forest Service “assume[d] no responsibility for
enforcing laws, regulations, ordinances and the like which are under the
jurisdiction of other government bodies.” Id. at 2. The Permit also stated that
the Forest Service “reserve[d] the right to use or permit others to use any part
of the permitted area for any purpose, provided such use does not materially
interfere with the rights and privileges hereby authorized.” Id. It is this
provision that plaintiffs claim was breached by the Forest Service.

   II.    Snowmobile-Related Activities at the Spout Springs Parking
          Lot

        After the Murrays began operation of Spout Springs, they
communicated with the ODOT several times in the first few years regarding
the SRA. One of such letters is dated June 14, 2001, addressed from the
ODOT to Mr. Murray. DA at 36. In that letter, the ODOT first informed Mr.
Murray that the “Rules of Use” document he had forwarded “do not appear
to conflict with or limit a ski area’s ability to participate in the State Sno-
Park program.” Id. The letter leaves unclear, however, what the “Rules of
Use” consisted of and what had prompted Mr. Murray to inquire about a
potential conflict between the SRA and those rules. See id. The ODOT then
reminded Mr. Murray that “[a]s a condition of participation in the Sno-Park
program, the parking area must be open to members of the public with a valid
Sno-Park permit for all winter recreational purposes and no additional charge
for parking may be assessed.” Id. It added, however, that a ski area could
still “post parking instructions or limit overnight parking to facilitate snow
removal.” Id. In the event that Mr. Murray chose to establish rules of use
specific to Spout Springs, the ODOT requested that he “take into account the
conditions for Sno-Park designation.” Id.

       Another letter from the ODOT to Mr. Murray dated June 12, 2002,
shows that Mr. Murray had a number of concerns regarding the Sno-Park
program. Id. at 37. Referring to a phone conversation that took place on June
7, 2002, the letter memorialized the issues that were discussed. One of those

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issues included “the terms of [the Murrays’ Permit] as it applies to the area
in front of the cabins located across the highway from the ski area.” Id. Other
than directing Mr. Murray to seek clarification with the Forest Service,
however, the letter does not indicate what Mr. Murray’s specific concerns
were and what sort of “activities” may have been occurring “near the cabins.”
See id. Similarly, the letter does not provide details about Mr. Murray’s
“concern with the enforcement services provided last season by the [Forest
Service].” The letter merely suggests that his concern had to do with the
Forest Service’s “enforce[ment] [of] the Sno-Park permit requirement,”
which the ODOT could not address because it had no contract with the Forest
Service. Id.

       At some point in 2004, the Forest Service asked the Murrays if Spout
Spring would “agree to allow certain limited snowmobile related activity
occur in the ski area parking lot.” Compl. ¶ 26. The request signified a change
in Forest Service policy, because “[a]t the time Spout Springs . . . began its
operations at the permit area, no snowmobile activity was authorized in or
around the permit area or its parking lot.” Id. at ¶ 22; see also Def.’s Supp.
Appx. (“DSA”) at 9 (Mr. Murray testifying at his deposition that although
“snowmobiles were always in the area,” their presence was “highly
controlled” and “operation of them was prohibited” at the time he bought
Spout Springs). The Murrays agreed to the Forest Service’s request to allow
snowmobile-related activities, “subject to the caveat that if such activity
became unacceptable . . . the activity would again be prohibited.” Compl.
¶27. Thus, upon the Murrays’ agreement, snowmobile-related activities were
allowed in the Spout Springs parking lot from 2004 onwards. Id. at ¶ 28.

        The record indicates that snowmobile-related activities began to affect
the operation of Spout Springs around 2010, when “oversized snowmobiles”
started to turn up at the ski area. See DA at 90 (Mr. Murray testifying at his
deposition that high-speed snowmobiles and the “super trailer[s]” that
facilitated them “didn’t really exist until about 2010, 2012”); id. at 95
(“[2011] is when we started noticing the big rigs and the high performance
snowmobiles. And the camping, you know, they’d come with places to sleep
in them, as well.”). According to Mr. Murray’s deposition testimony,
“Nothing ever changed until they showed. When they showed, things
changed. I mean, it was day and night.” Id. at 94. Pointing to the period
between 2010 and 2012 as marking “the advent of the super trailers where
they would show up with six snowmobiles,” id. at 88, Mr. Murray testified
that “that’s when the complaints kind of started happening and when the law,
Forestry got involved.” Id. at 90. Skier business “was dropping off” around
then, and “[p]eople were complaining, angry.” Id. at 93. More than once in
his deposition testimony, Mr. Murray referred to “[r]ight around 2010” as

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when “[t]hings started turning”: “We weren’t having the same years, the
same turnout.” Id. at 96. He also testified that the Murrays “started talking
about [shutting down Spout Springs] in ’12, ’13”: “Because attendance was
falling off, you know. We were starting to get a reputation of a
snowmobile/ski area.” Id.

       Mr. Murray stated at his deposition that not all snowmobile
recreationists posed a problem for Spout Springs; the problem “just got down
to 20 angry people with large trailers” or “a group of guys up there that are
like nuts.” DA at 93, 87. It did not take many of them to create trouble: “All
you need is a dozen, couple dozen. Then you’ve got issues with the cleaning,
safety. Liability.” Id. at 93. The complaint alleges that those individuals
would drive their snowmobiles through the parking lot “at very high and
unsafe speeds,” which resulted in “several close calls where serious injury
was narrowly averted.” Compl. ¶¶ 32, 34; see also DA at 84 (Mr. Murray’s
deposition testimony describing “close calls” as a result of “[p]eople
speeding on snowmobiles”). Mr. Murray himself received death threats for
trying to photograph snowmobile-related activities at the parking lot, with
threats dating back to the period between 2010 and 2012. See DA at 93; Pls.’
Appx. (“PA”) at 110.

        Correspondence between Mr. Murray and the Forest Service
corroborates the period between 2010 to 2012 as the point at which issues
with snowmobile trailers became serious. In a letter dated July 27, 2010, Mr.
Murray told the Forest Service that “Spout Springs Parking Lot will be closed
to all snowmobile trailers and RV’s effective the 10/11 season.” DA at 43.
He continued, “We will direct this traffic to other snow parks
nearby. . . . This decision has been made in light of the current and pasts [sic]
management problem in the parking lot.” Id.

        In a response letter dated March 7, 2011, the Forest Service referred
to a “revised plan [that] will replace the 2004 parking plan approved under
[the Murrays’] Ski Area Term Special Use Permit.” Id. at 40. The revision
chiefly consisted of allowing “additional day-use trailer parking” at the
parking area on the north side (ski area side) of the highway, next to where
the overnight trailers could park. Id. The Forest Service thanked Mr. Murray
for his “willingness to give this new arrangement a try” even though doing
so “may reduce available resort parking during the busiest times of the
winter.” Id. At the same time, the Forest Service requested that he remove
the “Resort Parking Only-No Trailers” signs he had posted in the parking lot
“as soon as practical.” Id.

       Despite these problems arising as early as 2010, Mr. Murray testified

                                       5
in his deposition that he initially felt that they were “manageable” and that
the Forestry Service “would intervene”—“You know, we had high hopes.
We were very, very optimistic.” PA at 104. He described “some effort early
on” that made him optimistic, such as the presence of the ODOT crew
manager “once or twice” on site and the police writing tickets. Id. at 105. But
according to his deposition testimony, law enforcement “gradual[ly]
disappear[ed],” id. at 107, and at the same time, problems that began in 2010
“seemed to grow worse and worse.” Id. at 110. The Murrays allege that even
though they “informed the Forest Service of the dangerous snowmobile
related activity and attempted to undertake efforts to eliminate the dangerous
activity in and around the parking lot,” their efforts “were met with either
indifference, hostility or adversity by the individuals engaging in the
snowmobile related activity, local law enforcement, and the Forest Service.”
Compl. ¶¶ 35-36.

        With the situation becoming “progressively worse,” by 2016 the
Murrays felt like they were “in trouble.” PA at 113. As Mr. Murray testified
at deposition, “By ’16, ’17 [it was] getting crazy. . . . Probably less than five
years we realized that we were not in control. We weren’t getting the type of
help we needed from law enforcement or the Forestry Service.” Id. at 112. In
an email sent to the Forest Service on April 14, 2017, Mr. Murray attached
photographs of the parking lot taken during the 2015-2016 season, which he
identified as demonstrating the “type of situation [that we have identified] as
a safety hazard.” DA at 63. He stated that the situation was affecting “the
business monetarily” and that he had “submitted similar photos almost every
year since 2011.” Id. “The only difference year to year,” he wrote, “is that
every year it gets a little more unmanageable, we get more complaints from
our customers, and less of the lot is cleaned by ODOT.” Id.

        It was also in 2016 that Spout Spring’s insurance agent “expressed
serious concerns about the clearly unsafe snowmobile related activity
occurring in the parking lot, which included snowmobilers driving through
the parking lot and consuming alcohol in the parking lot, as well as
inadequate plowing of the parking lot due to the presence of snowmobile
trailers.” Compl. ¶ 37. In an email dated August 1, 2016, the Murrays’
insurance agent suggested obtaining a legal opinion as to whether the Forest
Service was “materially interfere[ing]” with rights authorized under the
Permit by “creating a greatly reduced parking area as well as creating a
substantial risk to [the Murrays] and the public.” PA at 42.

   III.    The Closure of Spout Springs in the 2016/2017 Winter Season

       In 2016, the Murrays requested that the Forest Service no longer allow

                                       6
snowmobile-related activities in the Spout Springs parking lot. Compl. ¶ 40.
When the Forest Service refused, Spout Springs ceased operations beginning
in the winter 2016-2017 season. Id. at ¶¶ 44-46. An email written by a Forest
Service employee on December 13, 2016, describes the situation at Spout
Springs as follows: “This situation [involving snowmobilers at Spout
Springs] has been festering for a few years and the owner says he’s had
confrontations with snowmobilers in the parking lot, been threatened, and
had problems with snowmobilers hot rodding all over the parking lot and
endangering skiers. So now the owner says he won’t open unless the parking
lot on the ski area side can be all day use with no trailers. Since the Forest
Service isn’t willing to approve that change the owner has decided he won’t
open.” PA at 61. Stuck at an impasse with the Forest Service, Spout Springs
remained closed through the 2016-17, 2017-18, 2018-19, and 2019-20 winter
seasons. DA at 51.

       On January 4, 2021, the Forest Service revoked plaintiffs’ Permit,
citing noncompliance with its terms and conditions. Compl. ¶ 55.
Specifically, noncompliance occurred “because the Resort had not operated
for the minimum of 90 days per year since 2016 despite adequate snow
conditions, an operating plan had not been submitted since 2018, and no
insurance had been obtained.” DA at 56. Although the Forest Service had
presented “the option to begin proceedings to sell the Resort” as an
“alternative to curing those issues,” the Murrays neither cured the
noncompliance issues nor alternatively sold the Resort. Id.

        The Murrays appealed the Permit revocation on February 3, 2021.
Compl. ¶ 57. The Appeal Deciding Officer denied the appeal on April 5,
2021, which the Forest Service affirmed on May 28, 2021. Id. at ¶¶ 58, 60.
Plaintiffs then filed this lawsuit seeking compensation for the Forest
Service’s breach of its obligations under the Permit on June 21, 2021.

                               DISCUSSION

       To determine whether this court has subject matter jurisdiction, the
“court must accept as true all undisputed facts asserted in the plaintiff’s
complaint and draw all reasonable inferences in favor of the plaintiff.”
Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir.
2011). If a motion to dismiss challenges a jurisdictional fact, however, fact-
finding by the court is proper. Moyer v. United States, 190 F.3d 1314, 1318
(Fed. Cir. 1999) (citing Reynolds v. Army & Air Force Base Exch. Serv., 846
F.2d 746, 747 (Fed. Cir. 1988)). Moreover, the plaintiff bears the burden of
establishing subject matter jurisdiction by a preponderance of the evidence.
See Reynolds, 846 F.2d at 748.

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        One of the jurisdictional requirements in this court is that a claim must
be brought “within six years after such claim first accrues.” Accord 28 U.S.C.
§ 2501 (2018); John R. Sand & Gravel Co. v. United States, 552 U.S. 130,
132 (2008) (holding that the statute of limitations under § 2501 is
jurisdictional and not subject to waiver). A claim first accrues under § 2501
“when all the events have occurred that fix the alleged liability of the
government and entitle the claimant to institute an action.” Holmes v. United
States, 657 F.3d 1303, 1317 (Fed. Cir. 2011). Where the claim is for a breach
of contract, the claim accrues when the alleged breach occurs. Id.

        Importantly, when a claim accrues does not depend “upon the time at
which the consequences of the [unlawful] acts became most painful.”
Hamilton Square, LLC v. United States, 160 Fed. Cl. 617, 623 (2022)
(quoting Delaware State Coll. v. Ricks, 449 U.S. 250, 258 (1980)). The
plaintiff, however, must have actual or constructive knowledge that the
breach occurred. See Holmes, 657 F.3d at 1317 (holding that accrual of a
claim was suspended when the plaintiff showed that “the defendant has
concealed its acts with the result that plaintiff was unaware of their existence”
or that “its injury was ‘inherently unknowable’ at the accrual date”) (quoting
Young v. United States, 529 F.3d 1380, 1384 (Fed. Cir. 2008)).

        Here, the Permit constitutes a valid contract between plaintiffs and the
Forest Service, which imposed upon the Forest Service a duty not to
authorize third-party uses of Spout Springs that would materially interfere
with plaintiffs’ operations. 3 See DA at 2 (“The Forest Service reserves the
right to use or permit others to use any part of the permitted area for any
purpose, provided such use does not materially interfere with the rights and
privileges hereby authorized.”). Plaintiffs allege that the Forest Service
breached that contractual duty by authorizing snowmobile-related activities
in the Spout Springs parking lot, which materially interfered with their
operations. Because plaintiffs filed their breach-of-contract claim on June 21,

3
  The Permit, to be clear, did not impose upon the Forest Service a duty of
law enforcement with regard to third-party activities at the Spout Springs
parking lot. See DA at 2 (“The Forest Service assumes no responsibility for
enforcing laws, regulations, ordinances and the like which are under the
jurisdiction of other government bodies.”). Thus, a breach of duty, if any,
must be found in the Forest Service’s authorization of snowmobile-related
activities in the Spout Springs parking lot—what role the Forest Service did
or did not play in enforcing the law with regard to those activities is
irrelevant.

                                       8
2021, however, this court would lack jurisdiction if the breach occurred
earlier than June 21, 2015. Plaintiffs contend that material interference did
not occur earlier than 2016, whereas defendant argues that material
interference dates back to at least 2011. 4

        It is uncontroverted that although the Forest Service authorized (with
plaintiffs’ consent) snowmobile-related activities in the Spout Springs
parking lot beginning in 2004, high-speed snowmobiles and oversized
trailers did not appear on the market or at Spout Springs until around 2010.
See DA at 90. It is also undisputed that plaintiffs sought (unsuccessfully) to
limit snowmobile-related activities in the parking lot from 2010 onwards.
The record contains a letter Mr. Murray wrote to the Forest Service on July
27, 2010, stating his intent to close the parking lot to “all snowmobile trailers
and RV’s effective the 10/11 season.” See id. at 43. There is also a letter
dated March 7, 2011, in which the Forest Service requested that Mr. Murray
remove the “Resort Parking Only—No Trailers” signs he had posted around
the parking lot. See id. at 40. And in an email that Mr. Murray wrote to the
Forest Service on April 14, 2017, he referred to photographs he had
submitted “almost every year since 2011” to document safety hazards in the
parking lot. See id. at 63.

        Although plaintiffs do not contest these facts, they argue the
snowmobile-related activities caused “negligible,” rather than material,
interference with their business before 2016. See Oral Arg. at 1:02:00 to
1:04:00. In particular, they point to Mr. Murray’s deposition testimony that
problems in the parking lot “got progressively worse” and that he “didn’t feel
like we were in trouble until 2016, 2017.” See PA at 113. As the court held
in Hamilton Square, however, when a breach-of-contract claim accrues does
not depend on the plaintiffs’ subjective evaluation of when the consequences
of the defendant’s breach became most acute. See 160 Fed. Cl. at 623. It may
well be that plaintiffs only felt compelled to close Spout Springs in 2016—
but that does not necessarily mark when the Forest Service’s authorization
of snowmobile activities materially interfered with their business.

       What constitutes “material” interference is a question of contract
interpretation that the court must resolve, which begins with the “plain
language” of the contract. See Giove v. Dep’t of Transp., 230 F.3d 1333, 1340

4
  For purposes of its motion to dismiss, defendant assumes two things: first,
that “the Forest Service was responsible for allowing snowmobilers to use
the Spout Springs parking lot”; and second, that “snowmobilers actually
engaged in unruly behavior, despite the fact that local law enforcement was
unable to corroborate these allegations.” Def.’s Mot. to Dismiss at 9.
                                       9
(Fed. Cir. 2000). The court gives “the words of the agreement their ordinary
meaning unless the parties mutually intended and agreed to an alternative
meaning.” Id. (quoting Harris v. Dep’t of Veteran Affairs, 142 F.3d 1463,
1467 (Fed. Cir. 1998)). Because the Permit does not define the word
“material,” we turn to its ordinary meaning as defined in the dictionary: “Of
serious or substantial import; significant, important, of consequence.”
Material, Oxford English Dictionary (2023). Based on that meaning of
“material,” we disagree with plaintiffs’ assertion that they did not suffer
material interference with the operation of Spout Springs prior to its closure
in 2016. The word “material” simply is not so categorical or extreme.
Material interference is interference serious and substantial enough to prompt
action on the part of the business to mitigate the situation.

        The record indicates that conditions for material interference were
satisfied as early as 2010 and at the latest by 2013. As described above, Mr.
Murray started to take steps to limit snowmobile-related activities in his
parking lot from 2010 onwards: he posted signs banning snowmobile trailers,
took photographs of the parking lot (even when doing so led to death threats
from angry snowmobile recreationists), and communicated his concerns to
the Forest Service. These are not actions that a person would take in the
absence of a serious and substantial interference with the operation of a
business. Indeed, we need only look to Mr. Murray’s own deposition
testimony about the seriousness of the problem well before 2016. At his
deposition, Mr. Murray identified “[r]ight around 2010” as “when [t]hings
started turning” so that Spout Springs wasn’t “having the same years, the
same turnout.” DA at 96. He even testified that the change wrought by high-
speed snowmobiles and oversized trailers was “day and night,” see id. at 94,
and that he “started talking” about shutting down Spout Springs in 2012 or
2013 because “attendance was falling off” and they were “starting to get a
reputation of a snowmobile/ski area.” See id. at 96. A negative impact on
both revenue and business reputation is undoubtedly sufficient to constitute
material interference with a business.

        The breach that plaintiffs allege therefore occurred before June 21,
2015, and plaintiffs’ claim is not timely under § 2501. Because we lack
jurisdiction over this action, we need not address defendant’s alternative
motion for summary judgment.

                              CONCLUSION

      For the foregoing reasons, defendant’s motion for dismissal under
RCFC 12(b)(1) is GRANTED. The Clerk is directed to enter judgment
accordingly. No costs.

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     s/Eric G. Bruggink
     ERIC G. BRUGGINK
     Senior Judge

11