Published April 3, 2013, Los Angeles Daily Journal – When one of the most rare and beloved cars on the planet gets wrapped around a tree, the automotive community weeps. When the accident is caused by a Special Agent of the Federal Bureau of Investigations and an Assistant United States Attorney, the world takes notice.
Introduced in 1995 to celebrate Ferrari’s 50th anniversary, the Ferrari F50 is one of the most important automobiles of the modern era. With just 349 built – one less than Ferrari thought the market would accept – the car is a treasure to see and euphoria to drive. The street-legal racecar will top 203 mph in the blink of an eye, and do so in a way that is unmistakably Ferrari. And, at a cost of $750,000, this is a pleasure that very few will experience.
Whether overcome by greed, or having surrendered to temptation, airline pilot Tom Baker was not about to be denied this ride of a lifetime. In 2003, Baker walked into a Ferrari dealership in Rosemont, Pennsylvania and stated that he was looking to buy a Ferrari F50. Baker had concocted a story that he was the CEO of a California tech firm who had just flown in from Atlanta to see the car, and with a limousine waiting outside the story seemed to fit. Baker just wanted to take a quick test drive before he committed.
When the salesman handed Baker the keys to the supercar, it would be the last time he would ever see Baker, or the dealership’s famous Ferrari. Baker hopped into the car and sped off, never to return, leaving the confused salesman behind and igniting a tale of urban legend. Baker then transported the car to his home in Kentucky, where he parked it next to a Ferrari 328 GTS he had stolen from a North Carolina dealer and a Ferrari Testarossa he stole from a dealer in Long Island.
Baker then took the F50 to car shows in Kentucky and treated it as his own, before selling it to an emergency room doctor in 2008. When the doctor called the Ferrari factory to confirm the car’s vehicle identification number, he learned that the car had been stolen and he reported it to the local law enforcement. Because the car had been transported across state line, the matter was referred to the FBI. The FBI confiscated the car and notified Motor Insurance Corp., the insurance company who had reimbursed the dealership for the $750,000 loss, that the car had been recovered. The FBI then requested that the insurance company allow it to maintain possession of the car while it investigated the crime. And, this is where the story gets interesting.
In May 2009, while the car was being held by the FBI, Special Agent Frederick Kingston and Assistant U.S. Attorney Hamilton Thompson took the Ferrari out of the Lexington, Kentucky storage facility for an “undisclosed” reason. With Special Agent Kingston behind the wheel, the two drove the Ferrari down the country roads before losing control of the car and slamming it into a tree. With a bent frame and the driver’s side of the car caved in, the Ferrari – officially number 29 of the 349 built – was a total loss.
After the accident, Motor Insurance Corp. submitted a claim to the FBI and the Department of Justice for the $750,000 that it had paid to the Ferrari dealer for the loss. However, the agencies rejected the claim on the ground that the Ferrari was being “detained” by the FBI at the time of the incident, and that they were not responsible for the claim. The insurance company then tried to get documents relating to the crash under the Freedom of Information Act, but the government refused this request as well.
After trying to resolve this matter informally for nearly two years, and getting nowhere, in March 2011 Motor Insurance Corp. filed a lawsuit against the United States in the District Court for the Eastern District of Michigan. The insurance company brought claims for negligence and conversion, and importantly, for the turnover of the documents it originally sought under the Freedom of Information Act. The United States moved to dismiss.
The question raised was an interesting one, since sovereign immunity prevents lawsuits against the U.S. unless the U.S. has specifically allowed the claim for relief. Fortunately for Motor Insurance Corp., the U.S. had enacted the Federal Tort Claims Act, codified as 28 U.S.C. § 1346(b), which allows claims against the U.S. for negligent acts of federal employees while acting within the course and scope of their employment. Yet, there are exceptions.
The U.S. claimed that the “detention of goods exception” precluded Motor Insurance Corp.’s claim. Under 28 U.S.C. § 2680(c), the U.S. is immune from claims arising out of “the detention of any goods, merchandise or other property by any officer of customs or excise of any other law enforcement officer.” Thus, the U.S. argued, because the vehicle was damaged while being detained by the FBI – even if it was being taken out for a joyride – it had no responsibility for the $750,000 loss.
Motor Insurance Corp. argued that because it had voluntarily consented to the FBI’s storage of the Ferrari, the vehicle was not being “detained” at all. Motor Insurance Corp. presented the District Court with federal authority that defined a detention as the “deprivation of control and a right of dominion over the property,” not a voluntarily entrustment. Hence, because the insurance company voluntarily agreed to the FBI’s request that it be allowed to keep the car, the car was not being detailed and the exception did not apply.
The District Court disagreed with Motor Insurance Corp., stating that its argument had “no merit.” The court reasoned that the FBI had the right to detain the vehicle regardless of Motor Insurance Corp.’s consent, and then speculated that had the insurance company not consented, the FBI “would have taken the vehicle into its custody” anyway. The court also rejected Motor Insurance Corp.’s request for documents under the Freedom of Information Act as unnecessary. As the court held: “A plaintiff is not entitled to discovery where the court needs no further information to decide a motion to dismiss.”
The District Court then dismissed Motor Insurance Corp.’s case, and with that a bit of the integrity of the judicial system. Sometimes things just need to make sense, and immunizing the government from the FBI’s act of irresponsibility is both politically and legally unsound. Motor Insurance Corp.’s only crime was cooperating with the authorities, and for this it got stoned-walled for two years and recovered nothing on its $750,000 claim.
This is a poor result, particularly given that it was shrouded in requests for documents under the Freedom of Information Act. That the decision was based on the District Court’s pure speculation that the FBI would have confiscated the car had Motor Insurance Corp. not consented makes it all the more troubling. Whether Motor Insurance Corp.’s claims would have ultimately prevailed remains an open question, but its claim for damages should have been allowed to reach a jury of its peers. The summary dismissal of its claims, without allowing the company access to any of the information it sought, is an offensive distribution of justice