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United States v. Vantage Trust Federal Credit Union

United States District Court, M.D. Pennsylvania

January 5, 2018

UNITED STATES OF AMERICA, Plaintiff
v.
VANTAGE TRUST FEDERAL CREDIT UNION, f/k/a WILKES-BARRE VA EMPLOYEES CREDIT UNION, Defendant

          MEMORANDUM

          MALACHY E. MANNION UNITED STATES DISTRICT JUDGE

         The United States filed an action to eject the defendant Vantage Trust Federal Credit Union, f/k/a Wilkes-Barre VA Employees Credit Union (“Vantage”), from federal land which it has been occupying for free for the past 22 years under a revocable license it was granted alleging that the license was revocable at the instance of the United States, i.e., licensor, and that the license expired. (Doc. 1). The United States also seeks to have Vantage restore the federal land to substantially the same condition as it was at the beginning of its occupancy. Additionally, the United States seeks damages from Vantage for the alleged unlawful holding over.

         In response to the government's complaint, Vantage filed an answer with affirmative defenses and attached a copy of the Revocable License it was granted by the government as an exhibit. (Doc. 7, Doc. 7-1). Vantage also asserted three counterclaims against the government essentially claiming that it is entitled to its continued free occupancy of the federal land and, it seeks damages from the government alleging that it is being deprived of the benefits conferred upon it by the license it was granted. Vantage claims that after the license expired, it was entitled to continued occupancy of the property since the government expressly gave it permission to do so.

         Presently before the court is the government's motion to dismiss the counterclaims of Vantage pursuant to Fed.R.Civ.P. 12(b)(6). (Doc. 12). The government seeks to dismiss Vantage's counterclaims for breach of contract and promissory estoppel as well as its claim for declaratory judgment.

         In viewing the factual allegations of Vantage's counterclaims in the light most favorable to Vantage, the court will GRANT the government's motion and dismiss the counterclaims since they fail to state cognizable claims.

         I. BACKGROUND[1]

         On September 18, 1995, the government entered into a Revocable License (the “license”) with Vantage's predecessor, namely, Wilkes-Barre VA Employee Credit Union (licensee). The purpose of the license was: “Construction of a 6, 909-square-foot free-standing one-story building to house the Wilkes-Barre VA Employees Credit Union.” The consideration for the license which the government (licensor) received was: “VA to use a portion of [the] building” to be constructed by licensee. The license had an express term from October 1, 1995 through September 30, 2011. (Doc. 1, Ex. A & Doc. 7-1).

         The license specified conditions, including the following two:

I. NOTICE. Any property of the Licensee installed or located on the property affected by this License shall be removed within 30 days of written notice from the Veterans Administration.
o. ASSIGNMENT, REVOCATION, AND ABANDONMENT. This license is unassignable and shall be revocable by either party within the time indicated under special conditions. Upon revocation of this license or abandonment by the licensee, at election of the Government, the licensee shall restore the property to substantially the same conditions as those existing at the time of entry.

         Addendum I of the license contained a provision pertaining to termination or expiration of the license which provided:

12. Upon the termination or expiration of the License, or in the event of default by the Licensee of the Revocable License, the Licensee will determine the decision to move, tear down or donate the building to the VA should the credit union not be granted a new Revocable License. In the event Licensor terminates this License prior to it's (sic) expiration for any reason, or closes its medical facility, Licensor agrees to reimburse the Licensee in an amount equal to the fair market value of the building.
Addendum I also provided:
14. No. later than 90 days prior to the date of expiration or termination of this License, or upon default by the Licensee, if the government determines that it does not want to occupy, or otherwise use the building construction pursuant to paragraph 1 of this License, and the Licensed property should be restored to its original state, the Licensee shall vacate the building, remove its personal property and all fixtures therefrom, and restore the Licensed property to the same condition as that existing on the commencement date of this Licensed property.

         Further, ¶11 of Addendum I provided that: “In consideration of the covenants of this License, Licensee agrees to make available to the Licensor, when unoccupied, the Board Room for its use.”

         On April 18, 2016, counsel for the VA sent an email to Vantage, (Doc. 1, Ex. B), advising it in pertinent part as follows:

The counter offer provided by your client is not feasible. lt has been over a year now since discussion on this matter began and there has been no progress in reaching a mutually agreeable resolution. As a result, the Department of Veterans Affairs (VA), in accordance with Paragraph I. Notice of the General Conditions of the most recent Revocable License (License), is hereby providing Vantage Trust Federal Credit Union (Licensee) a 30-day written notice to remove all property installed on VA Property affected by said License.

         In its complaint, (Doc. 1, ¶13), the government alleges that despite the email “Vantage continues to maintain unauthorized use and occupancy of the [VA property] and has refused to restore the property to substantially the same conditions as those existing at the time of its entry, all of which constitutes a trespass upon property of the United States.”

         II. PROCEDURAL HISTORY

         The government commenced this action by filing a complaint on February 24, 2017. (Doc. 1). Jurisdiction in this court was based upon federal question and since the Untied States was ...


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