UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

THAD KELLY, JR.,
Plaintiff-Appellant,

v.
                                                                       No. 96-2278
UNITED STATES OF AMERICA; FARMERS
HOME ADMINISTRATION,
Defendants-Appellees.

Appeal from the United States District Court
for the Middle District of North Carolina, at Rockingham.
Frank W. Bullock, Jr., Chief District Judge.
(CA-95-92)

Submitted: June 17, 1997

Decided: July 28, 1997

Before WIDENER, NIEMEYER, and MOTZ, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

Thomas Lavigne, BRAY & LAVIGNE, Fayetteville, North Carolina,
for Appellant. Walter C. Holton, Jr., United States Attorney, Lynne
P. Klauer, Assistant United States Attorney, Greensboro, North Caro-
lina, for Appellees.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

Thad Kelly appeals from the district court's order dismissing for
lack of subject matter jurisdiction his action filed under the Federal
Tort Claims Act ("FTCA"), 28 U.S.C.A. #8E8E # 2671-2680 (West 1994).
Kelly challenges the district court's conclusion that the Farmer's
Home Administration's ("FmHA") decision not to repair the floor in
a house the agency sold to Kelly is within the discretionary function
exception to the United States' waiver of immunity under the FTCA.
We affirm.

Kelly was hanging pictures in a bedroom of the house he purchased
from the FmHA when the floor gave way, causing injuries to Kelly's
right leg. Before purchasing the house, Kelly and his real estate agent
inspected the house, noting a number of defects in the property. Kelly
submitted to the FmHA a list of defects, including that the floor in the
front bedroom "showed water stain and could be weak."

James McCaskill, the Community Development Manager for the
Rockingham Rural Economic Development Office, reviewed the list
to determine which items the FmHA would repair. During his inspec-
tions of the house prior to sale, McCaskill observed the water stain,
but noted that the floor was dry and did not have any noticeable give
or weakness. Concluding that the stain was not indicative of a defect
or unsafe condition, McCaskill decided not to repair the floor. He
notified Kelly of this decision prior to closing.

One exception to the waiver of sovereign immunity under the
FTCA is for acts involving elements of judgment or choice where the
acts are based on considerations of public policy. United States v.
Gaubert, 499 U.S. 315, 322-23 (1991). To determine if the exception
applies, the court must first determine if the government employee's
actions are discretionary or mandatory. Acts are discretionary if they

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involve "judgment or choice," Williams v. United States, 50 F.3d 299,
309 (4th Cir. 1995), rather than having to follow a prescribed course
of action. See Berkovitz by Berkovitz v. United States, 486 U.S. 531,
536 (1988). If the conduct is discretionary and the discretion is based
on considerations of public policy, the discretionary function excep-
tion applies. See Williams, 50 F. 3d at 323.

The federal regulations governing the sale of FmHA homes require
that property be "structurally sound, functionally adequate," "in good
repair," and "safe." 7 C.F.R. §§ 1944.16(h), 1955.103 (1996). "Safe"
is defined to mean that "a hazard does not exists that would endanger
the safety of dwelling occupants." 7 C.F.R. § 1955.103. The adjec-
tives describing FmHA housing requirements are not further defined
in the regulations. Because the regulations do not contain specific
standards or mandate a certain defined level of safety or adequacy, the
FmHA officials have to make choices and exercise their judgment in
determining whether houses meet the general standards expressed in
the regulations. These decisions, therefore, are discretionary.

The second part of the test to determine whether the discretionary
function exception applies is to determine whether the challenged
decisions are of the type that normally involve considerations of pub-
lic policy. See Baum v. United States, 986 F.2d 716, 722 (4th Cir.
1993). The policy goal of the Housing Act of 1949 is to provide
decent inexpensive housing for people who might not otherwise be
able to obtain financing. To achieve this goal, the FmHA must bal-
ance social, economic, and budgetary considerations. Such consider-
ations in a government program are permissible bases for
discretionary authority. See Bowman v. United States, 820 F.2d 1393,
1395 (4th Cir. 1987) (decision not to place guardrails in certain area
was a discretionary decision because it required balancing safety,
environmental impact, and budgetary restrictions). Decisions as to the
best allocation or use of resources are "inherently bound up in consid-
erations of economic and political policy, and accordingly are pre-
cisely the type of governmental decisions that Congress intended to
insulate from judicial second-guessing through tort actions for dam-
ages." Baum, 986 F.2d at 724.

Decisions regarding repairs to property to be sold by the FmHA are
discretionary decisions involving the balancing of budgetary, politi-

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cal, and social policy to best achieve the agency's goal of assisting
people in attaining adequate inexpensive housing. Therefore, we con-
clude that the discretionary function exception applies to the FmHA's
determination that the floor in the bedroom of Kelly's house was ade-
quate and not in need of repair. See Ortiz v. United States, 661 F.2d
826, 831 (10th Cir. 1981); Wohlford v. United States, 823 F. Supp.
386, 390 (W.D. Va. 1992).

Because the United States is immune from liability for FmHA's
repair decisions under the discretionary function exception, Kelly's
alternative theories of liability under state law are irrelevant and need
not be addressed. See Boyle v. United Techs. Corp., 487 U.S. 500,
511-12 (1988); see also Goldstar (Panama) S.A. v. United States, 967
F.2d 965, 970 (4th Cir. 1992). Therefore, we affirm the district court's
order dismissing this action. We dispense with oral argument because
the facts and legal contentions are adequately presented in the materi-
als before the court and argument would not aid the decisional pro-
cess.

AFFIRMED

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