John Kapua was injured in a collision between his bicycle and a United States Postal Service vehicle. Following the accident, Kapua's attorney sent a Tort Claim Notice to the USPS seeking $675.42 specifically for property damage, noting an intent to resolve that portion before pursuing personal injury claims. The USPS responded with a check for the property damage amount, explicitly stating that acceptance of the check would operate as a complete release of any additional or future claims arising from the same subject matter. Kapua cashed the check without objection but later submitted a Standard Form 95 seeking over $30,000 for personal injuries. The USPS refused the claim, asserting the release was valid. The district court dismissed the lawsuit for lack of subject matter jurisdiction, and Kapua appealed to the Ninth Circuit.
The Ninth Circuit reviewed the case de novo, emphasizing that the FTCA's waiver of sovereign immunity is strictly construed in favor of the sovereign. The court analyzed the interaction between Kapua's initial demand and the USPS's response. While Kapua's letter was an offer to settle only property damage, the USPS's letter constituted a counteroffer to release all claims arising from the accident in exchange for the property damage payment. Under 28 U.S.C. § 2672, acceptance of any award, compromise, or settlement by the claimant is final and conclusive, constituting a complete release of any claim by reason of the same subject matter. By cashing the check, Kapua accepted this counteroffer. The court further addressed Kapua's argument that a valid release requires a signed settlement agreement or SF 95. The court noted this argument was forfeited because it was not raised in the district court. Even if considered, the court found that administrative settlements under $2,500 do not require a signed writing under 28 C.F.R. § 14.10(a). The court cited precedent establishing that cashing a check is a sufficient act of dominion to constitute acceptance of an offer and its accompanying terms.
This decision reinforces that plaintiffs must carefully review the terms of any settlement check issued by a federal agency under the FTCA. Cashing a check that explicitly states it is a 'complete release' will bar any subsequent claims for personal injuries or other damages stemming from the same incident, even if the plaintiff intended to reserve those claims. For claims under $2,500, the government is not required to secure a signed release document; the physical act of cashing the check is legally binding. The case is remanded with instructions to dismiss, leaving the plaintiff without a remedy for the personal injury claim.