United States v. N. A. Degerstrom, Inc., a Washington Corporation, and Bower MacHinery Company, Inc.

N. A. Degerstrom, Inc. leased to the United States two pieces of heavy equipment, complete with operators, to be used for flood emergency work. Due to the negligence of the operator, one of these pieces of equipment, known as a Model 988 loader, was damaged during the course of the work. Degerstrom brought this action against the United States under the Federal Tort Claims Act, 28 U.S.C. §§ 1346 (b), 2671-2680 (1964) (Act) to recover for the loss. Plaintiff alleged that, at the time of the accident, the negligent operator was the “loaned servant” of the Government.

After a non-jury trial, the district court rendered judgment for plaintiff, awarding damages in the sum of $3,430. The Government appeals, urging: (1) the trial court erred in holding that the operator of the loader was a loaned servant at the time of the accident, and (2) the trial court erred in rejecting the Government’s contention that under the express terms of the written agreement, plaintiff assumed liability for the operator’s negligence whether or not he was a loaned servant when the negligence occurred.

We consider first the Government’s argument that the trial court erred in holding that the operator of the…