Brown Park Estates-Fairfield Development Co. v. United States

127 F.3d 1449, 1997 WL 644765
Court of Appeals for the Federal Circuit·Decided October 21, 1997·No. No. 96-5103·Published·Cited by 13 cases

Opinion

SCHALL, Circuit Judge.

This case involves claims arising under the so-called “Section 8” housing program. Plaintiffs-Appellants Brown Park Estates— Fairfield Development Company (“Brown Park Estates”), Eden Limited Partnership (“Eden”), Parish Square Apartments (“Parish Square”), Pine Hill Estates Limited Partnership (“Pine Hill”), and Stone Vista Apartments — Fairfield Property Management (“Stone Vista”) (collectively “appellants”) appeal the November 29, 1995 decision of the United States Court of Federal Claims in Brown Park Estates-Fairfield Development Co. v. United States, 34 Fed. Cl. 464 (1995). Except for one claim asserted by Eden, the court dismissed appellants’ Section 8 claims as barred by the applicable statute of limitations, 28 U.S.C. § 2501 (1994).1 In addition, the court concluded that Stone Vista lacked privity of contract with the United States. It therefore held that it lacked jurisdiction to entertain Stone Vista’s claims.2 Because we conclude that all of the claims at issue are barred by the statute of limitations, we affirm.

BACKGROUND

I.

In 1974, Congress enacted Section 8 as part of section 201(a) of the Housing and [1451]*1451Community Development Act of 1974, Pub.L. No. 93-383, 88 Stat. 633, 653-67 (1974). In so doing, Congress amended the United States Housing Act of 1937 (codified as amended at 42 U.S.C. § 1437f (1994)). Section 8 created a housing assistance program “[f]or the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing____” 42 U.S.C. § 1437f(a) (1994). Under the program, the United States, acting through the Department of Housing and Urban Development (“HUD”), subsidizes the rents of low-income individuals and families who live in privately-owned dwelling units.3 These subsidies are generally provided in one of two ways: (i) HUD enters into a Housing Assistance Payments (“HAP”) contract directly with an owner of the dwelling units, see 42 U.S.C. § 1437f(a) (1994), or (ii) HUD enters into an “annual contributions contract” (“ACC”) with a “public housing agency” (“PHA”), 42 U.S.C. § 1437f(b) (1994).4 In the latter case, subject to HUD’s approval, the PHA in turn enters into a HAP contract with the owner. Id; see National Leased Hous. Ass’n v. United States, 105 F.3d 1423, 1425 (Fed.Cir.1997).

HAP contracts specify maximum monthly rents for the dwelling units being subsidized — known as “contract rents” — which the owner is entitled to receive for each dwelling unit for which rental assistance payments are to be made. 42 U.S.C. § 1437f(c)(l) (1994); 24 C.F.R. § 880.201 (1996). Of this contract rent, the tenant is responsible for paying a specified amount based on his or her income, known as the tenant rent. See 42 U.S.C. § 1437a(a) (1994); 24 C.F.R. § 880.201. The remaining portion of the contract rent— which is the amount of the rental assis-

tance — is paid by the governmental entity (either HUD or the local PHA) contracting with the owner. 42 U.S.C. § 1437f(c)(3)(A) (1994); 24 C.F.R. § 880.501(d)(1) (1996).

The contract rent is initially set by HUD to approximate the fair market value of the rental property for the local area, taking into account certain adjustments to reflect additional costs associated with complying with Section 8 requirements. See generally National Leased Hous., 105 F.3d at 1425. In addition to setting initial contract rents, HUD is responsible for adjusting the contract rents on at least an annual basis. Section 8(c)(2)(A) provides in pertinent part:

The [HAP] contract shall provide for adjustment annually or more frequently in the maximum monthly rents for units covered by the contract to reflect changes in the fair market rentals established in the housing area for similar types and sizes of dwelling units or, if the Secretary determines, on the basis of a reasonable formula.

42 U.S.C. § 1437f(c)(2)(A) (1994).

II.

Appellants are owners of various rental apartment properties in the state of Louisiana. From 1978 through 1991, they entered into HAP contracts. All of the appellants except Stone Vista contracted directly with HUD. Stone Vista entered into a HAP contract with a local PHA, the Housing Authority of the City of Shreveport, which in turn entered into an ACC contract with HUD.5 Appellants’ claims grow out of the rent adjustment provisions of their contracts.

The HAP contracts in this case contained specific provisions implementing the statuto[1452]*1452ry mandate relating to rent adjustments. Two versions of HAP contracts were utilized. A 1976 version was used for Pine Hill’s HAP contract with HUD, while a 1980 version was used for each of the remaining contracts. The 1976 version HAP contract contained Section 1.8b on rent adjustments, which stated:

(b) Automatic Annual Adjustments
(1) Automatic Annual Adjustment Factors will be determined by the Government at least annually[6]; interim revisions may be made as market conditions warrant. Such Factors and the basis for their determination will be published in the Federal Register. These published Factors will be reduced appropriately by the Government where utilities are paid directly by the Families.
(2) On each anniversary date of the Contract, the Contract rents shall be adjusted by applying the applicable Automatic Annual Adjustment Factor most recently published by the Government. Contract Rents may be adjusted upward or downward, as may be appropriate; however, in no case shall the adjusted Contract Rents be less than the Contract Rents on the effective date of the Contract.

The 1980 version HAP contracts contained Section 2.7(b) on rent adjustments, which read:

(b) Annual Adjustments.

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Brown Park Estates-Fairfield Development Co. v. United States, 127 F.3d 1449, 1997 WL 644765 (Fed. Cir. 1997).

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