Christopher Village, LP v. United States

50 Fed. Cl. 635, 2001 U.S. Claims LEXIS 214, 2001 WL 1478646
CourtUnited States Court of Federal Claims
DecidedOctober 26, 2001
DocketNo. 99-775C
StatusPublished
Cited by9 cases

This text of 50 Fed. Cl. 635 (Christopher Village, LP v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Christopher Village, LP v. United States, 50 Fed. Cl. 635, 2001 U.S. Claims LEXIS 214, 2001 WL 1478646 (uscfc 2001).

Opinion

ORDER DENYING CLASS CERTIFICATION

FIRESTONE, Judge.

This action is brought by plaintiffs Christopher Village, Limited Partnership (“Christopher Village”) and Wilshire Investments Corporation, the general partner (hereinafter referred to jointly as plaintiffs). The plaintiffs are seeking damages in connection with the government’s actions in foreclosing upon plaintiffs’ low-income housing apartment building, called Mockingbird Run Apartments, in Bryan, Texas. The complaint alleges that the actions taken by the United States Department of Housing and Urban Development (“HUD”) in this foreclosure constitute a breach of plaintiffs’ contracts with HUD. Plaintiffs’ current motion, which the government opposes, is to certify a class [637]*637pursuant to Rule 23 of the Rules of the United States Court of Federal Claims (“RCFC 23”). The plaintiffs’ putative class is made up of all allegedly similarly-situated low-income housing owners. As discussed below, the court finds that plaintiffs do not meet the criteria for class certification and therefore denies plaintiffs’ motion for class certification under RCFC 23.

BACKGROUND FACTS

The facts in this case are best understood after a brief summary of the statutory and regulatory backdrop. For more than twenty years, Christopher Village owned the Mockingbird Run Apartments, a low-income housing complex with mortgages guaranteed by HUD under the National Housing Act of 1934,12 U.S.C. § 1701 et seq. (2001). Under § 221(d)(3) of this Act (“Section 221”), HUD is authorized to insure loans made by private developers and others for the purpose of building and maintaining multifamily housing facilities for low and moderate income tenants. See id. § 1715(d)(3). The owners of Section 221 properties are allowed to sign non-recourse notes and are entitled to certain tax benefits, including accelerated depreciation. See 26 U.S.C. § 168(b)(4) (1998 & Supp.2001). In return for these benefits, owners must enter into a “Regulatory Agreement” with HUD. These Regulatory Agreements give HUD extensive authority over the operation and maintenance of the subject properties. Among the obligations established under the Regulatory Agreement, is the requirement that owners maintain the project in good condition. Section 7 of the Regulatory Agreement provides that owners must “maintain the mortgaged premises, accommodation, and the grounds and equipment appurtenant thereto, in good repair and condition.”

In addition to these Regulatory Agreements, HUD also has statutory authority to enter into Housing Assistance Payment (“HAP”) contracts pursuant to section 8 of the National Housing Act of 1937, 42 U.S.C. § 1437 (“Section 8”). Section 8 allows HUD to provide rental assistance to residents of non-government owned multi-family housing projects. 42 U.S.C. § 1437f. Under Section 8, HUD provides housing assistance payments directly to the owner. Many of the provisions of these HAP contracts are mandated by statute and regulation, including the requirement that owners maintain the project in good repair: section 14a of the HAP contract requires the owner to agree “to maintain and operate the contract units and related facilities so as to provide decent, safe and sanitary housing as defined by HUD.” See 24 C.F.R. § 886.123(a) (1995).

The Regulatory Agreements and HAP contracts also address HUD’s obligations with regard to setting rents for the subject properties. Pursuant to the Regulatory Agreements, HUD must approve project rents. Once rents are set, HUD must also approve any rent increase. Among the issues HUD must consider in evaluating a proposed rent increase are: “the project’s operating costs and debt service (as calculated by HUD), and the owner’s return on investment, with adjustments for vacancies, the project’s non-rental income, and other factors HUD deems to be appropriate.” 24 C.F.R. § 886.112(b). With respect to properly-supported requests for rent increases, pursuant to the Regulatory Agreement, HUD is required to: “Approve [those increases] that are necessary to compensate for any net increase occurring since the last approved rental schedule, in taxes ... and operating and maintenance expenses over which Owners have no effective control, or Deny the increase stating the reasons therefor.” Regulatory Agreement § 4(g).

The present case arises out of the Regulatory Agreement and HAP contracts entered into between HUD and Christopher Village. In 1995, HUD decided to take action against Christopher Village based on HUD’s conclusion that the Mockingbird Run Apartments had become severely run down. By 1995, HUD estimated that the cost of necessary maintenance repairs at the Mockingbird Run Apartments exceeded $1 million. As a consequence, HUD placed the project on its list of the nation’s most troubled low income housing properties. This consequently subjected the Mockingbird Run Apartments and its managers to certain enforcement actions prescribed by a HUD enforcement program aimed at identifying and improving the phys-[638]*638ieal and financial conditions of HUD’s troubled subsidized properties.1

Under the HUD enforcement program, HUD assembled “Special Workout Assistance Teams” or “SWAT” teams to identify and correct maintenance problems at the subject properties.2 Nicolas R. Retsinas, Assistant Secretary for Housing during the mid-1990’s, explained the role of the SWAT teams in testimony before the United States House of Representatives, Committee on Government Operations Subcommittee on Employment, Housing and Aviation, as follows: “The SWAT approach provides a concentrated focus of skills and enforcement to prevent the failure of projects ... and to mitigate losses to the government.” Addendum to Testimony of Nicolas P. Retsinas, Oct. 6, 1994. According to Vyllorya A. Evans, the Director of HUD’s SWAT program from 1995 to 1998, over the life of the SWAT program, fifty HUD managers reviewed and evaluated the maintenance status of approximately 400 of HUD’s 30,000 low-income housing projects. Ms. Evans explains in her affidavit that the projects identified for SWAT attention “were properties which failed to be maintained in good repair, but could also include projects with financial deficiencies, high vacancies, management deficiencies and diversions of project income.”3

The actions taken by the SWAT team that evaluated the Mockingbird Run Apartments have already been the subject of litigation between plaintiffs and HUD. See Christopher Village, LP v. Retsinas, 190 F.3d 310 (5th Cir.1999). The key facts in that litigation are set forth in the Fifth Circuit’s decision and may be summarized as follows. Following an initial inspection of the property in April 1995, HUD informed plaintiffs that their failure to refurbish the property could result in their loss of Section 8 rent subsidies and could lead to a default under their Regulatory Agreement.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Danziger v. United States
Federal Claims, 2026
Jones v. United States
126 Fed. Cl. 165 (Federal Claims, 2016)
Garcia v. United States
Federal Claims, 2015
Demons v. United States
119 Fed. Cl. 345 (Federal Claims, 2014)
Adams v. United States
93 Fed. Cl. 563 (Federal Claims, 2010)
Rasmuson v. United States
91 Fed. Cl. 204 (Federal Claims, 2010)
Fisher v. United States
69 Fed. Cl. 193 (Federal Claims, 2006)
Jaynes v. United States
69 Fed. Cl. 450 (Federal Claims, 2006)
Barnes v. United States
68 Fed. Cl. 492 (Federal Claims, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
50 Fed. Cl. 635, 2001 U.S. Claims LEXIS 214, 2001 WL 1478646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/christopher-village-lp-v-united-states-uscfc-2001.