United States v. Barrett

315 F. Supp. 941, 14 Fed. R. Serv. 2d 835, 1970 U.S. Dist. LEXIS 10973
CourtDistrict Court, N.D. West Virginia
DecidedJuly 10, 1970
DocketNo. 69-10-P
StatusPublished
Cited by7 cases

This text of 315 F. Supp. 941 (United States v. Barrett) is published on Counsel Stack Legal Research, covering District Court, N.D. West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Barrett, 315 F. Supp. 941, 14 Fed. R. Serv. 2d 835, 1970 U.S. Dist. LEXIS 10973 (N.D.W. Va. 1970).

Opinion

MAXWELL, Chief Judge.

On April 25, 1967, the City Council of Parkersburg, West Virginia, noting that a need existed within the city for low income housing, adopted a resolution calling for the creation of a local housing authority. The following day, the Mayor of Parkersburg created by proclamation the Parkersburg Housing Authority which consisted of five Commissioners who were appointed by the May- or, the city’s chief executive officer.

Prior to this formal action of the Mayor and City Council, the City of Parkersburg had consulted extensively with the United States Housing Authority of the Department of Housing and Urban Development.

On January 2, 1968, the City of Parkersburg entered into a “Cooperation Agreement,” wherein the Parkersburg Housing Authority agreed to begin negotiations with HUD for loans and contributions toward the erection of three hundred units of low rent housing, and the city consented to undertake certain obligations and to waive other rights should the project be initiated.1

Next, the Parkersburg Housing Authority chose Theodore Morlang as the individual who would serve as developer and ultimately sell the project to the [944]*944Parkersburg Housing Authority. Finally, on June 19, 1968, the Parkersburg Housing Authority entered into an Annual Contributions Contract with the United States Housing Authority. This contract, many pages in length, defined in great detail the cooperative effort to which the parties were dedicated. Immediately prior to the execution of this Annual Contributions Contract, and up to the present moment, there has been a great deal of controversy over the actions of the Parkersburg Housing Authority, particularly as to their selection of a site for the proposed development.

On July 19, 1968, Russell W. Barrett and sixty-one co-plaintiffs, all of whom allegedly then resided within the statutory “area of operation” of the proposed housing development2 sued in the Circuit Court of Wood County, West Virginia, for a declaratory judgment that would, in effect, prohibit completion of the housing development. Named as defendants in the suit were the City of Parkersburg, the Parkersburg Housing Authority, members of the local authority and their appointees, individually, and Theodore Morlang, the developer and vendor selected by the Parkersburg Housing Authority.

After the institution of the state court action in Wood County, the United States Housing Authority demanded an assignment of the Parkersburg Housing Authority’s interest in the proposed development under Part I, Section 12(C) of the Annual Contributions Contract. This last mentioned clause, which will be later discussed in greater detail, provided that should the right of the Parkersburg Housing Authority to contract for the development of the housing project be questioned in any legal proceeding, a substantial default would occur thus entitling the United States to demand and obtain an assignment of the local authority’s rights in the development. After the assignment became a reality, Morlang formally attorned to the United States.

Finally, the United States instituted the present action in this Court to enjoin prosecution of the state court action in Wood County which, allegedly, is severely hampering the obtaining of private capital for the venture.

Russell W. Barrett and the citizens from Parkersburg, defendants herein, have raised four issues. First, that the contract between the Parkersburg Housing Authority and the United States is void, because the contracting party for the United States was the Public Housing Administration, a defunct agency, and not the United States Housing Authority. This first point was raised and subsequently rejected in a motion to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure, but may, of course, properly be raised and considered again in defendants’ answer. Secondly, the defendants maintain that the Parkersburg Housing Authority lacks corporate existence, de jure or de facto, under W.Va.Code §§ 16-15-1 to -6 (Michie 1966).3 Thirdly, defendants al[945]*945lege that because of procedural irregularities incidental to its meeting and the illegal delegation of authority, decisions of the Parkersburg Housing Authority on the development at issue are voidable if not void.4 The second and third issues are at the heart of the case now pending before the Circuit Court of Wood County. Finally, defendants attack the default provision in the contract between the United States Housing Authority and the Parkersburg Housing Authority under which the United States demanded and received an assignment of the local authority’s rights.

Of the original sixty-two defendants, two parties, Harry G. Morehead and Evelyn Morehead, are presently unrepresented by counsel. Because they have not been dismissed from this case, they are bound as parties by the decision of the Court in this case.

The City of Parkersburg and the Parkersburg Housing Authority moved to be dismissed from this action on the grounds that there is no cause of action alleged against them or that they are merely “incidental parties.” The city and the local housing authority were ordered joined earlier upon the motion of the individual defendants who thought such joinder proper under Rule 19(a) of the Federal Rules of Civil Procedure. Rule 19(a) reads:

(a) Persons to be Joined if Feasible. A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed inter[946]*946est. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and his joinder would render the venue of the action improper, he shall be dismissed from the action.

In measuring the interest of the Parkersburg Housing Authority against the standards of Rule 19(a), the Court first notes that the local authority made the assignment to the United States after institution of the litigation in the Circuit Court of Wood County. Issues to be decided which should or could affect the Parkersburg Housing Authority therefore are: (1) the validity of the assignment, and (2) the local authority’s vulnerability to the state court suit in Wood County.

Generally, where the “validity” of the assignment is in question, the assignor is deemed to be an indispensable party. Respectable authority, decided before the advent of the federal rules, supports this view. Brown v. Fletcher, 231 F. 92 (2d Cir. 1916); Hubbard v. Manhattan Trust Co., 87 F. 51 (2d Cir. 1898).

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Bluebook (online)
315 F. Supp. 941, 14 Fed. R. Serv. 2d 835, 1970 U.S. Dist. LEXIS 10973, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-barrett-wvnd-1970.