Haddon Housing Associates, LLC v. United States
2011 U.S. Claims LEXIS 1158
| Fed. Cl. | 2011Background
- Rohrer Towers II is a HUD-subsidized elderly-housing project in New Jersey; Haddon Associates owns the property and leases to the Housing Authority, which entered into a HAP Contract with HUD; in 2008 HUD, Housing Authority, and Haddon assigned the HAP Contract to Haddon Associates and amended it; the 1994 Amendments to the Housing Act shifted rent-adjustment burden to owners and introduced AAAF changes and a 60-day submission window; HUD issued Notice 95-12 implementing the 1994 Amendments; Rohrer Towers II’ s rent adjustments from 1982–2007 show a complex sequence of automatic and requested adjustments; plaintiffs allege the 1994 Amendments and HUD actions breached the HAP Contract and caused monetary damages; the complaint was filed September 4, 2007, triggering a damages period back to September 4, 2001; the court previously denied summary judgment, finding material issues of fact, and held a three-day liability trial in November 2010.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Privity and entitlement to sue government | Haddon Associates properly joined as plaintiff via Assignment. | Anti-Assignment Act and lack of privity barred action. | Haddon Associates properly a plaintiff; privity established by assignment. |
| Whether 1994 Amendments and HUD Notice 95-12 breached the HAP Contract | Amendments breached contract by dictating comparability studies and denying adjustments. | HUD acted within statutory and contractual discretion; no breach. | Yes, the 1994 Amendments and Notice 95-12 breached the contract; liability found for 2004–2006 and related damages. |
| One-percent AAAF reduction for non-turnover units | Reduction lacks market-based basis; breach of contract. | Reduction permitted by statute; reasonable under discretion. | Breach established; one-percent reduction unconstitutional as applied. |
| 60-day notice requirement for rent adjustments | Policy is an improper extension of burden; breach. | Reasonable, non-arbitrary administrative deadline. | 60-day requirement deemed reasonable; not a breach per se, but damages still awarded for other breaches. |
| Effect of partial breach and continuing performance | Partial breaches allow damages while continuing performance. | Partial breach does not nullify protections. | Partial breach doctrine applicable; damages awarded for ongoing breach effects. |
Key Cases Cited
- Cisneros v. Alpine Ridge Grp., 508 U.S. 10 (U.S. 1993) (upheld use of comparability studies and agency administration of AAAFs)
- Statesman II Apartments, Inc. v. United States, 66 Fed.Cl. 751 (Fed.Cl. 2005) (contractual duty to provide adjustments and limits under 1994 Amendments)
- Park Properties I, 74 Fed.Cl. 264 (Fed.Cl. 2006) (breach of old-form HAP contract for AAAF reductions not based on Federal Register basis)
- Park Properties II, 82 Fed.Cl. 162 (Fed.Cl. 2008) (prevention doctrine and overall limitation reception in post-amendment context)
- Dominion Resources, Inc. v. United States, 641 F.3d 1359 (Fed.Cir. 2011) (assignment of claims; privity and waiver concepts in government contracts)