Normandy Apartments, Ltd. v. United States
100 Fed. Cl. 247
Fed. Cl.2011Background
- Normandy Apartments, Ltd. owned a 208-unit complex in Tulsa, Oklahoma, and entered into a Housing Assistance Payment (HAP) contract with HUD in 1992, which was renewed periodically after expiration in 1997.
- Normandy prepaid its HUD-insured mortgage in 2000 under a Use Agreement that required Normandy to maintain the property as low‑income housing and to adhere to HUD’s Section 8 requirements.
- The 2004 HAP Renewal Contract listed the Oklahoma Housing Finance Agency (OHFA) as contract administrator and did not name HUD as a party, though it incorporated prior HAP provisions and stated that the Renewal Contract is between the Contract Administrator and the Owner.
- REAC inspections in 2004 and 2006 rated the property as failing (59c, then 54c), with OHFA later concluding deficiencies were corrected, while HUD did not re-inspect and ultimately terminated funding in 2007.
- Normandy challenged HUD’s termination in district court and on appeal, with prior litigation indicating jurisdictional and regulatory questions; Normandy later filed this suit in this court in 2010 asserting HUD breached the 2004 Renewal Contract.
- The court grants in part and denies in part, dismissing the contract claim for lack of privity, allowing an amendment to assert a regulatory takings theory, and denying dismissal of other claims such as interest, costs, and attorney’s fees on preserved grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether this court has jurisdiction due to lack of privity with HUD | Normandy asserts privity via the Use Agreement and renewal contract | There is no privity between Normandy and HUD for the 2004 Renewal Contract | Lack of jurisdiction on the contract claim; privity not established for the Renewal Contract |
| Whether judicial estoppel bars HUD from challenging jurisdiction | HUD should be estopped from opposing jurisdiction based on earlier positions | No clear inconsistent position or resulting prejudice | Judicial estoppel does not apply here |
| Whether HUD is a party to the 2004 HAP Renewal Contract | HUD was a party via renewal and agency relationship | Contract designated OHFA as administrator, no agency or party in HUD | HUD not named or properly privity-established; contract claim dismissed for lack of privity |
| Whether the Use Agreement incorporates all terms of HAP contracts | Use Agreement creates privity by incorporating HAP terms | Use Agreement does not expressly incorporate all HAP terms | Use Agreement does not provide jurisdictional basis for contract claim |
| Whether amendment to plead takings claim should be allowed | Takings claim is a viable alternative given lack of privity | Amendment would be futile or prejudicial without jurisdictional basis | Leave to amend allowed; plaintiff must file amended complaint by a set deadline |
Key Cases Cited
- Holley v. United States, 124 F.3d 1462 (Fed.Cir. 1997) (jurisdictional and pleading standards; look beyond pleadings to jurisdictional facts)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard requires plausible claims)
- Klamath Tribe Claims Comm. v. United States, 97 Fed.Cl. 203 (Fed. Cir. 2011) (clarifies plausible claim standards in 12(b)(6) context)
- Cambridge v. United States, 558 F.3d 1331 (Fed.Cir. 2009) (accept undisputed facts as true and construe in plaintiff’s favor on 12(b)(6))
- Northrop Grumman Info. Tech., Inc. v. United States, 535 F.3d 1339 (Fed.Cir. 2008) (incorporation by reference must be clear and explicit)