OPINION
This case is before the court on defendant’s motion to dismiss for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief may be granted, pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States Court of Federal Claims (RCFC).
I. Background
Plaintiffs allege that, in October 1991, United States Department of Housing and Urban Development (HUD) officials persuaded Edward T. Arakaki and Helen Arakaki (collectively, plaintiff
Defendant has moved to dismiss plaintiffs complaint as untimely or, alternatively, for
Plaintiff claims that he was precluded from bidding on his mortgage both because the HUD regulations strictly forbid it,
The original complaint-naming only Edward T. Arakaki as plaintiff-was filed in Hawaii state court on June 5, 2002 against then-Secretary of HUD Mel Martinez and HUD.
A. Lack of Subject Matter Jurisdiction
1. Standard of Review
RCFC 12(b)(1) governs dismissal of a claim for lack of subject matter jurisdiction. RCFC 12(b)(1). Such a dismissal is warranted when, “assuming the truth of all allegations, jurisdiction over the subject matter is lacking.” Beekwilder v. United States,
2. The Tucker Act
The Tucker Act, 28 U.S.C. § 1491, confers on the Court of Federal Claims jurisdiction over certain claims against the United States. 28 U.S.C. § 1491 (2000). The Tucker Act does not, however, create a substantive right enforceable against the sovereign. United States v. Testan,
Here, plaintiffs alleged basis for jurisdiction is an express oral contract with HUD. See Compl. at 2. Defendant argues that, because the government agent who allegedly entered into this contract on behalf of HUD did not possess the authority to do so, no contract was formed.
3. Statute of Limitations
Defendant argues that plaintiffs claims are barred by the statute of limitations and therefore fall outside this court’s jurisdiction. Def.’s Mot. at 7. All claims that otherwise fall within the jurisdiction of the United States Court of Federal Claims “shall be barred unless the petition thereon is filed within six years after such claim first accrues.” 28 U.S.C. § 2501 (2000). Accrual occurs “when all events have occurred that fix the alleged liability of the Government and entitle the plaintiff to institute an action.” Creppel v. United States,
a. Relation back to original filing date in state court
Defendant removed this case pursuant to title 28, section 1442 of the United States Code, which provides:
A civil action ... commenced in a State court against any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending: (1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office ....
28 U.S.C. § 1442. This case was brought against an agency of the United States (HUD) and an officer (Secretary Martinez).
This case was transferred to the United States Court of Federal Claims pursuant to title 28, section 1631 of the United States Code, which provides:
Whenever a ... court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred.
28 U.S.C. § 1631 (2000) (emphasis added); see also Best v. United States,
Plaintiff filed his initial complaint in state court on June 5, 2002. The case was removed by defendant to federal court on July 8, 2002, dismissed with leave to amend on March 6, 2003,
Clearly, the United States District Court for the District of Hawaii took plaintiffs original filing date in state court as the applicable filing date for its consideration of the statute of limitations issue. See Transfer Order at 6-8 (discussing the parties’ arguments for various accrual dates for plaintiffs cause of action and measuring the limitations period from the original state court filing date of June 5, 2002). That court’s discussion of the applicable filing date for measuring the limitations period was in contemplation of the transfer of this case to the United States Court of Federal Claims and specifically referred to this court’s statute of limitations, 28 U.S.C. § 2501. Id. at 6-7. Although, as discussed in the following paragraphs, the relation back to the original state court filing date of a removed and transferred case may not always be appropriate, the court agrees with the District Court’s choice of the state court filing date as the filing date for statute of limitations purposes.
The analysis of the District Court for the District of Hawaii of the applicable filing date, Transfer Order at 6-8, interprets the “actually filed” language of the federal transfer statute with respect to a case removed from state court. See 28 U.S.C. § 1631 (stating that “the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court [in this case, the United States District Court for the District of Hawaii] from which it is transferred”); Best,
For the purposes of calculating the date when an action was filed, where the action was removed from state court to this Court, the Court has used the date of the filing in state court____Since the Court has the power to transfer an action which was removed from a state court to another federal district court, Plaintiff should be able to take full advantage of the portion of Section 1631 which provides that the original date of filing shall be respected by the transferee court.
Chicosky v. Presbyterian Med. Ctr.,
Admittedly, other interpretations of the “actually filed” language in Section 1631 are conceivable. In 1987, the Tenth Circuit overturned a summary judgment of the District Court for the District of Colorado which had dismissed a complaint on statute of limitations grounds, holding that the removal date, i.e., the date when the case arrived in the first federal court in New York, must be accepted as the filing date by the federal district court in Colorado. See Ross v. Colo. Outward Bound Sch., Inc.,
The court believes that using the state court filing date as the applicable filing date for a removed and transferred case is sound where, as here, the transferor district court has analyzed the issue and found the state court filing date to be the proper filing date in federal court for statute of limitations purposes. Even if that analysis were not sound, however, an alternative source of support for using the state court filing date as the applicable filing date for statute of limitations purposes can be found in recent precedential decisions of the United States Supreme Court and the Federal Circuit, decisions extending the doctrine of equitable tolling of statutes of limitations to suits against the United States.
In Irwin v. Department of Veterans Affairs, the Supreme Court held that, when discussing “statutory time limits applicable to lawsuits,” “the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States. Congress, of course, may provide otherwise if it wishes to do so.”
We have allowed equitable tolling in situations where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary’s misconduct into allowing the filing deadline to pass.
Id. at 96,
We have generally been much less forgiving in receiving late filings where the claimant failed to exercise due diligence in preserving his legal rights.
Id. (citation omitted).
These statements in Irwin have given rise to extensive jurisprudence, binding upon this court, deciding both whether Congress, in enacting a particular statute, “provide[d] otherwise” than the “rebuttable presumption of equitable tolling,” see, e.g., Stone Container Corp. v. United States,
The Federal Circuit has not spoken decisively as to whether the six-year statute of limitations in 28 U.S.C. § 2501 is subject to equitable tolling. See, e.g., Martinez v. United States,
Irwin cited to three cases,
In Herb, the plaintiffs sued in a city court that did not have jurisdiction but where process was nevertheless served on the defendants.
In Burnett, the plaintiff sued before the limitations period had run in a state court which possessеd jurisdiction, and served pro
Burnett discussed extensively aspects of Ohio and federal law that justified tolling of the federal statute of limitations where the initial state suit was dismissed, not transferred.
Because Irwin, Burnett and Herb all point to the conclusion that a defective but timely state court filing could toll a federal statute of limitation, unless Congress “provide[d] otherwise,” the proper inquiry here is whether the state court fifing in this case is “defective,” and if so, whether the defect is serious enough to prevent tolling on equitable grounds. See, e.g., Irwin,
Taking the “more relaxed diligence requirement” as a lodestar, plaintiff here has met that standard, if indeed his fifing could be described as defective in state court. Plaintiffs original complaint, naming as defendants, among others, the Secretary of the Department of Housing and Urban Development (HUD) and HUD itself, sought monetary and other relief under the National Housing Act, 12 U.S.C. §§ 1701-1750g (2000) and cited specifically to 12 U.S.C. § 1702. Complaint of June 5, 2002 ¶¶ 2-3, 31. A seminal Supreme Court case “liberally construed” the waiver of sovereign immunity in section 1702 to permit suits in state or federal courts against what is now HUD. Fed. Hous. Admin., Region No. 4 v. Burr,
In light of the holding in Burr, there is no indication, at least on the face of the pleading, that plaintiffs initial complaint was misfiled or defective in state court. See Armor Elevator Co. v. Phoenix Urban Corp.,
This case arose in Hawaii, and was removed to a district court within the Ninth Circuit. Ninth Circuit precedent also permits suits filed in state court under section 1702, subsequently removed to federal court, to be transferred to the Court of Federal Claims. See Marcus Garvey Square, Inc. v. Winston Burnett Constr. Co. of Cal.,
In its Marcus Garvey opinion, the Ninth Circuit left open the question of whether jurisdiction of some claims under section 1702 might be exclusive to the United States Court of Federal Claims under the Tucker Act and therefore whether a state court within the Ninth Circuit, under facts different from those then before it, can possess jurisdiction under section 1702 over claims against HUD or the Secretary of HUD. See id. at 1132 (“We need not decide whether the Tucker Act is an exclusive grant of jurisdiction; no other waiver of sovereign immunity or grant of jurisdiction exists which would apply to the facts of this сase.”). If state courts within the Ninth Circuit are without jurisdiction over any suits under section 1702, perhaps plaintiff here would be deemed to have misfiled his suit in state court. The court has found no definitive pronouncement from the Ninth Circuit, or from the state courts of Hawaii, on this subject.
For the foregoing reasons, the court chooses the June 5, 2002 state court filing date as the filing date in this court for statute of limitations purposes.
b. Accrual date
For the purposes of the six-year statute of limitations governing the Court of Federal Claims, “[a] claim accrues when all events have occurred that fix the alleged liability of the Government and entitle the plaintiff to institute an action.” Creppel v. United States,
The facts of a claim need not be known but must only be knowable to plaintiff. Menominee Tribe of Indians v. United States,
Several dates have been put forth as possible accrual dates for plaintiff’s claim. The court will discuss, first, whether plaintiffs claim accrued before its mortgage loan was sold and, second, whether it accrued at the time of sale.
When a promisor fails “to perform at the time indicated for performance in the contract,” that failure is an actual breach. Franconia Assocs. v. United States,
i. Accrual Date Before Time of Sale
Defendant claims that plaintiffs alleged right to bid on its mortgage “was foreclosed well before the actual date of the sale of the loan.” Def.’s Mot. at 7. In support, it invokes Plaintiffs in Winstar-Related Cases v. United States for the proposition that “at some point a largely anticipatory breach may be sufficiently ‘actual’ to trigger the statute of limitations.”
Initially, defendant argued that the statute of limitations began to run on March 21, 1996, when HUD published new regulations regarding the sale of HUD-held mortgages. Def.’s Mot. at 8. These regulations provided:
HUD will sell current mortgages securing subsidized projects, as follows: (a) Current mortgages with FHA mortgage insurance will be sold either: (1) On a competitive basis to FHA-approved mortgagees; or (2) On a negotiated basis, to State or local governments, or to a group of investors that includes an agency of a State or local government if, in addition to meeting the requirements of the Statute, the sales price is the best price that HUD can obtain from an agency of a State or local government while maintaining occupancy for the tenant group originally intended to be served by the subsidized housing program.
Disposition of Multifamily Projects and Sale of HUD-Held Multifamily Mortgages, 61 Fed.Reg. 11,684, 11,690 (Mar. 21, 1996) (codified at 24 C.F.R. § 290.31 (1996)). In its motion, defendant claimed that thеse regulations precluded plaintiff from bidding on his mortgage loan. See Def.’s Mot. at 8. Likening plaintiffs situation to that of the plaintiffs in Winstar (1997), defendant argued that, once effective, these regulations constituted an actual breach that started the statute of limitations running. Def.’s Mot. at 8; Winstar (1997),
Specifically, defendant argued that plaintiff should have been aware that the new HUD regulations precluded plaintiff from bidding on his loan and that the new regulations therefore “served as a material breach ...” of defendant’s alleged promise. Def.’s Reply at 4. Defendant was unable, however, to establish either that the regulations conclusively excluded plaintiff from bidding, or that plaintiff should have been aware of any possible exclusion. See Tr. at 46-48 (exchange between defendant’s counsel Mr. Mager and the court evidencing defendant’s inability to rule out the possibility that plaintiff could be
Nor was defendant able to support its contention that the statute of limitations started running on April 26, 1996, when HUD published a notice opening the multifamily loan auсtion that specifically applied the new regulations to plaintiffs mortgage. Def.’s Mot. at 9.
The HUD notice explained that “[bidders must be eligible institutional investors in order to have their bids considered.” Notice of Sale of HUD-Held Multifamily Mortgage Loans, 61 Fed.Reg. 18,652, 18,652 (April 26, 1996) (Notice of Sale). The list of ineligible bidders included “[a]ny Mortgagor of any of the Mortgage Loans or an entity affiliated with any such Mortgagor.” Id. at 18,653. Again relying on Winstar (1997), defendant argues that this notiee-by explicitly foreclosing plaintiff, as a mortgagor, from bidding on his mortgage-constituted an actual breach of the right to bid allegedly promised to plaintiff. See Def.’s Mot. at 8.
Defendant claims that plaintiff was aware that the Notice of Sale pertained to his mortgage because HUD had previously written to inform plaintiff that his mortgage was to be included in an upcoming sale, and because “the bidding materials” that were sent to plaintiff specifically listed his mortgage loan. Tr. at 49-50 (statement of defendant’s counsel Mr. Mager); Pl.’s Resp. to June 23, 2004 Order Ex. A (July 5, 1995 letter from Alfred B. Sullivan, HUD Director of Multifamily Housing Management, to plaintiff); Def.’s Resp. to June 23, 2004 Order at Tab V (Mortgage Loan Schedule listing plaintiffs property, Lake Mead Villa Apartments, as HUD/FHA case #125-35100). Plaintiff, however, insists he “did not see any Notice [of Sale] published in the Federal Register,” and, in spite of the HUD letter, “continued to hope that HUD would keep its promises.” Declaration of Edward T. Arakaki flU 9-10 (Mar. 4, 2004).
The court notes that the issue is not whether plaintiff personally saw the Notice of Sale, but whether plaintiff knew, or should have known, of a breach by the government of its alleged contract with plaintiff. See Hopland Band,
Sufficient notice of a government act which allegedly creates liability may be defined differently according to the context in which the claim arises. See, e.g., Venture Coal Sales Co. v. United States,
Plaintiff contends that, even if he had seen the Notice of Sale, the terms of the notice were insufficient to have constituted notice of an actual breach. Pl.’s Sur-Reply at 4. First, plaintiff maintains that the notice in no way specifically identified his mortgage but, instead, “generieally [referred] to ‘its intention to dispose of approximately 157 ... loans.’ ” Id. (quoting 61 Fed.Reg. at 18,652). Thus plaintiff could havе seen the Notice of Sale and, not knowing that it concerned the Property, could have remained unaware that he had a claim. Id. Second, plaintiff notes that HUD reserved the right to “delete any Mortgage Loan from the Partially Assisted Sale ... for any reason and ... for any reason whatsoever, to reject any and all bids ... [and] to terminate the Partially Assisted Sale at any time prior to the Class A Trust Certificate bid date.” 61 Fed.Reg. at 18,652-53; Pl.’s Sur-Reply at 4. Third, plaintiff points out that the Notice of Sale did not establish a “firm auction date,” Pl.’s Sur-Reply at 4, and instead signaled that a closing of bids was “ ‘expected in the middle of June 1996.’ ” Id. (quoting 61 Fed.Reg. at 18,652).
Plaintiff argues that the Notice of Sale merely established a tentative sale and that HUD could have “[changed] its mind before the bid and pull[ed] Plaintiffs loan off the auction or allow[ed] Plaintiffs to bid.” Pl.’s Sur-Reply at 4. The possibility that the government could change its mind and perform was part of the Supreme Court’s reasoning in Franconia for deciding that a claim had not accrued on the date of a statutory enactment the terms of which foreshadowed the breach of a loan agreement: “Just as Congress may announce the Government’s intent to dishon- or an obligation to perform in the future through a duly enacted law, so may it retract that renouncement prior to the time for performance, thereby enabling the agency or contracting official to perform as promised.” Franconia, 536 U.S. at 148,
Plaintiff argues that this case is “almost identical” to Franconia. Pl.’s Sur-Reply at 3. In Franconia, plaintiffs were promised a right to prepay their mortgages, a promise that was later precluded by the Congressional еnactment of a statute that placed “permanent restraints upon prepayment of [plaintiffs’] loans.” Franconia,
If petitioners enjoyed a “right to prepay their loans at any time,” then necessarily the Government had a corresponding obligation to accept prepayment and execute the appropriate releases____ Viewed in this light, [the Act] effected a repudiation of the ... loan contracts, not an immediate breach. The Act conveyed an announcement by the Government that it would not perform as represented in the promissory notes if and when, at some point in the future, petitioners attempted to prepay their mortgages.
Id. at 142-43,
Defendant attempts to distinguish Franco-nia by asserting that the government’s time for performance was at the opening of the auction, and not at the time of sale. Tr. at 54 (statement of defendant’s counsel Mr. Mag-er). A repudiation might not ripen into a breach until the time performance is due. Franconia,
ii. Accrual Date at the Time of Sale
Defendant also contends that, even if the claim accrued on the date HUD actually sold its mortgage, as plaintiff contends, Pl.’s Opp. at 3, plaintiffs mortgage was in fact sold before June 5, 1996 and plaintiffs claim is time-barred. Tr. at 58-60 (statements of defendant’s counsel Mr. Mаger). The actual date of sale is a hotly contested issue. Id. at 7-15 (statements of plaintiffs counsel Mr. Jaress), 58-62 (statements of defendant’s counsel Mr. Mager). Seven different documents have been introduced, each suggesting a different sale date for plaintiffs mortgage. Four of these documents-one of which was introduced by defendant-indicate that plaintiffs mortgage sold after June 5,1996:
— The Notice of Sale, 61 Fed.Reg. 18652, states that “closing is expected in the middle of June, 1996.” Pl.’s Sur-Re-ply Ex. A (emphasis added).
— In response to the court’s June 23, 2004 Order, plaintiff introduced a letter dated June 21, 1996 from Dorothy A. Manz, HUD Multifamily Asset Branch Chief, to Aurea Mabe, of a Nevada property management company, concerning the Property, Lake Mead Villa Apartments. Pl.’s Resp. to June 23, 2004 Order Ex. B. The letter indicates that “[t]he loan on the above property sold at the Partially Assisted Loan Sale on June 6, 1996.” Id. (emphasis added); see http:// www.ebme.com (last visited Aug. 23, 2004).
— Plaintiff also introduced a letter dated September 22, 1997 from HUD Assistant Secretary Hal C. DeCell III to Senator Daniel K. Inouye. Pl.’s Opp. Ex. D. This letter-correcting the Assistant Secretary’s statements in a prior letter to Senator Inouye-states that “HUD included [plaintiffs] loan in the June 27, 1996, Partially Assisted Loan Sale.” Id. at 1 (emphasis added).
— In response to the court’s June 23, 2004 Order, defendant introduced a copy of the Trust Certificate Purchase Agreement for the HUD 1996 Partially Assisted Multifamily Mortgage Loans disposition. Def.’s Resp. to June 23, 2004 Order (Trust Certificate Purchase Agreement). This document provides: “Payment of the Closing Date Payment will be made against delivery of the Class A Trust Certificate ... on June 27, 1996 (the ‘Closing Date’).” Id. H 3(b) (emphasis added).
Three other documents, however, point to a sale date prior to June 5, 1996. Assuming that plaintiffs claim accrued when his mortgage was sold, any of these sale dates would time-bar plaintiffs claim:
— The initial letter, dated May 24, 1996, from HUD Assistant Secretary Hal C. DeCell III to Senator Daniel K. In-ouye in response to the Senator’s inquiries regarding the Property states that plaintiffs loan “was included in the Department’s Structured Finance Sale of Partially Assisted Mortgage Loans on May 23, 1996.” Pl.’s Opp. Ex. C (emphasis added).
— The bid information documents issued by HUD on May 15, 1996 apparently set a Class A Trust Certificate bid date of May 28, 1996. Def.’s Resp. to June 23, 2004 Order (Preliminary Bidding Materials-Partially Assisted Multifamily Mortgage Loans Structured Finance Disposition at 1) (Preliminary Bidding Materials).21
— The signature portion of the Trust Certificate Purchase Agreement-purportedly signed by the purchaser of*260 the Property-is dated May 29, 1996,22 Def.’s Resp. to June 23, 2004 Order (Trust Certificate Purchase Agreement at 15).
Plaintiff has sufficiently supported a sale date after June 5, 1996 to avoid dismissal at this juncture for failure to bring its claim within this court’s six-year statute of limitations, 28 U.S.C. § 2501.
B. Failure to State a Claim Upon Which Relief Can be Granted
1. Standard of Review
RCFC 12(b)(6) governs dismissal of a claim for “failure to state a claim upon which relief can be granted.” RCFC 12(b)(6). Such a dismissal is warranted “when the facts asserted by the plaintiff do not entitle him to a legal remedy.” Boyle v. United States,
Summary judgment is warranted where the record shows that “there is nо genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” RCFC 56(c). A material fact is one that could significantly affect the outcome of the suit. Anderson v. Liberty Lobby, Inc.,
2. Contract Formation
To establish the existence of an express contract, plaintiff “must show a mutual intent to contract including an offer, an acceptance, and consideration.” Trauma Serv. Group v. United States,
3. Authority of the Contracting Party
Defendant argues that Mr. Ewing-the HUD agent who allegedly promised plaintiff the right to bid on its mortgage-was not authorized to bind the government in contract. Def.’s Mot. at 14. A government agent can bind the United States in contract only when the Constitution, a statute, or a regulation grants the authority to do so in unambiguous terms. Howard v. United States,
Contractors dealing with the United States “take[ ] the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority.” Fed. Crop Ins. Corp. v. Merrill,
Plaintiff claims he was promised the right to bid on his property by HUD agent David F. Ewing. Compl. 11116-8. A letter from HUD Assistant Secretary Hal C. DeCell III to Senator Daniel K. Inouye, written in response to the Senator’s inquiries on plaintiffs behalf, identifies David F. Ewing as the “asset manager for Lake Mead Villas Apartments.” PL’s Opp. Ex. D at 2. Defendant argues that Mr. Ewing’s duties were purely managerial and that he did not have the authority to make the alleged oral contract with plaintiff.
An additional complication is injected intо this case by the fact that the scope of Mr. Ewing’s authority might vary depending on whether the alleged promise to allow plaintiff to bid was a modification of plaintiffs mortgage or an independent agreement. Defendant claims that the alleged contract can only be interpreted as a purported modification of plaintiffs mortgage, Def.’s Reply at 13, while plaintiff claims the alleged contract was a separate and distinct agreement. Pl.’s Opp at 9; Pl.’s Sur-Reply at 5. Plaintiff insists that the alleged oral agreement-a promise that plaintiff could bid on his mortgage-was not an oral modification of plaintiffs mortgage, but “[a]n independent promise ... to induce a purchase Defendant wanted to happen.” Pl.’s Opp. at 9. The alleged contract could not be otherwise, plaintiff alleges, since it was entered into before the mortgage was signed. Pl.’s Sur-Reply at 5. Further, plaintiff claims that he would not have purchased the property in question without the inducement of defendant’s promise, and that the promise was made in consideration of plaintiffs subsequent investment. Compl. 1f 12. Plaintiffs arguments are not effectively rebutted by defendant and the court is persuaded that the alleged contract was an independent agreement.
An agent purporting to act on behalf of the sovereign must possess actual authority to bind the United States, by way of Congressional delegation or agency rule-making and delegation. City of El Centro,
Where an agent “by ignoring statutory and regulatory requirements ... exceeds his actual authority, the Government is not es-topped to deny the limitations on his authority, even though the private contractor may have relied on the contracting officer’s apparent authority to his detriment.” Prestex Inc. v. United States,
A contracting officer’s authority can be either express or implied. H. Landau & Co. v. United States,
Under the portion of NHA that addresses rental housing mortgage insurance, United States Code title 12, section 1713, the Secretary of HUD is authorized to acquire insured mortgages
Notwithstanding any other provisions of law relating to the acquisition, handling, or disposal of real and other property by the United States, the Secretary shall also have power, for the protection of the interests of the General Insurance Fund ... to deal with, ... make contracts for the management of ... or sell for cash or credit or lease in his discretion, any property acquired by him under this section____
12 U.S.C. § 1713(1) (2000).
A different section of the NHA, dedicated to the management and disposition of multifamily housing projects,
The provisions concerning the acquisition and disposal of both insured mortgages [12 U.S.C. § 1723] and multifamily housing projects [12 U.S.C. § 1701z-ll] give the Secretary of HUD wide latitude in disposing of mortgages, as long as the economic interests of United States are protected.
In order to carry out these, and the other provisions of the NHA, the Secretary is empowered to promulgate any necessary rules or regulations. 12 U.S.C. § 1715b (2000). In addition, in order to fulfill his duties, the Secretary is given broad powers to delegate his authority. In particular, the Secretary may
utilize such Federal officers and employees ... and appoint such other officers and employees as he may find necessary, and ... may delegate any of the functions and powers conferred upon him under [the Act] ... to such officers, agents, and employees as he may designate or appoint.
12 U.S.C. § 1702 (2000).
Defendant first argues that the broad discretion afforded the Secretary by statute precludes the alleged contract with plaintiff. Def.’s Reply at 11. Defendant cites to 12 U.S.C. § 1701z-ll(k) (2000) for the proposition that “[t]he language of this subsection grants the Secretary unbridled discretion to decide the terms and conditions of a [HUD-insured] loan sale.” Id. Defendant contends that “[t]he Secretary cannot authorize a delegation of authority [to any HUD employee] that would strip himself of the ability to make such decisions or that would tie his hands to make another decision at his discretion.” Id.
Defendant’s argument, the court believes, proves too much. The Secretary could not enter into any transactions unless the Secretary gave up some options in order to pursue a particular end. A contract is a choice among options. While Congress can set standards and take away the authority to make certain kinds of contracts, the statutory scheme here does not prevent the Secretary from making deals, or delegating authority to make deals. The court understands, as conceded by the government during oral argument on June 22, 2004, that the Secretary cannot “bind his hands against a subsequent change in the law.” Tr. аt 86 (statement of the court). If an agreement were entered into, specific performance of it might be avoided by subsequent regulations. In some circumstances, however, the performance avoided might constitute a breach, giving rise to damages. See United States v. Winstar Corp.,
Next, defendant challenges the authority of the HUD agent, Mr. Ewing, who purportedly promised plaintiff the right to bid on his mortgage, to bind the United States in an
The court believes that defendant’s reliance on Schism is misplaced. The Federal Circuit’s holding in Schism teaches that a housekeeping statute relating to procedure and form cannot by itself confer a right relating to substance. Schism,
Furthermore, authority need not have been explicitly delegated to Mr. Ewing, but may have been implicit in his duties. H. Landau & Co.,
HUD apparently endows Field Asset Managers-sueh as Mr. Ewing-with a broad authority to design “[w]orkout-type arrangements ... to stabilize still insured but troubled or potentially troubled projects.” Id. These “workouts” are short term arrangements meant to avoid default and reflect “HUD’s basic objective ... [of] developing] a workable plan to stabilize the property, both financially and physically, and to minimize losses to the Department.” Id. at 11-1. This objective is commonly met by “providing the borrower with debt service relief.” Id. Asset managers are empowered-by way of workouts-to make arrangements meant to stabilize a project’s financial problems, secure “competent, interested owners,” and develop a “reinstatement plan that will protect the long term financial interest of HUD and ensure that the project can continue to be a viable operation.” Id. at 11-2 to 11-3. These duties could be consistent with the existence of contracting authority.
Drawing inferences in plaintiffs favor, Mr. Ewing’s duties might indicate the implied
In further response to defendant’s allegations, plaintiff introduced evidence that may indicate recognition of Mr. Ewing’s authority on behalf, of HUD. PL’s Opp. at Ex. C. HUD Assistant Secretary Hal C. DeCell III, writing to Senator Daniel K. Inouye in response to the Senator’s letter on behalf of plaintiff, stated: “[Plaintiff] was initially told by the Nevada State Office that if the mortgage was ever sold, he would be able to bid on it.” PL’s Oрp. Ex. C at 1. As the court noted in oral argument, this letter could possibly be construed as a ratification of Mr. Ewing’s authority by HUD. Tr. at 80 (statement of the court); see Harbert/Lummus Agrijuels Projects,
For the foregoing reasons, the issue of whether Mr. Ewing possessed the authority to bind defendant in contract involves genuine disputes of material fact which preclude resolution in defendant’s favor.
III. Conclusion
For the foregoing reasons, defendant’s motion to dismiss, which, as to defendant’s defense under Rule 12(b)(6), the court treats as a motion for summary judgment, is DENIED.
IT IS SO ORDERED.
Notes
. The court has before it Plaintiffs’ Fourth Amended Complaint for Breach of Contract (Compl.), Defendant's Motion to Dismiss (Def.’s Mot.), Plaintiffs['] Memorandum in Opposition to Defendant’s Motion to Dismiss Filed on January 16, 2003 (Pl.’s Opp.), Defendant’s Reply to Plaintiffs’ Opposition to Defendant’s Motion to Dismiss (Def.’s Reply), Plaintiff’s Sur-Reply in Opposition to Defendant’s Motion to Dismiss Filed on January 16, 2003 (Pl.’s Sur-Reply), Transcript of June 22, 2004 Oral Argument (Tr.), Defendant’s Response to the Court's June 14, 2004 Order (Def.'s Resp. to June 14, 2004 Order), Plaintiff's Response to the Court’s June 23, 2004 Order (Pl.'s Resp. to June 23, 2004 Order), and Defendant’s Response to the Court’s June 23, 2004 Order and Withdrawal of Argument (Def.’s Resp. to June 23, 2004 Order).
. Except as otherwise indicated by the text or context, facts cited to the filings of only one party do not appear to be disputed in connection with the pending motion. The court recites only the facts relevant to the present decision.
. Prior to the original filing of this case by Edward T. Arakaki, his mother, Helen Arakaki, had assigned her claim to him. See Am. Compl. of Sept. 25, 2002 K 1. When plaintiff filed his third amended complaint on March 14, 2003, in the United States District Court for the District of Hawaii, he joined Helen Arakaki as plaintiff. See Third Am. Compl. H 1. For convenience, and because most of the allegations relate to alleged events involving Mr. Arakaki alone, the court refers to Edward T. Arakaki and Helen Arakaki collectively as plaintiff.
. As discussed in part II.A.3 below, the sale occurred at some point between May 23 and June 27, 1996. The exact date of the sale, however, is disputed and is not decided here. See Tr. at 7-15, 58-68 (statements of plaintiff's counsel Mr. Jaress and defendant’s counsel Mr. Mager illustrating the disagreement concerning the exact sale date of plaintiff’s mortgage).
. The "Notice of Sale” published by HUD provided that "[b]idders must be eligible institutional investors in order to have their bids considered.” Notice of Sale of HUD-Held Multifamily Mortgage Loans, 61 Fed.Reg. 18,652-01 (Apr. 26, 1996) (Notice of Sale). Included among the list of ineligible bidders are “[a]ny Mortgagor of any of the Mortgage Loans or an entity affiliated with any such Mortgagor.” Id. at 18,653.
. Defendant's counsel stated in argument that the bundled group of loans sold for approximately $885 million. Tr. at 55 (statement of defendant's counsel Mr. Mager).
. Foreclosure occurred at some point in 1998. Compl. ¶ 18.
. In his first complaint in the United States District Court for the District of Hawaii, plaintiff joined as defendants any person, corporation, governmental agency or entity "connected in some manner with Defendant.” Complaint of June 5, 2002 114.
. In its Reply to Plaintiff’s Opposition to Defendant’s Motion to Dismiss and during oral argument, defendant also urged the cоurt to dismiss plaintiff’s claim as barred by the parol evidence rule and the statute of frauds. See Def.'s Reply at 13 (alleging parol evidence rule violations); Tr. at 79 (statement of defendant's counsel Mr. Mager alleging that, if the contract claimed by plaintiff is an independent contract, it violates the statute of frauds). The court will not consider arguments that were presented for the first time in a reply brief or after briefing was com
. The issue of contracting authority as it pertains to the pending motion to dismiss for failure to state a claim upon which relief can be granted is discussed below in part II.B.3 of this opinion.
. Controlling authority in the Ninth Circuit states that after a dismissal with leave to amend the complaint, the amended complaint generally relates back to the date of filing of the original complaint if the claims in the amended complaint arise out of the same transaction described in the original complaint and the defendant had notice of the claims. See Ashland v. Ling-Temco-Vought, Inc.,
. Irwin cited to Baldwin County Welcome Center v. Brown,
. In Teitelbaum v. United States Department of Housing and Urban Development, the United States District Court for the District of Nevada found that certain claims filed in federal court under section 1702 sounded in contract and were only cognizable under the Tucker Act.
. See also Shiny Rock Mining Corp. v. United States,
. Federal Housing Administration.
. After oral argument on defendant's motion, defendant filed with the court bid information documents dated May 15, 1996 (Preliminary Bidding Materials), that appear to establish a Class A Trust Certificate bid date of May 28, 1996 for the bundled mortgages including plaintiff's mortgage. Def.’s Resp. to June 23, 2004 Order (Preliminary Bidding Materials — Partially Assisted Multifamily Mortgage Loans Structured Finance Disposition at 1). A review of the Preliminary Bidding Materials, however, raises issues regarding the effectiveness of the notice the Preliminary Bidding Materials could have provided plaintiff of the sales procedures they describe. See Preliminary Bidding Materials at 1 ("These Preliminary Bidding Materials are confidential and may not be copied or distributed without the permission of the Federal Housing Administration of the U.S. Department of Housing and Urban Development” (all capital letters in original)); id. at 2 (“Bidding rules described herein are subject to change. Any such changes will be provided sup-plementally.”); id. ("FHA reserves the right, at its sole discretion and for any reason whatsoever, to reject any and all offers to purchase the Bonds or Class A Trust Certificate.”). Because the legal import of the Preliminary Bidding Materials has not been fully explained to the court by the parties, the court defers determination of whether the Preliminary Bidding Materials effected notice to plaintiff that would cause the accrual of his claim.
. See Pl.’s Opp. Ex. A (August 19, 1995 letter from Edward T. Arakaki to Robin Rains, Hamilton Securities Financial Advisor, expressing plaintiff's interest in negotiating for the mortgage on its property: "I ... am prepared to begin negotiations immediately or sooner”); Id. Ex. B (September 27, 1994 letter from Edward T. Arakaki to Albert B. Sullivan, HUD Office of Multifamily Housing Management Director, expressing plaintiff’s interest in "negotiating the purchase of the mortgage note on [his] property”)-
. Whether the bid date for the Class A Trust Certificate, apparently set by the Preliminary Bidding Materials of May 15, 1996, might be considered to be the accrual date for plaintiff’s claims has not been fully briefed by the parties and is not decided by the court. See supra note 16, and infra note 21 and accompanying text.
. The parties introduced other related arguments contesting or defending defendant’s proposed pre-sale accrual date. Def.'s Mot. аt 7-10; Pl.’s Opp. at 1-6; Def.’s Reply at 1-7. The parties' other arguments revolved around Wins-tar, Franconia, and the stabilization doctrine (damages must be fully stabilized before statute of limitations begins to run). Def.’s Mot. at 7-10; Pl.’s Opp. at 1 — 4; Def.’s Reply at 1-7; see Dixon Ticonderoga Co. v. Estate of O’Connor,
. See supra notes 16, 18, 19.
. The legal import of the Class A Trust Certificate bid date has not been fully explained to the court. See Tr. at 58-60 (Mr. Mager, defendant's counsel, stating that "to explain how this sale was structured, some of this is in the Federal Register and some of it is in the preliminary
. This date is twenty-nine days before the June 27, 1996 "Closing Date” denoted in the same document. Def.’s Resp. to June 23, 2004 Order (Trust Certificate Purchase Agreement ¶ 3(b)). The court notes that, if evidence subsequently reveals that plaintiff's mortgage sold before the general auction closed, and if this information was known, or knowable, by plaintiff, plaintiff's claim might have accrued on the date of sale instead of on the date of closing. See Menominee Tribe of Indians,
. Although he contends that the statute of limitations was strictly complied with, plaintiff alternatively invokes the doctrine of equitable estop-pel. Pl.’s Opp. at 4-6. Tolling of an accrual date is available "where the complainant has been induced or tricked by his adversary’s misconduct into allowing the filing deadline to pass.” Irwin,
(1) the government must know the true facts;
(2) the government must intend that its conduct be acted on or must so act that the contractor asserting the estoppel has a right to believe it so intended; (3) the contractor must be ignorant of the true facts; and (4) the contractor must rely on the government’s conduct to his injury.
JANA, Inc. v. United States,
Plaintiff asserts that equitable estoppel would apply to the facts of this case. PL's Opp. at 4. In particular, plaintiff relies on written statements made by the Assistant Secretary of HUD to Senator Daniel K. Inouye in response to the Senator’s inquiries on behalf of рlaintiff. Id.; see also PL’s Opp. Ex. C at 2 (May 24, 1996 letter from HUD Assistant Secretary Hal C. DeCell III to Senator Daniel K. Inouye) ("Mr. Arakaki may be reassured in learning that borrowers in default will be able to negotiate a discounted settlement or restructure the non-performing loan into a performing loan.... [and that] good faith negotiations can result in a solution that works for all parties.”); PL's Opp. Ex. D (September 22, 1997 letter from HUD Assistant Secretary Hal C. De-Cell III to Senator Daniel K. Inouye) (”[M]y May 24 ... statement was not accurate. After the loans were sold, the Department did not retain authority with respect to the loans or underlying projects.... Any other actions taken after the sale, including foreclosure ... are solely within the discretion of the purchaser of the loans.”).
Because plaintiff has so far sufficiently established that his complaint was filed within the statute of limitations, however, this issue is not yet ripe.
. According to defendant, Mr. Ewing was a "loan specialist in the local Las Vegas, Nevada
. Plaintiff's mortgage was acquired by HUD as an insured mortgage in default. Def.'s Mot. at 14.
. The Property was a multifamily housing project. See Def.’s Mot. at 4.
. See also Franklin Fed. Sav. Bank v. United States,