DBSI/TRI IV LIMITED PARTNERSHIP, аn Idaho limited partnership; Forest Hills Investors of Coquille, Oregon Ltd., an Oregon limited partnership; Jadin Investments, Ltd., an Oregon limited partnership; Norseman Village, an Oregon limited partnership; Parkside Development, an Oregon limited partnership, Plaintiffs, and Sherry Goldammer; Donald Gerhard; Ron Veillon; Carmen Thomas; Diana Rhodes, Appellants, v. UNITED STATES of America, Defendant-Appellee. Sherry Goldammer; Donald Gerhard; Ron Veillon; Carmen Thomas; Diana Rhodes, Plaintiffs-Appellants, v. Forest Hills Investors of Coquille, Oregon Ltd., an Oregon limited partnеrship; Jadin Investments, Ltd., an Oregon limited partnership; Norseman Village, an Oregon limited partnership, Defendants, and Ann Veneman, in her official capacity as secretary of the United States Department of Agriculture; DBSI/TRI IV Limited Partnership; DBSI Realty Corp., an Idaho corporation; Northwest Real Estate Capital Corporation, an Idaho corporation; DBSI/TRI VII, Defendants-Appellees.
Nos. 04-36066, 05-35748
United States Court of Appeals, Ninth Circuit
Filed Oct. 3, 2006
Argued and Submitted Sept. 13, 2006.
III
The sum of the majority‘s analysis in this case simply eviscerates the requirement that a habeas petitioner prove prejudice in order to prevail on a claim for ineffective assistance of counsel. Not satisfied with merely reconstructing the facts, the majority also reinvents Supreme Court authority, assеrting that the mitigating evidence in this case “is clearly sufficient to establish prejudice under the Supreme Court‘s standard in Wiggins, 539 U.S. at 534-38, 123 S.Ct. 2527.” Maj. Op. at 1015. This statement, of course, is patently absurd, as even a cursory review of the facts in Wiggins reveals that Correll fell drastically short of carrying the demanding burden of proving actual prejudice the Supreme Court found sufficient in that case.
In Wiggins, the petitioner “experienced severe privation and abuse in the first six years of his life while in the custody of his alcoholic, absentee mother,” suffered “рhysical torment, sexual molestation, and repeated rape” during his subsequent years in foster care, and spent time homeless. Id. at 512, 123 S.Ct. 2527. Perhaps most crucial, the petitioner in Wiggins was mentally retarded. Id.
Correll‘s new evidence, which reveals that he is “a highly functioning adult,” comes nowhere close to the “powerful mitigating narrative” present in Wiggins. Id. at 513, 123 S.Ct. 2527. In fact, the district judge, who is in the best position to evaluate the evidence, concluded that, when one considers both the positive and negative repercussions of Correll‘s new evidence, the balance of aggravation and mitigation “has barely been altered.” By holding that the mitigating evidence in this case is clearly sufficient to establish prejudice under Wiggins, the majority essentially writes the prejudice requirement out of our circuit jurisprudence.
I respectfully dissent.
Robert E. Bakes, Moffatt, Thomas, Barrett, Rock & Fields, Chartered, Boise, ID, argued the cause for appellee DBSI. Andrew R. Gardner, Stoel Rives, Portland, OR, was on the brief.
Kelly A. Zusman, Assistant United States Attorney, Portland, OR, argued the cause for aрpellee United States. John Muson, Special Assistant United States Attorney, Portland, OR, was on the briefs.
SILVERMAN, Circuit Judge:
This consolidated appeal concerns the prepayment of a Section 515 loan by owners of low-income housing in Oregon contrary to the prepayment procedures required by the Emergency Low Income Housing Protection Act of 1987,
First, they appeal the district court‘s denial of their motion to intervene in a quiet title lawsuit, DBSI/TRI IV Limited Partnership, et al. v. United States, No. 04-36066, between the property owners and the Rural Housing Service (“RHS“), an administrative division of the United States Department of Agriculture. Second, appellants appeal the district court‘s grant of summary judgment in favor of the owners and RHS in appellants’ Administrative Procedure Act (“APA“) claim, which alleged that RHS accepted prepayment on a Section 515 loan in violation of ELIHPA.
We affirm the district court‘s denial of appellants’ motion to intervene in the quiet title lawsuit because their interests are sufficiently protectеd by their APA lawsuit. However, because the district court misconstrued our holding in Kimberly Associates v. United States, 261 F.3d 864 (9th Cir.2001), we reverse the grant of summary judgment and remand for further proceedings. Kimberly merely held that certain defenses were not available to the government in a quiet title action brought by Section 515 borrowers to enforce their contractual right to prepay their loans. However, ours is an APA case brought by residents challenging the agency‘s noncompliance with the Emergency Low Income Housing Protection Act. Kimberly did not hold that ELIHPA was invalid or that the Deрartment of Agriculture was free to violate it. The district court therefore erred in granting summary judgment to the agency on the tenants’ claim that the agency acted contrary to law.
I. Background
The facts are not disputed.
Section 515 of the National Housing Act of 1949 was enacted by Congress to encourage private investment in housing for elderly and low-income individuals in rural areas. See
Defendant-appellees DBSI/TRI IV, Forest Hills, Jadin, Norseman, and DBSI/TRI VII (hereinafter collectively “DBSI“) entered into loan agreements with RHS in the mid- to late 1970s to finance six properties: Forest Village, Seacrest, Hillside Terrace, Vittoria Square, Norseman Village, and Meadowbrook I. The loan agreements gave DBSI the right to prepay the loans and еxit the Section 515 program at any time, even before the 40- or 50-year terms of the loans expired, stating: “Prepayments of scheduled installments, or any portion thereof, may be made at any time at the option of Borrower.” The loan agreements also provided: “This Note shall be subject to the present regulations of the Farmers Home Administration and to its future regulations not inconsistent with the express provisions hereof.”
Plaintiff-appellants are six tenants currently residing in these properties. Sherry Goldammеr, Donald Gerhard, Ron Veillon, and Carmen Thomas are elderly low-income residents of Seacrest; Diana Rhodes is a low-income resident of Meadowbrook.
In 1987, Congress enacted ELIHPA.
Thus, Congress imposed “elaborate requirements for prepayments” in order to “discourage project owners from prepaying their loаns,” despite the terms of the loan contracts. Kimberly, 261 F.3d at 867. ELIHPA provides, in pertinent part:
The Secretary may not accept an offer to prepay any loan made or insured under [Section 515] ... unless the Secretary takes appropriate action which will obligate the borrower (and successors in interest thereof) to utilize the assisted housing and related facilities for the purposes specified in [Section 515], as the case may be, for a period of [fifteen or twenty years, depending on the type of loan], or until the Secretary determines (prior to the end of such period) that there is no longer a need for such housing and related facilities to be so utilized or that Federal or other financial assistance provided to the residents of such housing will no longer be provided.
Specifically, ELIHPA requires an owner to give notice of its intent to prepay,
In 1998, DBSI submitted final payments on their loans on four Section 515 properties, including Seacrest. No prepayment was offered for Meadowbrook I. RHS, relying upon ELIHPA and the accompanying regulations, refused to accept the prepayment tenders and refused to reconvey the deeds of trust or issue satisfactions of the mortgages that encumbered the properties.
On October 27, 1998, DBSI filed a quiet title lawsuit against the United States in the District of Oregon. In its complaint, DBSI claimed that they were entitled to quiet title judgments because RHS wrongfully rejected the 1998 prepayment tenders.
On February 28, 2003, DBSI and RHS entered into an “Agreement in Principle” to settle the quiet title lawsuit. DBSI and RHS agreed to negotiate values for the four properties involved in the quiet title lawsuit, as well as for Meadowbrook I, and to offer the properties initially to nonprofit entities that would keep the properties in Section 515. If no such sale occurred, however, the Agreement provided that RHS would accept DBSI‘s prepayment and release the properties from Section 515 “without regard to any prepayment restrictions, including but not limited to the restrictions contained in
Although DBSI and RHS agreed to values for the four properties, the government did not agree to finance the sale of these propertiеs to nonprofit entities. Therefore, pursuant to the Agreement, DBSI paid the balance of the loan for Seacrest on October 28, 2003 and the government accepted this prepayment on December 1, 2003. On December 15, 2003, RHS reconveyed the deed of trust for the Seacrest property and released Seacrest from the Section 515 program. On December 19, 2003, DBSI and RHS stipulated to a quiet title judgment pursuant to
It is undisputed that RHS accepted prepayment of the Seacrest loan without requiring DBSI to comply with the requirements of ELIHPA.
After prepaying the Seacrest loan, DBSI conveyed Seacrest to Northwest Real Estate Capital Corporation (“Northwest“), which had previously purchased Seacrest from DBSI. Nоrthwest eventually procured United States HUD Section 8 housing vouchers for the Seacrest tenants from a local housing authority, allowing the tenants to continue paying below-market rents.
DBSI has not initiated prepayment of the Section 515 loan on Meadowbrook I.
II. Motion to Intervene
Approximately one month after DBSI and RHS stipulated to the quiet title judgment in the DBSI/TRI IV lawsuit, appellants filed their motion to intervene as of right in that action, pursuant to
A district court‘s denial of a motion to intervene is reviewed de novo. See United States v. Alisal Water Corp., 370 F.3d 915, 918 (9th Cir.2004).
As a preliminary matter, DBSI contends that the June 5, 2006, dismissal with prejudice of the quiet title lawsuit moots appellants’ appeal of the denial of their motion to intervene. The law is otherwise. Although the district court entered final judgment in the underlying case during the pendency of the appeal, “the intervention controversy is still alive because, if it were concluded on appeal that the district court had erred in denying the intervention motion, and that the applicant was indeed entitled to intervene in the litigation, then the applicant would have standing to appeal the district court‘s judgment.” Canatella v. California, 404 F.3d 1106, 1109 n. 1 (9th Cir.2005) (citing League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297, 1301 n. 1 (9th Cir. 1997)) (internal punctuation omitted); see also Leisnoi, Inc. v. United States, 313 F.3d 1181, 1184 n. 4 (9th Cir.2002) (refusing to dismiss for mootness and reaching merits of appeal because appellant‘s motion “might not be moot if intervention would permit him to appeal the judgment of dismissal“) (citing Wilson, 131 F.3d at 1301 n. 1). Therefore, we proceed to the merits of the claim.4
To intervene as of right under
“(1) the appliсation for intervention must be timely; (2) the applicant must have a ‘significantly protectable’ interest relating to the property or transaction that is the subject of the action; (3) the applicant must be so situated that the disposition of the action may, as a practical matter, impair or impede the applicant‘s ability to protect that interest; and (4) the applicant‘s interest must not be adequately represented by the existing parties in the lawsuit.”
We agree with the district court that appеllants failed to meet the third factor—i.e., they failed to demonstrate that “the disposition of the action may, as a practical matter, impair or impede the applicant‘s ability to protect that interest.” Id. The relief sought by appellants in their APA action is essentially the same relief they say they wish to obtain by intervening in the quiet title lawsuit. Under the APA, the district court has the power to set aside agency action found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accоrdance with law.”
III. APA Claim
A. Justiciability
On appeal, for the first time in the case, DBSI and RHS raise various issues
The APA provides: “A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.”
RHS argues that appellants lack standing because they have not suffered injury in fact, given that Meadowbrook remains in the Section 515 program and Seacrest is now involved in HUD‘s Section 8 program.
As to Seacrest appellants, it is undisputed that Northwest has not increased their rent as the result of mоving Seacrest5 from Section 515 to Section 8. However, it is also undisputed that Section 515 offers procedural safeguards and statutory protections that are unavailable under Section 8. For example, at the end of a lease under Section 8, the landlord may refuse to renew the lease consistent with state law, generally for no cause;
Seacrest appellants suffered injury in fact when their housing status changed. This change allegedly was caused by the agency‘s actiоn, and appellants’ injuries are redressable by a successful claim under the APA. Therefore, we hold that Seacrest appellants have standing to sue.
“[A] case is not ripe where the existence of the dispute itself hangs on future contingencies that may or may not occur.”
Porter v. Jones, 319 F.3d 483, 490 (9th Cir.2003) (quoting Clinton v. Acequia, Inc., 94 F.3d 568, 572 (9th Cir.1996)). It is undisputed that DBSI has not tendered prepayment on the Meadowbrook I loan, nor has it indicated an intention to do so. Moreover, Rhodes has not shown that she has been “adversely affected” by “final agency action“—specifically, RHS‘s acceptance of prepayment—as required for standing under the APA. Sеe Citizens for Better Forestry, 341 F.3d at 976.
Finally, respondents argue that Seacrest appellants’ claim is mooted by the sale of the Seacrest property to Northwest. This is not so. We have held that “[c]onveyance of property to another does not moot a case.” Muckleshoot Indian Tribe v. U.S. Forest Serv., 177 F.3d 800, 815 (9th Cir.1999) (citation omitted). Federal courts “are authorized to ‘void a property transaction’ where necessary.” Id. (quoting Nat‘l Wildlife Fed. v. Espy, 45 F.3d 1337, 1342 (9th Cir. 1995)); see also Goodwin v. United States, 935 F.2d 1061, 1064 (9th Cir.1991) (rejecting mootness argument because court could “still determine the validity” of seller‘s acquisition of property before it was sold tо eventual buyer). “Where the actions involved in a title transfer can be undone, this court will not find meritorious the defense of mootness.” Muckleshoot, 177 F.3d at 815 (citing Burbank Anti-Noise Group v. Goldschmidt, 623 F.2d 115 (9th Cir. 1980)). Because the sale to Northwest can be undone and the prepayment reversed, the claim is not moot. See, e.g., Lifgren, 767 F.Supp. 1473 (setting aside the borrower‘s prepayment in a similar APA action).
B. Kimberly and Summary Judgment
A district court‘s grant of summary judgment is reviewed de novo. See Soldano v. United States, 453 F.3d 1140, 1143 (9th Cir.2006). Viewing the evidence in the light most favorable to the non-moving party, we determine whether there are “any genuine issues of material fact and whether the district court correctly applied thе controlling substantive law.” Id.
In its orders denying the preliminary injunction and granting summary judgment in favor of defendants, the district court ruled that its decision “was mandated” by the Ninth Circuit‘s decision in Kimberly Associates v. United States. We disagree. There is a critical distinction between Kimberly and the present case. Kimberly was a quiet title action in which borrowers claimed to be entitled to pay off their loans in accordance with their contracts. In the present case, the question is entirely different—whether the agency acted contrary to federal law in failing to comply with ELIHPA to the detriment of the residents.
Kimberly involved a dispute similar to the DBSI/TRI IV quiet title lawsuit, in which Kimberly Associates (a subsidiary of DBSI) attemptеd prepayment of a Section 515 loan on a property in Idaho. Kimberly, 261 F.3d at 867. When RHS rejected
On appeal from the motion to dismiss, we agreed with the district court that sovereign immunity had been expressly waived, but held that the unmistakability doctrine did not apply. When the doctrine applies, it is a defense available to the government when the complaining party in a contract dispute claims that the original contract terms control, even when they conflict with subsequent legislation. Then, the court determines whether, in the contract language, the government waived its sovereign right to affect the contract through legislation “in unmistakable terms.” See United States v. Winstar Corp., 518 U.S. 839, 872, 116 S.Ct. 2432, 135 L.Ed.2d 964 (1996) (“Sovereign power governs all contracts subject to the sovereign‘s jurisdiction, and will remain intact unless surrendered in unmistakable terms.“) (citation and internal punctuation omitted); Kimberly, 261 F.3d at 869 (The doctrine allows “the Government to make agreements that bind future Congresses, but only if those contracts contain an unmistakable promise.“) (internal quotation marks and citation omitted). As we noted in Kimberly, this doctrine “governs the tension between the exercise of sovereign power and private contractual relations with the government.” 261 F.3d at 869.
However, the unmistakability doctrine does not apply to every situation in which legislation affects a priоr government contract. As we noted, “when the government is acting as a private contracting party, then the doctrine does not apply, and the government‘s rights and duties are governed by law applicable to private parties unaltered by the government‘s sovereign status.” Id. (citations omitted).
Kimberly remains good law as far as it goes, but nowhere does Kimberly hold that ELIHPA is invalid or that the government is free to disobey it. Bearing in mind that Kimberly was a quiet title action, we had no occasion then to opine on whether the government violated the APA by affirmatively allowing borrowers to ignore ELIHPA‘s statutory requirements.
Thus, the district court erred in relying on Kimberly as the basis for granting summary judgment on the appellants’ APA claim. On remand, the district court should decide whether RHS acted contrary to law as alleged in appellants’ APA complaint.
We note that, if appellants’ APA claim proves successful and Seacrest is returned to the Section 515 program, DBSI may still have recourse for RHS‘s apparent breach of contract. In Franconia Associates v. United States, 536 U.S. 129, 122 S.Ct. 1993, 153 L.Ed.2d 132 (2002), the Supreme Court noted the availability of a damages action under the Tucker Act,
Because the district court erroneously relied on Kimberly in deciding the summary judgment motion, it never reached the merits of appellants’ APA claim. We therefore reverse the grant of summary judgment and remand to the district court for further proceedings consistent with this opinion.
REVERSED and REMANDED.
Steven M. MORGAN, Plaintiff-Appellee, v. Eric MORGENSEN, Defendant, and Tom Canady, Defendant-Appellant.
No. 04-35608
United States Court of Appeals, Ninth Circuit
Filed Oct. 6, 2006
As Amended on Denial of Rehearing and Rehearing En Banc Nov. 30, 2006.
Argued and Submitted May 3, 2006.