79 Fed. Cl. 669 | Fed. Cl. | 2007
MEMORANDUM OPINION AND ORDER
Pending before the Court is the government’s motion to dismiss this case for lack of subject matter jurisdiction. At first blush, the motion appeared to the Court to present a simple matter for resolution. Plaintiff alleges, in a rather spare complaint, that it is the assignee of two Housing Assistance Payments (“HAP”) contracts made with the United States Department of Housing and Urban Development (“HUD”). Compl. at 1. The first contract, in writing and attached to the complaint, is a four-month renewal of a HAP contract that expired on September 13, 1999. See Att. to Compl. at 1. The second contract is alleged to be an additional renewal on the heels of the first. See Compl. at 1-2.
After discovery was completed, the government moved to dismiss under Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (“RCFC”). The government argues that plaintiff Forest Glen Properties, LLC was neither a party to any contract with HUD nor an assignee of such a contract, and that in any event the second renewal offer was never accepted. Def.’s Mot. at 7-8. The government supports its motion with an appendix containing several documents, most importantly the original HAP contract. This contract contains a clause in which the private party to the contract promises not to assign the contract “without the prior written consent of HUD.” See Def.’s App. at 34.
When the Court initially reviewed the motion and materials submitted by the government, it was of the opinion that plaintiff needed to produce evidence of HUD’s written consent to the assignment of the HAP contract in order to establish this Court’s subject matter jurisdiction. See Order (June 14, 2007) at 2. The Court at that time granted the plaintiff leave to file a supplemental memorandum and accompanying exhibits, and permitted an additional reply paper from the government. Id. at 3. Now, after having carefully reviewed all of the papers and materials submitted by the parties, the Court finds that the matter is more complicated than it first appeared, due in large part to HUD’s decision to deal with a receiver rather than the actual owner of the property subject to the HAP contract. As is further explained below, by renewing the HAP contract with a receivership, HUD may have rendered irrelevant the written consent clause of the contract. As a result, the factual questions that will resolve the jurisdictional issue are too intertwined with the merits of the case to be determined via a motion to dismiss. The government’s motion is, accordingly, DENIED.
I. BACKGROUND
Plaintiff Forest Glen Properties, LLC (“Forest Glen”) owns and operates an apartment complex in Cleveland, Ohio currently known as Forest Glen Apartments, but formerly called Lakeview Gardens. See Pl.’s App. at 12.
The contract contained the following provisions relating to assignments:
(a) The Owner agrees that it has not made and will not make any sale, assignment, or*672 conveyance or transfer in any fashion, of this Contract ... or the project or any part of them or any of its interest in them, without the prior written consent of HUD....
(b) The Owner agrees to notify HUD ... promptly of any proposed action covered by paragraph (a) of this section. The Owner further agrees to request the prior written consent of HUD____
Id. at 34-.
In June 1998, Lakeview Gardens was purchased by Y/A.W.A.R.E. Programs, Inc. (‘Y/ A.W.A.R.E.”) with HUD’s approval, and the HAP contract was assigned to the purchaser. Id. at 8 (Schuster Deck H 3). The property failed to receive a satisfactory score on an October 18, 1998 inspection by HUD’s Real Estate Assessment Center, “reflecting both the existence of exigent health and safety conditions and an overall failing grade.” Id. Five days later, Y/A.W.A.R.E. purported to transfer Lakeview Gardens to Diversity Institute, Inc. Id. Solo Ventures, LLC—de-scribed by the government as Y/A.W.A.R.E.’s mortgagor, see Def.’s Mot. at 3-responded with a state court lawsuit against Y/A.W.A.R.E. and Diversity Institute to prevent the transfer of Lakeview Gardens. See Def.’s App. at 38-42. On August 26, 1999, the state court appointed a receiver for the benefit of Solo Ventures, to escrow the funds generated by Lakeview Gardens. Id. at 38-39.
On September 9, 1999, the state court entered a default judgment in favor of Solo Ventures, voiding the transfer of Lakeview Gardens from Y/A.W.A.R.E. to Discovery Institute and imposing a $125,000 judgment lien on the property in the name of Solo Ventures. Def.’s App. at 40-42. The HAP contract expired on September 13,1999. See Att. to Compl. at 1; Def.’s App. at 3.
Two days later, the director of the Cleveland HUD office addressed a letter to Steven Bradley, one of the court-appointed receivers, which began: “As the Receiver for Lakeview Gardens, you are being offered a 120 day renewal of the Housing Assistance Payments (HAP) Contract for that property.” Att. to Compl. at 4; Def.’s App. at 6. The receiver was informed that copies of the renewal contract were being sent under separate cover and “should be signed and returned to the Cleveland HUD Office following your receipt.” Att. to Compl. at 4; Def.’s App. at 6. The renewal “ha[d] an effective date of January 14, 2000,” and HUD explained that “[d]uring this 120 day renewal period, the Cleveland Multifamily Program Center (Cleveland HUD Office) hopes to approve the new owner and management agent when we receive the proper information which permits us to identify those entities.” Att. to Compl. at 4; Def.’s App. at 6. The receiver was again asked for a TIN, and was also asked to submit copies of documents detailing the responsibilities of the receiver. Att. to Compl. at 4-5; Def.’s App. at 6-7. On January 29, 2000, Solo Ventures sold the Lakeview Gardens property to Forest Glen, a newly-formed entity in which Dr. Harris was also a member. Def.’s App. at 56-57; Pl.’s App. at 8.
Two weeks later, on February 11, 2000, counsel for Forest Glen and Solo Ventures submitted to the Cleveland HUD office a copy of the Ohio court order nullifying the transfer to Diversity Institute; the conveyance agreement transferring the property to Solo Ventures; the assignment of the HAP contract from Y/A.W.A.R.E. to Solo Ventures; copies of the warranty deeds transferring the property to Solo Ventures and to Forest Glen; and a notice that a HUD inspection of the property would occur on February 14, 2000. Def.’s App. at 60-61; Pl.’s App. at 7-8. The noticed inspection was conducted and although the resulting score of “26c* ” was a marked improvement over the score of “8c* ” tallied in October 1998, this was well below the passing grade of sixty. Def.’s App. at 62; see also id. at 8-9 (Schus-ter Decl. 11113, 6).
On March 23, 2000, HUD addressed a letter to Y/A.W.A.R.E. (with copies to Forest Glen, the receiver, and Solo Ventures), informing it that the February inspection revealed “twenty-five exigent, health and safety findings” and that “[a]s a direct result, the subsidy contract for Lakeview Gardens will not be renewed.” Def.’s App. at 62. Doctor Harris responded with a letter dated March 29, 2000, following up on a conversation he had earlier that day with the director of the Cleveland HUD office. Pl.’s App. at 12-14. The letter recounted the new ownership’s efforts to repair and improve the property, which were made with the “understanding of a working relationship and contract,” and Dr. Harris ultimately requested a new inspection, a meeting, and an additional extension of “our contract.” Id. at 13. The letter also revealed some confusion between Dr. Harris and the HUD official concerning whether the receiver had signed a contract. Id.
The agency further determined that the plan proposed by Forest Glen was inadequate in light of the property’s condition, and informed the plaintiff that “the HAP Contract for the project will not be assigned to the current owner and will not be renewed.” Id. at 65.
In its complaint filed September 16, 2005, Forest Glen alleges that it “was and remains Assignee” of a HAP contract entered between the government and the receiver, its assignor. Compl. at 1. Forest Glen also alleges that the receiver accepted the offer of a second renewal, and that plaintiff performed this contract from January 14, 2000 through April 14, 2000. Id. at 2. Plaintiff further alleged that it “continued to perform the same housing services” through June 30, 2000. After the government filed its motion to dismiss the case under RCFC 12(b)(1), Forest Glen sought to suspend consideration of the government’s motion while it attempted to “formalize its ‘assignee’ status.” See Pl.’s Mem. Contra Def.’s Mot. at 2. Apparently, the assignment had not previously been memorialized in writing, and the receivership had for several years been terminated. Rossi Aff. 11114-5 (Jan. 23, 2007).
II. DISCUSSION
The defendant contends that this case should be dismissed, under RCFC 12(b)(1), as a matter beyond our court’s jurisdiction. According to the government, Forest Glen is not in privity with the United States and thus has no standing to prosecute a breach of contract claim against it. See Def.’s Mot. at 7 (citing Cienega Gardens v. United States, 194 F.3d 1231, 1239 (Fed.Cir.1998) and Martinez v. United States, 48 Fed.Cl. 851, 860 (2001)).
In its initial response, plaintiff argued that it was inappropriate for the government to base an RCFC 12(b) motion on anything other than the pleadings. See Pl.’s Mem. Contra Def.’s Mot. at 1 (citing Blue Dot Energy Co. v. United States, 61 Fed.Cl. 548 (2004)). Forest Glen contended that the motion was therefore procedurally defective, and also suggested that the matter was instead appropriate for summary judgment— which it then sought to forestall via an RCFC 56(f) affidavit. See id. at 1-2. This affidavit, as noted above, stated that the receivership had been terminated for several years and needed to be reopened so that the receiver could sign a written assignment of the HAP renewal contract. Rossi Aff. 1Í115-6. Plaintiffs counsel stated that Forest Glen could not oppose summary judgment until the assignment was signed and attached to an affidavit of Dr. Harris. Id. 118.
After the government pointed out that a motion to dismiss due to the lack of subject matter jurisdiction may be based on outside evidence, see Def.’s Reply at 1 (citing Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747-48 (Fed.Cir.1988), and Englewood Terrace Ltd. P’ship v. United States, 61 Fed.Cl. 583, 584 (2004)), Forest Glen submitted a supplemental memorandum. The memorandum was accompanied by an affidavit of Dr. Harris to which was attached a copy of the written assignment, see Att. 1 to Pl.’s Supp’l Mem.; by excerpts from the deposition of a HUD official, see Att. 2 to Pl.’s Supp’l Mem.; and by copies of correspondence and other documents regarding the HAP contract and the apartment complex. See Pl.’s App. In its supplemental memorandum, Forest Glen argues that it is the real party in interest by virtue of the assignment of the HAP renewal contact. Pl.’s Supp’l Mem. at 2. It also contends that an implied-in-fact contract extended the HAP contact for the second renewal period. Id. at 1-2. Forest Glen also maintains that HUD’s interpretation of the HAP contract as requiring prior written consent of any assignments was inconsistent with HUD’s dealings with the receiver and HUD’s dealings with counsel representing both Solo Ventures and Forest Glen. See id. at 2-4. Plaintiff argues that as a consequence of HUD’s actions, the government waived its ability to enforce the prior written consent clause. Id. at 3-4.
A. Procedure for Determining Jurisdictional Facts
Before addressing the substance of the government’s motion, a brief discussion of procedure is in order. The parties appear to be somewhat confused about the manner in which a challenge to jurisdictional facts is considered. Forest Glen mistakenly believes that RCFC 12(b)(1) motions cannot be based on matters outside its pleading. See Pl.’s Mem. Contra Def.’s Mot. at 1. The government, for its part, misunderstands RCFC 12(b) as allowing the conversion of a motion to dismiss for lack of subject matter jurisdiction into one for summary judgment. See Def.’s Reply at 1-2.
The confusion of the parties, to be sure, is no doubt fostered by our court’s rules (and the Federal Rules of Civil Procedure (“FRCP”), which are their inspiration). Although the question is not raised infrequently, the rules are silent on the procedure to be followed when a party challenges jurisdictional facts. Motions to dismiss, including those based on a lack of subject matter jurisdiction, are typically based on the pleadings, in which case the court accepts as true all of the non-movant’s factual allegations and draws all reasonable inferences in a light most favorable to that party. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed.Cir.1988); see also Pixton v. B & B Plastics, Inc., 291 F.3d 1324, 1326 (Fed.Cir.2002) (explaining that court must “view the alleged facts in the complaint as true, and if the facts reveal any reasonable basis upon which the non-movant may prevail, dismissal is inappropriate”). But this approach applies only when a complaint’s jurisdictional allegations are unchallenged.
But reliance on evidence does not change the nature of the motion from one concerning
Clearly, though, when motions to dismiss for lack of subject matter jurisdiction challenge jurisdictional facts, a court must initially approach the factual issues as it would pursuant to a summary judgment motion. Cf. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (explaining how challenges to jurisdictional facts may be considered at “the summary judgment stage” of a case). Unlike, say, the determination of a bid protest, see 28 U.S.C. § 1491(b)(4), the question of jurisdiction is not one that is confined to some pre-packaged record within which our court must find the facts, using the process now located at RCFC 52.1.
Were this an RCFC 56 summary judgment motion, it would possess two procedural characteristics that differ significantly from an RCFC 12(b)(1) motion. First, the moving party would have submitted “Proposed Findings of Uncontroverted Fact,” to which the opposing party would have responded. See RCFC 56(h)(l)-(2).
The other significant procedural difference between a Rule 12(b)(1) motion and one for
If, despite drawing all reasonable inferences in favor of the nonmoving party, see Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed.Cir.1987), the Court were to find that material facts are not genuinely disputed and that these facts establish a lack of subject matter jurisdiction, the moving party would prevail on an RCFC 12(b)(1) motion just as it would on an RCFC 56 motion—the only difference being that, instead of receiving a judgment, the movant would succeed in having the case dismissed. See, e.g., KVOS, 299 U.S. at 278-80, 57 S.Ct. 197 (holding that case should be dismissed when plaintiff failed to offer evidence supporting jurisdictional allegations); Rocovich v. United States, 933 F.2d 991, 994-95 (Fed.Cir.1991) (same). The wrinkle surfaces when the Court finds a genuine issue as to a material fact. In the context of summary judgment, this suffices to defeat the motion. See Liberty Lobby, 477 U.S. at 248-49, 106 S.Ct. 2505; Mingus Constructors, 812 F.2d at 1390. But the matter is more complicated when subject matter jurisdiction is at issue, because “federal courts have the power, and the duty, to determine their own jurisdiction.” Williams v. Sec’y of the Navy, 787 F.2d 552, 557 (Fed.Cir.1986). And, as the Supreme Court has often recognized, “the first and fundamental question is that of jurisdiction.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Great S. Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 453, 20 S.Ct. 690, 44 L.Ed. 842 (1900)); Mansfield, Coldwater & Lake Mich. Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884). Any serious issue as to a court’s jurisdiction must be resolved before that court can render a judgment on the merits. See Steel Co., 523 U.S. at 93-102, 118 S.Ct. 1003 (rejecting the resolution of merits questions under assumed or “hypothetical jurisdiction”).
Thus, a plaintiff which is able to demonstrate the existence of a genuine issue concerning jurisdiction over the subject matter of its own case can hardly take comfort in this state of affairs. In that circumstance, the movant has succeeded in raising a serious doubt as to the court’s subject matter jurisdiction. The party invoking a court’s jurisdiction bears the burden of establishing it, and must ultimately do so by a preponderance of the evidence. See McNutt v. GMAC, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Reynolds, 846 F.2d at 748; Rocovich, 933 F.2d at 993. The question in dispute, then, is not only one which must be carried by the plaintiff, but is “the first and fundamental question” for a court, see Steel Co., 523 U.S. at 94, 118 S.Ct. 1003—which has the discretion to insist that the question be resolved through a fact-finding hearing before proceeding any further. See McNutt, 298 U.S. at 189, 56 S.Ct. 780. When it appears to a court, however, that the jurisdictional facts are “inextricably intertwined with the merits,” it may postpone their determination until trial when all relevant evidence may be considered at the same proceeding. Beure-Co. v. United States, 16 Cl.Ct. 42, 52-53 (1988); see, e.g., Land, 330 U.S. at 735-39, 67
B. Disputed Facts and Unaddressed Questions of Law
Turning to the substance of the government’s motion, its major premise is that Forest Glen was never assigned a HAP contract and thus is not in privity with the United States. The government argues that any HAP renewal contracts between HUD and the receiver could not be assigned to plaintiff without HUD’s prior written consent, under a clause of the original HAP contract. Def.’s Mot. at 7-8. It then cites a May 10, 2000 letter as evidence that consent was denied. Id. at 8 (citing Def.’s App. at 64-65); Def.’s Supp’l Reply at 1-2 (same).
Contract interpretation is a question of law. Seaboard Lumber Co. v. United States, 308 F.3d 1283, 1292 (Fed.Cir.2002); Cal. Fed. Bank v. United States, 245 F.3d 1342, 1346 (Fed.Cir.2001); C. Sanchez & Son, Inc. v. United States, 6 F.3d 1539, 1544 (Fed.Cir. 1993); Fortec Constructors v. United States, 760 F.2d 1288, 1291 (Fed.Cir.1985). A contract’s terms may, however, be ambiguous, necessitating a review of extrinsic evidence to determine the parties’ intent. See generally Tecom, Inc. v. United States, 66 Fed.Cl. 736, 747-49 (2005) (discussing the principles governing contract interpretation). The particular clause upon which the government relies was apparently incorporated by reference into the renewal of the HAP contract executed by the receiver on October 25,1999. The HAP renewal contract expressly stated that all terms of the original HAP contract— other than those pertaining to rent amounts, which were instead governed by an attached exhibit—were renewed. Att. to Compl. at 1 (cl. 2); Def.’s App. at 3.
Looking closely at the provision cited by the government, the Court discerns two basic problems with this ground for the government’s motion to dismiss. First, by explicitly substituting the receiver in place of the property owner as the second party to the renewal contract, the government appears to have, at best, created an ambiguity concerning the application of this provision—and perhaps rendered it unintelligible. Second, the provision in question, by its plain language, does not condition assignments upon the prior written consent of HUD—assignments made without consent are not ineffective or invalid, but instead constitute a breach of the owner’s promise not to do so. Associated with these two problems with the government’s interpretation of the provision are a number of disputed material facts, as well as a number of questions of law that the parties have not addressed.
1. The Receiver as a Party to the Renewal Contract
In the relevant provision of the original HAP contract, the “Owner” promises it “will not make any sale, assignment, or conveyance or transfer in any fashion, of this Contract ... or the project or any part of them or any of its interest in them, without the prior written consent of HUD.... ” Def.’s App. at 34. The first page of each part of that contract expressly identified the “Owner” as Lakeview Gardens, Ltd., see id. at 10,19, and the contract was executed on behalf of that owner. Id. at 14. The HAP renewal contract describes the second party to that agreement as “STEVEN L. BRADLEY, the court appointed Receiver: Per Case #372525 (dated August 26, 1999) (copy attached),” with the handwritten insertion of the name of Mark Marein, the second individual appointed as receiver. Att. to Compl. at 1; Def.’s App. at 3; see generally Def.’s App. at 38 (state court order appointing Messrs. Marein and Bradley as receivers). Unlike the expiring HAP contract, the designation “Owner” does not appear immediately after this party identification. Compare Def.’s App. at 3 with id. at 10. Nevertheless, the HAP renewal contract uses the term “Owner” throughout, apparently as a synonym for the second (that is, the non-HUD) party to the contract. See Att. to Compl. at 1-2; Def.’s App. at 3-4.
The HAP renewal contract also, however, specifically describes “the Owner” as the party which previously entered into the expiring HAP contract, and above the signature block identifies the “Owner” as Lakeview Gardens, Ltd. Att. to Compl. at 1-2; Def.’s App. at 3-4. This is problematic, and puzzling, as the
So who, then, was the “Owner”? Did the parties intend that the receiver be considered the “Owner,” or instead a party representing the “Owner”? The receiver was appointed at the request of Solo Ventures, a creditor of Y/A.W.A.R.E. which was alarmed by Y/A.W.A.R.E.’s attempted transfer of the Lakeview Gardens property to Diversity Institute. See id. at 38-42. The Ohio court authorized the receiver “to establish and maintain escrow of any and all funds related to Lakeview Gardens from whatever source derived pending the disposition” of the case brought by Solo Ventures, id. at 39, and to use “all powers necessary to carry out such escrow as permitted under Ohio Revised Code 2735.04.” Id. at 38. The referenced Ohio statute provides that “a receiver may bring and defend actions in his own name as receiver, take and keep possession of property, receive rents, collect, compound for, and compromise demands, make transfers, and generally do such acts respecting the property as the court authorizes.” Ohio Rev.Code Ann. § 2735.04 (2007).
The receiver was thus empowered to act as if he were the owner of Lakeview Gardens, and was appointed to collect rent payments while the state court determined whether Diversity Institute or Y/A.W.A.R.E. should receive them. And when appointed in these circumstances, a receiver exercises the rights not just of the property owner/debtor but also the creditor who applied for the receivership, and in addition has his own interest in the property. See McGinness v. United States, 90 F.3d 143, 146-47 (6th Cir.1996). The state court proceeding resulted in a lien on the Lakeview Gardens property in favor of Solo Ventures. Def.’s App. at 42. This lien was declared on September 9, 1999— four days before the original HAP contract expired and over six weeks before the HAP renewal contract was executed. See id.
Among the documents submitted by plaintiff to oppose the motion to dismiss is a letter from Forest Glen to HUD in which Dr. Harris—the managing member of Forest Glen, see Att. 1 to PL’s Supp’l Mem. at 1 (Harris Aff. 111)—describes an August 1999 meeting. PL’s App. at 12. It is reasonable to construe this account to reflect testimony which Dr. Harris would give in this proceeding, should it go to trial. Doctor Harris maintains that at the meeting, he informed HUD of the “ownership dispute” over Lakeview Gardens and of the state court’s appointment of the receiver, and received “a verbal extension for a contract.” Id. From this, one could conclude that HUD understood the receiver to be acting for Dr. Harris’s Solo Ventures, whether due to the latter’s status as a creditor or as a prospective owner.
Otherwise, it is far from clear how the HUD consent provision would apply, if “Owner” were to mean the receiver by virtue of the HAP renewal contract. When property comes under the control of a receiver or a trustee by operation of law, this event is not normally considered an assignment—for purposes of the Anti-Assignment Act, for instance. See, e.g., Nat’l Bank of Commerce v. Downie, 218 U.S. 345, 356-57, 31 S.Ct. 89, 54 L.Ed. 1065 (1910); Bailey v. United States, 78 Fed.Cl. 239, 265-67 (2007). If the passing of the interest to a receiver would not be a transfer in ownership, it is questionable that its passing from a receiver would be, either. Would this mean, then, that while the contract remains in force, whatever entity were to own the property at the time the receivership terminated would automatically assume the role of “Owner,” but subsequent transferees would be subject to the consent provision?
The matter is further complicated by the allegation that the receivership terminated “several years ago,” Rossi Aff. 115, and may not have existed when the lawsuit was filed. Plaintiff contends that, as owner of the property formerly known as Lakeview Gardens, it became the real party in interest entitled to money owed the receiver, including any amounts due under the HAP renewal contract. See PL’s Supp’l Mem. at 2; see also Def.’s App. at 56-57 (warranty deed granting property to Forest Glen). Due presumably to its interpretation of the HUD consent provision of the HAP contract, the government does not address this argument. It is not readily apparent to the Court why this lawsuit would need to be prosecuted in the name of the receiver, rather than the party for whose benefit the lawsuit has been brought, particularly if the receivership were already terminated.
In any event, the foregoing discussion demonstrates that to interpret the HAP contract provision upon which the government’s lack of privity argument rests, the Court will need to consider evidence of the parties’ intentions. But the facts that will tend to establish the obligations of the parties to the HAP renewal contract are inextricably intertwined with the merits of this case, as they will also be relevant to whether a breach has occurred. Thus, the Court concludes that a special evidentiary hearing on this question is not warranted prior to a merits proceeding.
£ The Promise to Obtain Prior Written Consent
The receiver appears to have signed the HAP renewal contract either as the representative of any party which would come to own the underlying property, or as the “Owner” himself. Plaintiff alleges that the receiver assigned it the HAP renewal contract, and an implied-in-fact renewal contract. See Compl. As was discussed above, this might simply mean that since Forest Glen became the owner of the apartment complex while the receiver still existed to -collect rent payments, the rent payments by operation of law came automatically to be assigned to plaintiff. This will depend on aspects of the law of receivership that have not yet been briefed, and facts concerning
But even if the “Owner,” as a consequence of the execution of the HAP renewal contract by the receiver, is understood to be a party separate and distinct from the plaintiff and embodied in the receiver, the government would still not prevail on its motion to dismiss. It argues that the provision in question prevents the assignment of a HAP contract without HUD’s consent. Def.’s Mot. at 8 (citing Def.’s App. at 34); Def.’s Reply at 2. As the government interprets it, “the HAP contract that was the subject of the initial renewal contract specifically conditioned the transfer of rights arising under the HAP contract upon the prior written consent of HUD.” Def.’s Mot. at 8. Based on this interpretation, one would expect the provision to read something like, “no assignment may be made of this contract without the prior written consent of HUD.”
Instead, the plain language of the provision recognizes the power of the “Owner” to assign the contract,
To support its interpretation of the provision as placing a precondition on the ability to assign the HAP contract, the government cites language in the document through which Y/A.W.A.R.E. attempted to transfer the expired contract to Solo Ventures. See Def.’s Mot. at 8. This purported assignment stated that it “is subject to the written consent required by [HUD] and shall not be effective until such consent is given.” Def.’s App. at 53. Neither party to this purported assignment was a signatory to the original HAP contract, nor to the HAP renewal contract, so their interpretation of the contract’s provisions may be discounted. Casting further doubt upon their understanding is the fact that this document, as well as the accompanying property conveyance agreement, appears to be based on ignorance of the HAP renewal contract that was executed two months prior. See Def.’s App. at 47 (paragraph 12 of the conveyance agreement stating that the HAP contract “has expired in whole as of September 13, 1999 and is not subject to renewal with [Y/A.W.A.R.E.]”); id. at 53 (purported assignment making no mention of the HAP renewal contract, and describing the subject HAP contract as being dated July 23,1984). This purported assignment is also internally inconsistent, as it contains two separate effective dates: “the date of transfer of the real estate” and the date when consent is given by HUD. Id. at 53.
Moreover, the interpretation of the HUD consent provision that is reflected in this purported assignment, and in the draft consent form that was submitted to HUD with the assignment, is at odds with the language of the provision in another respect: The HAP contract provision by its plain language covers transfers of the underlying property or “project” as well as of the contract, see id. at 34, while the agreement conveying the property to Solo Ventures does not indicate the need for HUD consent, see id. at 45-49, and the draft consent form that was submitted to HUD concerns only the HAP contract. See id. at 55. In any event, unless Solo
Forest Glen, to be sure, has not shown that undisputed facts prove that the HAP renewal contracts were assigned to it by the receiver prior to the filing of this lawsuit— the relevant date for purposes of jurisdictional determinations. See Keene Corp. v. United States, 508 U.S. 200, 207, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993). But the government’s motion, as framed, did not require it to do so. Rather than challenge the fact of an assignment, the motion rested on the absence of HUD’s prior written consent. To support its allegation that the receiver assigned it the two renewal contracts, Forest Glen has submitted a written assignment that was recently executed by Messrs. Bradley and Marein. Att. 1 to Pl.’s Supp’l Mem. at 2. Although the language used in this assignment suggests that the HAP contract had not previously been assigned to the plaintiff, one could reasonably infer that this document was intended to “formalize” an assignment which had already been made. See Pl.’s Mem. Contra Def.’s Mot. at 2. It remains to be seen whether Forest Glen can prove that the assignment occurred—perhaps orally or through actions such as the transfer of rent payments from the receiver’s bank account to the plaintiffs. And as with the issue of the meaning of “Owner” under the renewal contract, the Court finds this matter too intertwined with the merits to be considered separately.
3. The Impliedr-in-Fact Renewal Contract
A minor premise of the government’s motion, which the Court will treat briefly, is its argument that the offer of a second renewal was never accepted. It bases this contention on the fact that a second HAP renewal contract, executed by the receiver, cannot be found in HUD’s files. Def.’s Mot. at 8 (citing Def.’s App. at 9). But while the letter offering the receiver a second 120-day renewal indicated that hard copies of a written contract were being separately sent and “should be signed and returned,” the letter does not state that this is the only manner in which acceptance may be signified. See Att. to Compl. at 4; Def.’s App. at 6. Forest Glen alleges that the offer of a second renewal was accepted and that the resulting contract was performed, Compl. at 2, and argues that the contract was implied in fact. Pl.’s Supp’l Mem. at 1-2 & n. 2.
The question of whether a contract exists is a mixed question of fact and law. Cienega Gardens v. United States, 194 F.3d 1231, 1239 (Fed.Cir.1998) (citing Ransom v. United States, 900 F.2d 242, 244 (Fed.Cir.1990)). The elements of an implied-in-fact contract are the same as those of an express contract—namely an offer, acceptance, consideration, possession of the requisite authority by the government actor, and a mutual intent to contract. See Trauma Serv. Group v. United States, 104 F.3d 1321, 1325-26 (Fed.Cir. 1997); City of El Centro v. United States, 922 F.2d 816, 820 (Fed.Cir.1990); Brunner v. United States, 70 Fed.Cl. 623, 626-27 (2006). The Court notes that recent persuasive authority from our court has found that the allegation of the existence of an implied-in-fact contract suffices for purposes of establishing subject matter jurisdiction, and that any infirmity of proof of such contract presents a merits question. Kawa, 77 Fed.Cl. at 303-04 & n. 4 (relying on dictum from Spruill, 978 F.2d at 689).
In either event, the result is the same in this matter—as reasonable inferences drawn in Forest Glen’s favor support the existence of an implied-in-fact contract, and the factual questions are “necessarily intertwined” with the merits, warranting a denial of the motion. See Kawa, 77 Fed.Cl. at 304 n. 4. Two days
Forest Glen’s response indicated that it was still waiting to receive HUD’s share of the rent under what it understood to be an existing contract, and that it had just that day been informed by HUD that a contract might not have been signed by the receiver. PL’s App. at 13. After a meeting with Forest Glen, HUD visited the property a second time—its preferred procedure when terminating a contract. See Att. 2 to PL’s Supp’l Mem. at 8 (Schuster depo. tr. at 71). The agency followed with a letter dated May 10, 2000—which was 118 days after the 120-day renewal contract was to begin. In this letter, HUD stated that the property’s deficiencies “constitute events of default of any [HAP] Contract with HUD; whether such HAP Contract is between HUD and the former project owner, or otherwise.” Def.’s App. at 64; PL’s App. at 16. The letter concluded that “the HAP Contract for the project will not be assigned to the current owner and will not be renewed,” and the process for giving vouchers to tenants was discussed. Def.’s App. at 65; PL’s App. at 17.
The foregoing evidence is certainly consistent with, and can be read to support, the notion that a HAP renewal contract was in existence from the date of the offer through May 10, 2000. The record, such as it is, can reasonably be construed to rest on the recognition that during this period there existed a HAP renewal contract which HUD could have further renewed, could have approved the assignment of, and could have found in default or terminated, and under which HUD could have substituted vouchers in place of rent subsidies. While the inspection results could well have been grounds to not renew the HAP contract a third time, and perhaps to cease subsidy payments prospectively, nothing suggests that the second renewal offer was contingent upon them.
These inferences are further bolstered by consideration of one peculiar course of conduct that HUD has followed regarding the subject HAP contract: It seems that every single executed contract relating to this property was retroactive in effect. The first stage of the original contract was effective July 23, 1984, but executed on November 27 and 28,1984. Def.’s App. at 14. The second stage, effective September 14, 1984, was executed February 4, 1985. Id. And the HAP renewal contract, executed on October 25, 1999 was, as we have seen, effective September 14, 1999. Att. to Compl. at 1-2; Def.’s App. at 3-4. It is certainly more reasonable to assume that these agreements were initially performed as implied-in-fact contracts and later memorialized in express contracts, than to assume that the owner limited the rents it charged tenants under the hope that HUD
III. CONCLUSION
For the foregoing reasons, the government’s motion to dismiss for lack of subject matter jurisdiction is DENIED. The parties shall file a Joint Status Report within twenty-eight days of the date of this order proposing a schedule for further proceedings.
IT IS SO ORDERED.
. Although the offered renewal was for a 120-day period, Att. to Compl. at 4, plaintiff maintains that the renewal contract ran from January 14, 2000 through April 14, 2000—a ninety-two day period. Compl. at 1-2. Plaintiff also, however, alleges that it provided the relevant housing services for the 120-day period and then some. See Compl. at 2 (alleging services were provided through June 30, 2000).
. A third claim, alleging unjust enrichment, was withdrawn by plaintiff. See Pl.’s Notice of Withdrawal (Jan. 17, 2007).
. This appendix is spread over two attachments to the motion as filed electronically (Documents 17-2 and 17-3). When citing pages of this appendix, the Court will use the page numbers supplied by the defendant for the appendix as a whole.
. The information contained in this background section was culled from the documents submitted by each party and is intended to provide a context for the motion under consideration. As these materials were not submitted in a manner suitable for summary judgment, the resulting information should not be considered factual findings of the Court.
. For the sake of convenience, the Court refers to the third attachment to plaintiff’s supplemental memorandum (filed Feb. 9, 2007) as "Pl.’s App.” The page numbering provided by the electronic filing system is used for citation purposes.
. Although it is not legible on the copy submitted, this appears to be section 2.20 of the HAP contract.
. This appears to be section 2.20(e)(1). See supra note 6.
. Although two individuals were appointed as receivers of the property, see Def.’s App. at 38, the Court will refer to "receiver” in the singular. as it does not appears that joint action by both individuals was required under the receivership.
. By the terms of the initial HAP contract, it appears that the contract would have expired on two separate dates concerning each group of twenty units covered in separate stages—July 22, 1999 and September 13, 1999, respectively. See Def.’s App. at 11-12, 14.
. See also Pl.’s App. at 12 (letter to HUD from Dr. Harris stating that he and Andrew Jackson were the members of Forest Glen); Att. 1 to Pl.’s Supp’l Mem. at 1 (Harris Aff. ¶ 1) (identifying Dr. Harris as the "managing member” of Forest Glen).
. The "c*” aspect of the rating appears to represent "exigent, health and safety findings.” See Def.'s App. at 64.
. A HUD official later explained that the reason for visiting the property after denying the contract renewal (in the letter of March 23, 2000) was the agency’s preference for "another verification of condition before we ... terminate a contract.” Att. 2 to Pl.'s Supp’l Mem. at 8 (Schuster depo. tr. at 71).
. This affidavit was initially filed with plaintiff's memorandum on January 17, 2007, but due to technical problems the draft assignment referenced in the affidavit was not attached.
. Plaintiff’s motion to suspend action on the government’s dispositive motion was rendered moot once the Court granted its subsequent motion for leave to file a supplemental memorandum opposing the motion to dismiss. See Order (June 14, 2007) at 3.
. Although the government describes the alleged jurisdictional defect as a lack of "standing” in only one place in its papers relating to the pending motion, see Def.’s Opp. to Pl.’s Mot. for Leave to File Supp’l Mem. at 2, the absence of privity of contract is a matter of standing. See, e.g., Erickson Air Crane Co. v. United States, 731 F.2d 810, 813 (Fed.Cir.1984); Fairchild Inds., Inc. v. United States, 223 Ct.Cl. 315, 320, 620 F.2d 807 (1980).
. The government provided the inaccurate date of May 16, 2000 for this letter. See Def.’s Supp’l Reply at 1. While the date stamped on the letter is not entirely clear, see Def.’s App. at 64, the government had previously stated that it was May 10, 2000, Def.’s Mot. at 5, and a subsequent letter from HUD also used the May 10th date for reference. See Pl.’s App. at 20.
. Another exception, not applicable here, is when a complaint’s allegations are so frivolous that subject matter jurisdiction is found lacking. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998); Hagans v. Lavine, 415 U.S. 528, 536-38, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974); Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 90 L.Ed. 939 (1946).
. As the Court has frequently observed, the Supreme Court’s determination that the Administrative Procedure Act usually requires the review of an administrative record rather than a trial de novo when informal agency decisions are challenged is based on a misreading of legislative history. See, e.g., Gulf Group Inc. v. United States, 61 Fed.Cl. 338, 350 n. 25 (2004); Fort Carson Support Svcs. v. United States, 71 Fed.Cl. 571, 585 (2006); Beta Analytics Intl, Inc. v. United States, 67 Fed.Cl. 384, 394 (2005).
. Assuming, that is, that the parties were unable to stipulate to the material facts. See RCFC 56(h)(3) (allowing the filing of "a comprehensive stipulation of all of the material facts” in lieu of the proposed findings and response).
. The problematic lack of formal procedures for determining jurisdictional facts has long been recognized by the courts. See, e.g., Land, 330 U.S. at 735 n. 4, 67 S.Ct. 1009; Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S.Ct. 725, 83 L.Ed. 1111 (1939); Wetmore v. Rymer, 169 U.S. 115, 120-21, 18 S.Ct. 293, 42 L.Ed. 682 (1898).
. Forest Glen adds to the confusion by identifying Lakeview Gardens, Ltd., as one of the entities for which the receiver acted. Compl. at 1.
. Under this interpretation of the HAP renewal contract, another set of questions arise. For example, could Solo Ventures and Forest Glen be considered alter egos due to Dr. Harris's roles as the primary member of both entities? Or was the passing of Lakeview Gardens from Solo Ventures to Forest Glen the result of a reorganization? Cf. Seaboard Air Line Ry. v. United States, 256 U.S. 655, 657, 41 S.Ct. 611, 65 L.Ed. 1149 (1921) (holding corporate mergers and consolidations do not come within the reach of the Anti-Assignment Act).
. It is certainly not to HUD’s credit that on May 10, 2000, nearly four months after receiving the benefits of the HAP renewal contract, the agency implied that it was withholding payments due to its suspicion that the receiver lacked authority to renew the HAP contract. See Def.’s App. at 65; Pl.’s App. at 17.
. If the former were the case, there also does not appear to be any impediment to joinder or substitution of the receiver as plaintiff under RCFC 17(a), provided the receivership is or remains reopened.
. The government had previously indicated, in the joint status report filed October 5, 2006, that the pending motion would be one for summary judgment. Since the government did not use this opportunity to move for summary judgment, and instead filed only a motion to dismiss for lack of subject matter jurisdiction, the Court assumes that the ensuing merits proceeding will be a trial, and not a summary judgment hearing.
. Perhaps this explains why the government makes no mention of the Anti-Assignment Act, 31 U.S.C. § 3727 and 41 U.S.C. § 15, in its papers.
. It does not appear that any of these rights were expressly exercised, and the government did not state the affirmative defense of prior material breach in its answer.
. The seeming paradox of prior written consent given after-the-fact is perhaps explained by HUD’s apparent practice of executing retroactive agreements, discussed briefly below.
. And nothing would appear to make Y/A.W.A.R.E.’s interpretations relevant.
. The government has not challenged the sufficiency of these allegations under RCFC 9(h)(5).
. The Court notes that HUD entered into the October 1999 HAP renewal contract, and offered the second renewal in January 2000, despite the failing grade received in the October 18, 1998 inspection. See Def.’s App. at 8, 62.
. This course of conduct may also establish HUD’s recognition of the assignment to plaintiff. See Tuftco Corp. v. United States, 222 Ct.Cl. 277, 286, 614 F.2d 740 (1980).