St. Marks Place Hous. Co. Inc v. United States Dep't Of Hous. & Urban Dev., No. 09-5257.

• Decision Date: 25 June 2010
• Docket Number: No. 09-5257.
• Citation: 610 F.3d 75
• Parties: ST. MARKS PLACE HOUSING COMPANY, INC., et al., Appellantsv.UNITED STATES DEPARTMENT OF HOUSING & URBAN DEVELOPMENT and Shaun L.S. Donovan, as Secretary of the United States Department of Housing and Urban Development, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

610 F.3d 75

ST. MARKS PLACE HOUSING COMPANY, INC., et al., Appellantsv.UNITED STATES DEPARTMENT OF HOUSING & URBAN DEVELOPMENT and Shaun L.S. Donovan, as Secretary of the United States Department of Housing and Urban Development, Appellees.

No. 09-5257.

United States Court of Appeals, District of Columbia Circuit.

Argued April 16, 2010.

Decided June 25, 2010.

COPYRIGHT MATERIAL OMITTED

Appeal from the United States District Court for the District of Columbia (No. 1:08-cv-00193-RBW).

Stephen B. Meister argued the cause and filed the briefs for appellants.

Henry C. Whitaker, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Ronald C. Machen Jr., U.S. Attorney, and Michael S. Raab, Attorney. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

Before: HENDERSON, TATEL, and GRIFFITH, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

Circuit Judge HENDERSON concurs in the judgment.

TATEL, Circuit Judge:

Appellants, the current owners and prospective buyers of an affordable housing complex, seek to prepay the project's federally-insured mortgage. The Department of Housing and Urban Development interpreted the mortgage to require its approval for prepayment and then conditioned that approval on the parties agreeing to maintain the property as affordable housing. Appellants challenge this decision, contending that HUD regulations prohibit the Department from requiring prepayment approval. Deferring to HUD's interpretation of its own regulations, we affirm the district court's dismissal of appellants' complaint. Along the way, we resolve a tricky jurisdictional issue arising from the fact that the district court issued an order purporting to dismiss the case but stating, “[T]his Order shall not be deemed a final Order subject to appeal until the Court has issued its Memorandum Opinion.”

I.

The National Housing Act (NHA), 12 U.S.C. §§ 1701 et seq., authorizes the Department of Housing and Urban Development (HUD) to insure and subsidize mortgages in order to encourage development of affordable housing. See, e.g., id. § 1713(b). The housing project at issue in this case, Castleton Park Apartments, is a 454-unit complex located on Staten Island. Developed as part of New York State's Mitchell-Lama affordable housing program, the complex was originally financed in 1974 with an approximately $20 million mortgage from the state's Housing Finance Agency. Three years later, appellant St. Marks Place Housing Company and the Housing Finance Agency negotiated a refinancing, dividing the original mortgage into a senior loan of approximately $18 million and a subordinate loan for the balance of the debt. Under NHA sections 207 and 223(b), the Housing Finance Agency obtained insurance from HUD for the senior mortgage-the subject of this case. Section 207 “facilitate[s] particularly the production of rental accommodations, at reasonable rents, of design and size suitable for family living.” Id. § 1713(b)(2). Section 223(f) provides for “[i]nsurance of mortgages executed in connection with ... refinancing of existing multifamily housing project[s].” Id. § 1715n(f).

Although the Castleton Park mortgage has a forty-year term, reaching maturity in 2017, it gives the borrower a right to prepay. The mortgage's prepayment clause states: “Privilege is reserved to pay the debt in whole or in an amount equal to one or more monthly payments on principal next due, on the first day of any month prior to maturity upon at least thirty (30) days' prior written notice to the holder.” A footnote to this sentence provides, “Subject to the prior approval of the Secretary of Housing and Urban Development.”

In 2006, St. Marks and an affiliated limited partnership known as St. Marks Place Associates contracted to sell their interests in the Castleton Park Apartments to Stellar CP LP and Castleton GP LLC. As part of this transaction, the sellers and the prospective buyers notified HUD that the two St. Marks companies intended to prepay the senior HUD-insured mortgage. Citing the mortgage's requirement that HUD approve prepayment, however, the Department notified the parties that their prepayment was subject to NHA section 250. That section provides, “During any period in which an owner of a multifamily rental housing project is required to obtain the approval of the Secretary for prepayment of the mortgage, the Secretary shall not accept an offer to prepay the mortgage on such project” unless he finds that certain conditions designed to preserve the supply of affordable housing and protect the project's tenants have been satisfied. 12 U.S.C. § 1715z-15(a). HUD advised the parties that pursuant to these requirements it would approve prepayment only if the companies invested substantial sums to repair and rehabilitate the complex, promised to maintain it as a viable multifamily affordable housing property, and notified residents of the prepayment.

In response, the St. Marks companies and the prospective Castleton Park purchasers filed suit in the United States District Court for the District of Columbia. The companies principally argued that at the time the Castleton Park senior mortgage was executed, HUD regulations governing section 207 mortgages barred prepayment conditions and that the mortgage's requirement that the owners obtain HUD approval for prepayment is therefore unenforceable. In support, they cited 24 C.F.R. § 207.14(a) (1977), which provides that section 207-insured mortgages “shall contain a provision permitting the mortgagor to prepay the mortgage ... after giving to the mortgagee 30 days' notice in writing.” Moving to dismiss for failure to state a claim see Fed.R.Civ.P. 12(b)(6), HUD countered that section 207.14(a) limits only a lender's right to refuse prepayment. According to HUD, nothing in section 207.14(a) prohibits prepayment from being conditioned on HUD approval.

The district court, deferring to HUD's interpretation of its own regulation, dismissed the complaint. St. Marks Place Housing Co. v. HUD, No. 08-193, 2009 WL 1543688, at *6-7 (D.D.C. June 3, 2009). The companies appeal, and we review the district court's decision de novo. Nat'l Wildlife Fed'n v. Browner, 127 F.3d 1126, 1128 (D.C.Cir.1997) (reviewing de novo district court's Rule 12(b)(6) dismissal of a complaint against EPA based on the agency's regulations).

II.

Before considering the companies' arguments on the merits, we must address a threshold question regarding our jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (courts must consider jurisdictional issues sua sponte). Under 28 U.S.C. § 1291, appeals may be taken (with certain exceptions not relevant here) only from “final decisions.” “A ‘final decision’ generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Budinich v. Becton Dickinson & Co., 486 U.S. 196, 199, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988) (internal quotation marks omitted). Under Federal Rule of Appellate Procedure 4(a)(1)(B), the notice of appeal must be filed “within 60 days after the judgment or order appealed from is entered” in civil cases where a U.S. agency is a party. See also 28 U.S.C. § 2107(b) (statutory basis for Rule 4(a)(1)(B)); Bowles v. Russell, 551 U.S. 205, 210, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007) (recognizing “statutory time limits for taking an appeal as jurisdictional”). This deadline is strict: “Congress [has] specifically limited the amount of time by which district courts can extend the notice-of-appeal period,” litigants “cannot rely on forfeiture or waiver to excuse ... lack of compliance,” and courts have “no authority to create equitable exceptions.” Bowles, 551 U.S. at 213-14, 127 S.Ct. 2360 (2007).

In this case, the district court entered an order purporting to dismiss the companies' complaint on March 27, 2009. The order states:

The plaintiffs bring this claim pursuant to the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-06 (2006), seeking a declaratory judgment, injunctive relief, and an order of mandamus. Currently before the Court is the defendants' motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Upon consideration of the various filings submitted by the parties, the Court will grant the defendants' motion. Therefore, in accordance with the Court's reasoning to be set forth in the Memorandum Opinion to be issued within thirty days of this order, absent unforseen [sic] circumstances, it is hereby

ORDERED that the defendants' motion is GRANTED. It is further

ORDERED that this case is closed. It is further

ORDERED that this Order shall not be deemed a final Order subject to appeal until the Court has issued its Memorandum Opinion.

St. Marks, No. 08-193 (D.D.C. Mar. 27, 2009) (footnote omitted). Sixty-eight days later, on June 3, the court issued its opinion.

In a footnote, the court stated, “This Memorandum Opinion renders the Order granting the Defendants' Motion to Dismiss entered on March 27, 2009, an appealable Order.” St. Marks, 2009 WL 1543688, at *8 n. 5. The companies filed their notice of appeal on July 13, forty days after the June 3 opinion and 108 days after the March order. As measured from the opinion, then, the companies' notice of appeal was timely, but as measured from the earlier order, it was not.

The companies argue that their appeal is timely because, as they see it, the district court's March order was not a section 1291 “final decision,” so Rule 4(a)'s sixty-day clock could not start running until the district court issued its June opinion. HUD agrees, even though, having prevailed in the district court, it would obviously benefit from a dismissal for lack of appellate jurisdiction. Whether the companies and HUD are correct turns on how one resolves the apparently contradictory language in the March order. On the one hand, the order announced the court's...