Allied Home Mortgage Capital Corp. v. United States
Decision Date | 11 November 2010 |
Docket Number | No. 10-66C,10-66C |
Parties | ALLIED HOME MORTGAGE CAPITAL CORPORATION, Plaintiff, v. UNITED STATES, Defendant. |
Court | U.S. Claims Court |
Motion to Dismiss; Lack of Subject Matter Jurisdiction; Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, 7 U.S.C. § 6901, et seq.; United States Department of Agriculture National Appeals Division; Breach of Contract; Quantum Meruit.
Robert Wayne Bond, Womble Carlyle Sandridge & Rice, PLLC, Atlanta, GA, for the plaintiff.
Courtney Sheehan McNamara, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for the defendant. With her were Jeanne E. Davidson, Director, Commercial Litigation Branch, and Tony West, Assistant Attorney General, Civil Division.
Before the court is the government's motion to dismiss the complaint filed by plaintiff Allied Home Mortgage Capital Corporation (Allied). The plaintiff states in its complaint that it seeks "recovery of amounts owed under a Contract and approved Liquidation Plan entered into between Allied and the United States Department of Agriculture ('USDA')," or, alternatively, recovery under the theory of quantum meruit. The defendant argues, however, that this court should dismiss the complaint pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC) (2010), for lack of subject matter jurisdiction, based on the provisions of the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, Pub. L. No. 103-354, 108 Stat. 3178 ( )(the Reorganization Act). The defendant argues that pursuant to the Reorganization Act and the enabling regulations, 7 C.F.R. § 11.1, et seq. (2010), United States District Courts possess exclusive jurisdiction to entertain claims, such as those presented by plaintiff Allied, which arise from participation in a loan guarantee program administered by the USDA's Rural Development division. According to the defendant, the claims presented by the plaintiff are nothing more than a dispute "involving the USDA's Rd [Rural Development] division's loan note guarantee programs." Moreover, the defendant argues that the plaintiff was first required to exhaust administrative remedies at the USDA, through the agency's mandatory appeals process, including a review by the USDA National Appeals Division (NAD), before filing a complaint in a federal District Court. Defendant asserts that jurisdiction to review a decision by the NAD is available only in the appropriate United States District Court, not in the United States Court of Federal Claims. Finally, defendant argues that plaintiff's case does not present the necessary, limited circumstances pursuant to which quantum meruit relief may be granted in the United States Court of Federal Claims.
In its response to the defendant's motion to dismiss, plaintiff argues that the Liquidation Plan entered into by Allied and the USDA is a "separate" contract which includes an agreement to reimburse Allied for expenses incurred while carrying out the Liquidation Plan. Allied, therefore, claims that jurisdiction to review plaintiff's claims is proper in the United States Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491(a)(1) (2006). Plaintiff also asserts its right to recover in the Court of Federal Claims based on quantum meruit for services performed.
In the complaint filed in this court, plaintiff states that it is "in the real estate mortgage business and participates in USDA-approved loan programs throughout the United States." According to the complaint, in early 2003, the plaintiff became the servicer of a real estate development project known as the Blues Alley Project, involving the construction of lower-income, multi-family housing in Clarksdale, Mississippi (the Project). The Project was funded by bonds, the proceeds of which were held in trust by Wells Fargo Bank and were loaned to the borrower and developer of the Project, Blues Alley Estates, L.P. (Blues Alley), to complete the Project. The USDA subsequently repurchased the loan from Wells Fargo. The USDA guaranteed a large portion of the loan for the Project through the Rural Housing Service program administered by the USDA's Office of Rural Development.
Allied signed and entered into a "Lender's Agreement" with the USDA, by which Allied was "approved to process and request Loan Note Guarantees and to service those loans as authorized herein and under 7 C.F.R. part 3565." The plaintiff described its role in the Project as to "service the loan" and to ensure that USDA requirements were satisfied. Selected text from the Lender's Agreement is instructive and explicitly covers how Allied, as the lender, should proceed in the event of a failing or failedproject, including submission of a Liquidation Plan. The Lender's Agreement also specifically refers to and incorporates 7 C.F.R. Part 3565, titled "Guaranteed Rural Rental Housing Program." The Lender's Agreement states in part:
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