Bossert v. Springfield Group, Inc., C-3-83-365.

• Decision Date: 20 January 1984
• Docket Number: No. C-3-83-365.,C-3-83-365.
• Citation: 579 F. Supp. 56
• Parties: William BOSSERT, et al., Plaintiffs, v. SPRINGFIELD GROUP, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

579 F. Supp. 56

William BOSSERT, et al., Plaintiffs, v. SPRINGFIELD GROUP, INC., et al., Defendants.

No. C-3-83-365.

United States District Court, S.D. Ohio, W.D.

January 20, 1984.

Michael Catanzaro, Springfield, Ohio, for plaintiffs.

Gerald Kaminski, Asst. U.S. Atty., Dayton, Ohio, for defendant Farmers Home Admin.

Charles Henderson, Springfield, Ohio, for defendant Springfield Group.

Thomas W. Wilson, Asst. Pros. Atty., Springfield, Ohio, for defendant Clark County Bd. of Com'rs.

R. Paul Perkins, Jr., Dayton, Ohio, for defendants Maurice Humphrey, Laura Humphrey, Robert Dibert, Deloris Dibert, David Leedale, Brenda Leedale, Greg White, Lori White, Darryl Yount, Julia Yount, John Gray, Michelle Gray, Minny Walker, Steven Queen, Diana Queen, Jerry Lightner, Deborah Lightner, Michael Lonsway, Linda Lonsway, Gregory Hamilton, Lori Hamilton.

DECISION AND ENTRY OVERRULING PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION; CONFERENCE CALL SET

RICE, District Judge.

This case came to be heard on December 5 and 8, 1983, on Plaintiffs' motion for a preliminary injunction, seeking to enjoin the construction of certain homes in Northridge, a suburban community on the outskirts of Springfield, Ohio. For the reasons outlined below, the Court overrules the motion in its entirety.

Fifty-four Plaintiffs, all homeowners in Northridge, bring suit in the second amended complaint. Named as Defendants are Springfield Group, Inc. (SGI), the Farmers Home Administration (FmHA) of the United States Department of Agriculture, and the Clark County (Ohio) Board of Commissioners. Also named as Defendants, primarily for their status as indispensable parties under Fed.R.Civ.P. 19(a), are 26 individuals who are building, or intend to build, homes near those of the Plaintiffs, with the aid of a Self-Help Technical Assistance Grant administered by SGI. This federal grant, commonly known as the "sweat-equity" program,¹ is authorized under various provisions of the National Housing Act, as amended, 42 U.S.C. § 1490 et seq. Under that program, the FmHA may make grants to non-profit corporations, such as SGI, to assist low income individuals in "rural areas" in acquiring land and building homes thereon. See 42 U.S.C. §§ 1490c, 1490e.

In their second amended complaint, Plaintiffs allege generally that their properties and property values will be damaged if the "sweat-equity" homes in Northridge are completed. More specifically, Plaintiffs advance five separate causes of action (or grounds in support of the motion for a preliminary injunction), as follows:

(1) SGI does not have the necessary background and experience to administer the Self-Help Grant, as required by the FmHA's regulations, 7 C.F.R. § 1933.404(a)(2)(i) (1983);

(2) SGI failed to demonstrate a need for the self-help housing, and "failed to provide a market-feasibility study," as required by 7 C.F.R. § 1933.406(a) (1983);

(3) the proposed home sites will excessively increase the amount of raw sewage treated by the Northridge Waste Water Treatment Plant, which will contaminate water, cause sewage backup, and decrease Plaintiffs' property values;

(4) the proposed homes are of such lesser quality than Plaintiffs' homes that the diminution in market value of the Plaintiffs' homes will amount to $9,500 for each home; and

(5) the FmHA improperly designated the Northridge community as a "rural area," as that term is defined in 42 U.S.C. § 1490 and 7 C.F.R. §§ 1933.403(j) & 1944.10(a) (1983).

The second amended complaint also sets out a "Federal Question Statement," which predicates jurisdiction of this Court on the general federal question statute, 28 U.S.C. § 1331. In that "Statement," Plaintiffs also allege (1) that SGI violated 7 C.F.R. § 404(b) (1983), a conflict-of-interest provision, and (2) that the actions of SGI and the FmHA have resulted in an uncompensated taking of private property, which is forbidden by the Fifth and Fourteenth Amendments to the United States Constitution.²

In conformity with Fed.R.Civ.P. 65(d), the Court sets forth its findings of fact and conclusions of law.

I. FINDINGS OF FACT

Based upon the record, the stipulated facts, and the evidence introduced at the December 5 & 8, 1983, hearings, the Court makes the following findings of fact:

1. Plaintiffs are real property owners of 35 parcels of land, with fully constructed homes thereon, in Northridge, Ohio, an unincorporated community north of the city of Springfield, Ohio. These homes are in subdivisions 18, 18A, 2 and 15 of Northridge, and are adjacent or near to the homes being constructed under the "sweat-equity" program. (Testimony of William Braam, William Bossert; Defendants' ex. 30).

2. SGI is a non-profit Ohio corporation, which entered into a Self-Help Technical Assistance Grant Agreement with the FmHA on September 30, 1982. Under that Agreement, SGI is to receive a total of $197,500 over a two-year period from the date of the Agreement to provide a program of technical and supervisory assistance to aid groups of low income families, in the mutual self-help construction of their homes in Northridge subdivision 18A. (Testimony of Stanley Turner; Defendants' ex. 10³).

3. The FmHA approved SGI's application for a Self-Help Technical Assistance Grant on September 30, 1982. The FmHA determined that the application met the requirements of the statutory provisions and regulations at issue in this case. (Testimony of Stanley Turner, Carl Wagner; Defendants' ex. 10).

4. Northridge Subdivision 18A is located north of Moorefield Road, which runs in an east-west direction north of the city of Springfield. The subdivision is located approximately one mile from the Springfield city limits. Most public services for the subdivision, such as sewer and waste disposal, schools, and roads, are separate from those of the city of Springfield. (Some of these services are administered by Clark County, in which Northridge lies.) The only public service combined with Springfield is the potable water system, in which Clark County purchases the water from Springfield and resells it to subdivision residents. Northridge, as a whole, contains stores, professional offices, service stations, and other commercial entities. Farm land and other open space lies north and west of subdivision 18A. The population of Northridge, north of Moorefield Road, is undoubtedly less than 2,500.⁴ (Testimony of William Bossert, Carl Wagner, Stanley Turner; Plaintiffs' ex. L, Defendants' exs. 25A, 25B, 26; Stipulated Facts, doc. # 49).

5. In May of 1981, Carl Wagner, administrative supervisor for the FmHA over Clark County, prepared a map designating certain areas in Clark County to be "rural" and "non-rural," and those terms are defined in the relevant statutes and regulations. He relied upon census data and his own examination of the character of subdivision 18A, in designating the subdivision (and other areas north of Moorefield Road) as "rural." More specifically, Wagner, in making this decision, drove by car through the area, consulted aerial photographs of the area (prepared by the Department of Agriculture), consulted with officials of the Soil Conservation Service of the Department of Agriculture, the Clark County Engineer, and members of the Clark County Planning Commission, reviewed the 1980 census data for Clark County (and determined that the area of Northridge north of Moorefield Road has less than 2,500 residents), and reviewed FmHA files for Clark County, which indicated that several FmHA loans were made to residents of Northridge. Wagner considered drawing the "rural/non-rural" dividing line at Route 334, which is south of Moorefield Road, and north of which he considered rural in character. He declined to do so, however, since a dividing line at Route 334 would have bisected the Clarence J. Brown, Sr., Reservoir and created administrative difficulties. (Testimony of Carl Wagner; Defendants' ex. 24).

6. The 1980 Census revealed the population figures:

                City of Springfield                72,563
                Moorefield Township                 9,823
                Northridge                          5,559
                Dayton/Springfield Metropolitan   942,083
                Statistical Area
                

(Plaintiffs' exs. F & G).

7. Stanley Turner is the Executive Director of SGI, and the authorized representative of SGI concerning the Self-Help Technical Assistance Grant. Mr. Turner has no pecuniary interest in any aspect of the Grant. (Testimony of Stanley Turner; Defendants' ex. 5, pp. 1, 21).

8. SGI has the background and experience, with a proven ability to perform responsibly in the field of mutual self-help housing. SGI has administered three grants or programs for the city of Springfield: (1) a housing rehabilitation program, funded in an amount totalling over one million dollars by a Community Development Block Grant received by the city from the Department of Housing and Urban Development; (2) an Urban Homesteading Program under which SGI receives homes repossessed by the FmHA and makes these homes available to prospective homesteaders who are willing and able to repair and rehabilitate these homes; and (3) a Voluntary Acquisition Program under which SGI acquires, rehabilitates and resells homes which the owners cannot or will not maintain to conform to housing code standards. (Testimony of Stanley Turner; Defendants' ex. 5, pp. 3-4).

9. The application filed by SGI with the FmHA set forth statistical data demonstrating a need for self-help housing in Clark County. More specifically, that data included information as to new single-family housing construction in Clark County, the income level of County residents, and a description of existing housing conditions in two communities (Limecrest and Crystal Lakes/Medway) within rural Clark County. When SGI filed its grant application, the FmHA had over 500 applications from low income residents from Clark County seeking assistance in the purchase of single-family homes in the County, under the FmHA's "502 program" (i.e., ...