Grant v. City of Roanoke
| Decision Date | 18 March 2019 |
| Docket Number | Civil Action No. 7:16-CV-00007 |
| Court | U.S. District Court — Western District of Virginia |
| Parties | MARK T. GRANT, Plaintiff, v. CITY OF ROANOKE, Defendant. |
MEMORANDUM OPINION
Plaintiff Mark T. Grant, proceeding pro se, filed this action under 42 U.S.C. § 1983 against the City of Roanoke (the "City"), alleging that the City improperly retained $26,257.30 from the sale of certain real property. The property at issue was previously rehabilitated for occupancy using funds awarded to the City through the federal HOME Investment Partnerships Program. Grant claimed that the City violated regulations implementing the HOME Investment Partnerships Act ("HOME Act") and his right to due process.
The case was initially assigned to Senior United States District Judge Glen E. Conrad. On July 18, 2017, Judge Conrad ruled that Grant had no viable claim for damages under the HOME Act itself or § 1983 for alleged violations of the Act and its implementing regulations. Accordingly, Judge Conrad granted the City's motion for summary judgment with respect to those claims. The City then filed a supplemental motion for summary judgment on the plaintiff's claim that he was denied due process. On November 7, 2017, that motion was granted in part and denied in part. Finding issues of fact as to whether Grant received adequate notice and an opportunity to be heard, Judge Conrad denied the City's motion for summary judgment on the issue of procedural due process. However, to the extent that the complaint could be read to assert a violation of substantive due process, Judge Conrad concluded that the City was entitled to summary judgment on such claim.
Following an unsuccessful attempt at mediation, the case was transferred to the undersigned for the conduct of all further proceedings. On December 17, 2018, the parties appeared before the court for a bench trial on the procedural due process claim. Having considered all of the evidence together with the applicable law, the court issues this memorandum opinion, which sets forth its findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). For the reasons stated herein, the court will enter judgment in favor of the City on the remaining claim.
1. The City participates in the HOME Investment Partnerships Program ("HOME Program"), a federal grant program that provides funding to states and localities to be used to increase the supply of affordable housing available for low and moderate income residents. The HOME Program is administered at the federal level by the Department of Housing and Urban Development ("HUD").
2. In 2002, the City partnered with Blue Ridge Housing Development Corporation ("BRHDC") to develop and rehabilitate housing for sale to purchasers meeting HUD's income criteria. Pursuant to the partnership agreement, the City gave BRHDC approximately $101,119.05 in HOME funds to acquire and develop property located in the City at 607 Bullitt Avenue ("the Property").
3. In late 2004 or early 2005, the plaintiff and his wife, Lori M. Grant, began looking for a house to buy in Roanoke. They planned to move to the area from New York after the plaintiff completed his service in the United States Army. While driving around Roanoke with a real estate agent, the Grants saw a "for sale" sign in front of the Property, which was new and in their price range. After touring the Property with their agent, the Grants expressed an interest in purchasing it.
4. The Grants met with representatives of BRHDC and were found to satisfy the eligibility requirements of the HOME Program. On May 20, 2005, the Grants bought the Property from BRHDC for $85,000.00. The funds used to pay the purchase price and additional closing costs were derived from the following sources: (1) an $80,000.00 mortgage loan; (2) a $2,200 HOME grant from the Virginia Department of Housing and Community Development; (3) a community development block grant ("CDBG grant") in the amount of $6,400.00; and (4) $100.00 in cash, paid out-of-pocket by the buyers.
5. The Property was subject to certain use and resale restrictions for a period of 15 years, based on the amount of HOME funds used to develop the Property. The restrictions were imposed by a Declaration of Restrictive Covenants ("Restrictive Covenants") that was signed by the City, BRHDC, and the Grants. The Grants executed the Restrictive Covenants in the presence of a notary public on May 20, 2005. The Restrictive Covenants were recorded in the Roanoke City Circuit Court Clerk's Office that same day.
6. The Restrictive Covenants provided that "[t]he terms and conditions herein shall apply for a period of 15 years from the date this document is recorded ('the period of affordability')." Restrictive Covenants 1, ECF No. 16-1. In accordance with regulationspromulgated by HUD, the Restrictive Covenants specified that the Property could only be conveyed to "a family having a gross family income not exceeding 80% of the area median," and that the family "shall use the Property as its principal residence." Id.; see also 24 C.F.R. § 92.254(a)(3) ().
7. The Restrictive Covenants also provided that the City "shall be notified of any . . . impending resale" within the period of affordability. Restrictive Covenants 1. The Restrictive Covenants further provided, in relevant part, as follows:
8. City officials were not present for the closing on the sale of the Property. The plaintiff had no discussions with City officials regarding the Property or the Restrictive Covenants at that time.
9. The Grants moved into the Property in May of 2006, after the plaintiff completed his military service. They continued to use the Property as their principal residence until 2010, when they purchased a home in Hardy, Virginia. That same year, the Grants moved to Hardy. They subsequently rented the Property to at least two individuals. The amount of rent charged by the Grants was higher than their monthly mortgage payment on the Property.
10. At some point in 2013, the Grants decided to sell the Property. The plaintiff met with a listing agent, who advised him that the Property was still subject to the Restrictive Covenants.
11. The plaintiff obtained a copy of the Restrictive Covenants and then contacted several attorneys. The attorneys indicated that it would be difficult to avoid the terms of the Restrictive Covenants. After researching the matter on his own, the plaintiff came to believe that certain provisions of the Restrictive Covenants were invalid.
12. In late 2013, the plaintiff went to the City's Department of Planning, Building & Development to speak with someone about the Restrictive Covenants. He eventually met with Crystal Hypes, who held the position of HUD Community Resources Program Specialist II. Hypes was responsible for administering the grant funds obtained through the HOME Program.
13. During his meeting with Hypes, the plaintiff indicated that he and his wife had listed the Property for sale and that a prospective buyer, Devin Brown, had made an offer to purchase the Property. The plaintiff also indicated that he and his family were no longer living there. The plaintiff presented Hypes with a copy of the Restrictive Covenants and inquired as to how the provisions would affect the potential sale. Hypes advised the plaintiff that theProperty was still subject to the terms of the Restrictive Covenants since the 15-year affordability period had not expired, and that the proceeds from any sale within that period would be shared in accordance with the formulas set forth in the Restrictive Covenants.
14. The plaintiff and Hypes discussed the fact that the resale provisions allowed for owners of the Property to recover "any capital improvement investment." The plaintiff told Hypes that he had installed interior cabinets and was planning to build a shed on the Property. Hypes advised the plaintiff that such additions would not qualify as capital improvements for purposes of the Restrictive Covenants. Consequently, the plaintiff did not provide the City with receipts for the cabinets or other improvements made to the Property.
15. The plaintiff also learned that the City did not consider mortgage payments to be part of the "homeowner investment" for purposes of the resale formulas. As a result, the Grants would not recover any equity accumulated from making such payments if they sold the Property prior to the expiration of the 15-year affordability period.
16. Hypes emphasized to the plaintiff that the resale restrictions only applied for a period of 15 years. Hypes recommended that the Grants move back into the Property and wait until the affordability period expired before selling it, so that they would not have to share the sales proceeds with the City.
17. The plaintiff also met with Keith Holland, the Community Resources Program Administrator and Hypes' supervisor. The plaintiff disputed what Hypes had told him about the...
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