Nambe Pueblo Hous. Entity v. United States Dep't of Hous. & Urban Dev.

• Decision Date: 04 September 2012
• Docket Number: Civil Action No. 11-CV-01516-RPM
• Parties: NAMBE PUEBLO HOUSING ENTITY, Plaintiff, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD), SHAUN DONOVAN, Secretary of HUD, SANDRA HENRIQUEZ, Assistant Secretary for Public and Indian Housing, and DEBORAH LALANCETTE, Director, HUD's Office of Grants Management, National Office of Native American Programs, Defendants.
• Court: U.S. District Court — District of Colorado

NAMBE PUEBLO HOUSING ENTITY, Plaintiff, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) SHAUN DONOVAN, Secretary of HUD SANDRA HENRIQUEZ, Assistant Secretary for Public and Indian Housing, and DEBORAH LALANCETTE, Director HUD's Office of Grants Management, National Office of Native American Programs, Defendants.

Civil Action No. 11-CV-01516-RPM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Dated: September 4, 2012

Senior District Judge Richard P. Matsch

MEMORANDUM OPINION AND ORDER ON ISSUES PRESENTED IN THE

SPECIAL BRIEF OF PLAINTIFF NAMBE PUELBO HOUSING ENTITY

Plaintiff Nambe Pueblo Housing Entity is a governmental agency of the Nambe Pueblo, a federally recognized Indian Tribe in New Mexico. The Plaintiff is a Tribally Designated Housing Entity (TDHE), authorized to receive and administer Indian Housing Block Grant (IHBG) funds awarded annually to the Tribe by the United States Department of Housing and Urban Development (HUD). HUD is the federal agency within the United States government designated to oversee and administer housing assistance to eligible Indian Tribes pursuant to the Native American Housing Assistance and Self-Determination Act (NAHASDA), 25 U.S.C. § 4101 et seq. The IHBG program and the formula for determining each Tribe's share of theannual NAHASDA appropriation are described in Fort Peck Housing Authority v. HUD, 435 F. Supp. 2d 1125, 1127-28 (D. Colo. 2006), rev'd 367 Fed. Appx. 884 (10th Cir. 2010) (unpublished), cert. denied, 131 S.Ct. 347 (2010).

On June 10, 2011, Nambe Pueblo Housing Entity (Nambe Pueblo) filed this action pursuant to the Administrative Procedure Act (APA), 5 U.S.C. §§ 701-06, challenging HUD determinations that resulted in the elimination of certain Mutual Help units from the Formula Current Assisted Stock (FCAS) component of Nambe Pueblo's IHBG allocation and reductions to Nambe Pueblo's grant allocations for fiscal year (FY) 2006 and subsequent years.

This action is one of several related actions pending in this court involving challenges to HUD's reductions of the plaintiffs' IHBG awards and HUD's authority to recapture purported grant overfunding. Legal issues common to the related actions have been decided in the Memorandum Opinion and Order dated August 31, 2012, in Fort Peck Housing Authority v. HUD et al., Civil Action No. 05-cv-00018-RPM. Nambe Pueblo and the Defendants (collectively, HUD) have submitted briefs addressing issues unique to the claims of Nambe Pueblo. Arguments of counsel were heard on May 30, 2012.

Nambe Pueblo challenges a series of HUD determinations regarding the FCAS eligibility of twenty-three (23) units in two housing projects known as NM99B040011 (Project 11) and Project NM99B040013 (Project 13). These projects are located in northern New Mexico on the reservation of the Pueblo of Nambe, on land held in trust by the United States Government. Nambe Pueblo also disputes HUD's determinations regarding the FCAS eligibility of one unit in another project known as Project 17. During oral argument Plaintiff's counsel stated that disputes about the one unit in Project 17 could be determined, if necessary, during the countingphase of the coordinated proceedings. Accordingly, this opinion and order addresses only the challenged agency determinations regarding the 23 units located in Projects and 11 and 13.

The subject housing projects were built in the 1980s. At that time, the Northern Pueblos Housing Authority, an Indian Housing Authority, was acting on behalf of several tribes, including Nambe. (See Pl.'s RA 7, at p. 5 of 10). Northern Pueblos Housing Authority held land leases for the subject projects. (See id.)

In 1998, the Pueblo of Nambe withdrew from the Northern Pueblos Housing Authority and created Nambe Pueblo Housing Entity to be its tribally designated housing entity. (Pl.'s RA 7 at p. 6). In 1999, Nambe Pueblo Housing Entity assumed responsibility for the management of housing units located in the subject projects.

Transfer of legal ownership of the projects from Northern Pueblos Housing Authority to Nambe Pueblo required the execution and recording of quitclaim deeds for the projects and the execution of new land leases to Nambe Pueblo. The Bureau of Indian Affairs (BIA) Division of Land Titles and Records has responsibility for recording and maintaining documents affecting title to Indian Land.

In 2003, Northern Pueblos Housing Authority and Nambe Pueblo signed a quitclaim deed by which Northern Pueblos Housing Authority quitclaimed Project 11 to Nambe Pueblo. (See Pl.'s RA 7 at 6 (describing the quitclaim process)). In 2005, the quitclaim deed was amended to include Project 13. The amended quitclaim deed was sent to the BIA for approval and was recorded in the Land Titles and Records Office on October 6, 2006. (Id) In December 2006,Nambe Pueblo learned that the amended quitclaim deed for Projects 11 and 13 had been recorded. (See Pl.'s Ex. at to Pl.'s RA 7).¹

There are a total of 47 Mutual Help units in Projects 11 and 13. The date of full availability (DOFA) for those units was September 30, 1980, which indicates that the 25-year "lease-purchase" period generally would have expired on or about October 1, 2005. After that date, Nambe Pueblo continued to operate and maintain the units and did not convey them to the homebuyers.

As the operator of the projects, Nambe Pueblo charged administrative fees to the homebuyers. Some homebuyers refused or failed to pay those fees, which resulted in the accumulation of tenant account receivables (TARs).

On Nambe Pueblo's Formula Response Form for FYs 2005, 2006, 2007 and 2008, the 47 units were included in the Tribe's FCAS inventory. For those fiscal years, the annual allocations which HUD paid to Nambe Pueblo included FCAS funding for those units.

On June 23, 2008, HUD sent a letter to Nambe Pueblo questioning the FCAS eligibility of the 47 Mutual Help units in Projects 11 and 13. (Defs.' RA C). HUD's letter pointed out that the 25-year lease-purchase period should have expired on October 1, 2005, and requested information about why the Tribe had not conveyed the units to the homebuyers.

In July 2008, representatives of the BIA and Nambe Pueblo met and discussed the process of recording quitclaim deeds to homebuyers. (Pl.'s RA 7, Ex. B). The BIA advised Nambe Pueblo that the Tribe would need to prepare quitclaim deeds for units to be conveyed andsubmit the deeds to the BIA for approval and filing at the Southwest Regional Office, Division of Land Titles and Records Office. Around this time it was also discovered that a new Master Lease needed to be recorded for Projects 11 and 13 before the BIA could approve quitclaim deeds to homebuyers. (Id.)

In a letter dated September 18, 2008, Nambe Pueblo responded to HUD's inquiry about the status of the 47 units, identifying each unit, the name of the homebuyer, and the conveyance status. The Tribe explained that between April, 2007 and January, 2008, Nambe Pueblo had delivered quitclaim deeds for 24 units to the BIA for approval and recording, and the Tribe was still waiting for BIA approval or recording of the deeds. With respect to the other 23 units, Nambe Pueblo explained:

• 9 units had no delinquent balances in 2005 and Nambe Pueblo was awaiting Board action to convey the units;

• 6 units had not been conveyed because there were delinquent accounts, which Nambe Pueblo had addressed through payback agreements;

• 3 accounts were paid off and Nambe Pueblo was awaiting execution of quitclaim deeds by the homebuyers;

• 1 account was paid off but still under Nambe Pueblo's management because it was receiving renovation work;

• The Board was expected to approve conveyances of 4 units in October 2008.

(Defs.' RA D).

In a letter dated November 18, 2008, HUD informed Nambe Pueblo of HUD's determination that five (5) Mutual Help units in Projects 11 and 13 had become ineligible forFCAS funding as of fiscal year 2006. (Defs.' RA E). HUD stated that TARs were not a sufficient reason for delaying conveyance, citing NAHASDA Guidance 98-19, which states: "Because promissory notes can be issued, TARs alone are not adequate grounds for failure to convey units that are otherwise conveyance eligible."² HUD informed Nambe Pueblo that the Tribe had incorrectly received grant funds in the following amounts: $14,506 for the 5 units for fiscal year 2006; $15,757 for the 5 units fiscal year 2007, and $16,181 for the 5 units fiscal year 2008. HUD stated that Nambe Pueblo would need to repay the overfunded amount of $ 46,161. (Defs.' RA E).³

With respect to the remaining 42 units, HUD stated, "We are working with the BIA on the quitclaim process ... In the interim, the units will remain on the Tribe's FCAS until we can make a determination of their eligibility for funding under the IHBG program." (Id.) HUD informed Nambe Pueblo:

Should you disagree with this decision, you have the right to file an appeal within 30 days of the date of this letter. HUD's policy is to afford tribes the same appeal rights afforded tribes who dispute data in accordance with [24 C.F.R.] § 1000.336.

(Defs.' RA E).

On November 21, 2008, Nambe Pueblo learned that the BIA had been unable to record Nambe's quitclaim deeds to homebuyers because a Master Lease for Projects 11 and 13 had not yet been recorded, although the Master Lease had been transmitted for recording on September 17, 2008. (Pl.'s RA 7, Ex. B).

In a letter to HUD dated December 17, 2008, Nambe Pueblo appealed HUD's decision about the 5 units which HUD had determined were no longer eligible for FCAS funding. (Defs.' RA F). Nambe Pueblo explained that TARs were not the only reason these units had not been conveyed. Nambe Pueblo stated that title problems had prevented timely conveyance, explaining that Nambe Pueblo had not received quitclaim deeds for the Projects from Northern Pueblos Housing Authority until late 2006, and the BIA was unable to transmit quitclaim deeds for units in the two projects...