2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-30-2015

Kenneth Taggart v. GMAC Mortgage LLC

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Recommended Citation

"Kenneth Taggart v. GMAC Mortgage LLC" (2015). 2015 Decisions. Paper 108.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

________________

No. 13-3781

________________

KENNETH J. TAGGART,

 Appellant

v.

GMAC MORTGAGE, LLC; UNITED STATES OF AMERICA;

DEPARTMENT OF HOUSING & URBAN DEVELOPMENT (HUD);

THE FEDERAL HOUSING ADMINISTRATION (FHA); DOES

________________

On Appeal from the District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 2-12-cv-00415)

District Judge: Honorable J. William Ditter, Jr.

________________

Submitted Pursuant to Third Circuit LAR 34.1(a)

November 20, 2014

Before: AMBRO, SCIRICA, and ROTH, Circuit Judges

(Filed: January 30, 2015)

________________

OPINION*

________________

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent.
2

SCIRICA, Circuit Judge

Kenneth Taggart appeals the District Court’s orders dismissing his amended 

complaint and granting summary judgment in favor of defendants, the United States, the 

Department of Housing and Urban Development (“HUD”), and the Federal Housing 

Administration (“FHA”) (collectively, “the Government”). We will affirm.

I.

The following undisputed facts were set out in the District Court’s Memorandum. 

Taggart was an appraiser of properties for both FHA-insured and non-FHA-insured 

mortgages. HUD regulations permit only appraisers on HUD’s “Appraiser Roster” to 

appraise “property that is to be the security for an FHA-insured single family mortgage.” 

24 C.F.R. § 200.200(a). To be eligible for placement on the Appraiser Roster, an 

appraiser must both (1) be state-certified and (2) not appear on any of three lists, 

including HUD’s Credit Alert Verification Reporting System (“CAVRS”). Id.

§ 200.202(b). 

Taggart was once on HUD’s Appraiser Roster. He also personally held an FHAinsured mortgage serviced by GMAC Mortgage, LLC (“GMAC”). Taggart and GMAC 

disagreed about the payments Taggart owed, and as a result of Taggart’s failure to pay 

what GMAC demanded, GMAC reported through CAVRS that Taggart was in default 

and initiated a foreclosure action in state court. In response to the CAVRS report, on 
3

January 27, 2010, HUD removed Taggart from the Appraiser Roster, admittedly without 

following proper removal procedures.1

After Taggart filed the present action, HUD attempted to remedy its earlier 

mistake by rescinding his removal and reinstating him to the Appraiser Roster. HUD sent 

Taggart a letter on April 5, 2012, “reinstat[ing Taggart] to active status on the FHA 

Appraiser Roster, effective immediately,” and informing him that it intended to initiate 

removal proceedings because he was still listed on CAVRS. On April 12, 2012, HUD resent a nearly identical letter fixing May 2, 2012, as the date by which Taggart could 

“submit a written response appealing the proposed removal and/or requesting a 

conference.” Taggart wrote back four days later requesting a conference, demanding a 

jury trial, and asking several questions about the conference. HUD responded to some of 

these inquiries on May 10, 2012, and it offered May 14 or May 17 as potential conference 

dates. 

Although a HUD official notified Taggart by e-mail on May 14, 2012, that the 

conference would “not [be] a formal hearing nor a jury trial,” and Taggart renewed his 

objection, he attended the hour-long conference at HUD’s office on May 17, 2012, 

presided over by Anthony Triolo, a Supervisory Housing Program Specialist at HUD. 

Taggart brought along a court reporter who transcribed the proceedings. On June 14, 

2012, Triolo sent Taggart a letter removing him from the Appraiser Roster on the 

 

1 According to HUD regulations, an appraiser may be removed “from the Appraiser 

Roster for cause,” 24 C.F.R. § 200.204(a), which includes the “[f]ailure to maintain 

eligibility requirements,” id. § 200.204(a)(1)(vii). HUD regulations define the procedures 

the agency must follow to remove an appraiser for cause. See id. § 200.204(a)(2).
4

grounds that his “inclusion in the [CAVRS]system render[ed him] ineligible.” Although 

“during [the] conference . . . [Taggart] made allegations regarding fraudulent foreclosure 

documents filed . . . by . . . GMAC,” Triolo found that Taggart “offered no testimony or 

documentation to support [those] allegations.” Triolo wrote that he had used 

Neighborhood Watch, an FHA program, to verify that Taggart was 39 months in default 

and owed in excess of $162,000.00.

Taggart filed this suit pro se on January 20, 2012 (he was later represented in the 

District Court by counsel, as he is here), and filed the final amended complaint on March 

22, 2012, alleging 16 counts against the Government. On the Government’s Federal Rule 

of Civil Procedure 12(b)(6) motion, the District Court on November 26, 2012, dismissed 

all of Taggart’s claims, “with the exception of Taggart’s due process claim for equitable 

relief based on the inadequacy of his conference with HUD.” At least four of the 

dismissed claims sought damages from the Government and were dismissed as barred by 

sovereign immunity. 

The Government, having not initially addressed the merits of the due process 

claim, moved again to dismiss this remaining claim, and the District Court heard 

counseled argument and, under Federal Rule of Civil Procedure 12(d), converted the 

motion to one for summary judgment. After accepting additional briefs and exhibits, the 

court granted summary judgment on the ground that “Taggart was given a full and fair 

opportunity to show he should not have been removed from the Appraiser Roster. 

Because Taggart received all the process he was due, HUD’s decision was not arbitrary 

and capricious, and the federal defendants are entitled to summary judgment.” Taggart 
5

filed a timely appeal. 

II.

Our review of the District Court’s grant of summary judgment is plenary. Miller 

v. Eichelay Eng’rs, 886 F.2d 30, 35 (3d Cir. 1989). Our review of the District Court’s 

dismissal of the claims for damages is also plenary. Byers v. Intuit, Inc., 600 F.3d 286, 

291 (3d Cir. 2010).2

III.

Taggart challenges, first, the District Court’s conclusion that he was afforded due 

process in granting summary judgment and, second, the Court’s dismissal of his “claim 

for damages” arising from “HUD’s admitted two-year defective termination.”3

A.

Taggart contends the District Court erred in finding that HUD had afforded him 

due process because the process he received was mere “pretext.” He raises three lines of 

argument. First, “an adversarial, counseled true hearing [was] required (with burdens of 

proof and a neutral decision-maker).” In the alternative, he argues, under the Supreme 

Court’s due process balancing test set out in Mathews v. Eldridge, 424 U.S. 319 (1976), 

he did not receive adequate process. As his demand for a “true hearing”—which is 

simply a statement of what process was due—is part of the Mathews analysis rather than 

an “alternative,” we will address both arguments together. Finally, he appears to argue 

 

2 The District Court had jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under 

28 U.S.C. § 1291. 

3 As best we can tell, this is the only portion of the November 26, 2012, order that 

Taggart appeals. 
6

throughout that HUD’s decision was arbitrary or capricious under the Administrative 

Procedure Act, 5 U.S.C. § 706(2)(A). 

1.

In order to determine what process is due in a given situation involving 

employment-based property rights, courts look to the test the Supreme Court laid down in 

Mathews, which asks courts to balance “the private interests in retaining employment, the 

governmental interest in the expeditious removal of unsatisfactory employees and the 

avoidance of administrative burdens, and the risk of an erroneous termination.” 

Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542-43 (1985) (citing Mathews, 424 

U.S. at 335). The District Court applied this test and determined that because placement 

on the Appraiser Roster “neither guarantees income nor precludes other employment,” 

only “minimal safeguards” are required. Next, because the procedures in place allow the 

individual an opportunity to present evidence at an in-person, pre-removal conference, 

the court found that “[a]dditional procedures would be of little or no value.” Finally, the 

court found that “it is important for the government to have an efficient procedure for 

removing poorly performing appraisers or those who do not comply with HUD’s 

eligibility requirements.” Taggart challenges all of these determinations.

We believe that Loudermill answers the question before us. There, the Supreme 

Court held that “[t]he tenured public employee is entitled to oral or written notice of the 

charges against him, an explanation of the employer’s evidence, and an opportunity to 
7

present his side of the story.” Loudermill, 470 U.S. at 546.4 That is, “one essential 

component of due process [is] a pretermination opportunity to respond.” McDaniels v. 

Flick, 59 F.3d 446, 454 (3d Cir. 1995). “In general, ‘something less’ than a full 

evidentiary hearing is sufficient prior to adverse administrative action.” Loudermill, 470 

U.S. at 545 (quoting Mathews, 424 U.S. at 343). 

Here, Taggart received written notice of the charges against him and an 

explanation of HUD’s evidence via HUD’s April 5 and 12, 2012, letters. As the District 

Court noted, although “only 4 or 7 days separated HUD’s notification of dates and the 

proposed conference dates,” “more than 30 days separated the initial notices and the 

conference date” and “Taggart was aware of the issue—his alleged default—for over two 

years”—because he had been litigating it in the state foreclosure proceedings since 2009 

and had been previously removed from the Roster for the same reason in 2010. Taggart 

asserts, however, that had he had more time, and counsel,5 he would have been able to 

produce evidence that GMAC’s report was in error. We think the District Court correctly 

found that Taggart did not show that any additional time, either before or during the 

conference, would have helped him to produce additional evidence and thus to reduce the 

potential for error in these proceedings. 

 

4 Even assuming Taggart is correct that the significance of his property interest was 

understated by the District Court, he received all the process that he was due under the 

more taxing standard set out by Loudermill. 

5

In fact, the record makes clear that Taggart was permitted to bring counsel—HUD’s 

May 10, 2012 letter explained that Taggart or his “designated representative” could 

appear.
8

Taggart also received “an opportunity to present his side of the story” at the May 

17 conference. Loudermill, 470 U.S. at 546. Taggart cites Bell v. Burson, 402 U.S. 535 

(1971), in support of his proposition that the District Court “fail[ed] to substantively 

consider that the process afforded was inherently defective: CAVRS reporting equals 

termination regardless of error (to wit, it is robotic).” Bell stands for the proposition that 

where deprivation of a right cognizable under due process is conditioned on a certain 

factor, the government must provide an opportunity for “consideration of that factor in its 

prior hearing.” Bell, 402 U.S. at 541. Notwithstanding Taggart’s assertions to the 

contrary, HUD did “provide a forum for the determination of the question” at the heart of 

its noneligibility determination—his placement on the CAVRS list. Id. at 542. Before the 

conference, HUD’s May 10, 2012, letter informed Taggart that he would “be afforded an 

opportunity to explain why [he] should not be removed from the FHA Appraiser Roster, 

and given the opportunity to provide support for that proposition,” including any 

documentation he might wish to present. At the conference, Triolo repeatedly assured 

Taggart that he could rebut GMAC’s CAVRS report. But “[n]ot once did Taggart offer to 

present some evidence or testimony and [have] that request [be] denied by HUD.” We 

cannot therefore say that HUD in any way prevented Taggart from having a meaningful 

opportunity to present his side of the story. 

To the extent Taggart raises other arguments that he was not afforded due process, 

we think the District Court properly addressed and rejected them. In sum, we conclude 

that Taggart received all the process he was due.

2.
9

Next, HUD’s decision was not arbitrary or capricious within the meaning of the 

Administrative Procedure Act, 5 U.S.C. § 706(2)(A), as Taggart appears to suggest. 

Though it is not clear that Taggart has properly raised this issue on appeal, we note that 

arbitrary and capricious review of agency action requires review only of “whether the 

[agency’s] decision was based on a consideration of the relevant factors and whether 

there has been a clear error of judgment.” Citizens to Pres. Overton Park, Inc. v. Volpe, 

401 U.S. 402, 416 (1971) (citations omitted). We think it readily apparent that HUD 

satisfied this deferential standard. 

As described above, Triolo’s June 14, 2012, letter to Taggart informed him of the 

reason for his removal from the Appraiser Roster. As Triolo explained, during the 

conference, Taggart “alleged that [he was] improperly placed [on CAVRS]; however, 

[he] offered no testimony or documentation in support of that proposition. Bald assertions 

without foundation will not suffice.” Triolo therefore accepted that Taggart was in default 

and appropriately on CAVRS. Because HUD’s regulations permitted it to remove an 

individual from the Appraiser Roster if listed on CAVRS, and, as the District Court 

noted, because Taggart received all the process he was due throughout the removal 

process, it cannot be said that HUD’s determination was arbitrary and capricious. 

B.

Finally, Taggart argues the District Court erred in “fail[ing] to address HUD’s 

admitted two-year defective termination . . . giving rise to [his] claim for damages.” To 

the contrary, the District Court addressed all of Taggart’s multiple damages claims and 

correctly found them barred by sovereign immunity in its November 26, 2012, order. 
10

As the District Court observed, “[a]bsent a waiver, sovereign immunity shields the 

Federal Government and its agencies from suit,” FDIC v. Meyer, 510 U.S. 471, 475 

(1994), even when those claims are constitutional in nature, see e.g., Bivens v. Six 

Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 410 (1971) (Harlan, 

J., concurring in the judgment). Taggart cannot proceed under the Federal Tort Claims 

Act because, even when his claims against HUD and the FHA are properly construed as 

against the United States,6they are patently not claims for which the government has 

waived sovereign immunity, as the District Court thoroughly explained. 

Accordingly, the District Court addressed Taggart’s claims for damages and 

correctly dismissed them. 

IV.

Because we see no error with the District Court’s judgments, we will affirm. 

 

6 See 28 U.S.C. § 2679(a) (“The authority of any federal agency to sue and be sued in its 

own name shall not be construed to authorize suits against such federal agency on claims 

which are cognizable under section 1346(b) of this title, and the remedies provided by 

this title in such cases shall be exclusive.”).