Opinion ID: 771678
Heading Depth: 3
Heading Rank: 4

Heading: Contract Arguments

Text: 36 The City argues that Homeowners cannot enforce the MOA because they lack privity of contract and are not intended beneficiaries of the MOA. The MOA is a contract and the City is bound by its terms. See Citizens' Comm. for Envt'l Protection v. United States Coast Guard, 456 F. Supp. 101, 115 (D.N.J. 1978). Federal law controls the MOA's interpretation because it was entered into pursuant to a federal scheme and HUD is a party. See Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 2000) (holding that federal law controls the interpretation of a contract entered into pursuant to federal law when the United States is a party). The interpretation of a contract is a mixed question of law and fact subject to de novo review. In particular, the determination of whether contract language is ambiguous is a question of law. Id. (citation omitted). 37 Stipulation 5 of the MOA specifically provides that if a member of the public makes a written complaint, the City shall take the objection into account and consult as needed with the objecting party. While Homeowners were not signatories to the MOA, Stipulation 5 specifically provides that objections can be raised by members of the public. See Waterford Citizens' Ass'n v. Reilly, 970 F.2d 1287, 1290 (4th Cir. 1992) (holding that a citizen's association had standing to enforce the provisions of a MOA for a nearby sewer, even when it was neither a party to nor mentioned in the MOA). In Tyler II, we distinguished Citizens' Committee, 456 F. Supp. at 115, by noting that there the court held that plaintiffs could not enforce an Agreement entered into for purposes of NEPA when they were not signatories to it, nor mentioned in it . . . . Here, however, the public's right to bring objections is specifically mentioned in the Agreement. Tyler II, 136 F.3d at 610 (citation omitted). 38 The City nonetheless argues that Homeowners do not have standing to challenge the MOA because they are not third-party beneficiaries. See Helfand v. Gerson , 105 F.3d 530, 538 (9th Cir. 1997) (Courts have extended the right to sue for breach of contract to intended third-party beneficiaries.). Before a third party can recover under a contract, it must show that the contract was made for its direct benefit -that it is an intended beneficiary of the contract.  Klamath Water Users, 204 F.3d at 1210. Although Homeowners were not concurring parties to the MOA, this is not conclusive as a matter of law to show that they were not intended beneficiaries, especially since the public is specifically referenced in Stipulation 5. See 36 C.F.R. 800.5(e)(4) (1986); Klamath Water Users, 204 F.3d at 1210. It would appear that Stipulation 5's reference to the public would include Homeowners and, thus, that Homeowners have standing as third-party beneficiaries to the MOA. 39 We conclude that Homeowners have adequately alleged Article III standing as against the City under Stipulation 5. 10 They have also adequately alleged standing to survive the City's contract-based arguments on a motion to dismiss.