Opinion ID: 3064793
Heading Depth: 3
Heading Rank: 2

Heading: ELIHPA Created a New Restricted-Use Period.

Text: [7] Schroeder next contends that ELIHPA does not extend the Loan Covenant and, thus, she had the right to pay the balance on her Loans as of September 2004. The relevant provision in the 1984 deed of trust states: The borrower and any successors in interest agree to use the housing for the purpose of housing people eligible for occupancy as provided in Section 515 of Title V of the Housing Act of 1949 and FmHA regu- lations then extant during this 20 year period beginning August 31, 1984. No person occupying the housing shall be required to vacate prior to the close of such 20 year period because of early repayment. Thus, Schroeder contends, she was free to discontinue offering § 515 housing upon the expiration of the aforementioned twenty-year period. Schroeder’s argument, however, overlooks the fact that the deed of trust is not the only document imposing obligations on the use of the property; the loan agreement, which she voluntarily executed in 1984, imposes additional restrictions. That agreement requires her to use the property as low-income housing “so long as the loan obligation remains unsatisfied.” Under ELIHPA, Schroeder may not repay the loans—and thus the “loan obligation [will] remain[ ] unsatisfied”—until either: (1) she completes the prepayment procedures outlined in ELIHPA; or (2) the loan period expires. See Franconia, 536 U.S. at 143. Thus, until one of these events occurs, Schroeder is bound to continue using her property as low-income housing. [8] It is undisputed that Schroeder has not completed ELIHPA’s procedures and that the latter of the Loan terms will 7406 SCHROEDER v. UNITED STATES not expire until 2034. Therefore, Schroeder is still bound by the requirements, as imposed by the loan agreement and ELIHPA, to use the property as low-income housing. The district court did not err in so holding. II. The District Court Did Not Abuse its Discretion in Declining to Quiet Title to Schroeder’s Property. Finally, Schroeder argues that the district court abused its discretion in declining to quiet title to her property. As stated above, because this suit involves contracts with the federal government, federal common law applies. See Clearfield Trust Co. v. United States, 318 U.S. 363, 366 (1943); N. Side Lumber Co., 753 F.2d at 1484. We assume, without deciding, that a quiet title remedy is available to Schroeder under federal common law. See Kimberly Assocs., 261 F.3d at 870. But see DBSI/TRI, 465 F.3d 1041 (questioning scope and validity of Kimberly). Even under this assumption, however, we conclude the district court did not abuse its discretion in declining to grant that relief. [9] First, equitable relief is not appropriate where an adequate remedy exists at law. Mort v. United States, 86 F.3d 890, 892 (9th Cir. 1996) (“‘It is a basic doctrine of equity jurisprudence that courts of equity should not act . . . when the moving party has an adequate remedy at law . . . .’ ” (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381 (1992))). Here, as the district court rightly determined, an adequate remedy exists. The Supreme Court has made clear that, by prohibiting unfettered prepayment, ELIHPA “effected a repudiation of” existing loan contracts. Franconia, 536 U.S. at 143; see also Franconia, 61 Fed. Cl. at 740. Therefore, Schroeder may seek compensation for that repudiation in the Court of Federal Claims under the Tucker Act, 28 U.S.C. § 1491. See DBSI/TRI, 465 F.3d at 1041 & n.8 (“[T]he Supreme Court noted the availability of a damages action SCHROEDER v. UNITED STATES 7407 under the Tucker Act to compensate owners for contracts breached because of ELIHPA.” (citation omitted) (citing Franconia, 536 U.S. 129)). [10] Second, Schroeder has not shown that the equities favor relief. In declining to grant equitable relief, the district court concluded that “the importance of preserving that which ELIHPA seeks to preserve (i.e., a reduction in Section 515 mortgage repayments, a reduction in the loss of low-income housing units, and a reduction in the displacement of Section 515 residents) outweighs the burden to Plaintiff of complying with ELIHPA.” We agree.