Opinion ID: 2980821
Heading Depth: 3
Heading Rank: 1

Heading: Initiation of negotiations

Text: The date of the initiation of negotiations is the factual issue at the heart of the Meachams’ complaint. The Meachams point to a letter from Akron, which reads that “[t]he effective date of this [notice of eligibility for HUD assistance] is September 13, 2005 which is the Initiation of Negotiations for your site.” Given this letter, the Meachams argue, they need only to have owned and to be living in 630 Diagonal since mid-March of 2005. HUD’s 2008 determination, meanwhile, insists that the initiation of negotiations took place in November 2003, when Akron offered to purchase 630 Diagonal from Thomas Faulknier, the owner of record at that time. This contention is supported by a letter from Akron to the Meachams’ attorneys that outlines the negotiations that -6- No. 10-4501 Meacham v. City of Akron took place on November 19, 2003, among Akron negotiators, John Meacham, and George Emershaw, an attorney who represented Faulknier and the Meachams. The Meachams insist that the initiation of negotiations could not have taken place in 2003, because such a conclusion would violate HUD regulations. HUD requires that “[b]efore the initiation of negotiations[,] the real property to be acquired shall be appraised . . . and the owner, or the owner’s designated representative, shall be given an opportunity to accompany the appraiser during the appraiser’s inspection of the property.” 49 C.F.R. § 24.102(c)(1). The Meachams contend that (1) there was no appraisal, and (2) if there was, there was no opportunity to accompany the appraiser; therefore, the initiation of negotiations could not have taken place in 2003. A letter from Akron to Emershaw, dated March 10, 2004, states that Akron “has offered $145,000 for this property, which amount represents the fair market value of the property as determined by an MAI appraiser, and reviewed by another MAI appraiser.” Evidence in the record also suggests that Akron attempted to contact Faulknier in June 2003, via certified mail, to inform him that he would have the opportunity to accompany the appraisers on the inspection of his property.2 HUD’s determination that the initiation of negotiations took place in November 2003 therefore finds ample support in the record. Throughout 2003, Akron conducted an appraisal, attempted to contact the owner of record to notify him of his rights in the appraisal process, and conducted negotiations for the purchase of the land. 49 C.F.R. § 24.2(a)(15)(i) defines the initiation 2 Faulknier was, throughout 2003, the owner of record of 630 Diagonal. -7- No. 10-4501 Meacham v. City of Akron of negotiations as the date when the agency initially offers just compensation to the owner of the real property. Given that there is evidence in the record suggesting that an offer of $145,000 was made in 2003, HUD’s determination that the initiation of negotiations took place in November 2003 has a rational basis and is neither arbitrary nor capricious. 2. Occupation of 630 Diagonal prior to the initiation of negotiations In order to be eligible for replacement housing assistance, the Meachams must be able to show that they both owned and occupied 630 Diagonal prior to the initiation of negotiations. HUD did not base its 2008 determination on the ownership question, but instead focused on the occupation requirement. HUD noted that the Meachams “had not occupied the home for several years prior to November of 2003 because of a fire that occurred in June of 1998 at the property. When [Akron] sent the first appraiser out to the site in August 2003, the property was vacant, not occupied by [the Meachams].” The Meachams maintain instead that they “constructively occupied” the home as it was being repaired for damage caused by the 1998 fire,3 and insist that our decision in Nagi required HUD or Akron “to apply a constructive occupancy type exception in cases of unusual circumstances and equity.” 751 F.2d at 830. HUD, meanwhile, points out that Nagi is only applicable when the displacee considered the dwelling his home, and would have met the occupancy requirement “but for economic or other circumstances beyond his control . . . .” Id. 3 The Meachams do not argue that the constructive occupation took place during the relevant 2003 period, but instead during the 2005 period, since they believe that the initiation of negotiations took place in 2005. In effect, they make no argument as to why they did not occupy the home immediately prior to November 2003. -8- No. 10-4501 Meacham v. City of Akron As the district court noted, the Meachams “received the insurance proceeds from the 1998 fire at the Residence in 2001. These proceeds were not used to restore the Residence.” Rather, the proceeds were used to rescue the home from foreclosure. The Meachams thus argue that they were unable to occupy the home, such that the constructive occupancy exception ought to apply. Alas, information submitted by the Meachams themselves to the district court belies their argument. The Meachams provided information to the district court to prove that their home and the replacement home, 590 Diagonal, were not comparable. One such submission, a letter from a contractor who worked on 630 Diagonal after the fire, read “As of March, 2003, all mechanical, structural and major systems were restored and functioning properly.” Another contractor wrote, “I had personally observed both in 2002 and later in September 2005 that all mechanical systems were functioning properly . . . . The overall general condition of the house including the 3rd floor was in my professional opinion in good living condition.” These statements tend to show that the home could have been lived in, in contrast to the Meachams’ contention that the home was unfit for their occupancy. While we normally may consider only evidence that was before the agency, this does not preclude our consideration of the contractors’ statements for two reasons. First, there is evidence that these materials were submitted to HUD prior to their 2008 determination. Second, it was the Meachams themselves who presented this evidence to the district court. The Meachams would have us consider their evidence when it is in their favor, but ignore it when it is not. We decline to engage in such compartmentalization. Finally, there is evidence in the record that Faulknier occupied 630 Diagonal at the same time that the Meachams claim they were unable to do so. On September 17, 2003, Faulknier checked a -9- No. 10-4501 Meacham v. City of Akron box on a mortgage loan application, indicating that he “presently occup[ied] [630 Diagonal] as [his] primary residence.” The Meachams argue that this should be given limited weight, given that there is no signature on the document. But, a later document that refers to that lender’s mortgage loan does bear Faulknier’s signature. Under the relevant standard of review, we must ensure that HUD examined the relevant data, and that its 2008 determination articulated a satisfactory explanation for its actions. Given the evidence in the record that the Meachams 1) did not live in 630 Diagonal immediately prior to the initiation of negotiations in 2003, and 2) were able to live in the home if they decided to do so, there is a rational connection between the facts HUD found and the choice it made.