Opinion ID: 209417
Heading Depth: 3
Heading Rank: 2

Heading: Claims during the extended period

Text: Appellants alternatively contend that the Court of Federal Claims erred as a matter of law by misapplying Franconia to the so-called extended period and abused its discretion by not granting Appellants' request to amend their Complaint to add extended period claims. Appellants' extended period contention appears to involve two distinct periods: (1) the term of the pre-1979 loans that will remain unexpired following the end of the twenty-year use restrictions agreed upon by Appellants in the incentive loans, and (2) claims based on breach of the incentive loans themselves.
As described above, the twenty-year use restriction of the incentive loan obligates Mullica to maintain the financed housing for low-to-moderate income renters until 2011. However, the incentive loan did not supplant the pre-1979 loans to Mullica and the restrictions are in effect until 2017. Similarly, the twenty-year use restriction of the incentive loan obligates Park Terrace to maintain the housing for low and moderate income renters until 2013. Concurrently, the original 1978 FmHA loans to Park Terrace are still outstanding and restrict use for eligible tenants until 2028. Appellants contend that, even if there were tender and rejection of prepayment when Appellants took the incentive loans, the bar of the statute of limitations should only extend to the end of the twenty-year restriction period because any rejection of prepayment occurred only to the extent of the use restriction. Appellants assert that new opportunities to prepay the original loans occur between 2011 and 2017 as to Mullica, and between 2013 and 2028 as to Park Terrance, because during those periods the use restrictions will have expired, which Appellants contend necessarily implies a new opportunity for breach through tender and rejection. The Court of Federal Claims analyzed Appellants' contention, namely, that a new limitations period arose for any refusal to allow prepayment, under the continuing claims doctrine. This doctrine applies where a plaintiff's claim is inherently susceptible to being broken down into a series of independent and distinct events or wrongs, each having its own associated damages. Brown Park Estates-Fairfield Dev. Co. v. United States, 127 F.3d 1449, 1456 (Fed.Cir.1997). The doctrine allows later arising claims even if the statute of limitations has lapsed for earlier events. [16] Tamerlane II, 80 Fed. Cl. at 736 (quoting Ariadne Fin. Servs. Pty. Ltd. v. United States, 133 F.3d 874, 879 (Fed.Cir.1998)). The Court of Federal Claims found that the continuing claims doctrine was inapplicable to Appellants' alleged extended period because a single repudiation made clear the [g]overnment's intent to dishonor the terms of the contract and that [a]ny subsequent or continuing denial ... of [Appellants'] right to prepay their loans ... does not give rise to a new cause of action, but flows from the [g]overnment's original repudiation and later breach occurring in 1992 and 1991. Tamerlane II, 80 Fed.Cl. at 737. We find that the Court of Federal Claims correctly determined that Appellants have no remaining viable claim for a failure to allow prepayment of the original pre-1979 loans in the extended period or otherwise. As Franconia held, the enactment of ELIHPA constituted a repudiation of Appellants' FmHA loan agreements. Breach of those agreements arises upon tender of prepayment and subsequent government rejection of that attempted prepayment. 536 U.S. at 143, 122 S.Ct. 1993. Franconia in no way tied the breach of the original contract to the terms of a subsequent incentive contract. In this case, Appellants appear to improperly conflate the government's breach of the original loan agreements with the use restrictions that arose from the incentive loan agreements. That is, there is no second opportunity for breach of the original agreements just because the incentive agreements contain time-limited use restrictions. As the Court of Federal Claims correctly found, there was a single agreement that was breached on a single occasion, which does not allow any sort of continuing claims to be brought under the prevailing law of this Circuit. [17]
Appellants contend that the Court of Federal Claims erred in its ruling with respect to dismissing their claims for breach of the incentive loans during the so-called extended period. The claims on account of the extended period seek relief for the breach of the right to prepay the incentive loans after the twenty-year restriction period expires. In addressing Appellants' contention with respect to an alleged breach of the incentive loans, the Court of Federal Claims clearly stated that its opinions do not purport to dismiss any claims asserting breach of incentive equity loan contracts, as the complaint did not plead those claims. Tamerlane III, 81 Fed.Cl. at 513 n. 2. We find that the Court of Federal Claims correctly ignored Appellants' contentions relating to an alleged breach of the incentive loans. Appellants' Complaint does not make any allegations relating to the incentive loans. [18] Accordingly, the Court of Federal Claims' failure to address Appellants' extended period claims based on the incentive loans is affirmed.
Finally, Appellants contend that the Court of Federal Claims erred by not permitting them to amend their Complaint to include claims for the extended period. From Appellants' papers, however, it is not clear to which extended period they are referring. Treating the proposed amendment as applying to the incentive loans, the Court of Federal Claims found that the Complaint was not reasonably susceptible [to] amendment to assert breach of contract claims with respect to the incentive equity loans, as such claims would appear to state separate and independent causes of action. Tamerlane III, 81 Fed.Cl. at 513 n. 1. The decision to grant or deny a motion for leave to amend ... lies within the sound discretion of the trial court. Insituform Techs., Inc. v. CAT Contracting, Inc., 385 F.3d 1360, 1372 (Fed.Cir. 2004). We find that there was no abuse of discretion by the Court of Federal Claims in denying leave to Appellants to introduce separate and independent causes of action. Accordingly, the Court of Federal Claims' denial of leave to amend is affirmed.