Court Opinion

ID: 9472013
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:46:50.226067+00
Date Added: 2024-06-11T17:42:41.764311
License: Public Domain

KRUPANSKY, Judge,
dissenting.
The majority opinion disregards the district court’s reasonable interpretation of *320the consent decrees in issue and adopts the plaintiffs wholly unsupportable position. Accordingly, I dissent.
As Judge Damon J. Keith of this Court has observed, the district judge’s interpretation of a consent decree is entitled to great deference since “[f]ew persons are in a better position to understand the meaning of a consent decree than the district judge who oversaw and approved it.” Brown v. Neeb, 644 F.2d 551, 558, n. 12 (6th Cir.1981). In the instant matter the district judge concluded that “the rights and responsibilities of the parties must be resolved solely by reference to the 1980 decree.” Even if proper respect for the district court’s intimate familiarity with the background of the consent decree did not compel this Court to afford the district judge's views extreme deference, I would still be compelled to accept the lower court’s construction by the sheer force of logic.
Stripped to the bare essentials, the facts are remarkably simple. On September 15, 1977, HUD agreed with the city of Toledo pursuant to a stipulation and settlement (the 1977 Decree) to “take all steps reasonable and necessary” to make available “(a) ... during a four year period ending September 30, 1981 funds for ... subsidized family housing units” and “(e) ... take all steps reasonable and necessary to comply with the terms and conditions of the stipulation and settlement.” On October 10, 1980, as a result of the plaintiffs’ charges that HUD was not properly implementing its obligation defined by the 1977 Decree, the parties entered into another stipulation order (the 1980 Decree) designed to resolve the dispute over the alleged failure of the city and HUD to comply with the 1977 Decree. Pursuant to the 1980 Decree “(2) ... the parties retain all rights granted under the September 15, 1977 Stipulation and Settlement...” (the 1977 Decree). The 1980 Decree also precisely defined the number of units HUD would fund, the geographical areas to which housing units would be allocated, the number of units to be allocated to each Planning District and HUD’s obligation to solicit proposals from developers for the construction of the designated- planning districts by advertising for the new construction.
A comparative analysis of the 1977 and 1980 Decrees discloses that the 1977 Decree, which could be characterized as a statement of purpose, was drafted in broad generalizations. It committed HUD to take all steps reasonable and necessary to make available during a four year period ending September 30, 1981 funds for at least 2,000 subsidized family housing units. The 1977 Decree expressed a cooperative spirit to be implemented by the city and HUD to accomplish the twin goals of reducing the geographic compartmentalization of racial and income groups in Toledo, and fostering more diverse and vital neighborhoods by city-wide dispersal of housing opportunities for minorities and families of low and moderate incomes.
By comparison, the 1980 Decree, as outlined above, was far more precise and exacting in its terms. HUD’s basic undertaking pursuant to the 1980 Decree was simply to initially allocate sufficient funding for the specified number of low cost housing units in the designated geographical areas within the city of Toledo, secondly, to solicit developers through appropriate advertising (Notification of Fund Availablity —NOFA) to submit proposals for the construction, and thirdly, to approve the successful preliminary proposals and thereafter execute formal contracts ■ with the successful developers.1 While the period for implementing the 1980 Decree was designated as fiscal years 1981 and 1982, no precise time was mentioned when HUD would begin funding the allocated units authorized in paragraph 4 of the 1980 Decree in those years.
At issue in the appeal sub judice is the funding for seventy-five (75) remaining *321units of the (101) units, allocated by the 1980 Decree to the Westgate Planning District for which only twenty-six (26) acceptable proposals had been received as of the end of fiscal year 1982.
At the outset it should be noted that a HUD commitment to fund units for the Westgate Planning District or for any geographical area in the nation is no guarantee that the allocated units actually will be constructed. Every project is contingent upon attracting developers who submit acceptable proposals. The trial court concluded and the appellants have conceded that from the inception of these proceedings, practical and economic obstacles posed serious difficulties to placing housing units within the Westgate district. New parcels of land were available for new construction in the area and their acquisition costs were prohibitive. Nor did the area offer a substantial number of structures suitable for rehabilitation under the Section 8 program. In sum, the Westgate area was not economically attractive to developers as is evidenced by the limited number of developer responses to HUD’s advertised NOFA’s.
Succinctly stated, appellants argue that the dearth of proposals was due to HUD’s delay in processing funds for the Westgate Planning District. Defendants counter with the assertions that more than adequate time existed within which to process and approve proposals for the geographical area, if a sufficient number of adequate proposals had been submitted.
The resolution of the arguments rests in the operational facts developed in the record.
The point of departure for reviewing the evidence in its entirety is the unequivocal language of the 1980 Decree which obligated HUD to advertise and provide funding for the designated housing units “during fiscal years 1981 and 1982”. By the clear terms of paragraph four of the 1980 Decree, HUD obligated itself to provide funding through the end of fiscal year 1982, the last day being September 30, 1982.
Responding to the appellants charges that HUD’s action, or perhaps its inaction, jeopardized the funding for the remaining seventy-five (75) units allocated to the Westgate Planning District to the point that such funds would be forever lost, the trial court entered comprehensive findings of fact firmly supporting its ultimate conclusions of law.
Initially the trial court acknowledged that the critical language of the 1980 Decree “during fiscal years 1981 and 1982” could be construed to mean, as appellants contend, that HUD was obligated to make funds available for all the units of the 1980 Decree in fiscal year 1981 and continue to do so throughout fiscal year 1982, until acceptable proposals for all units were obtained. If this was indeed the HUD commitment, HUD failed to honor it. Upon further analysis, however, the trial court concluded that it was equally plausible to interpret the operative phrase to mean that so long as HUD made all the funds available sometime during the two year period, allowing adequate time for processing and awarding the successful proposals, it would be in compliance with the 1980 Decree. The trial court thereupon turned to the surrounding facts for a proper interpretation of the words “during fiscal years 1981 and 1982” as intended by the parties to the 1980 Decree.
The record discloses that HUD’s understanding of the 1980 Decree required that the twenty (20) units for the Southside Planning District and the seventy (70) units for the West Toledo Planning District would be made available in fiscal year 1981, and that the one hundred fifty (150) units for the Westgate Planning District (subsequently reduced by agreement to one hundred and one (101) units) would not be made available until 1982. In this manner, all units would be funded “during fiscal years 1981 and 1982.”
The HUD Field Office commenced immediate implementation of the 1980 Decree on February 11 and 18 of 1981 when it published its NOFA inviting proposals for 70 and 20 units for the West Toledo and *322Southside Planning Districts respectively. After receiving a number of proposals HUD funded the 40 units for the West Toledo Planning District. No proposals were received for the Southside Planning District.
Thereafter on March 29, 1982 the Cleveland Service Office (CSO), the HUD field office with jurisdiction over Toledo, was allocated funding for one hundred fifty-seven (157) units from the Chicago HUD Regional Office with the notation “in accordance with the Dotson litigation” [appellants herein]. By letter dated April 1, 1982 the CSO informed Toledo of the available funds and instructed it to confer with appellants to establish target areas for the Section 8 housing as' required by the 1980 Decree. By letter dated April 19, 1982, the City of Toledo advised HUD’s CSO that a consensus had been reached as to the final target areas for the units provided by HUD.2
In accordance with the April 19, 1982 letter, HUD advertised fund availability for one hundred and fifty-one (151) units on May 5 and 12, 1982. HUD received nine preliminary proposals — three (3) for the Westgate Planning District, four (4) for the West Toledo Planning District, and two (2) for the Southside Planning District. A thirty (30) unit proposal was approved for the West Toledo Planning District, a twenty (20) unit proposal was approved for the Southside Planning District and a twenty-six (26) unit proposal was approved for the Westgate Planning District. It should be noted that HUD received the proposals on June 16, 1982 and thereafter expeditiously processed them and issued notices of preliminary approval to the successful developers. HUD advised the developers, the City and appellants of its favorable action and the reservation of funds for the projects on August 13, 1982. Actually HUD, through its CSO, reserved the funds as early as August 5, 1982. Contrary to the implication of the majority opinion that “as the 1982 fiscal year closed, therefore, 75 Westgate units remained unapproved” the evidence fails to reflect that any qualified unit proposals were pending with HUD when the funding expired on September 30, 1980.3 The record conclusively supports the trial court’s conclusions that the time frame within which HUD implemented the 1982 Decree was more than adequate to process all submitted proposals, and that the lack of developer interest attributable to the obstacles inherent in the Westgate Planning District foreclosed the expectation of receiving additional proposals for this area. Appellants awareness of the lack of developer interest in the Westgate area is evidenced by correspondence between HUD, the City and Appellants (Joint Ex. 13), which disclosed an agreement between the City and Appellants to consider a modification of the 1980 Decree. The proposed modification would switch the funding earmarked for the remaining seventy five (75) units allocated to Westgate area to use in some other planning district.
Whether HUD’s obligation is considered pursuant to an independent interpretation of the 1980 Decree, or whether its obligation is considered pursuant to an interpre*323tation of the 1980 Decree in para materia with the 1977 Decree, the intent of parties as to the manner of implementing HUD’s obligation is clear.
Intent, as the trial court correctly ruled, is best demonstrated by the conduct and action or inaction of the parties, and not by the mere post hoc assertions of one’s understanding. Applying this time honored rule, the intent of the parties throughout the critical time period in issue is obvious. The record confirms that the commitment of HUD was implemented in precisely the manner in which all parties, including the appellants herein, intended it to be.
In reviewing the instant action, one must also be mindful of the extremely close relationship that evolved between the parties over the nine-year period beginning in December of 1974, when this litigation was commenced, and the aggressive and adversary manner in which the proceedings were pursued by the appellants throughout that protracted time period, during which they .demonstrated not the slightest reluctance to invoke the process of the trial court whenever they believed HUD was acting contrary to their best interests. Had appellants actually believed HUD’s obligation to fund Westgate predated fiscal year 1982, reasonable minds would conclude that appellants would have placed HUD on immediate notice of its commitment to fund this area when the initial NOFA, which excluded Westgate, was issued on February 11th and 18th in fiscal year 1981 for the West Toledo and Southside Planning Districts, or at least when it became apparent that Westgate would not, or feasibly could not, be funded during the 1981 fiscal year. Despite more than ample opportunity to register any objections to the manner in which HUD was implementing its understanding of its commitment during fiscal year 1981, appellants failed to do so. The first time appellants made their understanding of the HUD responsibilities known to anyone was when they filed their motion for a temporary restraining order on September 29, 1982, the eve of the expiration of fiscal year 1982 and the forfeiture date of allocated funding for the seventy-five (75) remaining units for Westgate. As a matter of fact, rather than evincing objection to HUD’s action, the record reflects appellant’s approval and satisfaction of HUD’s action throughout fiscal years 1981 and 1982.
Apart from any suggestion that HUD was in violation of its obligation, appellants, on March 4, 1982, advised the trial court in a status report that “the availability of funds for the remaining one hundred and fifty-seven (157) units must be advertised by the end of April 1982, in order to realistically allow sufficient time for processing applications from developers by the end of the 1982 fiscal year” when the funds were released for the Westgate units. On October 1, 1981, the first day of fiscal year 1982, appellant’s counsel, Paul F. Belazis, wrote defendant’s counsel, John W. Herold, that:
... all remaining units which must be funded in fulfillment of the October 11, 1980 Stipulation [1980 Decree] will receive funding authority from 1982 appropriations.
Although defendant’s conduct, considered by itself, is not conclusive evidence of the proper interpretation to be given the 1980 Decree, whether considered independently or if read in para materia with the 1977 Decree, the appellant’s participation, acquiescence in, and ratification of such conduct, and their failure to object even when ample opportunity was afforded, belies their assertion that HUD was obligated to fund all projects in fiscal year 1981.
It is apparent from the record and the trial court’s findings of fact and conclusions of law that the majority plumbs its decision on a misconception of the issue presented on appeal. On page 318 of its opinion, the majority states:
The initial question for review is whether the appellees breached their duty under the express and implied terms of the decree. The district court properly found that the “four corners” of the 1980 decree did not provide explicit guidance on the intent of the parties. In *324the face of the decree’s apparent “silence,” the district court implied a “reasonable time” for performance. Citing, Bach v. Friden Calculating Machine Co., 155 F.2d 361 (6th Cir.1946).
In the very next sentence the majority assumes a conclusion by the trial court which the lower court did not actually make. The majority states:
The court’s implication of a “reasonable time” is supported by Section 2-309(1) of the Uniform Commercial Code. That section provides that where the parties have neglected to specify the “time for delivery,” that time shall be a “reasonable time.” See also White and Summers, Uniform Commercial Code, p. 105. This practice is appropriate in the commercial contract field because it encourages the formation of binding contracts among business entities. But this commercial law policy has little place in the field of fair housing decrees. Section 2-309, in fact, does not apply at all where the time for performance is geared toward completion of a specific project United States Industries v. Semco, 522 F.2d 1061 (8th Cir.), cert. denied, 434 U.S. 986, 98 S.Ct. 613, 54 L.Ed.2d 480 (1977).
At 318.
The Uniform Commercial Code analogy to the case at bar is the innovation of the majority that has no support either in the law or the facts of the trial court’s disposition.4
It is conceded, as the majority concludes, that "... commercial law policy has little place in the field of fair housing decrees.” The trial court never asserted to the contrary. This U.C.C. analysis was applied solely by the majority opinion. The Uniform Commercial Code is, by its express provisions, a statutory enactment directed toward achieving uniformity in state laws regulating commercial transactions. More particularly, § 2-309 of the U.C.C. by its specific language deals only with contracts for the sale of goods; the fact that specific projects are involved is irrelevant. The majority’s reliance upon United States Industries v. Semco, 562 F.2d 1061 (8th Cir.), cert. denied, 434 U.S. 986, 98 S.Ct. 613, 54 L.Ed.2d 480 (1977) is equally misplaced and irrelevant.
Having attributed, by implication, an irrelevant U.C.C. section to the trial court’s disposition, it is significant to note that the majority ignored completely the predicate of the trial court’s actual reasoning in arriving at its decision. The true basis of the lower court’s holding was the Restatement of Contracts 2d § 202(4), paired with the great weight to be given to the course of dealing between the parties during the critical two year period in issue.
Having applied the correct legal precedent to its exhaustive findings of fact, the trial court concluded, in a well-reasoned opinion, that the course of conduct and dealings between the parties reflected an understanding and intent to implement the 1980 Decree in the exact manner in which it was accomplished.
Accordingly, I would affirm the trial court’s reasoning and apply a standard of reasonableness to the 1980 Decree.
But even assuming arguendo, that the majority is correct in its conclusion that the 1980 and 1977 Decrees should be read in pari materia for the purpose of determining HUD’s obligation, and further assuming that the 1980 Decree is bound by the language of the 1977 Decree (as the majority insists), the ultimate disposition of the case is, in my opinion, not effected. I am unable to ascertain any difference between the “reasonableness” standard imposed by the trial court, and an obligation to “take all steps reasonable and necessary” which *325the majority advocates as the correct standard. The trial court’s approval of HUD’s performance as “reasonable” under the circumstances strongly indicates that the lower court’s opinion was tantamount to a conclusion that HUD did take “all steps necessary and reasonable” to fulfill its obligation under the 1980 Decree. Because there is no difference in the standard actually applied, and the standard insisted upon by the majority, there can be no difference in the final resolution of the dispute.
Accordingly, I would conclude that HUD had performed its obligation to appellants even if those obligations were defined by reading the 1980 Decree and the 1977 Decree together.

. Approval of a preliminary proposal results in the funding being reserved for that project until the developer submits a final proposal (Tr. at 77, 78). While reserved, the funds are not subject to fiscal year-end recapture by HUD headquarters.

. One hundred one (101) units for the Westgate Planning District (this figure is arrived at by subtracting forty-nine (49) units comprising the ARC/COR project from the one hundred fifty (150) units specified in paragraph four of the October 10, 1980, Stipulation. This was permitted by paragraph five of that Stipulation because the project eventually was located in the Westgate Planning District);
Thirty (30) units for the West Toledo Planning District (seventy (70) units less the forty (40) units already funded for the district);
Twenty (20) units for the South Toledo/West Toledo Planning Districts; Six (6) units for the handicapped (Project Reach).

. A fourth proposal for the Westgate Planning District was submitted to HUD on September 29, 1982, one day prior to the expiration of the fiscal year 1982. Although the proposal was not processed through HUD’s review procedures due to the time constraints presented by late filing, C. Edward Caldweil, the Acting Chief of the CSO’s Housing Program Branch, testified that even at that late date, the application was examined by the person in the CSO responsible for overseeing review and approval of Section 8 housing proposals, and it was his considered opinion that due to the prohibitively excessive land and relocation costs, the proposal was not viable.

. The trial court actually addressed the issue thusly:
Confining itself solely to the four corners of the 1980 Stipulation and Order, the Court finds that the relevant language is not free of ambiguity. No precise time during fiscal years 1981 and 1982 is mentioned when HUD would begin funding the units called for in paragraph four ____ Thus, the Court must turn to the surrounding facts and circumstances to arrive at a proper interpretation of the words "during fiscal years 1981 and 1982."