Court Opinion

ID: 6984168
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:46:39.095155+00
Date Added: 2024-06-11T16:09:21.472818
License: Public Domain

RADER, Circuit Judge,
concurring.
Relying on Cienega Gardens v. United States, 162 F.3d 1123 (Fed.Cir.1998), this court determines that the United States was not in privity of contract with the low-income housing owners. As in Cienega Gardens, this court detects no privity because the prepayment rights, which Congress unilaterally withdrew, appeared in mortgage agreements but not in regulatory agreements with the United States. During the present case, this court learned that the United States had argued before the United States District Court for the Eastern District of Pennsylvania that the regulatory agreements with the owners and the mortgage notes were a single transaction. See United States’ Memorandum in Opposition to the Defendants’ Motion for Summary Judgment, United States v. David, No. 94-7191, 1995 WL 57502 (E.D.Pa.1995). In my judgment, this revelation undermines this court’s reliance on Cienega Gardens, which itself looks suspect in the context of the arguments the United States made in the Pennsylvania District Court.
In David, the United States claims that the defendant property owner violated the NHA regulations and the regulatory agreement between HUD and the owner by withdrawing funds from HUD-insured projects. In response to defendant’s motion for summary judgment, the United States reveals its position on the NHA mortgage documents:
“All writings forming part of the same transaction must be construed together.” United States’ Memorandum at 7, David (No. 94-7191).
“The mortgage instruments support the United States’ construction of the language of the regulatory agreements.... The rules of construction require the two documents be examined together to ascertain the parties’ objective intent.” Id. at 13-14.
“The regulatory agreement is the quid pro quo for HUD’s endorsement of the note for insurance.” Id. at 15.
“The regulatory agreement viewed in the context of its role in the mortgage insurance program, and the requirement that mortgages be regulated as evidenced by the regulations, must be construed to endure as long as HUD insures, coinsures, owns or holds, the mortgage.” Id. at 16.
These statements in David cast a very different light on the United States’ arguments that HUD did not intend to be *1361bound by the terms of the mortgage agreements. Because Cienega Gardens governs in later cases on the same issue, I must concur in the judgment of this court unless revisited en banc.