IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MISSOURI
SOUTHEASTERN DIVISION
CHARLESTON HOUSING AUTHORITY, )
a Municipal Corporation, )
)
Plaintiffs )
)
v. ) No. 1:01CV00101CDP
)
UNITED STATES DEPARTMENT OF )
AGRICULTURE and ANN VENEMAN )
in her official capacity as Secretary of the )
United States Department of Agriculture )
)
Defendants )
)
TIMOTHY OWENS, ESSIE McCATREY, )
and HOUSING COMES FIRST, INC., )
a Missouri non-profit corporation, )
)
Intervenors )
TIMOTHY OWENS, ESSIE McCATREY AND HOUSING COMES FIRST, INC’s ANSWER IN INTERVENTION AND CROSS-CLAIM AGAINST UNITED STATES DEPARTMENT OF AGRICULTURE AND ANN VENEMAN IN HER CAPACITY AS SECRETARY OF UNITED STATES DEPARTMENT OF AGRICULTURE
ANSWER IN INTERVENTION
Come now Timothy Owens, Essie McCatrey and Housing Comes First, Inc. (hereinafter referred to as “Intervenors”) and for their Answer in Intervention to the numbered paragraphs of Plainfiff Charleston Housing Authority’s Complaint amended by Interlineation (the “Complaint”) state as follows:
COUNT I
1. Admit
2. Admit
3. Admit
4. Admit
5. Intervenors admit that on or about April 27, 1981 the United States of America through the Farmers Home Administration, an agency of the United States Department of Agriculture, loaned $740,000 to CHA pursuant to section 515 of the Housing Act of 1949 to enable CHA to purchase a Section 23 leased housing development known as Charleston Apartments and that by virtue of a Housing Assistance Payment Contract entered into between CHA and the United States Department of Housing and Urban Development the project was converted to a Section 8 “Substantial Rehabilitation Project.” Intervenors are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 5 and deny them at this time.
6. Admit
7. Admit
8. Intervenors admit that the Promissory Note, Deed of Trust and Loan Resolution executed by CHA are dated April 27, 1981 and state that said documents speak for themselves as to their terms. Intervenors deny all other allegations in paragraph 8 not expressly admitted herein.
9. Intervenors admit only that Note referred to in Plaintiff’s Complaint speaks for itself as to its terms. Intervenors deny all other allegations contained in paragraph 9 except as otherwise expressly admitted herein.
10. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 10 and therefore deny them at this time.
11. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 11 and therefore deny them at this time.
12. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in pargraph 12 and therefore deny them at this time.
13. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 13 and therefore deny them at this time.
14. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 14 and therefore deny them at this time.
15. Intervenors admit that on or about May 7, 2001 and June 1, 2001 CHA sent a check in the amount of $126.14 to Defendant USDA which said Defendant returned to CHA. Intervenors deny all other allegations contained in paragraph 15 not expressly admitted herein.
16. Intervenors admit that Defendant USDA, Rural Development, acting as successor to Farmers Home Administration informed Plaintiff CHA that CHA was required to comply with the Emergency Low Income Housing Preservation Act (42 U.S.C. § 1472 (c) and its implementing regulations including without limitation submitting a complete prepayment request as required under 7 C.F.R. § 1965.205. Intervenors deny all other allegations contained in paragraph 16 except as otherwise expressly admitted herein.
17. Intervenors admit that on or about December 1, 2000 Plaintiff CHA requested USDA to accept a final payment of approximately $120 and allow removal of the Charleston Apartments from the Rural Housing Service (“RHS”) program. However, Intervenors deny that Plaintiff CHA has ever submitted a complete prepayment request to USDA to prepay the aforesaid loan as required by ELIHPA and its implementing regulations. Intervenors deny all other allegations contained in paragraph 17 not expressly admitted herein.
18. Intervenors admit that USDA has requested information from CHA and that CHA has failed to provide such information. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in paragraph 18 and therefore deny them at this time.
19. Intervenors admit that on or about April 18, 2001 USDA, Rural Development requested certain documentation from CHA and CHA’s response to certain questions in order for USDA to continue to process CHA’s request to make final payment on the loan. Further answering Intervenors affirmatively aver on information and belief that CHA failed to provide the requested information. Intervenors deny all other allegations in paragraph 19 not expressly admitted herein.
20. Intervenors admit that on or about May 7, 2001 CHA sent a check in the amount of $126.14 to Defendant USDA which said Defendant returned to CHA. Intervenors further admit that on or about June 1, 2001 CHA resent the check in the amount of $126.14 to USDA and that Defendant USDA again returned the check to CHA. Intervenors are without knowledge or information sufficient to form a belief as to the remaining allegations contained in paragraph 20 and therefore deny them at this time.
21. Intervenors admit that on or about May 7, 2001 CHA sent a check in the amount of $ 126.14 to Defendant USDA which said Defendant returned to CHA and that on or about June 1, 2001 CHA resent the check in the amount of $126.14 to Defendant USDA and that said Defendant again returned the check to CHA. Intervenors further admit that the State Director of Rural Development, USDA advised CHA of the necessity of compliance with ELIHPA and its implementing regulations including Section 1965 –E. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in paragraph 21 and therefore deny them at this time.
22. Admit
23. The Promissory Note referred to in paragraph 23 speaks for itself as to its terms. The remaining allegations in said paragraph constitute characterizations and/or conclusions of law and not allegations of fact for which an answer is required. To the extent a response is required, however, Intervenors deny all other allegations contained in paragraph 23 not expressly admitted herein.
24. Deny
25. The statute cited in paragraph 25 speaks for itself as to its terms. All remaining allegations in said paragraph constitute characterizations and/or conclusions of law and not allegations of fact for which an answer is required.
26. Deny
27. The regulations and decision of the United States Court of Appeals for the Eighth Circuit cited and referenced in paragraph 27 speak for themselves as to their meaning and effect. All remaining allegations in paragraph 27 constitute characterizations and/or conclusions of law and not allegations of fact for which an answer is required. To the extent a response is required, however, Intervenors deny all remaining allegations.
28. The regulations referenced in paragraph 28 speak for themselves as to their terms. All remaining allegations in said paragraph constitute characterizations and/or conclusions of law and not allegations of fact for which an answer is required.
29. Deny
30. Deny
31. Deny
32. Deny
COUNT II
1. Intervenors repeat, reallege and incorporate by reference their answer to paragraphs 1 through 14 of Plaintiff’s Complaint as fully as if set forth verbatim herein.
2. The Promissory Note referred to in paragraph 2 speaks for itself as to its terms. The remaining allegations in said paragraph constitute characterizations and/or conclusions of law and not allegations of fact for which an answer is required.
3. Deny
4. Deny
COUNT III
1. Intervenors repeat, reallege and incorporate by reference their answer to paragraphs 1 through 30 of Count I and paragraphs 2 through 4 of Count II above as fully as if set forth verbatim herein.
2. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 2 since Exhibit A was not attached to the copy of the “AMENDMENT BY INTERLINEATION III” served upon intervenors. Therefore, intervenors deny each and every allegation contained in paragraph 2 not expressly admitted herein.
3. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 3 and therefore deny them at this time.
4. Admit.
5. Deny.
6. Intervenors are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 6 and therefore deny them at this time.
AFFFIRMATIVE DEFENSES TO COUNTS I, II & III
1. Further answering and for their first affirmative defense, intervenors state that Plaintiffs’ Complaint fails to state a claim upon which relief can be granted.
2. Further answering and for their second affirmative defense, intervenors state that CHA’s claims are barred by the unmistakability doctrine as the United States Government did not unmistakably waive its sovereign power to amend the promissory note, Deed of Trust and Loan Resolution (collectively referred to as the “loan agreement”) between CHA and USDA by enacting the Emergency Low Income Housing Preservation Act (“ELIHPA).
3. Further answering and for their third affirmative defense, intervenors state that CHA’s alleged claims are barred by the doctrine of laches.
4. Further answering and for their fourth affirmative defense, intervenors state that if Plaintiff CHA has a cognizable claim, it has no right to specific performance or other equitable relief because it has an adequate remedy at law under the Tucker Act.
5. Further answering and for their seventh affirmative defense, intervenors state that pursuant to 7 C.F.R. § 1965.205 CHA was required to submit a complete prepayment request at least 180 days in advance of the anticipated prepayment date. CHA did not do so and in fact has withdrawn its previous (incomplete) prepayment request. As a result, CHA is estopped and/or has waived it right to assert its alleged claims herein.
6. Further answering and for their eighth affirmative defense, Intervenors state that if CHA has prepaid its Loan as alleged in Count II of its Complaint (which allegations intervenors deny), said prepayment is illegal and void and should be set aside for the reasons that:
a) CHA never submitted a complete prepayment request to USDA as required by 7 C.F.R. § 1965;
b) Intervenors Timothy Owens, Priscilla Johnson and other tenants of the Charleston Apartments were not afforded timely and proper notification of the proposed prepayment; nor were they kept apprised of all decisions reached regarding the alleged acceptance of the prepayment and action date;
c) USDA failed to offer an incentive package to CHA as an inducement to not prepay;
d) CHA never offered to sell the Charleston Apartments to a non profit or public agency interested in preserving the Charleston Apartments as affordable low – income housing;
e) CHA and USDA otherwise failed to comply with the Emergency Low Income Housing Preservation Act, 42 U.S.C. § 1472 (c) and its implementing regulations.
WHEREFORE, having fully answered, Intervenors Timothy Owens, Essie McCatrey and Housing Comes First, Inc pray that this Court Dismiss Plaintiff Charleston Housing Authority’s Complaint at Plaintiff’s Costs and grant Intervenors such other and further relief as may be just and proper.
CROSS-CLAIM AGAINST DEFENDANTS
UNITED STATES DEPARTMENT AND VENEMAN
COME NOW Intervenor Defendants Timothy Owens, Essie McCatrey, and Housing Comes First, and state as follows for their cross-claim against Defendants United States Department of Agriculture and Ann Veneman in her official capacity as Secretary of United States Department of Agriculture:
I. JURISDICTION
1. The court has supplemental jurisdiction of this cross-claim under 28 U.S.C. § 1367(a) because it arises out of the same transaction and occurrence alleged in the plaintiffs complaint amended by interlineations so as to form a part of the same case or controversy within the meaning of Article III of the United States Constitution. The court would have original jurisdiction of this claim under 28 U.S.C. §§ 1331, 1337, 1343(a)(3) and (4), and 42 U.S.C. § 3613. Declaratory and injunctive relief is authorized by 28 U.S.C. §§ 2201 and 2202, 5 U.S.C. §§ 701, 703, and 706, 42 U.S.C. § 3613, and Rules 57 and 65 of the Federal Rules of Civil Procedure. Waiver of sovereign immunity is provided by 5 U.S.C. § 702.
2. The cross-claims of Intervenor Defendants arise under the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq.; the Housing Act of 1949 as amended, 42 U.S.C. §§ 1471 et seq.; the Emergency Low Income Housing Preservation Act of 1987 and the Housing and Community Development Amendments of 1992, 42 U.S.C. § 1472(c); and the Fair Housing Act, Title VIII of the Civil Rights Act of 1968 as amended, 42 U.S.C. §§ 3601 et seq.
II. THE PARTIES
3. Intervenor Defendant/Cross-Plaintiff Timothy Owens is an African-American very low-income head of household who resides at 718 Warren in the Charleston Apartments with her three children. She and her family have lived at Charleston Apartments for more than thirteen years and is and at all material time herein was a participant in the Section 8 Housing Program under the United States Housing Act of 1937 (42 U.S.C. §§ 1437 et seq.)(the Section 8 Program).
4. Intervenor Defendant/Cross-Plaintiff Essie McCatrey is an African- American very low-income head of household who resides at 719 Warren in the Charleston Apartmetnts with her two children and six grandchildren. She is and at all material times herein was a participant in the Section 8 Program.
5. Intervenor Defendant/Cross-Plaintiff Housing Comes First, Inc. is a non-profit corporation organized and existing under the laws of the State of Missouri, with its principal place of business in the City of St. Louis, Missouri. Housing Comes First is a housing organization that engages in a variety of educational, informational, referral, and advocacy activities to prevent homelessness and preserve affordable housing. Housing Comes First has had to divert significant time and resources to address the loss of affordable housing, discrimination, lack of resident participation, and denial of residents’ rights in connection with CHA’s threatened demolition of Charleston Apartments, its failure to comply the ELIHPA prepayment requirements, and its refusal to re-let vacant units and otherwise operate the development as low-income housing.