Free Cross Motion [Dispositive] - District Court of Federal Claims - federal

Case 1:05-cv-00677-CCM

Document 63-2

Filed 01/16/2008

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No. 05-677C (Judge Christine O.C. Miller)

IN THE UNITED STATES COURT OF FEDERAL CLAIMS TAMERLANE, LIMITED, et. al, Plaintiffs, v. THE UNITED STATES, Defendant.

APPENDIX TO DEFENDANT'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND OPPOSITION TO PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO LIABILITY

Respectfully submitted, JEFFREY S. BUCHOLTZ Acting Assistant Attorney General JEANNE E. DAVIDSON Director Filed electronically SHALOM BRILLIANT Senior Trial Counsel Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, N.W. Attn: Classification Unit 8th Floor Washington, D.C. 20530 Telephone: (202) 616-8275 Facsimile: (202) 305-7643 Attorneys for Defendant January 16, 2008

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INDEX TO APPENDIX

Letter from Bart Axelrod to USDA, Rural Development (December 27, 2000) . . . . . . . . . . . . . 1 Letters from USDA, Rural Development to Bart Axelrod (August 30, 2001) . . . . . . . . . . . . . . . 3 Letter from Bala Realty to State Director, Rural Development (September 6, 2001) . . . . . . . . . 7 Letters from State Director, Rural Development to Bart Axelrod (January 31, 2002), with enclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Letter from D. Mark Griffin to State Director, Rural Development (March 14, 2002), with enclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Settlement Statement (May 10, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Plaintiffs' Responses to Defendant's First Set of Interrogatories (excerpts) . . . . . . . . . . . . . 22

Deposition of Bart J. Axelrod (excerpts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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TAMERLANE 704-G East Main Street Moorestown, NJ 08057 - .(856)866-0600

Mr. David H. Schmi~Jt Multi-Family Housing Servicing Specialist Rural Development 790 Woodlane Road Mt. Holly, NJ 08060

In re: Tamertane Apartments Winslow Township, New Jersey.o. Dear Mr. Schmidt: In accordance with RD Instruction 1965,E, this is to request approval to prepay the subject project loans in full by July 1,2001. We have reviewed the status of this project and have determined that it is in our interests to submit a request to prepay the ~oans. Accordingly complete and wel~documented information is enclosed for you to be able to complete the required Report on Prepayment. The project is eligible for prepayment; ihe Io~.ns were obligated before December 15, 1989. Exhibit C, item E (2) of RD Instruction 1965-E requires that "if the loan is to be prepaid," then the lease, language subsequent to prepayment should be included if the loan is to be prepaid subject to restrictive-use provisi.ons. Because we do not plan to pay off the loans subject to restrictive use provisions, such lease language is not required. All tenant leases will be extended until at least June 30, 2001, more than six months from this date. A Lease Addendum is required for all new tenants after the prepayment request is submitted. The Addendum is to be inserted in the leases of new tenants'after the submittal of the request. This is to request Agency approval of the attached Addendum. We have enclosed documentation of the ability to prepay: - an appraisal, including an analysis of competitive apartment complexes, which indicates the conventional, unsubsidized rental rates; Agency files should include a

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July 31,2000 letter from the Rural housing Program Director which states in the 5th paragraph: "Rural Development rerffal projects in the area presently have high vacancy rates at both subsidized and basic rent levels." - a proforma operating budget indicating the project will be economically feasible at projected market rents with conventional financing; and, - evidence that we can "refinance the project with conventional financing. We look forward to payment of the loans, converting the units to conventional rents,' and saving the govemment substantial amounts of money presently used for Interest Credit and Rental Assistance.

Sincerely yours,

Date~ attachments: Lease Addendum enclosures: Fair H~using Certification ' Exhibit C Information and Documentation

2
TAGA0121003

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USDA

~

Department
Agriculture

790 Wcodlane Rd Tar~sfleld Pla~a, Suite 22 Mr. Holly, NJ, 08060 TEL~ (609) 265-3600 FAX~

August 30, 2001 Bert Axelrod P.O. Box 669 Narberth, PA, 19072-0669

RE:

GENERAL INCENTIVE OFFER FOR Tamerlane Apartments

Project 01-4

Dear Mr. Axelrod: This letter is to notify you that in response to your request to prepay your multi-family housing loan, USDA, Rural Development is prepared to develop an incentive offer that wo~ld include one or more of the incentives found in RD Instruction 196S-E, paragraph 1965.2~3. These include the following: a. An equity loan b. Additional rental assistance c. Increased annual return on investment d. Excess Section~8-rents e. Conversion or modification of interest credit. If you accept a "Specific" incentive package, you will be required to execute a "Restrictive Use Agreement" that will obligate you and any successors in title to restricting the use of the above-referenced housing project to very-low, low, and moderate income tenants for a period of 20 years from the date the incentives are closed. An incentive package is a one-time offer. This letter serves as a "General Incentive Offer." If you accept this general offer, a "Specific XncentiveOffer" will be developed for you. You have until September 29, 2001 to accept or reject this "General Incentive Offer" in writing. If you do not respond in writing, either by accepting or rejecting these incentives, we will consider your request for prepayment concluded and the incentive offer will be considered withdrawn without additional notification. If you reject the "General Incentive Offer," Rural Development will advise you of additional processing requirements, including the possibility of prepayins the loan, or offering the project for sale to a non-profit organization. Your response must be postmarked no later than September 29, 2001.

Rural Development is an Equal Oppurtunlty Lender Cc~plalnts u£ Discrimination should be een~ to~
SeCretary of Agriculture, Washington, DC 20250

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Do consider these incentives carefully, and if you have any questions, please call our office. Sincerely,

ERNEST R. GRUNOW, JR2/ State Director lJ .

Rural Dovelopment is an Equnl Oppurtunity Lender Complaints o~ Discrimination should be u~nt to l Secrsta~-y of Agrioulturo, Washington, DC 20250

4 TAEW0042224

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USDA

Rural
D~pa~t

7%0 Woodlane Rd T~rnsfi~ld Plaza, Suite 22 M~, Holly, NJ, 00060 TE~ ~609~ 265-360~

30, 2001 Bart Axelrod P.O. Box 669 Narberth, PA, 19072-0669

RE:

GENERAL INCENTIVE OFFER FOR Tamerlane Apartments

Froject 02-6

Dear Mr. Axelrod: This letter is to notify you that in response to your request to prepay your multi-family housing loan, USDA, Rural Development is prepared to develop an incentive offer that would include one or more of the incentives found in RD Instruction 1965-E, paragraph 1965.213. These include the following: a. An equity loan b. Additional rental assistance c. Increased annual return on investment d. ExcessSection 8 rents e. Conversion or modification of interest credit. If you accept a "Specific" incentive package, you will be required to execute a "Restrictive Use Agreement'~ that will obligate you and any successors in title to restricting the use of the above-referenced housing project to very-low, low, and moderate income tenants for a period of 20 years from the date the incentives are closed. An incentive package is a one-time offer. This letter serves as a "General Incentive Offer." If you accept this general offer, a "Specific Incentive Offer" will be developed for you. You have until september 29, 2001 to accept or reject this "General Incentive Offer" in writing. If you do not respond in writing, either by accepting or rejecting these incentives, we will consider your reques~ for prepayment concluded and the incentive offer will be considered withdrawn withou~ additiona! notification. If you reject the "General Incentive Offer," Rural Development will advise you of additional processing requirements, including the possibility of prepaying the loan, or offering the project for sale to a non-profit organization. Your response must be postmarked no later than September 29, 2001.

Rural Davslopm~n~ is an Equal 0ppurt~nity L~nd~r Complaints of Discrimination should bs s~n~ t~

5
TAEW0042098

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Do consider these incentives carefully, and if you have any questions, please call our office. sincerely,

:ST R. GRUNOW, State Director

Rural Development is an Equal Oppurtunlty Lender Secretary of Agriculture, washington, DC 20250

6

TAEW0042099

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TELEPHONE: (610.~ 668-2224 FAX: (61 ef~H~

September 6, 200 ]
Mr. Ernest R. Grunow, .It. State Director, Rural Development 790 Woodlane Road, Suite 22 Mount Holly, NJ 08060

RE: GENERAL INCENTIVE OFFER FOR Tamerlane Apartments Dear Mr. Grunow: This is to accept the Agency letter dated August 30, 200I in which the Agency offers to develop an incentive otter,

The acceptance is for the total loans which encumber Tamerlane Apartments, a ] 60 unit apartment project.
A~p_r_ol~riate [ncen~iv~

We invite ~he specific offer of: an equity loan (and the opportunity to secure outside financing for an equity loan); increased annual return on investment; and, additional Rental Assistance ~pdale~t appraisal In order to save the Agency time and expense, we will request the appraiser to appraise the property taking into sccount the capital improvements required by the Agency. Because his prior appraisal was submitted to the Agency and determined to be acceptable, we believe this second appraisal will also be acceptable. We shall submit the appraisal to the Agency for review and acceptance.

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The appraisal can then be used by the Agency in developing the amount of'the equity loan for the incentive offer and in determining the increased amount of equity on which return to the owner will be offered.

We expect that the appraisal will be submitted by September 26, 2001. Please feel free to contact me if you have any questions.

Sincerely yours,

Bart J. Axelrod, President, Bata Realty Advisors, Inc, General Partner of Tameflane Investors, General Partner of q'amerlane, Limited

i

TAGA0121434

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USDA

Rural DevelOpms~t

?.~0 Wood1~ue Rd Tarnsfiald Pla~n, Suite 22 lqt:, Holly, NJ, 08060 TEL~ (60.9) 265-3600 FAX;

Bart Axelrod P.O. Box 669Narberth, PA, 19072-0669 INCENTIV~ OFFER FOR Tamerlane Apartments

January 31, 2002

RE:

Dear Mr. Axelrod: USDA Rural Development has completed its analysis of your request to prepay your Rural Rental Housing loan on the 40 unit project known as Tamerlane Apartments in Sicklervllle, NJ. Since you have submitted a complete application and demonstrated the abilityto prepay, we are offering you the following incentives to remain in the program. Based on an appraisal of the project and the prevailing rents for similar projects in the community, Rural. Development will consent to a junior lien or subordination that will allow for an equity loan from a third party, not to exceed a monthly repayment of $2,491. Any third party loan must be at a fixed rate of interes~ and equally amortized with no balloon payment. The amount of the third-party loan may not exceed $326,425. A third-party equity loan is also subject to review and approval of all the terms and conditions imposed by the thlrd-party !enter. The junior lien or subordination is also contingent on Rural 'Development approv~l and your continued eligibility for program assistance as defined in Rural Development instruction 1944-E. If you accept ~he ~ncentive paokage, we will reamortize the existing loan at the prevailing program interest rate in effect at the time of ~he loan closing, and will extend the repayment period over ~he remaining life of the project or the maximum program term, whichever is the lesser. In conjunction with the closing of the equity loan or the reamortization of the existing' Rural Development debts, the project will be required to convert to the Predetermined Amortization Schedule System (PASS), if it has not already been converted.

Both General Partners must sign all prepayment documents.

Rural Developm~n~ is ~n E~ual Opportunity Lander

.?
TAGA0121395

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All deferred maintenance must be addressed before any of these incentives may be received (see attached). This offer is made subject to the availability of funds' and~ continued borrower eligibility. If you accept this incentive package you will be required to execute a "Restrictive Use Agreement" that will obligate you and any successors in title to restricting the use of the project to very-low, low, and moderate income tenants for a period of 20 years from the date the incentives are closed. This incentive package is a one-time offer. If you accept this incentive package, you will not be eligible for ANY additional incentives on this project for the 20-year period of the "Restrictive Use Agreement." You have until March 2, 2002 (30 days from the date of this letter) to accept or reject this incentive package in writing. If you do not respond in writing, either by acceptins or rejecting these incentives, we will consider your request for prepayment concluded, and the incentive package will be considered withdrawn without additional notification. If you reject the incentive.package, Rural Development will advise you of additional processing requirements, including the possibility of prepaying the loan or offering the project for sale to a non-profit organization. Do consider these incentives carefully and if you have any questions, please contact my office. Please respond to the incentive package in writing by returning the ,,Acknowledgement of Incentive Offer and Response" attached to this letter. Your response must be postmarked no later than March 2, 2002.

Sincerely,

State Director

Rural Development t~ an Equal Opportunity Lender Se=retnzy Df A~F~I~ult%LTe, Washinston, DC 20250

TAGA0121396

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ACKNOWLEDGEMENT OF ~CENTIVE OFFER AND RESPONSE
Tamerlane Apartments 01-4
I am in receipt of an Incentive Package from Rural Development dated January 3 I, 2002. I understand that the incentives offered in that letter are being made to induce me to keep my 40 unit project known as Tamerlane Apartments and located in Sieklervitle, NJ in the Rural Housing Program. I hereby acknowledge that no other offers, either expressed or implied, have or will be made by Rural Development. I hereby declare that I have the authority to accept or reject this incentive package on behalf of all individuals and entities who have an ownership interest in this project. I further declare that I have read each of the incentives being offered and understand the financial and legal obligations of each of these incentives, both individually and as a whole. Based on these statements and my review of the incentives, I have made the following determination.

CHECK ONLY ONE OPTION
WILL ACCEPT THE INCENTIVES AS OFFERED BY RURAL DEVELOPMENT.

~

I AM REJECTING THE INCENTIVES OEFER/~D BY RLrRAL DEVELOPMENT,

SIGNED BY:

DATE:

SIGNED BY:

DATE:

TAG/~,0121397

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LIST OF DEFERRED MAINTENANCE iTEMS FOR Tamerlane Apartments
Estimated Cost
4,663 33,208
40,255

Deferred Maintenance Task

Rough Carpentry
Doors/Windows/Glass

Siding Roofing Sheet Metal Work Demolition Total Estimated Cost:

4,095 i, 842 15,487 99,550

Rural Development is an E~ual Opportunity L~nder Secretary of Agriculture, Washington, DC 20250

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USDA

A~iculturo

790 Woodlana Rd T~-nsfield Pl~zn, Sult~ Mr. Holly, NJ, 08060 TEL~ (609} 265-3600 FAX~

Bert Axelrod P.O. Box 669 Narberth, PA, 19072-0669

Ja/luary 31, 2002

RE:' ~NCENTIVE OFFER FOR Tamerlane Apartments

bear Mr. Axelrod:
USDA Rural Development has completed its analysis of your request to prepay your Rural Rental Housing loan on the 120 unit project know~ as Tamerlane Apartments.in Sicklerville, NJ, Since you have submitted a complete application and demonstrated the ability to prepay, we are offering you the following incentives to remain in the program. Based on an appraisal of the project and the prevail~ng rents for similar projects in ~he community, Rural Development will consent to a'Junior lien or subordination that will all~w for an equity loan from a third party, not to exceed a monthly repayment of $12,047. Any third party lo~n must be at a fixed ra~e of interest and equally amortized with no balloon payment. The amount of the third-party loan may not exceed $1,578.,470, A thlrd-party equity loan is also subject Eo review and approval of all the terms and conditions imposed by the third-party, lender. The Juhior lien or subordination is also contingent on Rural Development approval and your continued eligibility for program assistance as defined in Rural Development instruction 1944-E.

Rural Development will provide 105 additional units of family/elderly incentive rental assistance.
If you accept the incentive package, we will reamortize the existing lean at the prevailing program interest rate in effect at the time of the loan closing, and will extend the repayment period over the remaining life of the project or the maximum program term, whichever is the lesser.

Both General Partners mus. t sign el! prepayment documents.

Sec=~ary of Agrlcul~ure, Wash/ngtun, DC 20250

TAGA0121399

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In conjunction with the closing of the equity !oan or the reamortization of the. existing Rural Development debts, the project will be required to convert to the Predetermined Amortization Schedule System (PASS), if it has not al~eady been converted. All deferred maintenance must be addressed befor~ any of these incentives may be received {see attached). This offer is made subject to the availability of funds and continued borrower eligibility.
If you accept this incentive package you will be required to execute a "Restrictive Use Agreement" that will obligate you and any successors in title to restricting the use of the project to very-low, low, and moderate income tenants for a period of 20 years from the date the incentives are closed. This incentive package is a one-time offer. If you accept this incentive package, you will not be eligible for ANY additional incentives on this project for the 20-year period of the "Restrictive Use Agreement." You have until March 2, 2002 (30 days from the date of this letter) to accept or reject this incentive package in writing. If you do not respond in writing, either by accepting or rejecting these incentives, we will consider your request for prepayment concluded, and the incentive package will be considered withdrawn without additional notification. If you reject the incentive package, Rural Development will advise you of additiona! processing requirements, including the possibility of prepaying the loan or offering the project for sale to a non-profit organization. Do consider these incentives carefully and if you have any questions, please contact my office. Please respond to the incentive package in writing by returning the ,Acknowledgement of Incentive Offer and Response" attached to this !etter. Your r4sponse must be postmarked no later than March 2, 2002.

Sincerely,

State Director

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ACKNOWLEDGEMENT OF INCENTIVE OFFER AND RESPONSE
Tamerlane Apartmertts 02-6
][. I understand that the incentive's offered in that letter ar~ being made to induce me to keep my 120 unit project known as Tamerlane Apartments and located in Sicklerville, NJ in the Rural Housing Program. I hereby acknowledge that no other offers, either expressed or implied, have or will be made by P,.ural Development. I hereby declare that I have the authority to accept or reject.this incentive package on behalf of all individuals and entities who have an ownership interest in this project. I further declare that I have read each of the incentives being offered and understand the financial and legal obligations of each of these incentives, both individually and as a whole. Based on these statements and my review of the incentives, I have made the following determination.

CHECK ONLY ONE OPTION
WILL ACCEPT THE INCENTIVES AS OFFERED BY RURAL DEVELOPMENT.

~

I AM REJECTING THE INCENTIVES OFFERED BY RURAL DEVELOPMENT.

SIGNED BY:

DATE:

SIGNED BY:

DATE:

Rural Dovelol~m~nt is nnEqual opportunity Lond~r Complaints ~f Discrimination should be sont tot Ssor~t~l-y of Agriculture, Washington, DC 20250

TAGA0121401

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LIST OF DEFERRED MAINTENANCE ITEMS FOR Tamerlane Apartments "
Estimated Cost
13,989
99,623

No,

Deferred Maintenance Task Rough Carpentry Doors/Windows/Glass Siding Roofing

120,766

12,283 5,525
46,462 Total Estimated Cost: 298,648

'Sheet Metal Work
6o

Demolition

Ru=&I Develup~ant is an Equal 0pportuni~y Lmnder Compla£nts of Discr~minatlon should be sent to: S~c~stary of Agricul~ur~, Washington, DC 20250

TAGA0121402

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TAMERLANE LIMITED 704-G East Main Street Moorestown, NJ 07057 Telephone (856) 866-0600

March 11, 2002

Mr. Andrew M.G. Law State Director USDA Rural Development 790 Woodlane Rood MI. Holly, NJ 08060 Re: Incentive Offer.
"t.:

Dear Mr. Law: I would like fo take this opportunity to congratulate you on your promotion to State Director. I have enclosed signed Incentive Offers for Tamerlane Apartments 01-4 and Tamerlane Apartments 02-6. If you have any questions, please feel free fo contact me. Sincerely,

D. M DMG/rw Certified Mail

riffin

17
TAGA0121379

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FEB 2 7 2002 ACKNOWLEDGEMENT OF INCENTIVE OFFER AND RESPONSE
Tamerlane Apartments 01-4
I am in receipt of an Incentive Package from Rural Development dated January 31, 2002. I understand that the incentives offered in that letter are being made to induce me to keep my 40 unit project known as Tamerlane Apartments and located in Sicklerville, NJ in the Rural Housing Program. I hereby acknowledge that no other offers, either expressed or implied, have or will be made by Rural Development. i hereby declare that I have the authority to accept or reject this incentive package on behalf of all individuals and entities who have an ownership interest in this project. I further declare that I have read each of the incentives being offered and understand the financial and legal obligations of each of these incentives, both individually and as a whole. Based on these statements and my review of the incentives, I have made the following determination.

CHECK ONLY ONE OPTION
WILL ACCEPT THE INCENTIVES AS OFFERED BY RURAL DEVELOPMENT.

~

I AM REJECTING THE INCENTIVES OFFERED BY RURAL DEVELOPMENT.

SIGNED BY:

DATE:

Rural Dsvslopmen~ is an Equal Opportunity Lender

Complaints of Discrimination should be sent to:
Secretary of Agricul~ure, Washington, DC 20250

TAGA0121380

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FEB B 7 2002 ACKNOWLEDGEMENT OF INCENT!VE OFFER A R~SPONSE ~)
Tamerlane Apartments 02-6
I am in receipt of an Incentive Package from Rural Development dated January 31, 2002. I understand that the incentives offered in that letter are being made to induce me to keep my 120 unit projectknown as Tamerlane Apartments and located in Sicklerville, NJ in the Rural Housing Program. I hereby acknowledge that no other offers, either expressed or implied, have or will be made by Rural Development. I hereby declare that I have the authority to accept or reject this incentive package on behalf of all individuals and entities who have an ownership interest in this project. I fiarfiaer declare that I have read each of the incentives being offered and understand the finm~cial and legal obligations of each of these incentives, both individually and as a whole. Based on these statements and my review of the incentives, I have made the following determination.

CHECK ONLY ONE OPTION
WILL ACCEPT THE INCENTIVES AS OFFERED BY RURAL DEVELOPMENT.

~ I AM REJECTING THE INCENTIVES OFFERED BY RURAL DEVELOPMENT.

SIGNED BY:

DATE:

SIGNED BY:

DATE: , /rTa~o~ ~ ,;2oo~-

Rural Developmene is an Equal Opportunity Lender Complaints of Discrimination should be sent Secretary of A~riculture, Washington, DC 20250

TAGA0121381

,.A. Settlement Statement

Case 1:05-cv-00677-CCM
6. File Numbcr ST02-33814

Document 63-2

B. Tvoe of Loan I. []FHA 2. DFmHA 3. FIConv. Unins. 4. ~]VA 5. l~conv. Ins.

U.S. D .~'nenl of Housing end Urban Ooveloo lent OMB No. 2502-0265 7. Loan Number 8. Mo=lgag¢ l~uraec¢ Case Number

Filed 01/16/2008

Page 22 of 39

D. NAME OF BORROWEd: ApPRESS: E. NAME OF SELLER: F. NAME OF LENDER: ADDRESS: G. PROPERTY ADDRESS: ~] Princiesl Residenc¢ H.SETTLEMENT AGENT: PLACE OF SETTLEMENT: I, SE'ITLEMENT DATE:

TAMER.LANE LIMITED, a limited partnership

J, ~;UMMARy, OE,BORROVVER'S TRANSACTION;, .

ALLEGIANCE BANK OF NORTH AMERICA ONE BELMONT AVENUE-STE 105, BALA CYNWYD, P~, 19004 ...... CHEWS LANDING ROAD, WINSLOW TWP., NJ TOWNSHIP OF WINSLOW Other R~I Esl,te Settlers Title Agency, Inc., Telephone: 856-983-1880 Fax: 856-985-3568 The Pavilions at Greentree. Suite 302, Route..73. Marline, NJ 08053 05/10/2002
K. SUMMARY .O.F ~3ELLER'S TRANSACTION: 400. GROSS AMOUNT DUE TO SELLER: ~nt,'7~ ~ sales oflc~ Persona! Pmoedv

100. GROSS AMOUNT DUE FROM BORROWER

~luslm~nls for llems oald by seller ad~n~ 106. CIW~ taxes 107. County texes 108. C.C.M.U.A. 109. 110. 112, 120. GROSS AMOUNT DUE FROM BORROWER 200. AMOUNTS PAID BY OR ON BEHALF OF BORF OWER 202, Pdedoal amount of newloans 203 F:xtstL.'m loants~ t~kPn ~ubi~ct to ~

Adjustments for tiaras 0aid by seller in advance 408 407. County taxes 408, 409, 410, ~11, GROSS AMOUNT DUE TO SELLER: 500. RED~JCTIONS IN AMOUNT DUE TO SELLER

~ q~o.~ v, ,~o.
1,849 ~ 725,00 " 502. 503

Payoff of Sac~ed Modeaoa Loan

¯ 20~,

~0~, ~9~,
Adiustments for ffems unoald bv sell .,r

Adlustmenls for items unoaid bv seller 210. ClWlt~ ~xes ~42 G.C.M.U.A. 21~. 214, 215. .... 217. 2t0, 220, TOTAL PAID BY/FOR BORROWER 300. GASH AT SE~EMENT FNOM OR TO BORNO~

510. CINiIow~ texas 5~2. C.C.M.U.A. ~!4, 515 ~17, 51g, TOTAL REDUCTION AMOUNT DUE SELLER ~00. CASH AT SETTLEMENT TO OR FROM SELLE Gross amount due to seller flln~e 420'~

303. CASH, FROM ~) BORRO~R

CASH ~'

FROM

TO ) SELLER

SELLER(S} NEW MARLING ADDRESS:

TitlcExprcss Scalcmcnt System Prinlsd 05/08/2002 at l l:0?

'R.EV. HUD-I

20
TAGA0130011

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PAID FROM BORROWER'S FUNDS AT SET~'LEMENT PAIO FROM SELLER'S FUNDS AT SET]'LEMENT

Page 23 of 39

25.00
811. 900, ITEMS REQUIRED BY LENDER TO BE pAID tNADVANCE

g154.

~7; ................
3,744.00 Do

7,744.00

1100. ~E CHARGES

..t~! SETTLERS TITLE AGENCY, INC.

325.00

)

75.00

HUD CERTIFICATION OF BUYER .~ND SELLER

Titl¢Exprc~s S¢l(l¢mcnt System Printed 05/09F2002 n115:00

21

b

REV. HUD- I (3/86)

TAGA0130012

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS TAMERLANE, LIMITED, et al., Plaintiffs,
V.

No. 05-677C (Judge Christine O.C. Miller)

UNITED STATES OF AMERICA, Defendant.

PLAINTIFFS'RESPONSES TO DEFENDANT'S FIRST SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION OF DOCUMENTS Pursuant to Rules 26, 33 and 34 of the Rules of the United States Court of Federal claims ("RCFC"), Plaintiffs, Tamerlane, Limited ("Tamerlane") and Park Terrace East Limited ("Park Terrace East") (collectively "Plaintiffs"), hereby respond to the Interrogatories and Request for Production of Documents of Defendant, the United States of America (sometimes referred to as the "FmHA" or the "Government"). GENERAL OBJECTIONS The following general objections are incorporated by reference in the responses set forth below: 1. Plaintiffs object to the request for identification and production of

documents previously generated and submitted to Defendant pursuant to administrative regulation, and therefore already in the possession of Defendant, as unduly burdensome. 2. Plaintiffs object to the extent the Instructions and Definitions impose

requirements which exceed the requirements of the Rules of the Untied States Court of Federal Claims.

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As to Tamerlane, to the extent the equity loan with respect to that project conferred a benefit, the benefit wil! be calculated by Lukens as an offset to its damages. A report conforming to RCFC 26 will be timely provided to Defendant. INTERROGATORY NO. 12: Identify all persons whom possesses knowledge of each factual assertion made in your complaint. For each person, explain in detail the knowl.edge possessed in reference to each allegation raised in your complaint. RESPONSE: Objection is made to this interrogatory to the extent it seeks information subject to the attorney-client privilege or the work product doctrine. Bart Axelrod and/or the attorneys for Plaintiffs have knowledge of the allegations insofar as they relate to Plaintiffs. Insofar as the complaint was based on circumstances considered and adjudicated in Franconia, the Court, attorneys and parties to that proceeding may have such knowledge.

INTERROGATORY NO, 13:
With regard to the allegation, contained in paragraph 41 of the complaint, that "It]he Government has in every instance refused to accept prepayment from plaintiffs pursuant to the provisions of their contracts," please (a) identify all documents embodying, expressing, or otherwise evidencing the alleged refusal, all persons by whom and to whom the alleged refusal was communicated, and all plaintiffs from whom you contend the Government refused to accept prepayment; and Co) state the date when each of the alleged refusals occurred. RESPONSE: The language referred to in interrogatory 13 was intended to refer generally to the circumstances described in Franconia. INTERROGATORY NO. 14: Identify the individuals who "met with, or otherwise made inquiries of, FmHA officials regarding prepayment of their loans," as alleged in paragraph 42 of the complaint, the FmHA officials with whom they met or of whom they made inquiries, and the "Government officials" referenced in the second sentence of that paragraph, and state the date(s) of the meetings and inquiries referenced in the first sentence of that paragraph and the "representations" referenced in the second sentence of that paragraph.

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RESPONSE: Previous appraisals in the possession of the respective Plaintiffs, as well as letters received by lenders indicating willingness to provide financing, will be provided separately. The expert reports of Lukens will also be timely provided by the respective Plaintiffs. I~0UEST FOR PRODUCTION NO. 4: All market surveys/studies, appraisals, other financial documents, and related correspondence between the plaintiffs and third parties relating to its alleged damages incurred in this case. RESPONSE: To the extent created in comaection with this case, objection is made to this request since the documents sought constitute work product and are protected from discovery under the work product doctrine. Previous appraisals in the possession of the respective Plaintiffs, as well as letters received by lenders indicating willingness to provide financing, will be provided separately. The expert reports of Lukens will also be timely provided by the respective Plaintiffs. COZEN O'CONNOR

H. ROBERT FIEBACH, ESQUllKE" DAVID M. DORET, ESQUIRE 1900 Market Street Philadelphia, PA 19103 Tel: (215) 665-4166 Fax: (215) 665-2013 Attorneys for Plaintiffs, Tamerlane, Limited and Park Terrace East Limited Dated: September 6, 2007

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VERIFICATION I, Bart Axelrod, do hereby depose and state that I am authorized, on behalf of Plaintiff Park Lane East Limited to make this Verification; that I have reviewed the foregoing Plaintiffs' Responses to Defendant's First Set of Interrogatories and Requests for Production of Documents; and that the facts contained therein are true and correct to the best of my information and belief. I understand that the statements made herein are made subject to the penalties of 28 U.S.C. § 1746 relating to unsworn falsification to authorities.

Dated: September 6, 2007

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VERIFICATION I, Bart Axelrod, do hereby depose and state that I am authorized, on behalf of Plaintiff Tamerlane~ Limited, to make this Verification; that I have reviewed the foregoing Plaintiffs' Responses to Defendant's First Set of Interrogatories; and that the facts contained therein are true and correct to the best of my information and belief. I understand that the statements made herein are made subject to the penalties of 28 U,S.C. § 1746 relating to unsworn falsification to authorities.

Dated: September 6, 2007

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Page I
IN THE UNITED STATES COURT OF FEDE~ CLAIMS

TAMERLANE, LIMITED, et al.,
V.

CIVIL ACTION NO. 05-677C

UNITED .STATES OF AMERICA
November 14, 2007

Oral deposition of BART J. AXELROD taken pursuant to notice, was held at the law offices of COZEN O'CONNOR, 1900 Market Street, Philadelphia, Pennsylvania beginning at 1:40 p.m., on the above date, before Terri L. Ochipinti, a Professional Reporter and Notary Public in the Commonwealth of Pennsylvania.

ESQUIRE DEPOSITION SERVICES Four Penn Center 1600 John F. Kennedy Boulevard 12th Floor Philadelphia, Pennsylvania 19103 (215) 988-9191

ESQUIRE DEPOSITION SERVICES

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you're referring to the case of Franconia
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Apartments vs. United States. A. Q. intended to refer generally to the you mean-that paragraph 41 of the Complaint was not referring to the plaintiffs in this case? A. the question. Q. Well, let me break it down, okay? One of the things that the interrogatory's asking for is after referring to the allegation in paragraph 41 ever the Complaint about the government refusing to accept prepayment from plaintiffs, one of the things that that interrogatory asks for is the date when each of the alleged refusals occurred and it also asks other questions about the refusals. Did the government refuse to accept prepayment from Tamerlane? ESQUIRE DEPOSITION SERVICES I'll not sure I understand Yes, it is. When you say that was

circumstances described in Franconia, do

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I don't know if that's the right word. Q. Which? MR. FIEBACH: him finish.. THE WITNESS: Hold on. Let
I don't know

if refusal is the right word, but personnel, management personnel at what was then Farmers Home Administration made it clear that we had no choice, based on. legislation that had been -- had come into existence that we really had no.choice as to what we were going..to be able to do in the future with these properties. So I don't know word. BY MR. BRILLIANT: Okay. Well, I'm using the Q. word refusal to mean whatever it means in the Complaint. The Complaint says the government has in every instance refused ESQUIRE DEPOSITION SERVICES 29 bOd12c4d-7dd5-44b4-Sd22-8682d46a2518 I don't even know if the word refusal is the correct

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BART J. AXELROD
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to accept prepayment. MR. FIEBACH: The answer says when it's talking in every instance it's talking about Franconia. MR. BRILLIANT: I'm asking the witness. MR. FIEBACH: And that's what the answer to the interrogatory says. MR. BRILLIANT: I can read the answer to the interrogatory, but I understand what the interrogatory says. MR. FIEBACH: If you want to know what happened, ask him what happened, but stop arguing with him about an answer to interrogatories. He started to tell you what his understanding
was.

MR. BRILLIANT: No. The witness signed the interrogatory answers. I can ask him anything ESQUIRE DEPOSITION SERVICES

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B~T g. AXELROD Page 52
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about the interrogatory answers. MR. FIEBACH: The prior response says that insofar as the Complaint was based on circumstances considered and adjudicated in Franconia, the Court, attornies and parties to the proceedings may have such knowledge. Not this witness. MR. BRILLIANT: No, but I'm not asking anything about the Franconia. I'm asking about the allegations in the Complaint in this case. MR. FIEBACH: Ask him about the allegations but don't ask him about an answer to interrogatories. That answer language was based on Franconia.
MR. BRILLIANT: I understand

that.

I want to. MR. FIEBACH:

Show him the Complaint and ask him whatever you want to ask him about the ESQUIRE DEPOSITION SERVICES

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Complaint. You are not showing him the Complaint. MR. BRILLIA!qT: I can show him the Complaint, but I don't need to right now. MR. FIEBACH: Well, ask him whatever you want to ask him. MR. BRILLIANT: Just so he doesn't have to feel uncomfortable about talking about the Complaint without seeing it. BY MR. BRILLIANT: Q. Just to be clear on what you are claiming and not claiming, without getting involved with semantics, the reason I'm using the word refused, the Complaint said, in every instance "The I government has in every instance refused to accept prepayment from plaintiffs." understand that answer says that that refers generally to the circumstances described in Franconia. I see that answer. My question is, using the term the government has in every instance ESQUIRE DEPOSITION SERVICES

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refused to accept prepayment from plaintiffs, there way it's used in the Complaint, my question to you is, did the government refuse to accept prepayment from Tamerlane? MR. FIEBACH: Objection. You're asking about the way it's used in the Complaint without showing the witness the Complaint, but you can answer the best you can. I'm not instructing the witness not to answerbut I wanted the objection on the record. THE WITNESS: Can you just repeat it one more time. MR. FIEBACH: Could you just read it back. (The court reporter read the pertinent part of the record.) THE WITNESS: I'm trying to figure out how to appropriately answer this. The government -- if we're talking about the government, I will talk about the ESQUIRE DEPOSITION SERVICES

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BART g. AXELROD

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local officials of Rural Development, what was then Farmers Home Administration and later Rural Development, made it clear to us very -- at some point, I don't know the precise date, made it very clear to us that there was no way that we were ever going to be able to repay these and that the only options that were going to be available to us were certain incentives that they offered. We just had no choice. They just made that -- put it right out on the line. I can remember like it was yesterday. BY MR. BRILLIA~qT: Q. A.
'91.

When was it? It was probably around 1990, And who were those people Howard Henderson, who was

Q. A.

who told you that? then the state director of Farmers Home; ESQUIRE DEPOSITION SERVICES J

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Q.

Did you, during the period

we are talking about, at anytime in 19 -well, anytime in the 1990's or the early 2000's, did you ever read the agency's regulations concerning prepayment? A. I don't know whether -- I don't know whether I read their regulations specifically or not. Q. Do you recall whether the agency sent you copies of the regulations or any instruction? They have publications they have called like RD Instruction so-and-so. A~ I really don't know. When Tamerlane applied to Q. prepay -- by the way, were you personally involved in the correspondence, the preparing of the prepayment application that was submitted for Tamerlane? A. Yes. Q. At the time that that was submitted, did you make known to the agency that your true preference or desire was to actually prepay the loan ESQUIRE DEPOSITION SERVICES :
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B~T J. AXELROD

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and get out of the 515 program -- first of all, was that the case, was it your true desire? A. Absolutely. Did you communicate that I don't recall.

Q.
A.

desire to the agency? Do you recal! whether you Q. communicated that desire to the agency in connection with Park Terrace East? A. Q. property? A. I don't believe so. Did you ever do or -- you, Q. not necessarily personally, you or under your supervision, -- did you or Bala Realty ever prepare any kind of report for analysis as to the need for subsidized housing in the market that Tamerlane was serving? A. Q. No, we did not. What about Park Terrace I don't think that I did. Did you communicate that

desire in connection with any Section 515

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CERTIFICATE OF SERVICE I hereby certify that on the 16th day of January, 2008, a copy of the foregoing "DEFENDANT'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND OPPOSITION TO PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO LIABILITY" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Shalom Brilliant