Free Order - District Court of Federal Claims - federal

Case 1:97-cv-00381-FMA

Document 228

Filed 09/02/2004

Page 1 of 2

In the United States Court of Federal Claims
Nos. 97-381C & 97-3812C through 97-38129C

(Filed: September 2, 2004) __________ FRANCONIA ASSOCIATES, ET AL., Plaintiffs, v. THE UNITED STATES, Defendant. __________ ERRATA __________ Please substitute the attached page for the first page of the opinion in this case issued on August 30, 2004. IT IS SO ORDERED.

s/Francis M. Allegra Francis M. Allegra Judge

Case 1:97-cv-00381-FMA

Document 228

Filed 09/02/2004

Page 2 of 2

In the United States Court of Federal Claims
Nos. 97-381C & 97-3812C through 97-38129C (Filed: August 30, 2004) __________ FRANCONIA ASSOCIATES, ET AL, Plaintiffs, v. THE UNITED STATES, Defendant. * * * * * * * * * * Rural housing program under section 515 of the Housing Act of 1949; Prepayment right; ELIHPA and the HCDA; Breach of contract; Unmistakability doctrine; Law of the case doctrine; Takings; Expectancy damages; Lost profits; Mitigation; Proximate result; Forseeability; Reasonable certainty; Time of breach; Discounted cash flow; Speculation vs. reasonable approximation.

___________ OPINION __________ Jeff H. Eckland, Eckland & Blando, Minneapolis, Minnesota, for plaintiff. Shalom Brilliant, U.S. Department of Justice, Washington, D.C., with whom was Assistant Attorney General Peter D. Keisler, for defendant. ALLEGRA, Judge: "The United States are as much bound by their contracts as are individuals." 1 "You can check [in] any time you like, but you can never leave." 2 Following a remand from the Supreme Court, this contract case is before the court after a trial held in Des Moines, Iowa. Plaintiffs are various property owners that entered into mortgage contracts with an agency of the United States in exchange for providing low- and moderateincome rural housing. While these loan contracts allowed for prepayment, without restriction, Congress, concerned with the loss of rural housing due to such prepayments, subsequently enacted laws that significantly restricted the exercise of this right. Plaintiffs claim that this

1

The Sinking Fund Cases, 99 U.S. 700, 719 (1879).

The Eagles (Don Felder, Glenn Frey & Don Henley), Hotel California (Asylum Records 1976).

2