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IN THE
OF
FRANCONIA ASSOCIATES, a Limited Partnership, et al., Plaintiffs,
v.
File No. 97-381C Judge Francis M. Allegra
THE UNITED STATES, Defendant.
TO PLAINTIFFS' LEAVE TO
TO
JeffH. Eckland Attorney For Plaintiffs FAEGRE & BENSON LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402-3901 Telephone: (612) 766-7000 Telecopy: (612) 766-1600 Of Counsel: Mark J. Blando FAEGRE & BENSON LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402-3901 Telephone: (612) 766-7000 Telecopy: (612) 766-1600
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Page I. Declaration of Marge Alden with the following attached exhibits APP 1 APP 5 APP 15 APP 16 APP 20 APP 21 APP 22
Exhibit A. Letters dated December 31, 2002, from the Agency Exhibit B. USDA Memorandum dated January 2, 2003 ExhibitC. Letter dated February 13,2003, from the Agency
Exhibit D. Fax message to the Agency dated April 23, 2002. Exhibit E. Exhibit F. Fax message to the Agency dated May 28, 2002. Fax message to the Agency dated May 28, 2002
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IN THE FRANCONIA ASSOCIATES, a Limited Partnership, et al., Plaintiffs,
v.
COURT OF
CLAIMS
File No. 97-381C Judge Frauds M. Allegra
THE UNITED STATES, Defendant.
I, Marge Alden, declare as follows: 1. I am a general partner of, and the managing agent for, plaintiff Franconia
Associates, a Limited Partnership, the owner of the following properties: Riverfront Apartments and Sunrise River Apartments. I make this Declaration in response to the defendant's motion for leave to supplement the evidentiary record. All facts stated herein are based upon my personal knowledge. 2. The government first began foreclosure proceedings on these two
properties well before June 16,2003, the date that our trial began in Des Moines, Iowa. For example, I first learned of the foreclosure proceedings in late December 2002. 3. My business partner and co-owner of these two properties, Mr. George
Vitalis, passed away on September 29, 2003 from a rare form of cancer that unexpectedly and rapidly spread and advanced. Before he even knew about his illness, Mr. Vitalis and I both testified at the trial in Des Moines, Iowa on June 19,2003. During my testimony, I was questioned about the facts behind the pending foreclosure proceedings but was never cross-examined by the government lawyer about those subjects.
APP1
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4.
Mr. Vitalis was not only my business partner in these properties, but he
was the partnership's expert regarding project development and conversion strategies. I was the partnership's expert in the day to day management of the projects. Mr. Vitalis, as my business partner, would have been able to provide firsthand testimony regarding my abilities and skills in managing the properties. 5. Attached hereto as Exhibit A are true and correct copies of the two letters
that I received dated December 31, 2002 from the Agency wherein the government notified me of its intent to accelerate the loans on these two properties. Attached hereto as Exhibit B is a true and correct copy of an USDA memorandum dated January 2, 2003 that I received from the Agency wherein the government confirmed its decision to accelerate these loans and directed Agency personnel not to accept further payments "unless the reasons for acceleration are cured or the loan will be paid in full subject to any restrictive-use provisions." Attached hereto as Exhibit C is a true and correct copy of a letter dated February 13, 2003 that I received from the Agency wherein the decision to accelerate the partnership's loans was again confirmed. 6. Although the end result of the government's foreclosure proceedings and
sale on these two projects has allowed me to exit the 515 program, 1 have been damaged by the government's failure to abide by the terms of the contract into which we entered into with the government. For example, had we been permitted to pre-pay on these two properties when first intended, in 1992, we would have been able to invest money and time into converting these properties into valuable commercial real estate in locations where there is a growing demand for such real estate because of the expansion of the metropolitan area of the Twin Cities.
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7.
In addition, any rent increases that I may achieve later this year after
leaving the program have been impeded by the government's failure to honor its contract in 1992 -- nearly twelve years ago -- when we first sought prepayment on these two properties. If the partnership had been permitted to prepay in 1992, the market rate rents we would have been able to collect this year would have been based upon nearly twelve years of conventional marketing and management practices. Without these factors, my ability to raise rents to achieve the real value of the relevant market will be limited. 8. Over the years the relationship between the local Agency officials in
Minnesota and Mr. Vitalis and me deteriorated to a point where I now sincerely believe that they purposely permitted the partnership to prepay without restrictions - rather than hold a foreclosure sale - in a misguided attempt to undermine the partnership's ability to collect the damages to which I believe that it is entitled. For example, after thwarting our attempts to prepay for over a decade, Agency employees suddenly brought great pressure to bear on me to prepay without restrictions as soon as possible. 9. The situation in Minnesota became so bad that an USDA attorney in the
Agency's national office suggested that the servicing of all properties that I manage, including Riverfront and Sunrise River, be transferred to the RD officials in the State of Wisconsin. (See my FAX messages to Arthur Garcia, RD Administrator, dated April 23, 2002 and May 28, 2002, attached hereto as Exhibits D and E, respectively.) 10. The State Director and Multi-Housing coordinator for the State of
Wisconsin agreed to this transfer,, but the final written authorization from the national headquarters never issued. (See my FAX message to Obediah Baker, dated May 28, 2002, attached hereto as Exhibit F.)
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I declare under penalty of perjury that the foregoing is true and correct. Executed on January ]j^ 2004 in A»^ />/ j._ /- ^ U /
Marge Alden
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PAGE 83
Unted States Department of Agriculture
Rural " Development
375 Jackson Street 410 Farm Credit Building Saint Paul, Minnesota SS1O1 Phone: 651-602-7322 FAX: 651-602-7825 TTY: 651-602-7830 December 31, 2002
Building the Dream MAIL RECEIPT Franeonia Associates P O Box 236 Taylors Fate, MN Georg® Vitalls St Croix Trail Shafer, MN 55074 Marge AJden C/Q Croix Management Co. P.O. Box 236 Taylors Falls, MN
SUBJECT; JNQJJC£j3fL^CCI|^^ jy=HW£ILBJ^^ XQURJDWDf^^ To Whom It May Concern: PLEASE TAKE NOTE that the entire indebtedness due on the promissory note(s) and/or assumption agreements) which evidence the loan(s) received by you from the United States of America, Acting through the Rural Housing Service, United Dspartrnent of Agriculture, is now declared Immediately due and payable. The loan is described as follows:
November 29? 1974
$304,000.00 by a real
The promissory note(s) and/or assumption agreement(s) is(are) mortgage described as follows: November 29,1974 Office of County Recorder Chfsago County, Minnesota
143986
Rural D«v«topm«ot te «* Equal Opportunity Undw. PfOvfctef, and Emptoyar Compteints erf diaof mimtton $r»yl
Exhibit A
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PAGE
Page Two Franconla Associates Riverfront Apartments
This acceleration of your indebtedness is made in accordance with the authority granted in the above-described real estate instmment(s). The reasons for this acceleration of your indebtedness are as follows; Failure to provide adequate management Failure to meet reporting requirements Permitting the encumbrance of the title by allowing a junior lien to be placed against the property without prior written consent The indebtedness due Is 5l52slSliS§-- unpaid principal, and §U2^2L_unPaid interest, as of December 31, 2002, plus additional Interest accruing at the rate of §3,51 P®r ^ay thereafter, plus any advances to be made by the United States for the protection of its security and Interest accruing on any such advances. Unless full payment of your indebtedness is received and all actions as outlined in the attachment entitled Tenant Protection Actions" are taken within 30 days of the date of this letter, the United States will take action to foreclose the above described real estate Instrument, take possession of any project accounts, suspend any renfal assistance, cancel any interest credit, notify tenants that foreclosure will be pursued, and pursue any other avaitabie remedies. Project rent rate levels shall not be increased due to toss of subsidies. . The loca! Servicing Office should be contacted immediately to discuss the steps to take to remedy the deficiencies of the account or pay the loan in full. Payment should be made by cashier's check, certified check, or postal money orders to the order of the USDA, Rural Housing Service at your locai Servicing Office, If you do not comply with all requirements to prepay, or do not slibmft to the United States any payment sufficient to pay the entire indebtedness, or comply with any arrangements agreed to between the Rurai Housing Service and yourself, the action or payment Wfy__NOJ_CANCEL tha effect of this notice. Acceptance of such payment will be subject to agency regulations governing payments in full [and the provisions of the Housing and Community .Development Act of 1987. Such provisions normally require restrictive-use covenants be placed in effect at the time of the prepayment] Note: The preceding within brackets will be omitted for projects whose loans were made before December 22, 1979, unless Jess than one year has elapsed since the date the borrower had submitted a request to prepay the !ogns(s) under the provisions of RD instruction 196S-E. If insufficient payments are received and credited to your account, or payment without tenant displacement protection actions are accepted, no waiver or prejudice of any rights which the United may have for breach of any promissory note or covenant in the real instrument will result, and the Rural Housing Service may proceed as though no such payment had been made. :
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PASE 85
Page 3 Franconia Associates
Riverfront Apartments The above described real estate instrument provides that the United States may foreclose without Court action by selling the real estate at public safe after June 30, 2003. The Government intends to sell the property in this manner. No further notice is required to be given you concerning this foreclosure. However, you have the opportunity to have an informal meeting with the decision-maker (the undersigned) and/or an administrative appeal hearing before the foreclosure takes place. This is an opportunity to discuss why you believe the United Stales is in error in accelerating your account and proceeding" with foreclosure. If you request an informal meeting with the decision-maker or have any questions concerning the decision and/or facts used in making our decision, you should contact this office in writing to request a meeting, Ths request for an. informal meeting must be sent to the undersigned no later than January 15, 2003. Requests which are postmarked by the US Postal Service on or before that date will be considered as timely received. You also have the right to an administrative appeal hearing with a hearing officer in lieu of, or in addition to, a meeting with this office. If you request an informal meeting with the decision maker, and the meeting does not result in a decision in which you concur, you will be given a separate time frame in which to submit your request for an _ administrative appeal. See the attachment for your appeal rights. If you do not wish to hava an Informal meeting with the decision maker as outlined above, you may request an administrative appea! hearing with a member of the National Appeals Division.' The request for an administrative appeal must be sent to the National Appeals Division, Eastern Regional Office, William A. Crutchfieid, St., Area Supervisor, 8909 Purdue Road, Suite 240, Indianapolis, IN 46268, no later than January 30, 2003. Requests which are postmarked by the U.S. Postal Service on or before that date will be considered as timely received. If requesting an administrative appeal, please include a copy of this letter with your request In addition to an informal meeting, you have the right to request mediation or other form of Alternative Dispute Resolution (ADR) to resolve the adverse decision. There will be a cost for this service. The request to use mediation or other form of AOR may be made at any time prior to a formal appea! hearing. A request to exercise this option to settle the dispute on the denial will stop the running of the 30-day period you have to request an appeal. If you request an appeal, and prior to the appea! hearing, decide to request this option, you have waived your right to an appeal hearing until after conclusion of mediation or other ADR; however, you have the right to an appeal hearing wfthfn 45 days of the conclusion of mediation or ADR. If you fail to comply with the requirements outlined herein, the United States plans to proceed with foreclosure.
APP7
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PAGE 86
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Page 4 Franconia Associates Riverfront Apartments Th0 Federal Equal Credrt Opportunity Act prohibits creditors from discriminating against credit applicants on th-2 basts of racs, color, religion, national origin, sex, marital status, handicap, or (provided that the applicant has the capacity to enter into a binding contract), because all or part of the applicants income derives from any public assistance program, or because the applicant has, in good faith, exercised any right under the Consumer Credit Protection Act The Federal agency that administers compliance with th3 law concerning this creditor is the Federal Trade Commission, Equal Credr: Opport; iniiy, Washington, D.C. 2Q5SQ.
Stephen G. Wenzef State Director Rural Development, acting on behalf of the Rural Housing Service, (successor in interest to the Farmers Home Administration) State of Minnesota U.S. Department of Agriculture
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·Provide the focal Servicing Office with a current list of all tenants shewing their · adjusted incomes. The Servicing Office will: (a) Notify tenants that the project Is being prepaid;
(b) Send eligible tenants in the project "Letters of Priority Entitlement (LOPE)", for priority placement in other Rural Housing Sen/ice projects. Extend a!! tenant for 180 days after the date the accelerated loan was paid off at the same rental and terms that were in effect on the day of the acceleration. (If tenant is receiving RA, the tenants' share of the rent will be reflected on the lease.) Execute restrictive-use provisions, as appropriate, for "incorporation into releases of security instalments to be filed. (II the loan was made prior to December 21, 1979, no restrictive-use provisions will be Included in the releases of security instruments, MO!JII>§ i&ss than one year has elapsed since the date the borrower had submitted a request to prepay the loan(s) under the provisions of RD instruction 1965-E.) (NOTE: Any tenants or applicants for occupancy protected by these restrictions may not have total shelter costs (rent and utilities) above 30 percent of adjusted Income or current shelter costs, whichever is higher.) If the loan on this project to build or acquire new units was made on or after December 15, 1989, the restrictive-use provisions will remain for the term of the loan.
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6514653088 United Stat_,^ Department of Agricultum Rural Davalopment
375 Jackson Streat 410 Farm Cmdrt Building Saint Paul, Minnesota 55101 Phone: 651-602-7822 FAX: 651-602-7825 TTY: 651-602-7830
Builcfing the Dream
December 31, 2002 " PAIL
Franeonia Associates P O Box 238 Taylors Falls, MN George Walls 28025 St CroSx Trail Shafer, MN 55074 Marge Alden do Croix Management Co. P.O. Box 236
Taylors Falls, MN 55084
SUBJECT:
To Whom it May Concern: PLEASE TAKE NOTE that the entire indebtedness due on the promissory note(s) and/or assumption agreement(s) which evidence the loan(s) received by you from the United of America, acting through the Rural Housing Service, United States Department of Agriculture, Is now -declared immediately due and payable. The loan is described as follows;
May 17,1978
$341,200.00
The promissory note(s) and/or assumption sgreement(s) is(are) secured by a real mortgage described as follows: May 17,1378 Office of County Recorder Chlsago County, Minnesota 1531S8
RuraJ Pivrtopmsnt to an Opportunity Uma«r, PtovldM'. «nd Emptojw CompteWs of «9atnln«Son «houJd b® «M« to: USOA. Director, 0»e® o( a*« Mghs, WtsWr^too. O.C. 202SOS41D
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Page Two Franconia Associates Sunrise River This acceleration of your indebtedness is made in accordance with the authority granted in the above-described real estate Instruments). The reasons for this acceleration of your Indebtedness are as follows: Failure to provide adequate management Failure to meet reporting requirements Permitting the encumbrance of the title by allowing a junior lien to be placed against the property without prior written consent The indebtedness due is S191il83&.20___ unpaid principal, and J>JLS2.42__unpaid interest, as of December 31, 2002, plus additional interest accruing at the rate of 54^34 per day thereafter, plus any advances to be made by the United States for the protection of its security and interest accruing on any such advances. Unless full payment of your indebtedness is received and all actions as outlined in the attachment entitled 'Tenant Protection Actions'* are taken within 30 days of the date of this letter, the United States will take action to foreclose the above described rsal estate instrument, take possession of any project accounts, suspend any rental assistance, cancel any interest credit, notify tenants that foreclosure will be pursued, and pursue any other available remedies. Project rent rate levels shall not be increased due to loss of subsidies. The loca! Servicing Office should be contacted immediately to discuss the steps to take to remedy the deficiencies of the account or pay the loan in full. Payment should be made by cashier's check, certified check, or postal money orders to the order of the USDA, Rural Housing Service at your (oca! Servicing Office. If you do not comply with all requirements to prepay, or do not submit to the United States any payment sufficient to pay the entire indebtedness, or comply.with any arrangements agreed to between the Rural Housing Service and yourself, the action or payment WJU,^OT_CANCEL the effect of this notice. Acceptance of such paymsnt will be subject to agency regulations governing payments in full [and the provisions of the Housing and Community Development Act of 1987. Such provisions normally require restrictive-use covenants be placed in effect at the time of the prepayment] Note; The preceding within brackets will be omitted for projects whose loans were made before December 22, 1979, unless less than one year has elapsed since the date the borrower had submitted a request to prepay the loans(s) under the provisions of RD Instruction 1965-E, if insufficient payments are received and credited to your account, or payment without tenant displacement protection actions are accepted, no waiver or prejudice ci any rights which the United States may have for breach of any promissory note or covenant in the real instrument will result, and the Rural Housing Service may proceed as though no such payment had been made.
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PA6E 30
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Page 3 Franconia Associates Sunrise River · The above described real estate Instrument provides that the United States may foreclose without Court action by selling the real estate at public' sale after June 30, 2003. The Government intends to sell the property In this manner. No further notice is required to be given you concerning this foreclosure. However, you have the opportunity to hav^ an informal meeting with the decision-maker (the undersigned) and/or an administrative appeal hearing before the foreclosure takes place, This is an opportunity to discuss why you believe the United States is in error in accelerating your account and proceeding with foreclosure. If you request an informal meeting with the decision-maker or have any questions concerning the decision and/or facts used in making our decision, you should contact this office in writing to request a meeting. The request for an informal meeting must be sent to the undersigned no later than January 15, 2003. Requests which are postmarked by the US Postal Service on or before that date will be considered as timeiy received. You also have the right to an administrative appeal hearing with a hearing officer in lieu of, or in addition to, a meeting with this office. If you request an informal meeting with the decision maksr, and the meeting does not result in a derision in which you concur, you will be given a separate time frame in which to submit your request for an administrative appeal. See the attachment for your appeal rights. If you do not wish to have an informal meeting with the decision maker as outlined above, you may request an administrative appeal hearing with a member of the National Appeals Division, The request for an administrative appeal must be sent to the National Appeals Division, Eastern Regional Office, William A. Crutehfieid, Sr, Area Supervisor, 8909 Purdue Road, Suite 240, Indianapolis, IN 462S3, no later than January 30, 2003. Requests which are postmarked by the U.S. Postal Service on or before that date will be considered as timely received. If requesting an administrative appeal, please include a copy of this letter with your request. In addition to an informal meeting, you have the right to request mediation or other form of Alternative Dispute Resolution (ADR) to resolve the adverse decision. There wit! be a cost for this service, The request to us® mediation or other form of ADR may be made at any time prior to a formal hearing. A request to exercise this option to settle the dispute on the denial will stop the running of the 30-day period you have to request an appeal. If you request an appeal, and prior to the appeal hearing, decide to request this option, you have waived your right to an appeal hearing until after conclusion of mediation or other ADR; however, you have the right to an appeal hearing within 45 days of the conclusion of mediation or ADR. tf you fail to comply wrth the requirements outlined herein, the United States plans to proceed with foreclosure.
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Page 4 Franconia Associates Sunrise River The Federal Equal Credft Opportunfty Act prohibits creditors from discriminating againr.t credit applicants on the basis of race, color, religion, national origin, sex, marital status, handicap, or age (provided that the applicant has the capacity to enter into a binding contract), because all or part of the applicant1s income derives from any public assistance program, or because the applicant has, in good faith, exercised any right under the Consumer Credit Protection Act, The Federal agency that administers compliance with the law concerning this creditor is the Federal Trade Commission, -Equal Credit Opportunity, Washington^ D.C. 20580.
UNI
TATES
·jen Q. Wenzel State Director RurarDevetopment, acting on behalf of the Rural Housing Service, (successor in interest to the Farmers Home Administration) State of Minnesota U.S. Department of Agriculture
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·Provide the local Servicing Office with a current list of all tenants showing their adjusted Incomes. Th« Servicing Office will: (a) Notify tenants that the project is being prepaid;
(b) Send eligible tenants in the project "Letters of Priority Entitlement (LOPE)", for priority placemen-': in other Rural Housing Service projects. Extend all tenant for 1 SO days after the data the accelerated Joan was paid off at the same rental and terms that were in effect on the day of the acceleration. (If tenant is receiving RA, the tenants' share of the rent will be reflected on the lease.) Execute resirictfve-usa provisions, as appropriate, for incorporation into releases of security instruments to be filed (If the loan was made prior to December 21, 1979, no restrictive-use provisions will be Included in the releases of security instalments, unless less than one year has elapsed since tie date' the borrower had submitted a request to prepay the foan(s) under the provisions of RO Instruction 1985-E.) (NOTE: Any tenants or applicants for occupancy protected by these restrictions may not have total sheiter costs (rent and unities) rosed above 30 percent of adjusted income or current shelter costs, whichever Is higher.) If the loan on this project to build or acquire new units was mada on or after December 15, 1989, the restrictive-use provisions wjjf remain for the term of the loan.
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PA6E 93
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United States O«partmantof Agriculture
Rural
n Street 410 Farm Credit Building ; S$t- Paul, Minnesota 55101 Phone: 651-602-7822 651-602-7830
Building the Januaij 2, 2003
SUBJECT: Pranconia Associates Notice of Acceleration TO: Leaec Hofiman, MFH Specialist Waite Park Area OfficeEnclosed arc copies of the Notice of Acceleration sent to Franconia Associates aa,d the general partners, Further payments should cot be accepted on this account unless the reasons for acceleration are cured or the loan will be paid in fall subject to any restrictive-use provisions. Please notify the tenants.using Guide Letter 1965-E-2, B-3, or E-5, modified as appropriate, that the Agency is pursuing foreclosure and that prepayment may occur. If foreclosure proceeds, we will send farther processing instructions after ail appeal rights have expired or tte appeal is concluded.
Scott Knutson Acting MFH Program Director
cc: Rodney Jackson
RDM East Central Area
Rural D«v«lepm«t te *n Opportunity Umdef, provWur; trrf Employer CafnpWnts of sflsedrnfmticm inouW tw cent ta USDA, Otrector. Offlot of CiviS Rlgh*. Wn»Wng»n, D.C. 20250-8410
Exhibit B
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PAGE 99
United States Department of
Rural Development
380 South Garteld Street Cambridge MN S5008 Phone 763-689-3354 Ext 4 Fax 763-689-2309 TDD 651-602-7830
February 13, 2003 RETURN Pranconia Associates PO Box 236 Taylors MN 55084 George Vitalis 28025 St Croix Trail ShaferMN55074 Marge Alden % Croix Management PO Box 236 Taylors Falls MN 55084 Subject: Informal Meeting Review
To Whom It May Concern: We appreciated the opportunity to review the facts relative to the acceleration of your loan account. We regret that we are unable to change OUT original decision of December 3 1 , 2002. The specific reasons for the acceleration of your loan account can be found in that December 31, 2002 letter, (attached) If you believe that facts used in this case are in error, you may pursue any or all of the following two options. Option I - Mediation or Alternative Dispute Resolution (ADR) You have the right to request mediation, the form of Altetaative Dispute Resolution (ADR) authorized by the United States Department of Apiculture for the issues thai are available for mediation. The University of Minnesota Extension Service, through its Farmer-Lender Mediation Pro^atn will conduct mediations. You mil hove to pay for 5® percent of the cost of mediation. Rural Development will pay for the other 50 percent of the cost You have 30 days from the date of this letter to request mediation. Once you request mediation, it stops the running of the 30-day period in which you may request an appeal (described in Option 2). If mediation does not result in resolution of these issues, you have the right to continue with a request for an appeal hearing as set forth in Option 2.
US0A Runl Development i* an Rqutl Opportunity lender. Provider, and Bmptoyer. Complaint* of dfecrimfturion *ho»M be Jew la: USDA, Wractor, OUfcs of Civil Rights, Wwhinpan DC 2Q230.S410
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When mediation is concluded, you will be notified of the result and advised that you must appeal within whatever remains of your original 30 day appeal period if you wish further review of the adverse decision. If you request mediation prior to filing for an appeal, the number of days ycm will have to request an appeal will be 30 days from the adverse decision minus the number of days you took to request mediation. Mediation does not take the place of, or limit your rights to, an appeal to the National Appeals Division (NAD); howover, an NAD appeal hearing would take place after mediation. You may skip the informal meeting and mediation and request an appeal, hearing. However, in doing so, you will automatically waive your rights to mediation once an NAD appeal hearing is held. If you elect to seek mediation, xoor.^ittes_regiies| for this service must be sent to the FarmerLender Mediation Program SsJhsJhe^ougon^Me^afiEMSI^SE.ta ®*e brochure, "Mediation at the University of Minnesota", which is attached to this letter. You must make your request no later than 30 caleadar days from the date of this letter. Mediation Program Address Mary Nell Preisler Statewide Mediation Coordinator Farmer-Lender Mediation 1526 170* Avenue Bejou,MN 56516-9736 Phone:(218)935-5785 Please send a copy of your request to the Rural Development Alternate Dispute Resolution Coordinator. Rural Development Address Bill Slininger USD A Rural Development Alternate Dispute Resolution Coordinator 823 Lief Erickson Place St. Cloud, MN 56301-5987 Phone: (320) 259-8507
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Option 2 - Request an Appeal You may request an appeaj hearing by the National Appeals Division (NAD) rather than an inform a] review or mediation. There is no cost for an appeal Your request for an appeal must be made no later than. 30 days from the date you received the this letter. You must write the Assistant Director, NAD. NAD Address Mr. WDliam Crutcbfield, Regional Assistant Director Eastern Regional Office, National Appeals Division 8909 Purdue Road, Suite 240 Indianapolis, Indiana 46268 Phone: (3 1 7) 871-3025 Your request for a NAD bearing musistate.thejcagons why you believe the decision is incorrect, be pasonal.ly.sigafed by you, and must ij3cH\£LrJL22I2X °f ^s letter. Please also send a copy of your request to the Rural Development State Appeals Coordinator. Rural Development Address Bill Sliningcr USDA Rural Development State Appeals Coordinator 823 Lief Eriekson Place St. Cloud, MN 56301-5987 Phone: (320) 259-8507 You have the right to an appeal hearing within 45 days of the receipt of your request You or your representative or counsel may contact this office anytime during regular office hours in the 1 0 days following the receipt of your request for a hearing to examine or copy relevant non-confidential material in your file. Photocopies will be provided to you. Your representative or counsel should have your written authorization to represent you and review your file, The NAD Hearing Officer will contact you regarding a lime and place for the hearing. You may aJso request a teleconference hearing in lieu of the face-to-face hearing. At anytime before the scheduled hearing you may also request that the Hearing Officer make a decision without a hearing, If you do, the Hearing officer's decision will be based on the Rural Development file, any written statements or evidence you may provide and any additional information the Hearing Officer tWnks necessary.
12/19/03
FRI 09:31
[TX/RX NO 7380]
APP18
Case 1:97-cv-00381-FMA
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PAGE 93
The Federal Equal Credit Opportunity Act prohibits creditors from, discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, handicap, age (provided that the applicant has the capacity to enter into a binding contract), or because all or part of the applicant's income derives from any public assistance program. Department of Agriculture regulations provide that BO agency, officer, or cmpjoyec of the United States Department of Agriculture si.aU exclude from participation In, deny the benefits of, or subject to discrimination any person based on race, color, religion, sex, age, disability, or national origin under any program or activity administered by such agency, officer, or employee. The Fair Housing Act prohibits discrimination in real estate-related transactions, or in the terms and conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national origin. If an applicant or borrower believes he or she has been discriminated against for any other reasons, thai person can write flic Secretary of Agriculture, Washington, D.C. 20250. Applicants also cannot be denied a loan because the applicant has in good faith exercised his or her right under the consumer Credit Protection Act. If an applicant believes lie or she was denied a loan, for this reason, the applicant should contact the Federal Trade Commission, Washington, D.C. 20580. ·.-·-? Sincerely,
RODNEY A. JACKSON Rural Development Manager Attach: "Mediation at the University of Minnesota"
12/18/03
FRI 09:31
[TI/RX NO 7380]
APP19
Case 1:97-cv-00381-FMA
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BOX 238 TAYLORS FAILS MN 5608-1 651 «5-<9941 FAX 831 465-3080
Croix IVIahaqement
'lM-. i'-'vV-'-"'-4' '··'·.if*'''"-"' i"f:li
fcf:i?|fiMSl »«;i(i!i^*«=|a«K^
Arthur Garcia Fax? 202 690-3444 651-465-6841
From:
MARGE ALDEN
April 23, 2002
CCs
D for Rfflwww
D Pfoasa Comment
Q Pt@ase R®piy'
O Ptease Urgent
First I want to say how much we appreciated the chance to meet with you on April 15: 2002. I greatly appreciate your willingness to review the Minnesota RO situation and what there actions are doing to my company and me personalty. At the time we met I suggested transferring servidng of al properties! handle in MN to Wisconsin. This originally was a suggestion of your attorney since it is a federal program any can handle servidng. Time is of the essence. I amrequestingI be allowed to immediately proceed with transferring servicing and/or a moritoriurn be Imposed on MN RD to cease harrassmerrt of owners and hart any chang? of management until this is resolved. : At the demand of RD by threats to owners I fee manage 515's for I have now lost. 59% of my business in Minnesota. If your office doesnl intercede this week, I will loose another 19% by me end of the month. TMs is a total of 3S% of my tee management business. Thank you in advance for your assistance. I am in my office al! day ioday at 651 465-5841. If I donl hear from you today, I will call you tomorrow to discuss any suggestions you may have or answer any questions.
Exhibit B
APP20
Case 1:97-cv-00381-FMA
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BOX 238 TAYLORS FALLS. MM 55084
651 466-6W1 FAX 651 -465-3030
mmmmmmmmm^m roix Management
To:
Faw
Arthur Garcia 202 690-3444 651-465-6841
Frtms
MARGE ALDEN
May..28,JJQJD2 » & Obidiah Baker
D for Rswaw
D Pteasa Conwwnt
D
Reply
D Please Urgent
I know, according to a message left by Wayne Rogers, that your office is investigating the situation wftn MN RD and that you are aware that there are some serious deficiencies, it has been six weeks since we met ami! aont mean to be impatient btA I |ave now lost 85% of my fee management 515 business In Minnesota. Rural Development continues threatening owners with foreclosure if they donl change management and do whatever iney wart. Since there is no RD hierarchy structure and no nne in charge to talk to. tne owners are reluaaniy reading to the threats, They see what MN Rural Development staff have done to destroy my and the harassment trtat takes in Minnesota to owners, managers, and the good Rural Development staff that, they are frightened. I requested at ourmcoting and in my fbltow up fax and ^conversations to nave servicing of ail complexes I manage handled out of the Wisconsin office. The jState Director ana Multf-nousing coordinator in Wisconsin have agreed and all I need is a letter torn Washington authorizing the change in servicing offices. Thte was originally suggested through a Dept of Agriculture attorney. Since tflls is 8 program servicing can be handled from any state. AJl! f need is written authorization ftwn Wasrtington. This Is an immediata remedy until you have time te.eoritinuc your Investigation and resafve the I been served papere at the demand of the Dulijrth office and will have a court appearance in a few If this can not be resolved. The RD staff demanded an owner take me to court and wasjn. my time and money or they wfli foreclose on his 515 properties. This situation is very serious. I have tried to worK wfth Washington and have attempted to keep 'this out of court and out of the press. I have no were else to turn. Please forward authorization to move everything | am involved with to Wisconsin by return fax or Sell me who we in Minnesota can turn to for a Sevaf playing field. There are g hand full of RD staff in Minnesota that are destroying the program and credibility of the 516 program and have seriously my company. Tnank you in. advance for your assistance.
E
APP21
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BOX 236 TAYLORS FALLS, MN 5508-* 851 465-5841 FAX 661 465-3080
Tos Paw
ObkJiah 202 66O-S444
MARGE ALDEN
651-465-6841
CCi
May 28,
For Rwtrw
O
Cemmant
D
Reply
O Ptease Urgent
Welcome back! I an 0Iad to hear you are back and dding well The Minnesota Rural Development situation continues to escalate. Since we last talked they hrre threatened all 515 owners I manage fer with foreclosure and the owners have reluctantly pulled 85% of my Minnesota business. This is very serious. I grn requesting a letter from whoever the appropriate staff person is in your office to allow me to transfer the res! of the properties f o Wisconsin for servicing. Since (tea federal program. I have been assured this is a sjmpte procedure letter. Wisconsin is agreeable. 1 manage property there and have never dad a problem with their customer friendly professional staff.
;' ·'
Die
is critical Your immediate'response Is appreciated. Thanks, Obe.
F
APP22
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Dated: January 15, 2004 Refiled: February 9, 2004 (per Court's Order of January 23, 2004)
Respectfully submitted, s/JeffH.Ecldand Mark J. Blando, Of Counsel FAEGRE & BENSON LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402-3901 Telephone: (612) 766-7000 Telecopy: (612) 766-1600
Filed Electronically
M2:20600240.01
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