Before Rich, Newman, and Michel, Circuit Judges.
The opinion of the court was delivered by: Michel, Circuit Judge.
Appealed from: United States Court of Federal Claims
Senior Judge Wilkes C. Robinson
Opinion for the court filed by Circuit Judge MICHEL. Dissenting opinion filed by Circuit Judge NEWMAN.
Plaintiffs-Appellants Alder Terrace, Inc., Alder Terrace Associates, and David A. Bolin, Sr. (collectively, the "Developer") appeal from the judgment of the United States Court of Federal Claims dismissing their complaint pursuant to Rules 12(b)(1) and (4) of the Rules of the United States Court of Federal Claims for lack of jurisdiction and for failure to state a claim upon which relief can be granted. See Alder Terrace, Inc. v. United States, No. 96-500C (Fed. Cl. Sept. 4, 1997). Oral argument was heard on September 3, 1998. Because the Developer's claims for breach of contract or, alternatively, for just compensation under the Takings Clause of the Fifth Amendment accrued when enactment of a statute vitiated the Developer's contractual right to prepay its loan more than six years before the Developer filed suit, we agree with the Court of Federal Claims that the Developer's claims were barred by that court's six-year statute of limitations and therefore affirm its dismissal of the action.
This case concerns an alleged government-caused breach of certain contracts between the Department of Housing and Urban Development ("HUD") and the Developer for the construction and operation of rental housing for low income persons in Ellensburg, Washington. The contracts were entered into and performed pursuant to a complex statutory and regulatory scheme (the "Program"), the evolution of which is described comprehensively in the Court of Federal Claims's opinion in this case as well as those deciding Anaheim Gardens v. United States, 33 Fed. Cl. 773 (1995), and Cienega Gardens v. United States, 33 Fed. Cl. 196 (1995). Only the aspects of the Program relevant to our decision will be described here.
The events relevant to this decision began when the Developer contracted with HUD pursuant to section 221(d)(3) of the National Housing Act, 12 U.S.C. §§ 1715l(d)(3), 1715z-1, to construct a fifty-one unit housing project named "Alder Terrace." The National Housing Act was expressly "designed to assist private industry in providing housing for low and moderate income families and displaced families." Id. § 1715l(a). To this end, the statute authorized HUD *fn1 to insure mortgages "upon such terms and conditions as [HUD] may prescribe." Id. § 1715l(b). Thus, a developer enters the Program when HUD becomes a party to the financing of its housing project. In return for HUD insuring its loan, a developer submits to HUD regulation of its housing project.
The Developer executed a promissory note (the "Note") to its lender, Sparkman and McLean Company, secured by a long-term deed of trust on January 4, 1968. In accordance with the statute, HUD and the Developer's lender then entered into a contract for mortgage insurance dated January 6, 1968. The Developer qualified for such mortgage insurance because it was a "limited distribution mortgagor" as defined by HUD regulations:
The limited distribution mortgagor shall be a corporation, trust, partnership, association, other entity, or an individual. Such mortgagor shall be restricted by law (or by [HUD]) as to distribution of income *fn2 and shall be regulated as to rents, charges, rate of return, and methods of operation in such form and manner as is satisfactory to [HUD] to effectuate the purposes of this provision.
24 C.F.R. § 221.510(c). *fn3 Pursuant to these statutory and regulatory provisions, the Developer entered into a "Regulatory Agreement" with HUD regarding the operation of Alder Terrace, which governed such matters as tenant eligibility, rent rates, profits, maintenance, and finance. The Regulatory Agreement was to remain in place as long as HUD insured, or had the obligation to insure, the mortgage on Alder Terrace.
In accordance with the applicable regulation, HUD's insurance of the Developer's mortgage loan was indicated by an endorsement on the Note. See 24 C.F.R. § 207.254(a). The effect of such an "initial endorsement" is that HUD, the Developer, and the lender "shall be bound by the provisions of [24 C.F.R. Part 207, Subpart B] to the same extent as if they had executed a contract including [those] provisions . . . and the applicable sections of the [National Housing Act]." 24 C.F.R. § 207.254(c).
The Note provided that prepayment prior to the final maturity date was not permitted without the approval of HUD. However, in accordance with the regulations, the Note also provided that "a maker which is a limited dividend corporation may prepay without such approval after twenty (20) years from the date of final endorsement of this note by [HUD]." *fn4 Because the Developer qualified as a limited dividend (distribution) corporation and because the final ...