`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`CALLAWAY MANOR APARTMENTS, LTD., FOX
`GARDEN APARTMENTS, LTD., FOX MANOR
`APARTMENTS, LTD., LAKE GARDEN
`APARTMENTS, LTD.,
`Plaintiffs-Appellants
`
`v.
`
`UNITED STATES,
`Defendant-Appellee
`______________________
`
`2018-1926
`______________________
`
`Appeal from the United States Court of Federal Claims
`in Nos. 1:14-cv-00332-EGB, 1:14-cv-00333-EGB, 1:14-cv-
`00334-EGB, 1:14-cv-00335-EGB, Senior Judge Eric G.
`Bruggink.
`
`______________________
`
`Decided: October 2, 2019
`______________________
`
`MARK BLANDO, Eckland & Blando LLP, Minneapolis,
`MN, argued for plaintiffs-appellants. Also represented by
`JEFF HOWARD ECKLAND, VINCE REUTER, LARA SANDBERG;
`WILLIAM LEWIS ROBERTS, Faegre Baker Daniels LLP, Min-
`neapolis, MN.
`
` GEOFFREY MARTIN LONG, Commercial Litigation
`Branch, Civil Division, United States Department of
`
`

`

`2
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`Justice, Washington, DC, argued for defendant-appellee.
`Also represented by JOSEPH H. HUNT, ROBERT EDWARD
`KIRSCHMAN, JR., FRANKLIN E. WHITE, JR.
` ______________________
`
`Before O’MALLEY, LINN, and HUGHES, Circuit Judges.
`Opinion for the court filed by Circuit Judge O’MALLEY.
`Opinion concurring-in-part and dissenting-in-part filed by
`Circuit Judge HUGHES.
`O’MALLEY, Circuit Judge.
`Appellants Callaway Manor Apartments, Fox Garden
`Apartments, Fox Manor Apartments, and Lake Garden
`Apartments (collectively, “Appellants”) appeal from a deci-
`sion of the United States Court of Federal Claims (“Claims
`Court”) granting the government’s motion for summary
`judgment on certain breach of contract and takings claims.
`Callaway Manor Apartments, Ltd. v. United States, 136
`Fed. Cl. 313 (2018). We find that the Claims Court improp-
`erly applied the law on the first issue and did so, in part,
`with respect to the second issue. Therefore, we reverse-in-
`part, vacate-in-part, affirm-in-part, and remand.
`I. BACKGROUND
`A. The Asserted Contracts
`Between 1983 and 1984, Appellants each entered into
`identical loan arrangements with the Farmers Home Ad-
`ministration (“FmHA”) of the United States Department of
`Agriculture. Under the loan arrangements, FmHA issued
`Appellants mortgage loans in exchange for Appellants
`providing housing for low-income tenants during the life of
`the loans (50 years) under Section 515 of the Housing Act
`of 1949, 42 U.S.C. §§ 1485, 1490a.
`The loan arrangements consisted of three contempora-
`neously executed documents: a loan agreement, promissory
`note, and mortgage. Together, the parties labeled these
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`3
`
`three documents the “loan obligation.” J.A. 32 (“The in-
`debtedness and other obligations of the Partnership under
`the [promissory] note evidencing the loan, the related secu-
`rity instrument[,] and [any] related agreement are herein
`called the ‘loan obligation.’”).
`The loan agreement described the terms of the loan, re-
`citing that FmHA would provide a loan to Appellants in ex-
`change for Appellants abiding by certain restrictions on use
`of the property prescribed by § 515. J.A. 32–34.1 The
`promissory note, issued under a 50-year term, detailed the
`amount of the debt and terms of payment, including provid-
`ing that the “[p]repayment[] of scheduled installments, or
`any portion thereof, may be made at any time at the option
`of the Borrower.” J.A. 40–41. Finally, the mortgage—
`which noted that the loan must be used in compliance with
`§ 515 and FmHA regulations—recited an additional use re-
`striction that required Appellants to use the property for
`low-income § 515 housing for 20 years before they could
`prepay the loan and exit the § 515 program. J.A. 4, 35, 39.
`In addition to being contemporaneously executed and
`pertaining to the same set of facts, the three documents
`also cite to each other. For example, the mortgage refer-
`enced the promissory note and expressly incorporated by
`reference the loan agreement. J.A. 4, 39. And, the loan
`agreement incorporated by reference both the promissory
`note and mortgage. J.A. 4, 32.
`It is undisputed that, under the loan obligation and the
`FmHA regulations at the time the parties entered the ar-
`rangement, Appellants were required to use the loan for
`
`
`1 The parties agree that the terms of the loan agree-
`ments, promissory notes, and mortgages are identical
`among all Appellants. Appellant Br. 3 n.1; Government Br.
`6. We, therefore, cite to instruments only between Calla-
`way Manor and the Government for simplicity.
`
`

`

`4
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`§ 515 housing for a minimum of 20 years. But the moment
`the 20-year restrictive use period expired, Appellants could
`prepay the remaining balance on the loan, exit the pro-
`gram, and terminate the requirement of using their prop-
`erty for § 515 housing. See Appellant Br. 4; Government
`Br. 4.
`
`B. Enactment of ELIHPA and HCDA
`Before Appellants’ 20-year restrictive use period
`ended, Congress, concerned with the vitality of the § 515
`program due to the number of borrowers exercising their
`prepayment options, enacted the Emergency Low Income
`Housing Preservation Act of 1987, Pub. L. No. 100-242, 101
`Stat. 1877 (1988) (“ELIHPA”) and the Housing and Com-
`munity Development Act of 1992, Pub. L. No. 102-550, 106
`Stat. 3672 (1992) (“HCDA”).
`Under ELIHPA and HCDA, regardless of the terms of
`any loan agreement, the borrower may no longer prepay
`loan installments at any time after the 20-year restrictive
`use period ends. The borrower, rather, must file a notice of
`intent to prepay the loan, to which the Department of Ag-
`riculture’s Office of Rural Development and its agency, the
`Rural Housing Service (FmHA’s successor), must respond
`by “mak[ing] reasonable efforts to enter into an agreement
`with the borrower . . . to extend the low income use of the
`assisted housing.” 42 U.S.C. § 1472(c)(4)(A) (2012). For
`example, Rural Development may offer the borrower incen-
`tives to remain in the low-income housing program, includ-
`ing, e.g., reduced interest rates or rental assistance. 42
`U.S.C. § 1472(c)(4)(B) (2012); 7 C.F.R. § 3560.656. If the
`borrower rejects these incentives or the agreement is not
`extended, the borrower must attempt to sell the property
`at fair market value to either a nonprofit organization or a
`public agency. 42 U.S.C. § 1472(c)(5)(A)(i); 7 C.F.R.
`§ 3560.658. Finally, if a sale is not completed within 180
`days from that point, the borrower may prepay the loan
`without
`any
`further
`restrictions.
`
`42 U.S.C.
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`5
`
`§ 1472(c)(5)(A)(ii); 7 C.F.R. § 3560.659(k); see also Rural
`Development Multifamily Housing Project Servicing
`Handbook, HB-3-3560, Chapter 15.31 (requiring the Loan
`Servicer to “[s]end a letter to the borrower notifying him or
`her that prepayment is permitted” if no sale is completed
`within the 180-day period).
`As relevant here, because of the enactment of ELIHPA
`and HCDA, Appellants could not automatically prepay
`their loan at the end of the 20-year restrictive use period
`like their loan obligations had permitted. Appellants, ra-
`ther, were required to follow the procedure outlined above
`before they were given the option to prepay the loan and be
`released from the § 515 restrictions.
`C. Appellants’ Restrictive Use Period Ends
`Appellants’ 20-year restrictive use period ended in
`2003 and 2004, but Appellants did not attempt to exercise
`their right of prepayment until 2008. Specifically, on Feb-
`ruary 28, 2008, Rural Development sent Appellants writ-
`ten notice expressing concern about the economic viability
`of their properties. J.A. 59, 138, 203, 271. In response,
`Appellants submitted prepayment requests, received by
`Rural Development on April 28, 2008, expressing their de-
`sire to prepay their respective loans by December 1, 2008.
`J.A. 6, 65–66, 142–43, 207–08, 275–76.
`Consistent with the requirements of ELIHPA and
`HCDA, Rural Development offered Appellants incentives
`to keep the properties in the § 515 housing program.
`J.A. 328, 338–39. Appellants rejected the incentive offers
`and, in 2009 through 2010, marketed their properties for
`the required 180-day period but were ultimately unable to
`sell the properties. J.A. 6. At this point, it is undisputed
`that Appellants satisfied the ELIHPA and HCDA require-
`ments and could have prepaid the loans to be released of
`the restrictive use requirements.
`
`

`

`6
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`In September 2010, facing foreclosure of their proper-
`ties and having difficulty maintaining occupancy due to
`“high unemployment and loss of jobs in the area,” Appel-
`lants requested that Rural Development allow them to of-
`fer deeds in lieu of foreclosure. See J.A. 70–71, 153–54,
`211–12, 279–80. In February 2011, Rural Development in-
`formed Appellants that, due to their violation of the loan
`agreement for various reasons including non-payment of
`debt, their debt to the Government would be accelerated.
`J.A. 72–74, 155–57, 213–15, 281–83. Appellants thus of-
`fered Rural Development their deeds in lieu of foreclosure
`on May 18, 2011, which Rural Development accepted in No-
`vember 2011. J.A. 115, 180, 247, 314. Appellants officially
`transferred the deeds to Rural Development on August 1,
`2012. J.A. 7.
`The accepted deed offers included multiple enclosures,
`including Form RD 3560-22, “Offer to Convey Security,”
`(hereinafter, the “Offer”) which stated:
`I. We hereby offer to convey to the United States of
`America, acting through the Rural Housing Service
`. . . our property covered by mortgages, deeds of
`trust, or other security instruments held or insured
`by the Agency[] in full satisfaction of debt.
`* * *
`IV. At closing the following will be assigned to the
`Agency: . . . (4) all our rights, title, and interest in
`all contract rights, inventories, equipment, fur-
`nishings, accounts, general intangibles, gross re-
`ceipts, gifts, pledges, income, and revenue as
`described in security instruments held or insured
`by the Agency.
`J.A. 90, 159, 226, 293. This Offer language is central to the
`parties’ breach of contract claims.
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`7
`
`D. Procedural History
`On April 22, 2014, Appellants each sued the Govern-
`ment in the Claims Court for breach of contract or, in the
`alternative, a taking in violation of the Fifth Amendment
`based on the Government’s failure to permit Appellants to
`prepay their debt once the 20-year restrictive period ended.
`Appellants’ cases were consolidated on April 15, 2016. On
`February 21, 2017, the Government moved to dismiss Ap-
`pellants’ breach of contract claim under Rule 12(b)(1) and
`moved for judgment on the pleadings as to Appellants’ tak-
`ings claim. First, the Government argued that Appellants
`lacked standing to bring the breach of contract claim be-
`cause, in executing the deeds in lieu of foreclosure, Appel-
`lants assigned the right to sue for breach of the prepayment
`right to the Government and, thus, could not demonstrate
`any redressable injury. Second, the Government argued
`that, even assuming interference with Appellants’ contract
`rights, the Government’s action could not constitute a tak-
`ing because it was acting in a proprietary, not sovereign,
`capacity.
`On August 8, 2017, the Claims Court converted the
`Government’s motion to dismiss to one for summary judg-
`ment and directed the parties to submit proposed findings
`of fact. On February 28, 2018, the Claims Court granted
`the Government’s motion. Callaway Manor, 136 Fed. Cl.
`at 315.
`First, regarding the breach of contract claim, the
`Claims Court relied on Dominion Res., Inc. v. United
`States, 641 F.3d 1359, in holding that, “[a]n assignment
`may be effective to transfer the right to bring a claim for
`damages resulting from breach of a contract, because the
`rights of a party to a contract encompass not just the
`party’s continuing rights and duties under the contract, but
`also the party’s existing right to enforce the contract for an
`ongoing breach and to collect damages that have been in-
`curred.” Callaway Manor, 136 Fed. Cl. at 318 (internal
`
`

`

`8
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`quotation marks omitted). And, here, the Claims Court
`found that the loan agreement, promissory note, and mort-
`gage were “all of one piece.” Id. at 320. The court thus
`concluded that the reference in the Offer to “all our
`rights . . . in all contract rights . . . described in the secu-
`rity instruments” “clearly incorporate[d] the contract
`rights set out in the [promissory] note”—namely, the right
`to prepayment. Id. Accordingly, when Appellants assigned
`their contract rights to the Government, “the prepayment
`right was no longer enforceable.” Id. The contemporane-
`ous circumstances, according to the Claims Court, sup-
`ported this outcome. The court explained that the events
`surrounding Appellants’ assignment established that Ap-
`pellants “sought a clean exit from the program” and “did so
`without carving out the right to later bring a breach of con-
`tract claim.” Id. at 319–20. The court, therefore, concluded
`that Appellants lacked standing to bring the breach of con-
`tract claim and granted summary judgment on this issue
`in favor of the Government. Id. at 320.
`Second, regarding the takings claim, Appellants pre-
`sented two theories, one based on the Government’s breach
`of the prepayment right and one based on a regulatory tak-
`ing based on enactment of ELIHPA and HCDA. As to the
`former, the court held that a takings claim may only result
`from a contractual breach when the Government prevents
`performance of the contract and substantially takes away
`the right to damages. Id. But, here, while ELIHPA and
`HCDA prevented Appellants from prepaying their loans at
`the 20-year mark, the Government did not deprive Appel-
`lants of the right to sue for breach of contract. The court
`emphasized that “[t]he fact that [Appellants] chose to
`transfer the properties and associated contract rights to
`the government after they placed the government in breach
`does not create a taking.” Id. The court also rejected Ap-
`pellants’ regulatory taking theory, explaining that the ad-
`ditional burdens imposed by ELIHPA and HCDA were the
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`9
`
`result of the Government’s contract breach and, thus, could
`not constitute the basis of a takings claim. Id. at 321.
`Appellants timely filed the instant appeal on April 27,
`2018, arguing that they did not assign the Government
`their accrued claims for breach of contract and that they
`properly pleaded an alternative takings claim. For the rea-
`sons below, we agree with Appellants on both issues. We
`have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).
`II. DISCUSSION
`All issues presented in this appeal—standing, contract
`interpretation, and whether a taking has occurred—are
`questions of law that we review de novo. See Castle v.
`United States, 301 F.3d 1328, 1337 (Fed. Cir. 2002); NVT
`Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir.
`2004); Barlow & Haun, Inc. v. United States, 805 F.3d
`1049, 1054 (Fed. Cir. 2015). We review any underlying fact
`findings for clear error. CliniComp Int’l, Inc. v. United
`States, 904 F.3d 1353, 1357 (Fed. Cir. 2018). Summary
`judgment, moreover, “is, of course, in all respects reviewed
`de novo.” Cienega Gardens v. United States, 331 F.3d 1319,
`1328 (Fed. Cir. 2003).
`A. Contract Claim
`The Tucker Act grants the Claims Court jurisdiction
`over “any claim against the United States founded . . . upon
`any express or implied contract with the United States.”
`28 U.S.C. § 1491(a)(1). On appeal, the Government argues
`that Appellants lack Article III standing to assert their
`contract claim. To establish standing, a plaintiff must
`show that it suffered an injury in fact that is causally con-
`nected to the conduct complained of and redressable by
`court action. Lujan v. Defenders of Wildlife, 504 U.S. 555,
`560–61 (1992). According to the Government, Appellants
`have no legal right to enforce their breach of contract
`claim—and thus cannot establish a redressable injury—be-
`cause they assigned their prior accrued claims for breach
`
`

`

`10
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`of contract to the Government when they transferred their
`deeds with the Offer.
`Appellants contend that, in transferring their deeds to
`the Government with the Offer, they did not assign away
`their accrued claims for breach of the prepayment right
`and, thus, retain standing to pursue this claim. According
`to Appellants, the Claims Court erroneously applied Do-
`minion in determining whether the Offer included an as-
`signment of Appellants’ prior accrued contract rights of
`action. Under a proper reading of Dominion and our prior
`caselaw, Appellants contend that no express or implied as-
`signment of accrued rights occurred here. We agree with
`Appellants.
`Before addressing Dominion, we must address an ear-
`lier case, Ginsberg v. Austin, 968 F.2d 1198 (Fed. Cir.
`1992), in which we articulated the standard for determin-
`ing whether an assignment incorporates prior accrued
`claims. In Ginsberg, a landlord leased space in a building
`to a government tenant. During the holdover period fol-
`lowing the lease’s termination date, the landlord sold the
`building to a third party. Under the sales contract, the
`landlord assigned to the third party “all of [his] right, title
`and interest in, to and under the Tenant Leases . . . .” Gins-
`berg, 968 F.2d at 1199. The day before the sale closed, the
`landlord filed a claim with the contracting officer for addi-
`tional rent incurred by the government’s holdover. The
`contracting officer dismissed the landlord’s claims for lack
`of standing, and the landlord appealed to the Board of Con-
`tract Appeals. The Board affirmed the contracting officer’s
`determination, explaining that the landlord’s contract with
`the third party was “an unqualified transfer to [the third
`party] of all right, title, claim and interest in the lease, in-
`cluding claims for back rent.” Id. at 1200. As such, the
`landlord was no longer in privity with the government and
`lacked standing to make any claim against it.
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`11
`
`On appeal to our court, we reversed. We explained that
`the Board’s decision—based on “the purely legal determi-
`nation that upon transfer of real property, all rights to back
`rent are transferred to the assignee unless those rights are
`expressly reserved to the assignor”—was an error of law.
`Id. Noting that federal law was not dispositive of the issue,
`we turned to general property and contract law principles,
`explaining that, in both contexts, “uniform and long-stand-
`ing legal authority” dictates that accrued claims are not
`transferred with an assignment unless expressly stated.
`Id. at 1200–02 (first citing Shell Petroleum Corp. v. Jack-
`son, 77 F.2d 340, 342 (6th Cir. 1935) (“[I]t is well settled
`that in the absence of an express intention to do so, an as-
`signment of a reversionary interest in a lease will not cover
`rent already accrued.”); and then citing Nat’l Reserve Co. of
`Am. v. Metro. Tr. Co. of Cal., 17 Cal. 2d 827, 833 (1941)
`(“[U]nless an assignment specifically or impliedly desig-
`nates them, accrued causes of action arising out of an as-
`signed contract . . . do not pass under the assignment as
`incidental to the contract if they can be asserted by the as-
`signor independently of his continued ownership of the con-
`tract and are not essential to a continued enforcement of
`the contract.”)). Accordingly, we concluded that, because
`the landlord did not expressly state that he was transfer-
`ring his back-rent claim in the contract to the third party,
`he retained his accrued claims and possessed the requisite
`standing to pursue them on the merits. Id. at 1202.
`Almost twenty years later, in Dominion, we again con-
`sidered the relationship between an assignment of contract
`rights and prior accrued claims in the context of an assign-
`ment of contracts for disposal of spent nuclear fuel entered
`into under the Nuclear Waste Policy Act (“NWPA”), 42
`U.S.C. § 10222(b)(3). Under the NWPA, the United States
`Department of Energy may enter into contracts with utility
`companies for the disposal of the utilities’ high-level nu-
`clear waste and spent nuclear fuel. As relevant in Domin-
`ion, one such utility company entered into three contracts
`
`

`

`12
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`with the Department of Energy and, later, sold its nuclear
`power plants to a third party and assigned that third party
`its contracts with the government. 641 F.3d at 1361. The
`assignment provided that the utility company transferred
`to the third party, along with title to the spent nuclear fuel,
`“all rights of the Sellers . . . under the [Department of En-
`ergy] Standard Contracts (including all rights to any
`claims of Sellers related to DOE defaults thereunder).” Id.
`The third party ultimately sued the government in the
`Court of Federal Claims for interim storage costs, including
`costs incurred by the original utility company prior to the
`assignment. The Claims Court ruled in favor of the third
`party, awarding it costs including those incurred by the
`original utility company. On appeal to our court, the gov-
`ernment argued that the third party was not entitled to sue
`for the originally incurred costs, not because the assign-
`ment did not expressly include a transfer of accrued claims,
`but because such a transfer under the NWPA was barred
`by the Assignment of Claims Act. Id. at 1361. According
`to the government, Congress was required under Ginsberg
`to expressly waive the Assignment of Claims Act as to ex-
`isting breach of contract claims for such a transfer to be
`valid. That is, it was undisputed that the assignment ex-
`pressly included any prior accrued claims because the as-
`signment included the clause, “including all rights to any
`claims of Sellers.” Dominion, 641 F.3d at 1361. And, the
`court found it undisputed that “both parties clearly in-
`tended for the sale to include the transfer of the claim
`against the government.” Id. The only issue for our court,
`therefore, was whether a transfer of prior accrued claims
`was permitted under the NWPA and the Assignment of
`Claims Act. Id. at 1362.
`We determined that such an assignment was permitted
`because the NWPA included language that “‘[t]he rights
`and duties of a party to a contract entered into under this
`section may be assignable’” and “[o]ne of the rights of a
`party to a contract is the right to bring a claim for damages
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`13
`
`resulting from breach.” Id. at 1362–63 (quoting 42 U.S.C.
`§ 10222(b)(3)). Notably, in reaching our conclusion that
`Congress permitted the assignment of accrued claims
`based on the language of the NWPA, we emphasized that
`our ruling was “not to the contrary” of Ginsberg. Id. at
`1363. We explained that, “Ginsberg recite[d] no require-
`ment that the transfer of an existing breach of contract
`cause of action requires a separate, specific, express desig-
`nation of the claim in the assignment document” and, ra-
`ther, “a contract assignment may ‘specifically or impliedly
`designate’ accrued causes of action.” Id. (quoting Ginsberg,
`968 F.2d at 1201). And, here, the NWPA’s “may be assign-
`able” language “permitted just such a designation.” Id. Fi-
`nally, having determined that the assignment was
`permitted, and because “[t]his [wa]s not a case where there
`[wa]s any confusion over whether the parties intended to
`transfer the right to sue for pre-acquisition interim storage
`fees—it [wa]s undisputed that they did[,]” we held that the
`third party had the right to collect pre-assignment dam-
`ages. Id.
`Together, Ginsberg and Dominion establish that a con-
`tract assignment does not automatically transfer prior ac-
`crued claims stemming from that contract, but that any
`such assignment may include prior accrued claims, specif-
`ically or impliedly. Here, the assignment did not include
`Appellants’ prior accrued claims for breach of contract.
`The language at issue stems from the Offer, which pro-
`vides that Appellants assigned “all [their] rights, title, and
`interest in all contract rights . . . as described in security
`instruments.” It is undisputed that an assignment of ac-
`crued claims is permitted under Appellants’ contracts with
`the government. See Appellant Reply Br. 6. But merely
`because such an assignment was permitted does not signify
`that those accrued claims were actually included within
`the assignment. See Dominion, 641 F.3d at 1363. That is,
`in both Ginsberg and Dominion, we required more than
`
`

`

`14
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`simply the fact that an assignment of accrued claims was
`allowed to find that they were transferred.
`In Ginsberg, we required an “express” intention to
`transfer prior accrued claims, 968 F.2d at 1202, and in Do-
`minion, it was undisputed that, based on both the language
`of the assignment and the parties’ intentions, the prior ac-
`crued claims were transferred, 641 F.3d at 1363. And,
`through Ginsberg and Dominion, we provided examples of
`language that does and does not include an assignment of
`prior accrued claims. First, in Ginsberg, we found the lan-
`guage “Assignor hereby assigns to Assignee all of its right,
`title and interest in, to and under the Tenant Leases” in-
`sufficient to include an assignment of prior accrued claims.
`968 F.2d at 1199. Then, in Dominion, we found the trans-
`fer of “all rights of the Sellers . . . under the DOE Standard
`Contracts (including all rights to any claims of Sellers re-
`lated to DOE defaults thereunder)” was sufficient to in-
`clude a transfer of prior accrued claims. 641 F.3d at 1361.
`The Offer language at issue here is nearly identical to
`that at issue in Ginsberg. Compare J.A. 90 (Offer lan-
`guage, “all our rights, title, and interest in all contract
`rights . . . as described in security instruments”), with Gins-
`berg, 968 F.2d at 1199 (“all of its right, title and interest in,
`to and under the Tenant Leases”). Despite the Govern-
`ment’s arguments raised for the first time during oral ar-
`gument surrounding
`the
`temporal distinctions
`in
`Ginsberg—i.e., that the assignment language there indi-
`cated that the assignment took effect on December 23,
`1986, and the assignor filed a certified claim for backpay
`against the government the day earlier—we relied on no
`such distinction in concluding that the language at issue
`was insufficient to encompass prior accrued claims.
`And, contrary to the language found to include prior
`accrued claims in Dominion, the Offer does not include any
`language related to the Appellants’ “claims,” or any other
`type of waiver or release, as the Government conceded
`
`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`15
`
`during oral argument. Oral Argument at 15:25, Callaway
`Manor v. United States (No. 18-1926), http://oralargu-
`ments.cafc.uscourts.gov/default.aspx?fl=2018-1926.mp3
`(Q: “There is no statement of release, the word release ap-
`pears nowhere, there’s no waiver, there’s nothing of that
`sort.” A: “That’s correct, your Honor.”).
`Even reading the loan agreement, promissory note, and
`mortgage as one piece, as the Claims Court did, the Offer’s
`reference to “all contract rights . . . in security instruments”
`does not include the parties’ prior accrued claims. That is,
`even construing the Offer as transferring all rights in the
`loan agreement, promissory note, and mortgage to the Gov-
`ernment does not automatically include an assignment of
`Appellants’ accrued breach of contract claims stemming
`from those rights under Ginsberg and Dominion. The par-
`ties, moreover, defined the three documents collectively as
`the “loan obligation” and chose not to use that language in
`the Offer. It is, therefore, unclear that the parties even in-
`tended the Offer to encompass all rights in the three agree-
`ments by only referencing “security instruments,” which
`the Government concedes refers only to the mortgage, not
`the promissory note encompassing the prepayment right.
`Accordingly, under our precedent, the express language of
`the Offer does not encompass an assignment of Appellants’
`prior accrued breach of contract claims.
`Finally, contrary to the Government’s arguments, the
`circumstances surrounding the Offer do not establish an
`implied assignment of prior accrued claims. Rather, draw-
`ing all inferences in favor of Appellants as the nonmovant,
`the surrounding circumstances show that Appellants in-
`tended to prepay the debt and recover their properties in
`2008 but, at least based in part on the statutory require-
`ments preventing prepayment, suffered three additional
`years of reduced housing rates and insufficient funds, ulti-
`mately forcing them to offer their deeds in lieu of foreclo-
`sure. While these circumstances support a finding that
`Appellants sought to exit the § 515 program, they do not
`
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`16
`
`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`demonstrate that Appellants or the Government under-
`stood or intended the Offer to include Appellants’ prior ac-
`crued claims.
`And, the Government has not pointed to a single refer-
`ence to the contrary. In fact, the Government conceded
`during oral argument that all the Offer-related documents
`in the record deal with conveying the property or extin-
`guishing the loan and nothing “suggested that there was
`any interest, concern, waiver, release, or anything of that
`sort with respect to any sort of an accrued cause of action,”
`nor is there anything in the record that “suggests or implies
`that anybody was even thinking about conveying an im-
`plied cause of action.”
` Oral Argument at 17:05,
`http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2
`018-1926.mp3.
`Accordingly, because Appellants did not expressly or
`impliedly assign the Government their accrued claims for
`breach of contract based on the prepayment right, Appel-
`lants retain the legal right to pursue those claims and have
`established standing. We, therefore, reverse the Claims
`Court’s decision that Appellants lack standing and remand
`for the court to consider the merits of that claim.
`B. Takings Claim
`Appellants additionally argue that the Claims Court
`erroneously dismissed their alternative Fifth Amendment
`takings claim. Appellants base their takings claim on two
`theories: (1) “the repudiation of the prepayment right itself
`constituted a taking of a contract right;” and (2) “the regu-
`latory burden placed on the properties as a result of
`[ELHIPA] constituted a taking of real property.” Appellant
`Br. 39.
`Regarding the first theory, Appellants argue that the
`Claims Court’s denial “is intrinsically tied to its holding re-
`garding the Appellants’ breach of contract claims” and, be-
`cause the Offer “cannot reasonably be interpreted as
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`

`

`CALLAWAY MANOR APARTMENTS v. UNITED STATES
`
`17
`
`assigning the Government each Partnership’s prepayment
`right,” we should reverse the Claims Court’s decision. Id.
`at 39–40. Regarding the second theory, Appellants argue
`that the Claims Court “erroneously conflate[d] the taking
`of real property with the taking of a contract right.” Id. at
`42. Appellants contend that they have property rights in-
`dependent from their contracts with the Government and
`that, through the enactment of ELIHPA, the Government
`“imposed significant restrictions on each owner’s property
`for its entire useful life.” Id. at 40. According to Appel-
`lants, these restrictions constitute a taking because they
`interfered with Appellants’ property rights and invest-
`ment-backed expectations and required Appellants “to
`charge restricted rents and house low-income tenants for
`an additional un-bargained-for period of thirty years.” Id.
`at 41. We uphold the Claims Court’s decision under the
`first theory but agree with Appellants as to the latter.
`Under the Fifth Amendment, no “private property
`[shall] be taken for public use, without just compensation.”
`U.S. Const. amend. V. Whether a regulatory taking has
`occurred involves a “two-tiered” inquiry, under which the
`court must determine: (1) “the nature of the interest alleg-
`edly taken to dete