Blue Angel Realty, Inc. v. United States of America et al.

Filing 28

OPINION AND ORDER re: 17 MOTION to Dismiss . filed by United States Department of Housing and Urban Development, United States Of America., For the foregoing reasons, the Court GRANTS Defendants' motion to dismiss the Amende d Complaint. The Court dismisses Plaintiff's claims for (i) negligence, (ii) fraudulent concealment, (iii) prima facie tort, (iv) unjust enrichment, and (v) violation of federal law under Rule 12(b)(1) for lack of subject matter jurisdiction. Additionally, the Court dismisses Plaintiff's claims for (i) quiet title, (ii) mandamus relief, and (iii) declaratory relief under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. If Plaintiff wishes to file a secon d amended complaint, it may do so on or before February 11, 2022. Any such complaint shall be limited solely to Plaintiff's claim for quiet title. The Clerk of Court is directed to terminate the motion pending at docket entry 17. (Amended Pleadings due by 2/11/2022.) (Signed by Judge Katherine Polk Failla on 1/8/2022) (rro) Transmission to Orders and Judgments Clerk for processing.

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 1 of 35

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
BLUE ANGEL REALTY, INC.,
Plaintiff,
-v.-

20 Civ. 8220 (KPF)

UNITED STATES OF AMERICA and
UNITED STATES DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT,

OPINION AND ORDER

Defendants.
KATHERINE POLK FAILLA, District Judge:
Plaintiff Blue Angel Realty, Inc., owns an apartment complex that
provides housing for low-income and disabled individuals in Utica, New York.
More than 25 years ago, Defendant United States Department of Housing and
Urban Development (“HUD”) awarded Plaintiff’s predecessor-in-title a loan that
was secured by a mortgage on the apartment complex. Plaintiff brings this
action against HUD and Defendant United States of America (together with
HUD, “Defendants”) to clear the cloud on the title created by HUD’s mortgage
and recover damages arising out of Plaintiff’s inability to sell the complex free
and clear of the mortgage. Defendants have moved to dismiss Plaintiff’s claims
for lack of subject matter jurisdiction under Federal Rule of Civil Procedure
12(b)(1) and for failure to state a claim under Federal Rule of Civil Procedure
12(b)(6). For the reasons that follow, the Court grants Defendants’ motion and
dismisses Plaintiff’s complaint with limited leave to replead.

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 2 of 35

BACKGROUND 1
A.

Factual Background
1.

The Section 811 Program

The mortgage at issue in this case was issued pursuant to the CranstonGonzalez National Affordable Housing Act of 1990, Pub. L. 101-625, 104 Stat.

1

This Opinion draws its facts primarily from the Amended Complaint (Dkt. #14 (the
“AC”)), the well-pleaded allegations of which are taken as true for the purposes of this
Opinion. The Court also considers the Declaration of Laurie A. Beardi in support of
Defendants’ motion to dismiss (“Beardi Decl.” (Dkt. #18)) and the exhibits attached
thereto, including: (i) the July 11, 1996 Mortgage executed by the C.W.B. Housing
Development Fund Corporation and HUD (the “Mortgage” (id., Ex. A)); (ii) the July 11,
1996 Use Agreement executed by the same parties (the “Use Agreement” (id., Ex. B));
and (iii) the July 11, 1996 Regulatory Agreement also executed by the same parties (the
“Regulatory Agreement” (id., Ex. C)). The Court further considers the Declaration of
Bedis Zormati in opposition to Defendants’ motion to dismiss (“Zormati Decl.” (Dkt.
#22)) and the exhibits attached thereto, including certain emails Plaintiff exchanged
with HUD’s agents in August 2018 (id, Ex. C-E).
On a motion to dismiss, the Court may consider any statements or documents
incorporated by reference in the complaint, documents that are “integral” to the
complaint even if they are not incorporated by reference, and matters of which judicial
notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir.
2002). A document is integral to the complaint “where the complaint relies heavily
upon its terms and effect.” Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016)
(quoting Chambers, 282 F.3d at 153).
The Court considers three sets of documents that lie outside the four corners of the AC:
(i) the documents attendant to HUD’s Mortgage; (ii) the statutes and regulations
pursuant to which the Mortgage was issued; and (iii) emails Plaintiff exchanged with
HUD’s agents. First, as the Amended Complaint “relies heavily” on the Mortgage, Use
Agreement, and Regulatory Agreement, the Court finds that the documents are integral
to the Amended Complaint. See Goel, 820 F.3d at 559 (observing that “[i]n most
instances” where courts deem a document “integral to the complaint,” “the incorporated
material is a contract or other legal document containing obligations upon which the
plaintiff’s complaint stands or falls” (quoting Glob. Network Commc’ns, Inc. v. City of
New York, 458 F.3d 150, 157 (2d Cir. 2006))). Second, the Court may take judicial
notice of the Cranston-Gonzalez National Affordable Housing Act and the regulations
promulgated thereunder. See Williams v. N.Y.C. Hous. Auth., 816 F. App’x 532, 534 (2d
Cir. 2020) (summary order) (finding that courts may properly take judicial notice of
statutes); Richardson v. N.Y.C. Bd. of Educ., 711 F. App’x 11, 13-14 (2d Cir. 2017)
(summary order) (finding that courts may also take judicial notice of government
regulations). And third, the AC incorporates by reference emails Plaintiff exchanged in
August 2018 with HUD’s agents. (AC ¶¶ 70, 105). See Roth v. Jennings, 489 F.3d 499,
509 (2d Cir. 2007) (explaining that “when the complaint alleges that a document made
a particular representation, the court may properly look at the document to see whether
that representation was made”).

2

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 3 of 35

4079. Section 811 of the Act, found at 42 U.S.C. § 8013, authorizes the
Secretary of HUD “to provide assistance to private, nonprofit organizations to
expand the supply of supportive housing for persons with disabilities.” Id.
§ 8013(b)(2). The Secretary may provide such assistance through, among other
means, capital advances. Id. § 8013(d)(1). To protect HUD’s interest in a
capital advance provided under Section 811, “HUD … require[s] a note and
mortgage, use agreement, capital advance agreement and regulatory agreement
from the” recipient of the capital advance. 24 C.F.R. § 891.170(a). “Any project
for which a capital advance is provided … shall be operated for not less than 40
years as supportive housing for persons with disabilities[.]” 42 U.S.C.
§ 8013(e)(1)(A). During that forty-year period, capital advances bear no interest
and do not need to be repaid “so long as the housing remains available for
very-low-income persons with disabilities[.]” Id. § 8013(d)(1). Of note, even
repayment of the capital advance does not extinguish a recipient’s other
obligations under Section 811. 24 C.F.R. § 891.170(a).
2.

The Blandina Properties

Plaintiff is the latest in a series of owners of a five-unit apartment
complex located at 312 Blandina Street, Utica, New York (the “Blandina
Properties”). (AC ¶¶ 1-3). The Blandina Properties were first acquired in 1996

For ease of reference, the Court refers to Defendants’ memorandum of law in support of
their motion to dismiss as “Def. Br.” (Dkt. #19); Plaintiff’s memorandum of law in
opposition to Defendants’ motion to dismiss as “Pl. Opp.” (Dkt. #21); and Defendants’
reply memorandum of law as “Def. Reply” (Dkt. #23).

3

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 4 of 35

by C.W.B. Housing Development Fund Corporation (“CWB”) for the purpose of
providing housing to low-income individuals. (Id. at ¶¶ 4-6). 2
On July 11, 1996, CWB received a capital advance from HUD pursuant
to the Section 811 program. (AC ¶ 6). The parties executed three documents
incident to this capital advance: (i) the Mortgage; (ii) the Use Agreement; and
(iii) the Regulatory Agreement (collectively, the “Capital Advance Agreement”).
(See id.; see also Mortgage; Use Agreement; Regulatory Agreement). The
Mortgage stated that HUD would provide CWB with a capital advance of
$1,024,600 in exchange for a mortgage on the Blandina Properties.
(Mortgage 2). The Use Agreement provided that the Blandina Properties would
“be used solely as rental housing for very-low income elderly or disabled
persons,” and that CWB would not transfer ownership of the properties without
HUD’s permission. (Use Agreement 2-3). The Use Agreement further provided
that it would continue in force for a term of not less than 40 years from the
date of its execution. (Id. at 2). And the Regulatory Agreement reflected that
the Mortgage would neither bear interest nor require payments “so long as the
housing remains available for very low-income elderly persons or very lowincome persons with disabilities[.]” (Regulatory Agreement 2). The parties
recorded each component of the Capital Advance Agreement with the Oneida
County Clerk. (AC ¶ 6; Mortgage 1; Use Agreement 1; Regulatory Agreement 1).

2

Although the Amended Complaint refers to a “C.W.R.” Housing Development Fund
Corporation (see, e.g., AC ¶ 6), the Mortgage reflects that the relevant organization is
the “C.W.B.” Housing Development Fund Corporation (see Mortgage 1). Accordingly,
the Court will refer to the organization as “CWB.”

4

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 5 of 35

Approximately eight years after receiving the capital advance from HUD,
CWB failed to satisfy its local tax obligations and lost title to the Blandina
Properties. (AC ¶ 15). On or about August 19, 2004, the City of Utica sold the
Blandina Properties at a tax foreclosure sale to United Four Inc. (Id. at ¶ 10).
Although Defendants were provided notice of the foreclosure sale (id. at ¶ 11),
they elected not to participate in the sale or take any action to protect their
mortgage interest (id. at ¶¶ 12-13). Later, in 2006, CWB provided United Four
Inc. with a quitclaim deed to the properties. (Id. at ¶ 18). 3
Plaintiff acquired the Blandina Properties from United Four Inc. by
warranty deed in May 2006. (AC ¶ 20). 4 Prior to purchasing the Blandina
Properties, Plaintiff performed a title search that failed to uncover any
outstanding liens on the properties. (Id. at ¶ 22). 5 Plaintiff also purchased title
3

See 43A N.Y. JUR. 2D DEEDS § 242 (internal footnotes omitted):
A quitclaim deed is used where the grantor intends to convey only
such interest as the grantor has as opposed to a grant of the fee or
other estate with warranty of title, and it is just as effective to pass
such title as any other form of conveyance. Conversely, nothing is
conveyed by a quitclaim deed if the grantor had no title to, nor
interest in the property conveyed. A quitclaim deed passes only
such right, title, and interest as the grantor has at the time of
making the deed and which is capable of being transferred by deed,
unless a contrary intent appears, and it transfers nothing more.

4

See 43 N.Y. JUR. 2D DEEDS § 4 (internal footnote omitted):
Real property may be conveyed by means of a warranty deed or a
deed with full covenants. The covenants ordinarily consist of
covenants of seizin and good right to convey, quiet enjoyment,
freedom from encumbrances, further assurance, warranty of title,
and covenants that the grantor has not encumbered.

5

Plaintiff’s allegations in this regard are imprecise. Plaintiff concedes that the Blandina
Properties were encumbered by a “‘use agreement’ or mortgage, duly recorded in the
offices of Oneida County Clerk” (AC ¶ 6), but does not further distinguish between the
Use Agreement and the Mortgage in the AC, nor does it make mention of the Regulatory
Agreement that was filed concurrently with these documents. Plaintiff then suggests
that “any lien held by [Defendants] … had apparently been extinguished since same
failed to be discovered in the [title] search” (id. at ¶ 22), but does not suggest that the

5

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 6 of 35

insurance, but its policy was destroyed by a flood that impacted Plaintiff’s
attorney. (Id. at ¶ 24). Since purchasing the Blandina Properties, Plaintiff has
been renting the properties to low-income individuals. (Id. at ¶ 21).
On or about January 10, 2018, Plaintiff entered into a contract to sell the
Blandina Properties to the Utica Municipal Housing Authority (the “Utica
Housing Authority”). (AC ¶ 26). But the parties’ transaction failed to close on
the scheduled date in July 2018 because the Utica Housing Authority’s title
search uncovered the Mortgage, which was recorded with the Oneida County
Clerk. (Id. at ¶¶ 26-28, 31, 35). In an attempt to salvage the sale, Plaintiff
contacted HUD’s Buffalo, New York office and asked HUD to extinguish the
Mortgage. (Id. at ¶¶ 37-40). After Plaintiff exchanged several communications
with HUD’s Buffalo-based agents in or around August 2018, the agents
represented that they did not oppose the cancellation of the Mortgage. (Id. at
¶¶ 41, 44). 6 On October 3, 2018, however, HUD’s Washington, D.C. office
declined to remove the Mortgage from the properties. (Id. at ¶ 44). HUD did
not provide a reason for its decision. (Id.). As a result of HUD’s refusal to lift
the Mortgage, the Utica Housing Authority canceled its purchase of the
Mortgage (or the Use Agreement or the Regulatory Agreement) had actually been
removed from the Clerk’s Office records (see also id. at ¶ 86 (“When [Plaintiff] purchased
the real property in issue, the defendants’ mortgage failed to appear as a cloud on title
although a title search had been conducted on behalf [of Plaintiff].”); id. at ¶ 89 (“said
lien, upon information and belief, did not exist at the time the purchase was made by
plaintiffs”)).
6

Plaintiff’s allegations are again imprecise. Plaintiff alleges in the early portion of the AC
that HUD’s Buffalo-based agents merely “indicated [the Mortgage] should be cancelled”
(AC ¶ 41) and that “they did not see an issue with the cancellation by HUD of the”
Mortgage (id. at ¶ 44). Later in the AC, however, Plaintiff alleges that the same agents
“represented that the matter would be resolved in favor of [Plaintiff] and that the
[Mortgage] would be lifted and the title cleared[.]” (Id. at ¶ 87).

6

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 7 of 35

Blandina Properties and Plaintiff has incurred significant financial damages,
including the loss of the value of the contract and of the ability to sell the
Blandina Properties free and clear of the Mortgage. (Id. at ¶¶ 45-46).
B.

Procedural Background
On January 29, 2020, Plaintiff filed a claim with HUD’s Federal Tort

Claims Center seeking $4,790,000 in damages. (AC ¶¶ 59-60). By letter dated
June 4, 2020, HUD denied Plaintiff’s claim. (Id. at ¶ 60).
Following HUD’s denial, Plaintiff filed the initial Complaint in this case
on October 2, 2020. (Dkt. #1). On December 18, 2020, Defendants submitted
a pre-motion letter stating their intent to move to dismiss the Complaint under
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. #9). At the initial
pretrial conference held on January 6, 2021, the Court authorized Plaintiff to
file an amended complaint and set a briefing schedule for Defendants’ motion
to dismiss the amended complaint. (See Minute Entry for January 6, 2021).
Plaintiff filed the Amended Complaint (the “AC”), which is the operative
pleading in this matter, on January 29, 2021. (Dkt. #14). On March 5, 2021,
Defendants moved to dismiss the AC. (Dkt. #17-19). Plaintiff filed its
opposition brief on April 9, 2021 (Dkt. #20-22), and Defendants submitted a
reply brief on April 23, 2021 (Dkt. #23).
On August 19, 2021, following the close of briefing on Defendants’
motion to dismiss the AC, Plaintiff requested an emergency conference to
address its intent to sell the Blandina Properties prior to the Court’s resolution
of Defendants’ motion. (Dkt. #24). Plaintiff stated that it had entered into a
7

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 8 of 35

contract to sell the Blandina Properties, but could not complete the sale until
the status of the Mortgage was resolved. (Id.). Later that same day, the parties
exchanged dueling letters addressing whether a conference was appropriate.
Defendants argued that a conference was unnecessary because Plaintiff’s letter
sought the same relief as the AC and Defendants’ motion to dismiss the AC was
fully briefed and pending before the Court. (Dkt. #25). Plaintiff replied that its
sale of the properties would obviate the need for further litigation. (Dkt. #26).
On August 20, 2021, the Court denied Plaintiff’s request for a conference, but
remarked that the parties were free to explore a resolution of the matter among
themselves. (Dkt. #27). As the Court has not received any further submissions
from the parties, it finds Defendants’ motion to dismiss to be fully briefed and
ripe for the Court’s resolution.
DISCUSSION
A.

Applicable Law
1.

Motions Under Federal Rule of Civil Procedure 12(b)(1)

“It is a fundamental precept that federal courts are courts of limited
jurisdiction and lack the power to disregard such limits as have been imposed
by the Constitution or Congress.” Durant, Nichols, Houston, Hodgson &
Cortese-Costa P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009) (internal quotation
marks omitted). A “plaintiff asserting subject matter jurisdiction has the
burden of proving by a preponderance of the evidence that it exists.”
Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). “A case is
properly dismissed for lack of subject matter jurisdiction ... when the district
8

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 9 of 35

court lacks the statutory or constitutional power to adjudicate it.” Huntress v.
United States, 810 F. App’x 74, 75 (2d Cir. 2020) (summary order) (quoting
Makarova, 201 F.3d at 113), cert. denied, 141 S. Ct. 1056 (2021).
In resolving a Rule 12(b)(1) motion to dismiss, “[t]he court must take all
facts alleged in the complaint as true and draw all reasonable inferences in
favor of [the] plaintiff, ... but jurisdiction must be shown affirmatively, and that
showing is not made by drawing from the pleadings inferences favorable to the
party asserting it.” Morrison v. Nat’l Austl. Bank Ltd., 547 F.3d 167, 170 (2d
Cir. 2008) (internal citation and quotation marks omitted). When jurisdiction
is contested, a court is permitted to consider evidence outside the pleadings,
such as affidavits and exhibits. See Zappia Middle E. Constr. Co. v. Emirate of
Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000); accord Tandon v. Captain’s Cove
Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014).
2.

Motions Under Federal Rule of Civil Procedure 12(b)(6)

To survive a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6), a plaintiff must plead sufficient factual allegations “to state a claim to
relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). A claim is facially plausible “when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). When evaluating the viability of a plaintiff’s claims, the Court
must accept as true all well-pleaded factual allegations contained in the
operative complaint. Id. Additionally, the Court may consider any written
9

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 10 of 35

instrument attached to the complaint as an exhibit, any statements or
documents incorporated by reference in the complaint, documents that are
“integral” to the complaint even if they are not incorporated by reference, and
matters of which judicial notice may be taken. See Chambers v. Time Warner,
Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); see generally Goel v. Bunge, Ltd.,
820 F.3d 554, 559 (2d Cir. 2016) (discussing materials that may properly be
considered in resolving a motion brought under Fed. R. Civ. P. 12(b)(6)).
B.

Analysis
In this case, Plaintiff alleges claims for (i) mandamus relief (AC ¶¶ 79-91);

(ii) quiet title (id. at ¶¶ 92-109); (iii) declaratory judgment (id. at ¶¶ 110-123);
(iv) negligence (id. at ¶¶ 124-134); (v) “violation of applicable federal law” (id. at
¶¶ 135-145); (vi) unjust enrichment (id. at ¶¶ 146-153); (vii) fraudulent
concealment (id. at ¶¶ 154-158); and (viii) prima facie tort (id. at ¶¶ 159-167).
Defendants contend that all eight claims must be dismissed for either lack of
subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) or
failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The
Court begins with Defendants’ arguments in support of their motion under
Rule 12(b)(1) before turning to their arguments under Rule 12(b)(6).
1.

The Court Grants Defendants’ Motion to Dismiss Under
Federal Rule of Civil Procedure 12(b)(1)

“Where, as here, the defendant moves for dismissal under Rule 12(b)(1)”
and Rule 12(b)(6), “the court should consider the Rule 12(b)(1) challenge first”
because if it must dismiss for lack of jurisdiction, “the accompanying defenses
and objections become moot and do not need to be determined.” Rhulen
10

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 11 of 35

Agency, Inc. v. Ala. Ins. Guar. Ass’n, 896 F.2d 674, 678 (2d Cir. 1990); accord
Daly v. Citigroup Inc., 939 F.3d 415, 426 (2d Cir. 2019). The Court therefore
begins with Defendants’ motion to dismiss Plaintiff’s claims for (i) negligence,
(ii) fraudulent concealment, (iii) prima facie tort, and (iv) unjust enrichment for
lack of subject matter jurisdiction under Rule 12(b)(1).
Defendants advance two arguments in support of their position that this
Court lacks subject matter jurisdiction over certain of Plaintiff’s claims. First,
Defendants assert that Plaintiff’s tort claims against HUD must be dismissed
because the Federal Tort Claims Act (the “FTCA”), and in particular 28 U.S.C.
§ 1346(b), does not permit federal agencies to be named as defendants in tort
suits. (Def. Br. 7-8). Second, Defendants argue that Plaintiff’s tort and unjust
enrichment claims must be dismissed in their entirety because they do not fall
within the FTCA and thus are barred by the principle of sovereign immunity.
(Id. at 8-10). As the Court will explain, it finds that it lacks subject matter
jurisdiction not only over Plaintiff’s tort and unjust enrichment claims, but also
over its claim for violation of applicable federal law.
a.

Plaintiff’s Tort Claims Are Barred by Sovereign Immunity

Defendants first seek to dismiss Plaintiff’s tort claims under the FTCA.
“The FTCA waives the federal Government’s sovereign immunity from tort
claims brought against the United States for harm caused by the negligence or
wrongful conduct of any employee of the Government.” Badilla v. Midwest Air
Traffic Control Serv., Inc., 8 F.4th 105, 121 (2d Cir. 2021) (internal quotation
marks omitted) (citing 28 U.S.C. § 1346(b)(1)). “The FTCA contains several
11

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 12 of 35

exceptions, each of which preserves the Government’s sovereign immunity
under specified circumstances.” Id. Two such exceptions are relevant here.
See 28 U.S.C. § 2680(h). First, the United States retains its immunity under
the FTCA from “[a]ny claim arising out of … interference with contract rights[.]”
Id. Second, the United States also retains its immunity under the statute from
“[a]ny claim arising out of … misrepresentation[.]” Id.
“A plaintiff may not by artful pleading avoid the statutory exceptions to
the FTCA.” Dorking Genetics v. United States, 76 F.3d 1261, 1265 (2d Cir.
1996); accord Simone v. United States, 642 F. App’x 73, 75 (2d Cir. 2016)
(summary order). “In determining the applicability of the [Section] 2680(h)
exception, a court must look, not to the theory upon which the plaintiff elects
to proceed, but rather to the substance of the claim which he asserts.” Esrey
v. United States, 707 F. App’x 749, 750 (2d Cir. 2018) (summary order) (quoting
Lambertson v. United States, 528 F.2d 441, 443 (2d Cir. 1976)). In the
following subsections, the Court examines the substance of Plaintiff’s three tort
claims and finds that each is barred by an FTCA exception. 7
i.

Negligence

Plaintiff’s first tort claim is for negligence. (AC ¶¶ 124-134). In support
of its claim, Plaintiff alleges that Defendants were “negligent, careless and

7

Although the FTCA’s statutory exceptions compel the dismissal of Plaintiff’s tort claims
against both Defendants, Plaintiff’s tort claims against HUD must also be dismissed for
the independent reason that “the FTCA bars suit against agencies eo nomine.” Mejia v.
United States, No. 13 Civ. 5676 (AJN), 2015 WL 5138708, at *4 (S.D.N.Y. Sept. 1, 2015);
see also Leytman v. U.S. Dep’t of Homeland Sec. Transp. Sec. Admin., 804 F. App’x 78,
79 (2d Cir. 2020) (summary order) (stating that “[a]ny FTCA claim must be alleged
against the United States, not a specific United States agency”).

12

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 13 of 35

reckless” in at least 11 different ways. (Id. at ¶¶ 126, 130). 8 Distilling
Plaintiff’s numerous allegations, Defendants characterize Plaintiff’s negligence
claim as one for interference with contract and argue that the FTCA does not
waive sovereign immunity for such a claim. (Def. Br. 9). The Court agrees with
Defendants and finds that it lacks jurisdiction over the claim.
Plaintiff’s claim, although styled as one for negligence, seeks to hold
Defendants liable for the ultimate failure of Plaintiff’s contract to sell the
Blandina Properties to the Utica Housing Authority. Plaintiff alleges that it has

8

The Court chooses, for readability purposes, not to reproduce Plaintiff’s myriad
allegations in the body of its Opinion. For the sake of completeness, however, Plaintiff’s
allegations are that Defendants were negligent insofar as they:
[i] permitted the lien to be removed from the title of the premises
upon the sale of the property at a tax lien and the recording of the
deed at the time of sale; … [ii] never engaged in any activity to
collect on the grant at issue from the grantee; … [iii] were aware of
the sale of the real property in question at a tax foreclosure sale
and did nothing to participate in said sale or to protect its alleged
lien at the time of the sale; … [iv] abandoned any and all legal rights
the defendants had in said property as to the lien; … [v] lulled
members of the general public, interested in purchasing said real
property, in jeopardy, since, upon information and belief, the lien
no longer appeared as cloud on title and placed the unwary, acting
with due diligence in researching said titles, to upon information
and belief, believe they were purchasing real property with a clear
title; … [vi] fail[ed] to remove the recorded grant once the premises
were sold from the original grantee, C.W.B. Housing Development
Fund Corp. … to United Four, Inc.; … [vii] fail[ed] to ensure that
the capital improvement grant was satisfied from the sale of the
proceeds between C.W.B. to United Four, Inc.; … [viii] fail[ed] to
ensure that the grant/lien was expunged from the title; …
[ix] fail[ed] to take any and all steps necessary to remove the lien
from the title especially after plaintiffs notified the defendants of
same and plaintiffs inability to proceed to closing due to the lien on
title; … [x] owed the plaintiffs a duty to clear title … [and] breached
that duty and as a result, the plaintiff has been damaged in that
the title is to their real property is not clear and plaintiffs cannot
sell said property for fair value; … [and] [xi] that the defendants
have carelessly, recklessly and negligently failed to act in a timely
manner to clear said title[.]
(AC ¶¶ 126, 130).

13

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 14 of 35

suffered $4,790,000 in damages, consisting of: (i) the $750,000 value of its
contract to sell the Blandina Properties to the Utica Housing Authority; (ii) its
forgone investment of the proceeds from the sale of the Blandina Properties in a
second property valued at $4,000,000; (iii) the lost rental income,
approximated at $16,000 per month, that Plaintiff would have earned from the
second property; and (iv) the rental income Plaintiff is currently losing on the
Blandina Properties. (AC ¶¶ 133-134). 9 Contrary to Plaintiff’s contentions,
these financial injuries were not caused by Defendants’ failure to “engage[] in
any activity to collect on the grant at issue from the grantee” (id. at ¶ 126), to
“take any and all steps necessary to remove the lien from the title” (id. at
¶ 130), or by any of Defendants’ other allegedly negligent actions (see id. at
¶¶ 126, 130). Rather, Plaintiff’s injuries arise out of the Utica Housing
Authority’s decision to exit the contract to purchase the Blandina Properties
“due to the cloud on title from HUD.” (Id. at ¶ 74).
To be sure, Plaintiff’s account suggests that Defendants’ refusal to lift the
Mortgage contributed to the Utica Housing Authority’s decision not to purchase
the Blandina Properties. (See AC ¶ 74). But that “causal chain” only reinforces
the fact that Plaintiff’s claim seeks to hold Defendants liable for their
interference with its contract to sell the properties, because it is Defendants’
interference with the contract, not their breach an independent duty owed to
Plaintiff, that forms the basis of Plaintiff’s claim. See PAB Aviation, Inc. v.
9

The AC does not explain the cause of these losses. Plaintiff explains in its August 19,
2021 letter requesting an emergency conference, however, that “[r]ental payments have
not been made by the tenants in said properties due to the pandemic[.]” (Dkt. #24).

14

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 15 of 35

United States, No. 98 Civ. 5952 (JG), 2000 WL 1134468, at *3 (E.D.N.Y. Aug. 3,
2000) (finding for similar reasons that plaintiff’s negligence claim “is a claim, in
substance, for … interference with contract rights”), aff’d, 169 F. App’x 61 (2d
Cir. 2006) (summary order); see also Dixon v. United States, No. 13 Civ. 2193
(LAK) (GWG), 2014 WL 23427, at *5 (S.D.N.Y. Jan. 2, 2014) (observing that “in
cases where plaintiffs have alleged that federal employees have tortiously
interfered with their contracts by revealing harmful information about them to
third parties, courts have found such claims to fall under the FTCA exception”).
Because Plaintiff’s negligence claim seeks to recover for Defendants’
alleged interference with Plaintiff’s contract rights, the claim is barred by the
FTCA’s “interference with contract” exception and the Court lacks jurisdiction
to hear it. See PAB Aviation, Inc., 169 F. App’x at 63-64 (affirming dismissal of
plaintiff’s negligence claim under the FTCA after finding that the claim arose
out of alleged interference with contract). Accordingly, the Court grants
Defendants’ motion to dismiss Plaintiff’s purported negligence claim.
ii.

Fraudulent Concealment

Plaintiff’s second tort claim is for fraudulent concealment. (AC ¶¶ 154158). Plaintiff alleges that Defendants, through their agents, “made material
misrepresentations or omission of a fact to the plaintiff, in allowing the plaintiff
to believe that the lien would be lifted so the sale could go forward and/or to
clear the title for future sales[.]” (Id. at ¶ 157). In response, Defendants argue
that Plaintiff’s claim is barred by the FTCA’s misrepresentation exception. (Def.

15

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 16 of 35

Br. 9). The Court again agrees with Defendants and finds that it lacks
jurisdiction over the fraudulent concealment claim.
As previously noted, the United States retains sovereign immunity with
respect to “[a]ny claim arising out of … misrepresentation.” 28 U.S.C.
§ 2680(h). “[T]he essence of an action for misrepresentation ... is the
communication of misinformation on which the recipient relies.” Spinale v.
U.S. Dep’t of Agric., No. 05 Civ. 9294 (KMW), 2007 WL 747803, at *1 (S.D.N.Y.
Mar. 8, 2007) (quoting Block v. Neal, 460 U.S. 289, 296 (1983)). “For purposes
of this exception, ‘a misrepresentation may result from the failure to provide
information, as well as from the provision of information that is wrong.’” Esrey,
707 F. App’x at 749 (internal alterations omitted) (quoting Ingham v. E. Air
Lines, Inc., 373 F.2d 227, 239 (2d Cir. 1967)).
Here, Plaintiff’s fraudulent concealment claim rests on two alleged
misrepresentations by Defendants on which Plaintiff claims to have relied to its
detriment. (AC ¶¶ 154-158). 10 The first purported misrepresentation occurred
when Defendants’ agents from the Buffalo HUD office communicated to Plaintiff
that HUD would remove its Mortgage on the Blandina Properties. (Id. at
¶ 155). The second occurred when these same agents failed to inform Plaintiff
that HUD would not, in fact, remove the Mortgage. (Id. at ¶ 157). Plaintiff’s
fraudulent concealment claim is a quintessential misrepresentation claim, as it
relies solely on the Defendants’ alleged provision of misinformation, whether

10

As discussed later in this Opinion, Plaintiff’s allegations concerning its communications
with HUD representatives are not borne out by the communications themselves.

16

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 17 of 35

affirmative or by omission, to Plaintiff. As such, the claim is barred by the
principle of sovereign immunity and the Court lacks jurisdiction over it. See
Esrey, 707 F. App’x at 750 (finding that “the gravamen of [plaintiffs’] claim is
that the IRS wrongfully withheld information from them” and concluding that
such a claim “arises out of misrepresentation” and thus “no court is statutorily
accorded jurisdiction to hear it” (internal alterations omitted)); Regnante v. Sec.
& Exch. Offs., 134 F. Supp. 3d 749, 770 (S.D.N.Y. 2015) (dismissing claim
premised on “allegations of misrepresentation, concealment, deceit, and fraud,
all of which are barred by the doctrine of sovereign immunity”); see also Kim v.
United States, 940 F.3d 484, 492-94 (9th Cir. 2019) (finding fraudulent
concealment claim to be barred by FTCA misrepresentation exception).
In its opposition brief, Plaintiff attempts to recast its claim as arising out
of Defendants’ refusal to lift the Mortgage rather than their alleged
misrepresentations concerning the Mortgage’s status. (Pl. Opp. 15-17).
Plaintiff draws its argument from the Second Circuit’s decision in Devlin v.
United States, 352 F.3d 525 (2d Cir. 2003). (Pl. Opp. 16). In Devlin, the
Second Circuit found that a claim alleging “negligence in the performance of an
operational task, with misrepresentation being merely collateral to such
performance,” was not barred by the FTCA’s misrepresentation exception.
Devlin, 352 F.3d at 543. Plaintiff argues that its fraudulent concealment claim
similarly falls outside the scope of the misrepresentation exception because
Defendants’ alleged “misrepresentation was an operational task and not a
communicative task.” (Pl. Opp. 16). This argument fails for the simple reason
17

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 18 of 35

that it is inconsistent with the claim Plaintiff actually alleges in the AC. The
AC alleges that Defendants “made material misrepresentations or omission of a
fact to [Plaintiff], in allowing [Plaintiff] to believe that the [Mortgage] would be
lifted … and [Plaintiff] has been damaged as a result of this justifiable reliance”
on Defendants’ representations. (AC ¶ 157). Despite Plaintiff’s attempt to
repackage its claim, Defendants’ alleged misrepresentations are plainly not
collateral to the claim; they are the sole basis for it. Accordingly, the Court
grants Defendants’ motion to dismiss Plaintiff’s fraudulent concealment claim.
iii.

Prima Facie Tort

Plaintiff’s third tort claim for prima facie tort arises from the same
allegations as its negligence claim (compare AC ¶¶ 159-167 (prima facie tort),
with id. at ¶¶ 124-134 (negligence)), and is dismissed for the same reasons.
b.

Plaintiff’s Claim for Unjust Enrichment is Not Ripe

Defendants also move to dismiss Plaintiff’s claim for unjust enrichment
for lack of subject matter jurisdiction. Plaintiff’s claim alleges that “any
attempt on the part of” Defendants “to collect monies at the time of sale of the
real property by [Plaintiff] to a third party would be unjust enrichment[.]” (AC
¶ 152). Defendants argue that the claim is also barred by the FTCA. (Def.
Br. 10-11). The Court declines to address Defendants’ argument under the
FTCA because it finds that the claim must be dismissed because it is not ripe.
“Federal courts may adjudicate only those real and substantial
controversies admitting of specific relief[,] as distinguished from an opinion
advising what the law would be upon a hypothetical state of facts.” Auerbach
18

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 19 of 35

v. Bd. of Educ. of the Harborfields Cent. Sch. Dist. of Greenlawn, 136 F.3d 104,
108 (2d Cir. 1998) (internal quotation marks and alterations omitted). “To be
justiciable, a cause of action must be ripe — it must present a real, substantial
controversy, not a mere hypothetical question.” Nat’l Org. for Marriage, Inc. v.
Walsh, 714 F.3d 682, 687 (2d Cir. 2013) (internal quotation marks omitted).
“[B]ecause the ripeness doctrine is drawn both from Article III limitations on
judicial power and from prudential reasons for refusing to exercise jurisdiction,
the court can raise it sua sponte[.]” United States v. Traficante, 966 F.3d 99,
106 (2d Cir. 2020), cert. denied, 141 S. Ct. 2634 (2021).
“[I]n addressing any and all ripeness challenges, courts are required to
make a fact-specific determination as to whether a particular challenge is ripe
by deciding whether [i] the issues are fit for judicial consideration, and
[ii] withholding of consideration will cause substantial hardship to the parties.”
United States v. Balon, 384 F.3d 38, 46 (2d Cir. 2004). “Unlike a purely legal
question that is eminently fit for judicial review, factual disputes beyond the
prescience of the court are subject to abstract disagreements over matters that
are premature for review.” Traficante, 966 F.3d at 106 (internal brackets and
quotation marks omitted). Thus, “[a] claim is not ripe if it depends upon
contingent future events that may not occur as anticipated, or indeed may not
occur at all.” SC Note Acquisitions, LLC v. Wells Fargo Bank, N.A., 548 F. App’x
741, 742 (2d Cir. 2014) (summary order) (quoting Walsh, 714 F.3d at 687).
In this case, the Court lacks jurisdiction over Plaintiff’s unjust
enrichment claim because the claim is premised on events that have not
19

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 20 of 35

occurred and indeed may never occur. Plaintiff alleges that “any attempt on
the part of [Defendants] to collect the monies at the time of sale of the
[Blandina Properties] by [Plaintiff] to a third party would be unjust
enrichment[.]” (AC ¶ 152 (emphasis added)). This allegation is entirely
hypothetical. Despite its attempts, Plaintiff has yet to sell the Blandina
Properties, and nowhere in the AC does Plaintiff even suggest that Defendants
have sought to collect all or any portion of the proceeds from such sale. To the
contrary, Plaintiff’s allegations suggest that Defendants are unlikely to take the
actions contemplated by Plaintiff in its unjust enrichment claim. As Plaintiff
alleges elsewhere in the AC, Defendants have never attempted to recover under
the Mortgage or to thwart prior sales of the Blandina Properties. (See id. at
¶ 126). The facts underlying Plaintiff’s claim are therefore not only
hypothetical; they are also unlikely to occur. Accordingly, Plaintiff’s unjust
enrichment claim is not ripe and is dismissed. 11
c.

Plaintiff’s Claim for Violation of Applicable Federal Law
Is Barred By Sovereign Immunity

Although Defendants do not challenge the Court’s jurisdiction over
Plaintiff’s claim for violation of applicable federal law, the Court raises this
jurisdictional issue sua sponte. In this claim, Plaintiff alleges that Defendants

11

Because the Court finds that it lacks jurisdiction over Plaintiff’s unjust enrichment
claim, it does not reach Defendants’ separate argument that the claim should be
dismissed for failure to state a claim under Rule 12(b)(6). See Cornwell v. Credit Suisse
Grp., 666 F. Supp. 2d 381, 385 (S.D.N.Y. 2009) (“[A]bsent authority to adjudicate, the
Court lacks a legal basis to grant any relief, or even consider the action further.”); Norex
Petroleum Ltd. v. Access Indus., 540 F. Supp. 2d 438, 449 (S.D.N.Y. 2007) (stating that
dismissal for lack of jurisdiction “moots, and thus terminates, all other pending
motions”).

20

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 21 of 35

violated “all applicable federal statutes governing the activities of [Defendants]”
(AC ¶ 144) by “den[ying] [Plaintiff] the opportunity to fulfill” its contract to sell
the Blandina Properties to the Utica Housing Authority (id. at ¶ 143). For these
alleged violations of unspecified provisions of federal law, Plaintiff seeks
$1,500,000 in damages. (Id. at ¶ 145). The Court finds that this claim must
be dismissed because Plaintiff has not met its burden of showing that the
United States waived its sovereign immunity with respect to the claim.
“It is, of course, axiomatic under the principle of sovereign immunity that
the United States may not be sued without its consent and that the existence
of consent is a prerequisite for jurisdiction.” Adeleke v. United States, 355 F.3d
144, 150 (2d Cir. 2004) (internal quotation marks omitted). “Accordingly, in a
suit against the United States, ‘a waiver of sovereign immunity with respect to
the claim asserted is a prerequisite to subject matter jurisdiction.’” Frey v.
Pekoske, No. 18 Civ. 7088 (CS), 2021 WL 1565380, at *3 (S.D.N.Y. Apr. 21,
2021) (quoting Up State Fed. Credit Union v. Walker, 198 F.3d 372, 374 (2d Cir.
1999) (per curiam)). “Where, as here, the suit is brought against the federal
government, the Plaintiff ‘bear[s] the burden to show Congress waived
sovereign immunity with respect to their claims.’” Thompson v. U.S. Dep’t of
Educ., No. 20 Civ. 693 (AJN), 2021 WL 1199493, at *2 (S.D.N.Y. Mar. 30, 2021)
(quoting Vidurek v. Miller, No. 13 Civ. 4476 (VB), 2014 WL 901462, at *4
(S.D.N.Y. Feb. 27, 2014)). “[W]here a waiver of sovereign immunity does not
apply, a suit should be dismissed under [Rule 12(b)(1).]” Hamm v. United
States, 483 F.3d 135, 137 (2d Cir. 2007).
21

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 22 of 35

Plaintiff has not met its burden of establishing a waiver of sovereign
immunity with respect to its claim for violation of federal law. The AC alleges
that the Court may exercise jurisdiction over its claims under three statutes:
(i) the federal question statute, 28 U.S.C. § 1331; (ii) the FTCA, 28 U.S.C.
§ 1346(b); and (iii) the Mandamus Act, 28 U.S.C. § 1361. (AC ¶ 57). None of
these statutes waives the federal government’s immunity with respect to
Plaintiff’s claim, which seeks monetary damages for alleged violations of federal
law. See Keene Corp. v. United States, 700 F.2d 836, 838 (2d Cir. 1983)
(concluding that Section 1331 “does not establish a waiver of sovereign
immunity”); Liranzo v. United States, 690 F.3d 78, 86 (2d Cir. 2012) (noting
that the “FTCA does not waive sovereign immunity for claims based solely on
alleged violations of federal law”); Laporte v. United States, No. 09 Civ. 7247
(KMK), 2011 WL 3678872, at *9 (S.D.N.Y. Aug. 19, 2011) (observing that
“money damages are unavailable through 28 U.S.C. § 1361”). The remainder of
the AC “makes no mention of the concept of sovereign immunity or of any
possible basis why sovereign immunity might be waived for purposes of”
Plaintiff’s claim. Thompson, 2021 WL 1199493, at *3. Nor is the Court aware
of any waiver that would permit Plaintiff’s ill-defined claim to move forward.
Accordingly, Plaintiff has not carried its burden of identifying an applicable
waiver of sovereign immunity related to its claim for violation of federal law and
the Court dismisses the claim for lack of subject matter jurisdiction. 12

12

The Court recognizes that, in instances in which it determines that it lacks subject
matter jurisdiction, the preferred course of action is to refrain from considering other
arguments proffered by the movant. See supra n.11. The Court pauses to note,

22

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 23 of 35

2.

The Court Grants Defendants’ Motion to Dismiss Under
Federal Rule of Civil Procedure 12(b)(6)

Defendants move to dismiss Plaintiff’s remaining claims for (i) quiet title,
(ii) mandamus relief, and (iii) declaratory relief for failure to state a claim under
Rule 12(b)(6). The Court grants Defendants’ motion and dismisses each claim.
a.

Quiet Title

Defendants argue that Plaintiff’s quiet title claim should be dismissed
because it (i) is barred by the statute of limitations and (ii) does not entitle
Plaintiff to relief. (Def. Br. 12-16). In opposition, Plaintiff argues that (i) the
claim is timely and, in the alternative, (ii) the Court should equitably toll the
statute of limitations. (Pl. Opp. 19-23). As the Court explains below, it finds
that Plaintiff’s claim is barred by the applicable statute of limitations and
declines to toll the limitations period on the record before it.
Plaintiff brings its claim for quiet title pursuant to 28 U.S.C. § 2410. (AC
¶¶ 92-109). That statute provides that “the United States may be named a
party in any civil action or suit in any district court … to quiet title to … real or
personal property on which the United States has or claims a mortgage or
other lien.” 28 U.S.C. § 2410(a)(1). Although the statute is silent as to the
applicable statute of limitations, courts in this District and across the country
have held that similar quiet title actions “brought pursuant to [Section] 2410
however, that it is deeply skeptical of Plaintiff’s ability to state a plausible claim for
“violation of applicable federal law.” The AC does not identify a particular federal law
that Defendants allegedly violated, and Plaintiff fails to address the claim in its
opposition brief, effectively abandoning it. “[W]hether or not Defendants’ arguments
had merit, it was Plaintiff[’s] obligation to address the issue, on pain of [its] claim being
deemed abandoned.” Simon v. City of New York, No. 14 Civ. 8391 (JMF), 2015 WL
4092389, at *2 (S.D.N.Y. July 6, 2015).

23

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 24 of 35

are subject to the catch-all six-year statute of limitations for civil actions
commenced against the United States, found in 28 U.S.C. § 2401(a).” Nath v.
JP Morgan Chase Bank, No. 15 Civ. 3937 (KMK), 2016 WL 5791193, at *13
(S.D.N.Y. Sept. 30, 2016) (collecting cases); see also Caffey v. Heller First Fin.
Cap. Corp., 281 F. App’x 315, 317 (5th Cir. 2008); Macklin v. United States, 300
F.3d 814, 821 (7th Cir. 2002). Thus, for Plaintiff’s claim to be timely, it must
have accrued no later than October 2, 2014 — or more than six years prior to
Plaintiff’s filing of the Complaint in this matter. (See Dkt. #1).
“A federal claim generally accrues ‘once the plaintiff knows or has reason
to know of the injury which is the basis of his action,’ that is, ‘the allegedly
impermissible conduct and the resulting harm.’” DeSuze v. Ammon, 990 F.3d
264, 270 (2d Cir. 2021) (quoting Veal v. Geraci, 23 F.3d 722, 724 (2d Cir.
1994)). Although neither party cites to authority addressing when a quiet title
claim accrues under circumstances comparable to those presented here,
Defendants contend that Plaintiff’s claim accrued when it purchased the
Blandina Properties in May 2006, because Plaintiff knew or should have known
that the properties were subject to the contested Mortgage at that time. (Def.
Br. 13). In opposition, Plaintiff argues that its claim could not have accrued in
2006 because it had no actual knowledge of the existence of the Mortgage until
it attempted to sell the Blandina Properties to the Utica Housing Authority in
the early months of 2018. (Pl. Opp. 20; see also AC ¶ 26).
The Court finds that Plaintiff’s quiet title claim accrued at the latest in
May 2006. As set forth in the AC, CWB and HUD executed the Mortgage on
24

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 25 of 35

the Blandina Properties on July 11, 1996, and the Mortgage was recorded with
the Oneida County Clerk the following day. (AC ¶ 6; Mortgage 1). From that
point forward, HUD took no action to extinguish or otherwise remove the
Mortgage from the properties. (AC ¶ 32). Thus, the “injury which is the basis”
of Plaintiff’s action — HUD’s claimed security interest in the Blandina
Properties — existed at the time Plaintiff purchased the properties from United
Four Inc. in May 2006. Plaintiff could have brought a quiet title claim at that
time, or at any point in the following six years. See DeSuze, 990 F.3d at 270.
Plaintiff’s efforts to avoid the statute of limitations fall short. First,
Plaintiff repeatedly alleges that the title search it performed prior to its
purchase of the Blandina Properties failed to identify the Mortgage. (See, e.g.,
AC ¶¶ 99-100; see also Pl. Opp. 5, 12, 19-20). But Plaintiff does not provide a
reason for its failure to locate the Mortgage. And its assertion regarding the
title search it performed prior to obtaining a warranty deed for the property
from United Four Inc. is particularly perplexing given (i) its concession that the
Mortgage was “duly recorded” (AC ¶ 6) and (ii) the fact that the Utica Housing
Authority’s title search more than a decade later disclosed the Mortgage
without issue (id. at ¶ 103). Even accepting Plaintiff’s claim that it was
unaware of the Mortgage at the time it purchased the properties, however, the
fact remains that a claim accrues “once the plaintiff knows or has reason to
know of the injury which is the basis of his action.” DeSuze, 990 F.3d at 270
(emphasis added). And, under New York law, Plaintiff had reason to know of
the Mortgage at the time it purchased the Blandina Properties because “[t]he
25

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 26 of 35

intended purchaser [of real property] must be presumed to have investigated
the title, and to have examined every deed or instrument properly recorded,
and to have known every fact disclosed or to which an inquiry suggested by the
record would have led.” Akasa Holdings, LLC v. 214 Lafayette House, LLC, 109
N.Y.S.3d 17, 29 (1st Dep’t 2019) (italics omitted). In this case, a reasonable
investigation of the title to the Blandina Properties at the time Plaintiff
purchased them would have revealed the “duly recorded” Mortgage. (AC ¶ 6).
Second, Plaintiff argues that its claim may be deemed timely “under the
continuing violation doctrine.” (Pl. Op. 21). “The continuing violation doctrine,
where applicable, provides an exception to the normal knew-or-should-haveknown accrual date.” Gonzalez v. Hasty, 802 F.3d 212, 220 (2d Cir. 2015)
(internal quotation marks omitted). “Conduct that has been characterized as a
continuing violation is composed of a series of separate acts that collectively
constitute one unlawful … practice.” Washington v. Cnty. of Rockland, 373
F.3d 310, 318 (2d Cir. 2004) (internal quotation marks omitted). “The
continuing violation doctrine thus applies not to discrete unlawful acts, even
where those discrete acts are part of a ‘serial violation,’ but to claims that by
their nature accrue only after the plaintiff has been subjected to some
threshold amount of mistreatment.” Gonzalez, 802 F.3d at 220 (internal
alteration omitted). Here, as stated above, Plaintiff’s quiet title claim accrued
at the time it purchased the Blandina Properties, and thus this is not a case in
which Defendants’ subsequent actions formed an element of Plaintiff’s claim or

26

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 27 of 35

were otherwise necessary to push the claim across the viability threshold.
Therefore, the continuing violation doctrine is not applicable.
Third and finally, Plaintiff argues that the Court should toll the statute of
limitations. (Pl. Opp. 20-21). “[E]quitable tolling is only appropriate in rare
and exceptional circumstances[.]” Edo v. Antika Pizzeria Astoria, Inc., 852 F.
App’x 618, 619 (2d Cir. 2021) (summary order); see also DeSuze, 990 F.3d at
271 (holding that equitable tolling is available under Section 2401). “A statute
of limitations may be equitably tolled as a matter of fairness where a plaintiff
has been prevented in some extraordinary way from exercising his rights, that
is, in a situation where a plaintiff could show that it would have been
impossible for a reasonably prudent person to learn about his or her cause of
action.” DeSuze, 990 F.3d at 271 (internal quotation marks omitted).
The Court declines to toll the statute of limitations on the record before
it. Plaintiff mounts only a threadbare argument in support of equitable tolling,
primarily asserting that the limitations period should be tolled because its title
search failed to identify the Mortgage on the Blandina Properties. (Pl. Opp. 21).
Rather than argue that some external factor prevented it from exercising its
rights or from learning of the Mortgage, Plaintiff merely places blame on an
unsatisfactory title search. A failed title search is a far cry from the “rare and
exceptional circumstances” that warrant equitable tolling. Edo, 852 F. App’x at
619. In the absence of more detailed information suggesting that Plaintiff’s
failure to identify the Mortgage was due to an impediment that would have
thwarted a reasonably diligent person’s exercise of his or her rights, the Court
27

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 28 of 35

declines to equitably toll the applicable statute of limitations. See Nath, 2016
WL 5791193, at *13 (declining to toll statute of limitations under Section 2401
where “Plaintiff has not pled any facts that bear on his exercise of reasonable
diligence”). Accordingly, Plaintiff’s quiet title claim is untimely under the
applicable statute of limitations and is dismissed.
b.

Mandamus Relief

Defendants move next to dismiss Plaintiff’s request for mandamus relief.
Plaintiff’s mandamus claim seeks an order compelling Defendants “to clear and
quiet title in accordance with 28 U.S.C. § 2410(a)(1) and/or provide a capital
improvement in the sum of $750,000.00[.]” (AC ¶ 88). 13 Defendants argue
that the claim should be dismissed because it fails to meet any of the
prerequisites for mandamus relief. (Def. Br. 16-18). For the reasons stated
below, the Court dismisses Plaintiff’s request for failure to state a claim. 14
The Mandamus Act provides that “[t]he district courts shall have original
jurisdiction of any action in the nature of mandamus to compel an officer or
employee of the United States or any agency thereof to perform a duty owed to
the plaintiff.” 28 U.S.C. § 1361. “A plaintiff asking for a writ of mandamus

13

The Court notes that Plaintiff appears to abandon its request for a capital advance loan
later in the AC, stating only that it is “requesting that title be quieted and the lien by
[Defendants] be extinguished.” (AC ¶ 91; see also id., Prayer for Relief (“[Plaintiff]
pray[s] for relief … in the form of Mandamus, compelling [Defendants] … to clear title,
attorney’s fees and expenses[.]”)).

14

Although the Court dismisses the claim for the reasons stated in this section, it further
notes that Plaintiff abandoned its claim. See Simon, 2015 WL 4092389, at *2. Here,
despite Defendants’ argument that the AC failed to state a claim for mandamus relief
(Def. Br. 16-18), Plaintiff failed to address the claim in its memorandum in opposition to
Defendants’ motion.

28

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 29 of 35

bears a heavy burden.” AHEPA 91, Inc. v. U.S. Dep’t of Hous. & Urb. Dev., 43 F.
App’x 450, 453 (2d Cir. 2002) (summary order). “The action that the plaintiff
seeks to compel must be subject to positive command, plainly described, and
free from doubt.” Ahmed v. Cissna, 327 F. Supp. 3d 650, 672 (S.D.N.Y. 2018),
aff’d sub nom. Ahmed v. Cuccinelli, 792 F. App’x 908 (2d Cir. 2020) (summary
order); see also Zaidan v. Tillerson, No. 17 Civ. 3604 (CBA), 2018 WL 3769966,
at *2 (E.D.N.Y. Aug. 9, 2018) (observing that “[j]urisdiction under the
mandamus statute is limited to actions seeking to compel the performance of a
nondiscretionary duty” (quoting Duamutef v. I.N.S., 386 F.3d 172, 180 (2d Cir.
2004))). To obtain relief, the plaintiff must show that “[i] there is a clear right
to the relief sought; [ii] the Government has a plainly defined and peremptory
duty to perform the act in question; and [iii] there is no other adequate remedy
available.” Benzman v. Whitman, 523 F.3d 119, 133 (2d Cir. 2008).
In this case, the Section 811 program and components of the Capital
Advance Agreement suggest that Plaintiff is not entitled to the relief it seeks.
The Section 811 program, as discussed earlier, empowers HUD “[t]o provide
[capital advances] to private, nonprofit organizations[.]” 42 U.S.C. § 8013(b)(2).
Although such advances need not be repaid “so long as the housing remains
available for very-low-income persons with disabilities,” id. § 8013(d)(1), the
recipients of the advances must operate the properties in accordance with the
Section 811 program “for not less than 40 years,” id. § 8013(e)(1)(A); see also
24 C.F.R. § 891.170 (providing that “[t]he capital advance may not be repaid to
extinguish the requirements” imposed by the Section 811 program).
29

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 30 of 35

Consistent with these statutory and regulatory directives, the Mortgage on the
Blandina Properties is subject to a final maturity date of July 10, 2036.
(Mortgage 2; see also Use Agreement 2 (stating that “[t]his Agreement shall
remain in effect for not less than 40 years from July 11, 1996, unless otherwise
approved by HUD”)). Plaintiff has not pointed to any provision of the Capital
Advance Agreement or the Section 811 program that would entitle it to clear its
title to the Blandina Properties of the Mortgage.
Similarly, neither the Cranston-Gonzalez National Affordable Housing Act
nor the Section 811 program entitles Plaintiff to a capital advance. The Act
limits who can apply for capital advances and prescribes the contents of
applications for such advances, but it does not confer any applicant with a
right to an advance. See generally 42 U.S.C. § 8013. And Plaintiff does not
challenge the HUD Secretary’s performance of any non-discretionary duties.
Plaintiff does not, for instance, allege that the HUD Secretary failed to consider
“the types and priorities of the basic services proposed to be provided”; “how
quickly services will be established following approval of the application”; or
any of the other factors the Secretary must consider when exercising his or her
discretion to decide whether to provide a capital advance. Id. § 8007. To the
contrary, the AC fails to identify any basis that would entitle Plaintiff to a
capital advance, and Plaintiff’s briefing is similarly silent on the matter.
Rather than identify a clear right to the relief it seeks in the Capital
Advance Agreement or the applicable statutes and regulations, Plaintiff posits
two other possible sources for Defendants’ purported duty to clear title.
30

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 31 of 35

Neither is fruitful. First, Plaintiff suggests that the federal quiet title statute
obligates Defendants to remove the mortgage on the Blandina Properties. (AC
¶ 88 (citing 28 U.S.C. § 2410)). This argument fails because the quiet title
statute “does not create a … federal claim[.]” Falik v. United States, 343 F.2d
38, 40 (2d Cir. 1965). Rather, the statute simply “constitutes a limited waiver
of sovereign immunity” that allows the United States to be “named a party in
any civil action or suit … to quiet title to … real or personal property on which
the United States has or claims a mortgage or other lien.” S.E.C. v. Credit
Bancorp., Ltd., 297 F.3d 127, 138 (2d Cir. 2002).
Second, Plaintiff argues that it is entitled to quiet title because
Defendants “made it clear that the lien would be lifted” but failed to follow
through on their representations. (AC ¶ 89). This argument is also unavailing.
To begin, Plaintiff cites no authority for the proposition that representations
made by the HUD agents may provide a basis for a writ of mandamus. See
Michalski v. U.S. I.N.S., No. 00 Civ. 1216 (LAK), 2000 WL 1280972, at *1
(S.D.N.Y. Sept. 11, 2000) (finding that plaintiff could not pursue request for
mandamus relief based on government agents’ representations).
Moreover, even assuming that a writ could issue in these circumstances,
Plaintiff’s claim fails because it is not supported by any plausible factual
allegations. Despite Plaintiff’s repeated assertion that HUD’s Buffalo-based
agents represented that HUD would extinguish the Mortgage (see, e.g., AC
¶¶ 119-120), Plaintiff alleges elsewhere that that the agents merely indicated
that “they did not see an issue with the cancellation by HUD of the lien,” but
31

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 32 of 35

that HUD’s Washington, D.C. office would make the ultimate decision of
whether to remove the Mortgage (id. at ¶ 44). The implausibility of Plaintiff’s
allegations is further demonstrated by Plaintiff’s email exchanges with HUD’s
Buffalo agents. (See Zormati Decl., Ex. C-E). The emails reveal that the agents
did not make any commitment to remove the Mortgage. Rather, the agents
stated that they did not “see any legal requirement for HUD to discharge” the
Mortgage (id., Ex. C), but would recommend to HUD’s Washington, D.C. office
that the Mortgage be lifted (id., Ex. D). Under these circumstances, the HUD
agents’ representations cannot plausibly be understood to confer a right to
quiet title or impose a nondiscretionary duty on Defendants to extinguish the
Mortgage.
Plaintiff’s failure to identify either a right to the relief it seeks or a duty
Defendants owed to provide it with such relief compels the dismissal of its
request for mandamus relief. See Saleh v. Pastore, No. 21-1073, 2021 WL
4978574, at *2 (2d Cir. Oct. 27, 2021) (summary order) (affirming dismissal of
mandamus claim where plaintiff failed to “identify any statute or regulation
setting out” the relief sought). Accordingly, the Court dismisses the claim.
c.

Declaratory Judgment

Finally, Defendants move to dismiss Plaintiff’s request for a declaratory
judgment “expunging … [Defendants’] lien and clearing title[.]” (AC ¶ 123).
“The [Declaratory Judgment Act] is procedural in nature, and merely offers
an additional remedy to litigants.” Gregoire v. Citizens Bank, No. 20-2706,
2021 WL 4127076, at *2 n.1 (2d Cir. Sept. 10, 2021) (summary order) (quoting
32

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 33 of 35

Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Karp, 108 F.3d 17, 21 (2d Cir.
1997)). Put differently, “[d]eclaratory judgments … are remedies, not causes of
action.” MarketShare Corp. v. Transactis, Inc., No. 21 Civ. 750 (JSR), 2021 WL
1948283, at *6 (S.D.N.Y. May 12, 2021) (citing Chiste v. Hotels.com L.P., 756 F.
Supp. 2d 382, 406 (S.D.N.Y. 2010)). Here, because all of Plaintiff’s claims have
been dismissed, its request for a declaratory judgment must also be dismissed.
See Gregoire, 2021 WL 4127076, at *2 n.1 (noting that “the district court
properly declined to address as a separate claim the Gregoires’ cause of action
for a declaratory judgment” after it dismissed their substantive claims);
MarketShare Corp., 2021 WL 1948283, at *6 (dismissing request for declaratory
relief after dismissing all of plaintiff’s substantive claims). Accordingly, the
Court dismisses the claim.
3.

The Court Grants Partial Leave to Amend

Finally, the Court addresses Plaintiff’s request for leave to amend its
pleadings. (Pl. Opp. 24-26). Federal Rule of Civil Procedure 15(a)(2) provides
that a court should freely give leave to amend “when justice so requires.” Fed.
R. Civ. P. 15(a)(2); see also McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184,
200 (2d Cir. 2007). However, it is “within the sound discretion of the district
court to grant or deny leave to amend,” Broidy Cap. Mgmt. LLC v. Benomar, 944
F.3d 436, 447 (2d Cir. 2019), and such leave may be denied if the amendment
would be futile, see Olson v. Major League Baseball, 447 F. Supp. 3d 174, 177
(S.D.N.Y. 2020). Amendment is futile if the “amended portion of the complaint
would fail to state a cause of action.” Parker v. Columbia Pictures Indus., 204
33

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 34 of 35

F.3d 326, 339 (2d Cir. 2000); see also Kassner v. 2nd Ave. Delicatessen Inc.,
496 F.3d 229, 244 (2d Cir. 2007) (amendment is not futile where an amended
complaint would be “sufficient to withstand a motion to dismiss”).
The Court grants Plaintiff leave to amend in part. Given that Plaintiff has
failed to identify changes it would make in an amended pleading and that
Plaintiff has already amended its complaint once in this action, the Court finds
that any amendment to Plaintiff’s claims for (i) negligence, (ii) fraudulent
concealment, (iii) prima facie tort, (iv) unjust enrichment, (v) violation of
applicable federal law, and (vi) mandamus would be futile. By contrast, the
Court finds that Plaintiff may be able to state a claim for quiet title if it can
plead additional facts that would warrant equitable tolling. The Court cautions
Plaintiff that the standard for equitable tolling is stringent, and that a second
amended complaint that merely regurgitates the allegations contained in the
AC will be denied with prejudice. With that understanding, the Court grants
Plaintiff’s request to file an amended complaint limited only to its claim for
quiet title. See Nath, 2016 WL 5791193, at *13 (providing similar relief). 15
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ motion to
dismiss the Amended Complaint. The Court dismisses Plaintiff’s claims for
(i) negligence, (ii) fraudulent concealment, (iii) prima facie tort, (iv) unjust
enrichment, and (v) violation of federal law under Rule 12(b)(1) for lack of

15

If Plaintiff elects to continue to pursue its quiet title claim in a second amended
complaint, it may also seek, if appropriate, declaratory relief in connection with the
quiet title claim.

34

Case 1:20-cv-08220-KPF Document 28 Filed 01/08/22 Page 35 of 35

subject matter jurisdiction. Additionally, the Court dismisses Plaintiff’s claims
for (i) quiet title, (ii) mandamus relief, and (iii) declaratory relief under
Rule 12(b)(6) for failure to state a claim upon which relief can be granted.
If Plaintiff wishes to file a second amended complaint, it may do so on or
before February 11, 2022. Any such complaint shall be limited solely to
Plaintiff’s claim for quiet title.
The Clerk of Court is directed to terminate the motion pending at docket
entry 17.
SO ORDERED.
Dated:

January 8, 2022
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

35