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NIMCO Real Estate Associates LLC v. Nashua

United States District Court, D. New Hampshire

March 23, 2017

NIMCO Real Estate Associates, LLC, et al.
v.
Gregory G. Nadeau, as Administrator of the Federal Highway Administration, et al. Opinion No. 2017 DNH 058

          ORDER

          Joseph DiClerico, Jr. United States District Judge.

         NIMCO Real Estate Associates, LLC; Ultima Nashua Equipment Corporation; and Anoosh Irvan Kiamanesh brought suit against Gregory G. Nadeau, the administrator of the Federal Highway Administration (“FHWA”) the City of Nashua, and the New Hampshire Department of Transportation (“NHDOT”), alleging claims that arose from the acquisition of the plaintiffs' property by eminent domain for a highway project. The FHWA moves to dismiss the claim against it on the ground that the court lacks subject matter jurisdiction.[1] The NHDOT and the City of Nashua move to dismiss the claims against them and join in the motion to dismiss filed by the FHWA. The plaintiffs object, to the motions to dismiss and move for a preliminary injunction.[2]

         Standard of Review

         In considering motions under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), the court credits a plaintiff's properly pleaded allegations and draws all reasonable inferences in the plaintiff's favor.[3] Reddy v. Foster, 845 F.3d 493, 497 (1st Cir. 2017); Sanders v. Phoenix Ins. Co., 843 F.3d 37, 42 (1st Cir. 2016). Properly pleaded allegations are factual allegations not conclusory legal allegations. Guadalupe-Baez v. Pesquera, 819 F.3d 509, 515 (1st Cir. 2016). To avoid dismissal under Rule 12(b)(6), the properly pleaded facts, with appropriate inferences, must “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). When subject matter jurisdiction is challenged, “[t]he parties asserting jurisdiction, here the plaintiffs, have the burden of demonstrating the existence of federal jurisdiction.” Acosta-Ramirez v. Banco Popular de P.R., 712 F.3d 14, 20 (1st Cir. 2013).

         Background

         Ultima is a company that manufactures specialty machines, equipment, and parts and has operated at its place of business at 1 Pine Street Extension, Nashua, New Hampshire, since 1958. NIMCO is a real estate limited liability company that owns the property at 1 Pine Street where Ultima is located. Anoosh Kiamanesh is the manager of Nimco, the president and sole director of Ultima, and the majority owner of both NIMCO and Ultima.

         In early 2000, the City of Nashua and NHDOT were planning a highway project, called the Broad Street Parkway. Officials of the NHDOT and the city met, and Mike Rousseau, a representative of NIMCO, Ultima, and Kiamanesh was also at the meeting. The city and state officials told Rousseau that NIMCO's property at 1 Pine Street was needed for the project, which would require acquisition of the property and relocation of NIMCO and Ultima.

         At that time, the city and NHDOT expected to make an offer for the Pine Street property in September of 2000 and anticipated that plans for a new site for Ultima and NIMCO would be complete by the spring of 2002. Construction on the segment of the parkway that required the 1 Pine Street property was to begin in the fall of 2002.

         Ultima has hundreds of pieces of manufacturing equipment and machinery at the property with an estimated value of $12 million. Some of the pieces of equipment and machinery are large and heavy, making them difficult to move, and some require special foundations and service connections.

         The plaintiffs (NIMCO, Ultima, and Kiamanesh) requested relocation assistance and benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. § 4601, et seq., (“URA”). In a letter dated March 14, 2000, Jeanne A. Grover, Chief Relocation Advisor at NHDOT told the plaintiffs that NHDOT would grant advanced relocation benefits with certain conditions.[4] Thereafter, when the plaintiffs inquired about relocation benefits in 2000 and 2001, they were told that the project was on hold.

         The project began to move forward again in March of 2002. The plaintiffs received a letter from NHDOT about the process for applying for advanced relocation benefits. The NHDOT offered $870, 000 to acquire the property. The plaintiffs obtained moving bids of several million dollars each, because of the nature of the machinery and equipment.

         The plaintiffs found a property that would be suitable and available for relocation, which was to be auctioned on May 2, 2003. Alan Rau, the plaintiffs' relocation manager, notified the NHDOT of the auction on April 25, 2003, emphasizing that it was imperative that the relocation funds be available to move the plaintiffs to the new location and asked that the relocation funding be expedited.

         On May 2, 2003, Kiamanesh attended the auction and successfully bid on the property for the price of $3, 275, 000. He put a deposit of $100, 000 on the property. The plaintiffs notified the NHDOT of their winning bid and that they needed the eminent domain compensation award and relocation benefits by June 21, 2003, to close on the new property. Also in May of 2003, the NHDOT increased the acquisition offer to $1, 210, 000, although no payment was made.

         The plaintiffs defaulted on the purchase of the new property on June 21, 2003, and lost their deposit of $100, 000. The plaintiffs received $1, 210, 138.76 from the Board of Land and Tax Appeals on July 7, 2003.

         Another auction was scheduled on the property the plaintiffs had defaulted on, which was held on August 14, 2003. The plaintiffs again placed the winning bid of $3, 260, 000 for the property, and again gave a deposit in the amount of $100, 000. Although the plaintiffs received a letter in September that they qualified for relocation funds, no payment was made at that time. On October 3, 2003, the plaintiffs again defaulted on the purchase of the new property and again lost the $100, 000 deposit. The plaintiffs did not receive relocation assistance.

         From 2004 through 2008, the plaintiffs looked for property for relocation. Beginning in 2005 and through 2010, Rau, on behalf of the plaintiffs, signed leases for the 1 Pine Street property. The leases identified the owner of the property as NHDOT. Under the leases, the plaintiffs were required to pay Nashua the amount of real estate taxes on the property. The leases also included a provision that released the landlord, its agents and assigns, from liability for claims related to the taking of the property and construction and maintenance of the highway project.

         In 2006, Ultima was in financial difficulty and signed a contract with Kia Technologies Corporation, a Canadian corporation, through which Ultima agreed to sell its machinery and equipment to Kia. Kiamanesh is a stockholder in Kia. Ultima, with Kia, entered into contracts with companies in China to use the equipment and machinery and to deliver the equipment and machinery to the companies in China. On September 27, 2009, a representative of the Chinese companies came to Ultima to inspect the machinery and equipment.

         The next day, September 28, 2009, Kiamanesh met with the Economic Director of Nashua and the manager of the highway project to tell them about the venture with the Chinese companies and the need for money to ship the equipment and machinery to China. No relocation funds were provided.

         On December 18, 2009, Rau, on behalf of the plaintiffs, sent a letter to the NHDOT Right of Way Agent requesting relocation assistance and benefits. When Rau followed up the letter with a phone call in early January, 2010, he was told that Nashua was revising the highway project and might not need the 1 Pine St. property.

         Nashua's Director of Public Works notified the plaintiffs on April 26, 2010, that the 1 Pine Street property was no longer needed for the highway project. As a result, the plaintiffs were no longer required to move. The NHDOT agent also notified the plaintiffs on August 2, 2010, that the property was no longer needed and that relocation funds were not available. On September 12, 2014, the plaintiffs received a letter from Nashua offering the property for sale at a price of $1, 210, 000.

         Kiamanesh responded that he was not able to buy back the property. Nashua then told the plaintiffs that it was preparing to sell the property and that Ultima would have to enter into a lease agreement. The draft lease sent by Nashua in June of 2015 required rent of $8, 800 per month. The plaintiffs were unable to pay the rent in the lease.

         In July of 2015, Kiamanesh again requested relocation assistance funds. On August 6, 2015, Nashua sent the plaintiffs an eviction notice and a notice to quit before November 6, 2015. The plaintiffs remained on the property.

         In May of 2016, Nashua filed an action against Ultima in Hillsborough County Superior Court, seeking the unpaid real estate taxes through 2015. Nashua also sent a notice to vacate, and brought a landlord and tenant writ against the plaintiffs.

         The plaintiffs filed suit on September 9, 2016, alleging nine claims against the FHWA, the City of Nashua, and “various unnamed officials of the aforesaid agencies, and of the NHDOT.” The plaintiffs have not clarified which, if any officials, are defendants in this case.

         Count I is brought against the FHWA “and/or its Officials for failing or neglecting to undertake its responsibilities under the [URA] and regulations thereunder.” Count II is brought against the NHDOT “and its officials as they are and have acted as Agents for the City” with respect to relocation benefits under the URA, which is incorporated into state eminent domain proceedings by RSA 124-A:13. Count III, against Nashua, alleges that Nashua has taken the plaintiffs' property by failing to provide relocation assistance and benefits under the URA in violation of the Fifth Amendment. Count IV seeks to reopen the original taking of the property and seeks additional eminent domain damages. Count V claims that Nashua violated the equal protection clause of the Fourteenth Amendment by providing URA relocation assistance and benefits to other businesses but not to the plaintiffs. Count VI is a claim against Nashua under 42 U.S.C. § 1983, alleging violations of the URA, the Takings Clause of the Fifth Amendment, and the Equal Protection Clause of the Fourteenth Amendment. In Count VII, the plaintiffs seek an award of attorneys' fees and litigation expenses under the URA. Count VIII alleges “municipal estoppel” against Nashua, and Count IX alleges unjust enrichment against Nashua.

         Discussion

         The FHWA, the NHDOT, and Nashua have each moved to dismiss the claims against them. The NHDOT and Nashua have also joined in the FHWA's motion. The plaintiffs object to the motions to dismiss. NHDOT moved to dismiss Nashua's cross claims against it. Nashua did not respond to the motion to dismiss.

         I. NHDOT's Motion to Dismiss Nashua's Cross Claims

         Nashua brings cross claims against NHDOT alleging that NHDOT was negligent in failing to collect rent from the plaintiffs (Claim I), that NHDOT breached “agency agreements” with Nashua (Claim II), and that NHDOT is “obligated to indemnify the City” (Claim III). NHDOT moves to dismiss the claims on the grounds that they are barred by the statute of limitations, are barred by sovereign immunity and the Eleventh Amendment, and Claim III fails ...


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