B. Statute of Limitations
The government argues that this action, commenced on December 23, 1991 is time-barred. In the complaint, Ammcon seeks to enforce a state court judgment against HUD for monies due under the construction contract between Ammcon and First Baptist, an asset-less, non-profit shell corporation that is HUD's "alter ego" under a long line of precedent in this Circuit. See, e.g., C.H. Sanders Co. v. BHAP Housing Dev. Fund Co., 903 F.2d 114, 118, 120-21 (2d Cir. 1990); S.S. Silberblatt, Inc. v. East Harlem Pilot Block, 608 F.2d 28, 41-42 (2d Cir. 1979); Trans-Bay Engineers & Builders, Inc. v. Hills, 179 U.S. App. D.C. 184, 551 F.2d 370, 381-82 (D.C. Cir. 1976); F.W. Eversley & Co. v. East New York Non-Profit HDFC, Inc., 409 F. Supp. 791, 796-97 (S.D.N.Y. 1976). Those cases establish that HUD is liable for the debts of the non-profit sponsor under an unjust enrichment theory, i.e., HUD would be unjustly enriched were it to obtain the benefits of public housing without the attendant construction costs. Consequently, the government argues that because an unjust enrichment claim accrues once the goods or services are supplied, see F.W. Eversley, 409 F. Supp. at 800, Ammcon must have commenced this action within six years of March 30, 1983 -- when construction of the housing project was completed -- or be barred from commencing this action.
In support of its contention that Ammcon's claim is subject to a six-year statute of limitations, the government points to section 2401 of Title 28 of the United States Code which provides, in relevant part, that "every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues." 28 U.S.C. § 2401(a). This limitations period applies to legal as well as equitable causes of action. Sisseton-Wahpeton Sioux Tribe v. United States, 895 F.2d 588, 592 (9th Cir.) (applying § 2401 to bar equitable claims for relief), cert. denied, 498 U.S. 894 (1990); Christensen v. United States, 755 F.2d 705, 707 (9th Cir. 1985) (six-year limitations period of § 2401 applies to legal and equitable causes of action), cert. denied, 476 U.S. 1181, 91 L. Ed. 2d 543, 106 S. Ct. 2914 (1986).
However, that section is inapposite because Ammcon's claim is not against the United States; it is an action solely against HUD, a federal agency. In Sanders, as stated above, the court upheld a contractor's cause of action against HUD to enforce an arbitration award which the contractor had obtained against a not-for-profit corporate shell that was HUD's alter ego. The court held that the district court had subject matter jurisdiction over the action and that Congress had waived HUD's sovereign immunity, but only to the extent that the contractor could recover funds within HUD's control that were not in the United States Treasury. Sanders, 903 F.2d at 120 (citing F.H.A. v. Burr, 309 U.S. 242, 250-51, 84 L. Ed. 724, 60 S. Ct. 488 (1940); See also Sanders, 910 F.2d 33, 33 (2d Cir. 1990) (noting upon petition for rehearing that "the secretary [of HUD] will be obliged to satisfy the judgment only out of non-Treasury funds that are available to him, if any. If no such funds are available, the Secretary will have no payment obligation"). See also Lattimore v. Northwest Co-op Homes Ass'n, No. CV-90-0049, 1992 U.S. Dist. LEXIS 7441, 1992 WL 118383, at *6 & n.9 (D.D.C. May 19, 1992) (limiting plaintiff's recovery to funds within HUD's control that are severable from general funds in the United States Treasury).
The cases are legion that an action is characterized as a suit against the federal agency -- not as against the United States -- when recovery is limited to funds within the control of the agency. See, e.g., FHM Constructors v. Village of Canton Housing Auth., 779 F. Supp. 677, 681 (N.D.N.Y. 1992) (action against HUD in which plaintiff's recovery is limited to funds within that agency's control is not action against the United States); Jackson Square Assocs. v. United States Dep't of HUD, 797 F. Supp. 242, 245-46 (W.D.N.Y. 1992) (same with respect to HUD); Ensign Financial Corp. v. FDIC, 785 F. Supp. 391, 400-01 (S.D.N.Y. 1992) (same with respect to FDIC); see also Far West Federal Bank v. Director, Office of Thrift Supervision, 930 F.2d 883, 892 (Fed. Cir. 1991) (same with respect to FDIC); York Assocs., Inc. v. Secretary of HUD, 815 F. Supp. 16, 21-22 (D.D.C. 1993) (same with respect to HUD). But see Ippolito-Lutz, Inc. v. Harris, 473 F. Supp. 255, 260 (S.D.N.Y. 1979) (applying § 2401 limitations period with respect to actions against the United States to bar action against HUD); Portsmouth Redevelopment & Housing Auth., 706 F.2d 471, 473-74 (4th Cir. 1983) (action against HUD is action against the United States even if recovery is limited to funds within HUD's control because those funds are derived from United States Treasury), cert. denied, 464 U.S. 960, 78 L. Ed. 2d 336, 104 S. Ct. 392 (1983).
Accordingly, since this action is not against the United States, section 2401(a) is inapplicable.
Alternatively, the government contends that, in the absence of a governing statute of limitations, this Court must apply the analogous state statute of limitations period for an unjust enrichment claim, Board of Regents v. Tomanio, 446 U.S. 478, 483-84, 64 L. Ed. 2d 440, 100 S. Ct. 1790 (1980), which is the residual six-year limitations period under N.Y. Civ. Prac. L. & R. § 213(1) (McKinney 1990). See, e.g., Natimir Restaurant Supply Ltd. v. London 62 Co., 140 A.D.2d 261, 261, 528 N.Y.S.2d 564, 565 (1st Dep't 1988); Baratta v. Kozlowski, 94 A.D.2d 454, 464, 464 N.Y.S.2d 803, 809 (2d Dep't 1983); see also Equitable Life Assurance Society v. Branch, 32 A.D.2d 959, 960, 302 N.Y.S.2d 958, 960 (2d Dep't 1969) (applying six-year limitations period for cause of action in implied contract under N.Y. Civ. Prac. L. & R. § 213(2) to unjust enrichment claim).
However, this argument is flawed because Ammcon is not pursuing an unjust enrichment claim in this case. Ammcon seeks to enforce the judicial confirmation of an arbitral award -- which it obtained against First Baptist in state court -- against HUD on the theory that First Baptist is HUD's alter ego. When a plaintiff seeks to pierce the corporate veil to enforce a money judgment that was previously entered against the alter ego of a defendant, the applicable limitations period is twenty-years commencing from the date of the judgment under N.Y. Civ. Prac. L. & R. § 211(b) (McKinney 1990). Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., 608 F. Supp. 1261, 1264 (S.D.N.Y. 1985), rearg. denied, 611 F. Supp. 281 (S.D.N.Y. 1985), aff'd in relevant part and rev'd in part, 933 F.2d 131, 142-43 (2d Cir. 1991). The reference to "unjust enrichment" in Sanders was simply to allow the contractor to pierce the corporate veil and to confer subject matter jurisdiction in the district court to enforce an arbitration award against HUD. See Sanders, 903 F.2d at 117, 118, 121. Accordingly, the government's statute of limitations defense must be rejected as a matter of law.
C. HUD's Motion for Partial Summary Judgment
The government contends that it is entitled to partial summary judgment to the extent that the arbitrators awarded damages to Ammcon for increases in construction costs based on change orders that were not pre-approved by HUD. The government points to Article 1(E) of the Construction Contract between Ammcon and First Baptist, which provides that:
Changes in the Drawings and Specifications or any terms of the [Construction] Contract Documents, or orders for extra work, or changes by altering or adding to the work, which will result in any net construction cost increase, or will change the design concept, or which will result in a net cumulative construction cost decrease of more than 2% of the contract amount may be effected only with the prior written approval of HUD under such conditions as HUD may establish.
Consequently, the government argues that the arbitrators exceeded their authority in awarding $ 309,239.00 for "Change orders issued by [First Baptist], some of which were approved by [HUD] and others [i.e., change orders] which were unapproved." Ex. D to Mazzucca Aff.
However, this argument does not entitle HUD to partial summary judgment as a matter of law on the unapproved change orders. It is clear that a federal court must accord the same preclusive effect to a state court judgment as that judgment would receive under state law in a subsequent proceeding. Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81, 79 L. Ed. 2d 56, 104 S. Ct. 892 (1984) Moreover, under New York law," it is [well] settled that the doctrines of res judicata [and collateral estoppel are] applicable to arbitration awards and may serve to bar the subsequent relitigation of a single issue or an entire claim." Matter of Ranni's Claim, 58 N.Y.2d 715, 717, 458 N.Y.S.2d 910, 910-11, 444 N.E.2d 1328, 1329-30 (1982). Res judicata or claim preclusion estops a party from relitigating a claim or cause of action decided in an earlier action or which the party could have raised, but was not actually litigated, in the earlier proceeding, Schuylkill Fuel Corp. v. B. & C. Nieberg Realty Corp., 250 N.Y. 304, 306-07, 165 N.E. 456, 457 (1929) (Cardozo, J.), because "once a judgment has been rendered by a court of competent jurisdiction, it will be treated thereafter as the full measure of relief between the same parties on the same cause of action." Bottini v. Sadore Management Corp., 764 F.2d 116, 119 (2d Cir. 1985) (citing Reilly v. Reid, 45 N.Y.2d 24, 29, 407 N.Y.S.2d 645, 648, 379 N.E.2d 172, 175 (1978)).
In contrast, the doctrine of collateral estoppel or issue preclusion:
bars a party from relitigating in a second proceeding an issue of fact or law that was litigated and actually decided in a prior proceeding, if that party had a full and fair opportunity to litigate the issue in the prior proceeding and the decision of the issue was necessary to support a valid and final judgment on the merits.