Court Sets Parameters for Damages For Breach of HAP Contracts

摘要

In the damages phase of a suit against HUD for breach of Section 8 housing assistance payments (HAP) contracts, the U.S. Court of Federal Claims set out the parameters of the award calculations. (Cuyahoga Metropolitan Housing Authority v. United States, No. 01-46D, 01-251C, 01-416C, 2005 WL 1330658 (Fed.Cl.), June 2, 2005; for background, see Current Developments, Vol. 31, No. CD-23, p. 708.) The court previously ruled that HUD breached HAP contracts with the Cuyahoga, Ohio, Metropolitan Housing Authority (CMHA) when it failed to provide automatic annual adjustment factor (AAAF) rent increases at three Section 8 projects for various years between 1995 and 2001. At issue in this stage in the litigation were the appropriate damages for the breaches. CMHA sought two types of damages: expectancy damages based on HUD's failure to adjust the rents by applying the AAAFs and restitution damages to cover the cost of the comparability studies it eventually submitted to HUD in connection with the requested annual adjustments.