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Vinson Mortgage Services, Inc. v. Carson

United States District Court, E.D. Missouri, Eastern Division

March 13, 2018

VINSON MORTGAGE SERVICES, INC., Plaintiff,
v.
BENJAMIN S. CARSON SR., IN HIS OFFICIAL CAPACITY AS SECRETARY OF THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, AND UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Defendants.

          MEMORANDUM AND ORDER

          DAVID D. NOCE, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on the motion of plaintiff Vinson Mortgage Services, Inc., to hold the defendants, the Secretary of the U.S. Department of Housing and Urban Development and its Secretary (collectively "HUD") in contempt, for attorney fees, and to enforce the terms of the stay order this Court issued on January 26, 2018. (Doc. 23). The government opposes plaintiff's motion. (Doc. 29). For the following reasons, the motion is denied.

         BACKGROUND

         Plaintiff is a Missouri corporation. Its principal officers are Ray Shawn Vinson III, plaintiff's Chief Executive Officer, and Kevin D. Vester, plaintiff's Chief Operating Officer. Plaintiff employs approximately sixty-five people throughout the Midwest. By this judicial action, plaintiff seeks judicial review of a HUD decision under the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq. The subject matter of the action is HUD's decision to withdraw from plaintiff its Federal Housing Administration Title II license (“FHA license”), which decision went into effect on January 10, 2018.

         Plaintiff commenced this action on January 18, 2018. It immediately moved for an emergency stay of the final agency action pending judicial review. Defendants consented to the motion, and on January 26, 2018, this Court issued the following stay order in this case:

IT IS HEREBY ORDERED that the motion of plaintiff for a stay of HUD's withdrawal of plaintiff's FHA license (Doc. 3) is GRANTED pending judicial review. Plaintiff may participate in the Federal Housing Administration Title II program consistent with the terms of its original approval, including but not limited to loan underwriting, origination, and FHA insurance endorsement, pending entry of a final judgment in this action.

(Doc. 15).

         On March 13, 2018, in a separate administrative proceeding ("debarment proceeding") and decision, HUD implemented a three-year debarment of the only respondents in the debarment proceeding, Kevin Vester and Ray Shawn Vinson. (Doc. 23, Exs. 1 and 2). This administrative order concludes as follows:

DETERMINATION
Based on the foregoing, including the Findings of Fact, Conclusions, and the administrative record, I [(the "Debarring Official")] have determined, in accordance with 2 C.F.R. §§ 180.870(b)(2)(i) through (b)(2)(iv), to debar Respondents [(Keven Vester and Ray Shawn Vinson III)] for three years from the date of this Determination. Respondents' "debarment is effective for covered transactions and contracts that are subject to the Federal Acquisition Regulation (48 C.F.R. chapter 1), throughout the executive branch of the Federal Government unless an agency head or an authorized designee grants an exception."
Dated: 3/13/18

(Doc. 23-2 at 15).

         In an email to plaintiff's counsel from HUD counsel, dated March 23, 2018, counsel for HUD advised plaintiff's counsel in this judicial action of the agency's debarment determination against the individual respondents, Vester and Vinson. The email stated in relevant part that the debarment is effective immediately and precludes the respondents from participating in any federal executive branch program, including FHA programs, for three years. HUD counsel further stated HUD's understanding that the respondents were the owners and officers of plaintiff and that the “debarments are independent of the” instant action for judicial review. The email advised that the “debarment determination is unaffected by the stay that HUD agreed to regarding the withdrawal of Vinson Mortgage Services' FHA approval.” (Doc. 23-1). The email then stated:

Vinson Mortgage Services is prohibited from participating in the FHA program so long as Mr. Vinson or Mr. Vester retains either an ownership interest of or employment with Vinson Mortgage Services. 2 C.F.R. 180.130 (a debarred person cannot participate in any covered transaction); 24 C.F.R. 202.5(j) (a lender is ineligible if, inter alia, any officer, director, principal, manager, or supervisor is debarred); HUD Handbook 4000.1 I.A.3.c (“The Mortgagee must ensure that no Corporate Officers are suspended, debarred or ...

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