Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
4-29-2003
Mannarino v. Morgan
Precedential or Non-Precedential: Non-Precedential
Docket 02-2237
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 02-2237
___________
JULIA MANNARINO and RON TESKA d/b/a SOUTHWESTERN COM MUNITY
VENTURES
v.
MORGAN TOWNSHIP, SHIRL BARNHART, UNITED STATES DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT and ANDREW CUOMO
MORGAN TOWNSHIP, SHIRL BARNHART, Appellants
___________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(Civil Action No. 99-2058)
District Judge: The Honorable Robert C. Mitchell
___________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
March 6, 2003
Before: ROTH, BARRY and FUENTES, Circuit Judges
(Opinion Filed: April 29, 2003)
________________________
OPINION OF THE COURT
________________________
FUENTES, Circuit Judge
Defendants Morgan Township and Shirl Barnhart appeal the judgment entered against
them and in favor of plaintiffs Julia Mannarino and Ron Teska d/b/a Southwestern
Community Ventures on plaintiffs’ 42 U.S.C. § 1983 claims. Because we discern no error
in the findings of fact and conclusions of law entered by the District Court, we will affirm.
Facts and Procedural Background
The factual allegations underlying this case are well known to the parties, and
therefore, they are not detailed here, except to the extent that they directly bear upon the
analysis. On December 20, 1999, plaintiffs Julia Mannarino and Ron Teska, husband and
wife doing business as Southwestern Community Ventures, brought suit against defendants
Morgan Township, a Pennsylvania municipality, Shirl Barnhart, Chairman of the Morgan
Township Board of Supervisors, the United States Department of Housing and Urban
Development (“HUD”), and Andrew Cuomo, Secretary of HUD, alleging that their rights
under Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C.
§ 1701u, were violated by the manner in which Morgan Township had awarded a contract
to provide administrative services for housing rehabilitation. Thereafter, defendants HUD
and Andrew Cuomo were dismissed from the action. The parties consented to trial before
United States Magistrate Judge Robert C. Mitchell.
After holding a pretrial conference, the Court identified, in the Pretrial Order, the
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contentions of the parties and the issues to be resolved as follows:
Plaintiffs’ Contentions: Count II remains against Morgan
Township and Shirl Barnhart: § 1983 action alleging defendant
failed to give proper consideration under the HUD Act.
Defendants’ Contentions: Plaintiffs are not residents of Morgan
Township and therefore HUD is inapplicable to them.
Issue to be Resolved: In determination of award contract did
defendants give proper consideration to plaintiffs?
App. at 29. Following a bench trial, the Court ruled that plaintiffs’ action was timely filed
and that defendants failed to comply with Section 3 of the Housing and Urban Development
Act, which requires that, to the greatest extent feasible, opportunities for training and
employment be given to business concerns that provide economic opportunities to low and
very low income persons residing in the non-metropolitan county in which the assistance is
expended. The Court held that plaintiffs, who are residents of the non-metropolitan county,
are members of the class intended to benefit by Section 3 of the Act, while Community
Preservation, to whom the contract was awarded, was not and that plaintiffs were qualified
to be awarded the contract. The Court concluded that plaintiffs were entitled to $16,225 for
loss of income and thereafter entered a judgment awarding plaintiffs these damages, together
with costs. Defendants timely appealed.
II. Jurisdiction and Standard of Review
The District Court exercised jurisdiction over this matter under 28 U.S.C. § 1331. We
have appellate jurisdiction under 28 U.S.C. § 1291.
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We accept the trial court’s findings of historical or narrative facts unless clearly
erroneous and exercise plenary review of the court’s interpretation of legal precepts and its
application of those precepts to the historical facts. See Mellon Bank, N.A. v. Metro
Communications, Inc., 945 F.2d 623 (3d Cir. 1991) (citing Universal Minerals, Inc. v. C.A.
Hughes & Co., 669 F.2d 98, 101-02 (3d Cir. 1981)).
III. Discussion
Defendants assert on appeal that plaintiffs’ § 1983 claims are barred by the applicable
two year statute of limitations; that they satisfied the Section 3 requirements by informing
plaintiffs of the potential contracting opportunities and awarding them points in the
evaluation process for being a Section 3 business; that, in any event, plaintiffs’ business was
not a qualifying Section 3 business because plaintiffs do not reside in Morgan Township; and
finally, that the Court erred in finding personal liability against defendant Shirl Barnhart
because no evidence was presented that would support the imposition of personal liability
upon a township supervisor acting in his official capacity.
In response, plaintiffs explain that they do not claim that Barnhart is personally liable
for the judgment below and note that their original and amended complaint named Barnhart
only in his capacity as Chairman of the Board of Supervisors for Morgan Township. With
respect to the statute of limitations argument, plaintiffs counter that defendants did not raise
the statute of limitations defense based on the December 11 or 12, 1997 notice date until their
closing arguments at trial. Moreover, the statute of limitations defense, though pleaded in
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the answer, was not included in the Pretrial Order.
As we have previously observed, “[t]he finality of the pretrial order contributes
substantially to the orderly and efficient trial of a case.” Petree v. Victor Fluid Power, Inc.,
831 F.2d 1191, 1194 (3d Cir. 1987). Because the statute of limitations argument was not
identified in the Pretrial Order, plaintiffs did not have a meaningful opportunity to address
its merits at trial. We therefore agree with plaintiffs that allowing defendants to raise the
defense on appeal would constitute unfair prejudice and, accordingly, we affirm the District
Court on this issue.
Defendants next argue that plaintiffs were not entitled to a preference as a Section 3
business concern because they are not residents of Morgan Township. Defendants argue, in
the alternative that, under the Interim Rules in effect at the time of the awarding of the
contract, they were only required to seek out qualified Section 3 businesses to inform them
of the potential contracting opportunity. Defendants assert that they solicited Mannarino to
participate in the request for proposals and that they awarded her points in the evaluation
process for being a Section 3 business.
Plaintiffs correctly assert that Southwestern Community Ventures is entitled to
preference under Section 3 because the individual plaintiffs by whom it is wholly owned are
very low income individuals residing in Greene County, the nonmetropolitan county in which
the covered assistance was expended.
Section 3 provides:
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In providing housing and community development assistance
pursuant to other programs . . . to the greatest extent feasible,
and consistent with existing Federal, State, and local laws and
regulations, contracts awarded for work to be performed in
connection with a housing rehabilitation (including reduction
and abatement of lead-based paint hazards), housing
construction, or other public construction project are [to be]
given to business concerns that provide economic opportunities
for low- and very low- income persons residing within the
metropolitan area (or nonmetropolitan county) in which the
assistance is expended.
12 U.S.C. § 1701u(d)(2)(A) (emphasis added). As to the issue of compliance with Section
3, plaintiffs counter that informing Section 3 businesses of opportunities is but one of the
many actions that must be carried out to satisfy the “greatest extent feasible” statutory
requirement and, standing alone, is insufficient. The appendix to the HUD’s Interim Rules,
which were in effect when the contract at issue was awarded provides 22 “Examples of
Efforts to Award Contracts to Section 3 Business Concerns.” Economic Opportunities for
Low and Very Low Income Persons; Interim and Final Rules, 59 Fed. Reg. 33865, 33889
(1994). Providing notice of contracting opportunities is one of the many examples set forth
in the appendix. Defendants offer no basis however for concluding that, either standing
alone or coupled with the award of points given to plaintiffs to reflect Section 3 business
status, their selection process necessarily satisfied the “greatest extent feasible” statutory
requirement. We therefore affirm the District Court.
IV. Conclusion
After carefully considering the arguments discussed above and all other arguments
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advanced by appellants in support of their assertion that the District Court erred in awarding
damages to appellees on their § 1983 claims, we affirm the District Court’s judgment.
_____________________________
TO THE CLERK OF THE COURT:
Kindly file the foregoing Opinion.
By the Court,
/s/Julio M. Fuentes
Circuit Judge
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