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Counterclaim in Suits on Notes and Mortgages
Frequently, counterclaims are filed in suits on notes and
mortgages, arguing that the United States or one of its agencies
through its appraisal of the property or the business prospects of
a venture has in effect guaranteed success. The function of a
government appraisal in such circumstances is to protect the
government and its funds. See United States v. Longo, supra. The
government does not guarantee the economic feasibility of a
project, or that it will not shift personnel from an area or make
loans to competing concerns. See Deseret Apartments v. United
States, supra; Henry Barracks Housing Corp. v. United States, 281
F.2d 196 (Ct. Cl. 1960); Gross v. United States, 357 F.2d 368, 372
(Ct. Cl. 1966); Marcus Garvey Square, Inc. v. Winston Burnett
Construction Co. of Cal., Inc., supra. Counterclaimants'
allegations of government misrepresentation of the feasibility of
a project falls within the express exception to the Federal Tort
Claims Act, so that the court lacks jurisdiction to review the
merits of such allegations. See Redmond v. United States, 518 F.2d
811, 814-16 (7th Cir. 1975); United States v. Thompson, 293 F.
Supp. 1307, 1312 (E.D. Ark. 1967), aff'd, 408 F.2d 1075 (8th Cir.
1969); Lloyd v. Cessna Aircraft Co., 429 F. Supp. 181, 186 (E.D.
Tenn. 1977); United States v. Sheehan Properties, 285 F. Supp. 608
(D. Minn. 1968). |
Under loan insurance programs, the government only guarantees the repayment of loans insured by it and not the condition of the property. See United States v. Neustadt, 366 U.S. 696 (1961).