-1- 

### STATE OF MICHIGAN

COURT OF APPEALS

INKSTER HOUSING COMMISSION,

Plaintiff-Appellee, UNPUBLISHED January 20, 2015

v No. 317507 Wayne Circuit Court TOWANA R. ALLEN, LC No. 13-000079-AV

Defendant-Appellant.

Before: F ORT H OOD , P.J., and H OEKSTRA and O’C ONNELL , JJ.

P ER C URIAM

. In this landlord-tenant dispute, defendant, Towana R. Allen, a ppeals by leave granted 1 an order of the circuit court affirm ing the district court’s judgm ent awarding possession of the premises at issue to plainti ff, Inkster Housing Commission. We reverse.

I. FACTS AND PROCEDURAL HISTORY

Defendant entered into a lease with plaintiff for subsidized h ousing on August 1, 2012. This lease was for a three-bedroo m unit, and listed three resid ents, defendant and her two grandchildren. On September 12, 2012, plaintiff served a notic e to quit on defendant. The notice stated the following reas ons for terminating the lease:

Violation of dwelling lease agreement, see lease paragraph 8, t enant has intentionally misrepresented facts to determine eligibility for program assistance. Tenant is in direct violation of HUD’s multi-subsidy policy. T enant or household members [sic] rent is being subsidized by more than one rental assistance
program.
The notice required defendant to vacate the premises by October 13, 2012, or face eviction. Defendant did not vacate the premises, and on October 17, 2012, plaintiff filed a complaint in the district court to terminate de fendant’s tenancy based on the sa me reason listed in the notice.

1 Inkster Housing Comm’n v Allen , unpublished order of the Court of Appeals, entered January 10, 2014 (Docket No. 317507).-2- The district court held a bench trial. At the outset of the trial, plaintiff explained that it sought to evict defendant because she “was receiving a double s ubsidy.” 2 According to plaintiff, defendant received a subsidy from plaintiff for her two grandch ildren, of whom she had legal guardianship, and her daughter, Tiffany Allen (“Tiffany”), rece ived a subsidy from the Detroit Housing Commission for the same two children. Plaintiff presen ted one witness, Scharre Leslie (“Leslie”), a cashier for plaintiff, who testified that both de fendant and Tiffany were receiving housing subsidies for the same children. Plaintiff alleged tha t this situation violated defendant’s lease as well as the Department of Housing and Urban Developmen t’s (HUD) multi-subsidy regulation, 24 CFR § 5.233. Defendant did not present any evid ence or witnesses, but argued that she had legal custody of the children and that she had no control over what Tiffany reported to her housing authority.

The court ruled in favor of plai ntiff, finding that there was “some misrepresentation,” which violated defendant’s lease. The court also seemingly hel d that plaintiff violated 24 CFR § 5.233. Defendant thereafter filed an appeal in the circuit cou rt, arguing that the trial court erred by finding defendant made a misrepresentation, and by finding t hat defendant violated 24 CFR § 5.233. The circuit court denied plaintiff’s appeal. Defendant filed an application for leave to appeal in this Court, and on January 10, 2014, this Court grant ed leave to appeal. This Court also granted Legal Se rvices Association of M ichigan’s request t o file an amicus curiae brief. 3

II. DISCUSSION 4

2 Throughout the trial and in plaint iff’s brief on appeal, there were numerous uses of the term “double subsidy” and implications that defendant was receiving a “double subsidy.” This terminology is inaccurate as applied to the current case. Ther e was no evidence that defendant was receiving two subsidies hers elf; rather, the evidence showe d that defendant and her daughter were each receiving a subsidy for the same children. Thus, “du plicate” is a more accurate description.

3 Inkster Housing Comm’n v Allen , unpublished order of the Court of Appeals, entered October 1, 2013 (Docket No. 317507).

4 Plaintiff contends that, because it succeeded in evicting defe ndant, defendant’s appeal is now moot. “A case is moot when it presents only abstract questions of law that do not rest upon existing facts or rights.” B P 7 v Bureau of State Lottery , 231 Mich App 356, 359; 586 NW2d 117 (1998). “An issue is deemed moot when an event occurs that renders it impossible for a reviewing court to grant relief.” Id . “As a general rule, an appella te court will not decide moot issues.” Id . This Court may provide relief to defendant by reversing the judgment, and thus, the issue is not moot. See id . Further, an issue is not moot if it “may have collateral leg al consequences” for a party. Mead v Batchlor , 435 Mich 480, 486; 460 NW2d 493 (1990), abrogated on other grounds Turner v Rogers , ___ US ___; 131 S Ct 2507; 180 L Ed 2d 452 (2011). As defendant notes, her eviction from public housing m ay well cause her to be unable to procure public housing in the future. See, e.g., 24 CFR § 982. 552(c)(1)( ii ) (allowing a public housing authority to deny assistance to an individual if “any m ember of the family has been evicted from federally assiste d housing in the last five years[ .]”). The appeal is not moot.-3- A. MISREPRESENTATION

Defendant first argues that the district court clearly erred b y making a factual finding that defendant made a misrepresentation. While we do not believe th e district court’s stated factual finding was clearly erroneous, the district court’s conclusion that defendant violated paragraph eight of her lease was erroneous.

We review a trial court’s findi ngs of fact in a bench trial fo r clear error and review de novo its conclusions of law. Chelsea Investment Group LLC v City of Chelsea, 288 Mich App 239, 250; 792 NW2d 781 (2010). “A finding is clearly erroneous if there is no evidentiary support for it or if this Court is left with a definite and fir m conviction that a mistake has been made.” Id. at 251. Underlying issues of c ontract interpretation are revi ewed de novo. Wilkie v Auto-Owners Ins Co , 469 Mich 41, 47; 664 NW2d 776 (2003). When interpreting a co ntract, effect must be given to the cont ract’s plain and unambiguous la nguage. Id . at 61.

Plaintiff sought to terminate defendant’s tenancy, alleging a violation of paragraph eight of the lease, which provides that a resident’s “intentional mis representation [of] or willful failure” to notify management of certain information, such as a change in family income, family size, or other circumstance, is grounds to terminate the lease. In making its decision, the district court stated only that there was “some misrepresentation” that constituted a violation of the lease. When asked by defendant to explain its ruli ng, the district court sta ted, “all I know is that these children were receiving doub le subsidies, either by your hand or by [Tiffany]’s hand.” Thus, the “misrepresentation” the court was referring to appear s to be that someone, either defendant or Tiffany, misrepresented where the children resided . It was not disputed that both defendant and Tiffany represented that the children resided wit h them. Logically, the two children could not reside with both defendant and Tiffany at th e same time. Thus, the district court’s finding that “some misrep resentation” existed was suppo rted by the evidence.

However, absent from the record is a factual finding that defe ndant was the individual making that misrepresentation. Plaintiff could only terminate the lease pursuant to paragraph eight if defendant made an intentional misreprese ntation to plaintiff. Without afinding that defendant made the misrepresentation, the district court could not conclude defendant violated paragraph eight of the lease. Thus, while the district court’s factual finding that someone made a misrepresentation was not clearly erroneous, its conclusion tha t this factual finding was sufficient to establish a breac h of the lease was an error of l aw.
Moreover, even if we were to a ssume that the trial court found that defendant misrepresented where the children resided, such a finding would have been clearly erroneous. There is no evidence in the record regarding where the children were actually living. Leslie testified that she had no inform ation regarding whether the chi ldren were living with defendant. The lease, executed on August 1, 2012, indicates that the child ren lived with defendant. Leslie stated that defendant provided paperwork showing that she was t he legal guardian for the children, which led to plaintiff increasing defendant’s apartme nt size to a three-bedroom unit. Leslie further testified that def endant informed plaintiff that she obtained guardianship because Tiffany intended on enlisting in the military. While Leslie al so stated that, after receiving the notice to quit, defendant informed her that Tiffany changed her mind regarding entering the military, there was no evidence that the guardianship had alrea dy been terminated. This-4- evidence demonstrated only that the children did live with defe ndant and that she was their legal guardian. Accordingly, there wa s no evidence that would demons trate that defendant misrepresented the children’ s residence to plaintiff.

Plaintiff argues that because duplicate subsidies existed ther e was evidence supporting a conclusion that defendant made a misrepresentation sufficient t o warrant her eviction. The only evidence presented was that someone, either defendant or Tiffan y, misrepresented who the children resided with, and that was the only conclusion the dis trict court drew. There was no evidence, and more importantly, no factual finding by the court , that defendant was the person who misrepresented where the children resided.

Plaintiff also argues that defendant was required to notify pl aintiff that Tiffany was receiving a subsidy for the ch ildren, and that defendant’s know ledge that Tiffany was doing so may be inferred from the fact that defendant asked that the chi ldren be removed from her lease the day after plaintiff sent the notice to quit. Plaintiff’s a rgument is flawed for a number of reasons. First, the district court never concluded that defend ant was aware that Tiffany was also receiving a subsidy for the children. Quite the contrary, the district court indicated that it did not believe defendant had any knowledge of this fact. In response to defendant’s explanation that she had no knowledge of what Tiffany had done, the court explai ned that it “ understood that , but [defendant] need[ed] to make it [her] business to know that.” Thus, the district court did not make a factual finding that defenda nt was aware of Tiffany’s co nduct.

Second, paragraph eight of the l ease does not contain any duty to notify plaintiff that Tiffany was receiving a duplicate subsidy for the children. Pa ragraph eight of the lease explains that a resident has a duty to provide accurate information to d efendant regarding family income, employment, and composition, as well as subsequent changes to i ncome, family size, or other circumstances. Without explana tion, plaintiff asserts that the district court’s conclusion that “some misrepresentation” occurred was a reference to defendant’ s “failure to notify [defendant] of a change in her circumstances—the double subsidy.” Plaintif f ignores that the lease, by its terms, only requires a resident to report changes to the resident’s circumstances, not to any other individual’s circumstances. Fur ther, defendant was only requir ed to report “any change in family income, family size, or circumstance . . . .” The doctr ine of ejusdem generis states that general words following specific subjects are presumed to inclu de only things of the same kind, class, or character. Sands Appliance Se rvs, Inc v Wilson , 463 Mich 231, 242; 615 NW2d 241 (2000). The preceding terms, the resident’s own family income and family size, bear no similarity to the conduct of anot her individual living separate ly from the resident. Furthermore, this provision only required defendant to report changes that “ would justify an increase in rent . . . .” Plaintiff offers no explan ation of how Tiffany’s conduct could justify increasing defendant’s rent. In short, the lease did not require defendant to notify plaintiff that Tiffany or anyone else was receiving a duplicate subsidy for the children, and accordi ngly, defendant’s failure to do so did not give rise to a right to t erminate under paragraph eight of the lease.

Finally, paragraph 8 only allows the lease to be terminated in the case of an “intentional misrepresentation” or a “willful failure to notify . . . .” Th e terms “intentional” and “willful” are not defined by the lease. However, courts are to enforce unamb iguous contractual terms, and such terms are to be given their plain and ordinary meanings. Holland v Trinity Health Care Corp , 287 Mich App 524, 526-527; 791 NW2d 724 (2010). “Courts may consult dictionary-5- definitions to ascertain the plain and ordinary meaning of term s undefined in an agreement.” Id

. at 527-528. “Willful” is defined as “deliberate, voluntary, or intentional,” while “intentional” is defined as “done with intention or on purpose; intended[.]” Random House Webster’s Collegiate Dictionary (2001). “Intend” is defined as “to have in mind something to be done or brought about; plan[.]” Id . Certainly, the terms “intentional” and “willful” as used in the lease infer an act (or failure to act) done with knowledge of the relevant fac ts. The district court did not find that defendant had any knowledge that Tiffany was receiving a d uplicate subsidy for the children. Thus, even if the lease could be read as creating a duty for defendant to report such conduct, because there was no finding that her failure to repor t the conduct was intentional or willful, paragraph eight did not provide any ground to terminat e the lease.

B. 24 CFR § 5.233

Defendant also argues that t he trial court erred by relying on24 CFR § 5.233. We agree.

“The proper interpretation of a statute is a legal question th at this Court . . . reviews de novo.” McCormick v Carrier , 487 Mich 180, 188; 795 NW2d 517 (2010).

Along with an allegation that defendant made an intentional mi srepresentation in violation of the lease, plaintiff’s complaint alleged that defe ndant violated “HUD’s MultiSubsidy Program.” At the outset of trial, plaintiff explained the alleged violation of the HUD regulations led plaintiff to initiate an action for termination of tenancy. At trial, plaintiff questioned Leslie regarding 24 CFR § 5.233:

Q . And, Ms. Leslie, is the receipt of a double subsidy a violat ion of any HUD Regulation?

A . Yes it is.

Q . What regulation is it, if you know?

A . It’s HUD’s Multi-Subsidy Policy.

Q . And does that have a CFR, Code o f Federal Regulation [sic]?

A . It does, CFR 245.233 [sic, 24 CFR § 5.233].

Plaintiff asked the district court to take judicial notice of 2 4 CFR § 5.233, and the district court did so. Leslie further explained:

Q . Ms. Leslie, is it safe to say that both [defendant] and [Tif fany] are both in violation of the M ulti-Subsidy Program?

A . Yes.

Q . Regardless of who has physical c ustody of the two children?

A . Repeat the question.-6- Q . Would they both be in violati on, regardless of who[]ever has physical custody of the two children?

A . Possibly yes.

Defendant asked that Leslie explain what she meant by stating, “Possibly yes[,]” to which Leslie responded, “Possibly yes means that if one or both parties fail ed to notify the Housing Authority of children being provided subsidy in both homes, that both cou ld be—one could be or both could be.”

In its closing argument, plaintiff argued that the circumstanc es “violate[d] the Code of Federal Regulations,” and specific ally asked the court to “term inate [defendant]’s tenancy pursuant to the statute [sic, r egulation], thank you.” In stat ing its ruling, the district court acknowledged that it took judici al notice of 24 CFR § 5.233, an d stated that plaintiff was “required to do inquiries in order to prevent fraud; and in the ir inquiries they [sic] determined that the two minor children were receiving double subsidies . . . .” 5 However, the district court’s initial ruling did not explicitly state that defendant violated the regulation, or conclude that a violation of the regulation would allow termination of the leas e. After defendant requested clarification of the ruling, the district court stated that the existence of duplicate subsidies was “in violation of the rules for m aintaining Inkster Public Housi ng.” As the only rule discussed was 24 CFR § 5.233, presumably, the district court was referenc ing this rule. The court then suggested that defendant had an obligation to know Tiffany’s co nduct in regard to the subsidy. After defendant explained that she did not know what Tiffany ha d done, the court told defendant “that’s what you need to know, because you have a contract and an agreement that says if you involve yourself in multi-subsidies, then you’re in violation o f the lease.” The district court further explained that, even if defendant had no knowledge of T iffany’s conduct, she “need[ed] to make it [her] business to know that.”

Thus, although it initially found that plaintiff was entitled to judgment in its favor because of a misrepresentation, the district court’s further ex planation to defendant indicated that the existence of duplicate subsidies, regardless of whether def endant had any knowledge of their existence, violated 24 CFR § 5.233 and was a ground for termina tion of her lease. In doing so,

5 This statement was correct. 24 CFR § 5.233(a)(2) states: Processing entities must use HUD’s [Enterprise Income Verificat ion] system in its entirety:

( i ) As a third party source to verify tenant employment and incom e information during mandatory reexaminations or recertifications of family c omposition and income, in accordance with § 5.236, and administrative guidance issued by HUD; and

( ii ) To reduce administrative and su bsidy payment errors in accord ance with HUD administrative guidance.-7- the district court seemed to adopt Leslie’s explanation that th e rule required defendant and Tiffany to notify their respectiv e housing authorities if the c hildren were being claimed by multiple parties. Both Leslie and the district court are incor rect. The regulation only imposes a duty on “ processing entities [to] use HUD’s [Enterprise Inco me Verification] system . . . . ” 24 CFR § 5.233(a)(2) (emphasis added). The rule places no duty on a tenant to do anything at all; it plainly limits its requirements to various processing entities, which are specifically enumerated in 24 CFR § 5.233(a)( i ) to ( ix ). The rule imposed no duty on defendant to report anything to plaintiff, and certainly no duty to investigate whether duplica te subsidies existed, as the district court suggested. Accordingly, there is no conceivable way for defendant to violate the regulation, and to the extent th e district court suggested defe ndant violated this rule, the district court erred.

Plaintiff argues that defendant mischaracterizes Leslie’s test imony, as it believes Leslie only testified that the regulat ion imposed a duty on plaintiff to use mandated reports. Plaintiff’s position is disingenuous. At the start of trial, plaintiff sta ted that it sought to terminate defendant’s tenancy due to a vi olation of HUD regulations. It was plaintiff who elicited Leslie’s testimony, in which she explained her belief that the existence of duplicate subsidies violated the regulation and that defendant h ad a duty under the regulation t o report the existence of duplicate subsidies to plaintiff. Plaintiff further asked the court to “ terminate [defendant]’s tenancy pursuant to the [s]tatute [sic, regulation], thank you.” Defen dant has in no way mischaracterized Leslie’s testimony, and as was explained above, the district co urt seemed to rely on Leslie’s testimony in deciding the matter.

Plaintiff further argues that this error does not require reve rsal because the district court’s ruling can be affirmed based on its finding that a misrepresent ation occurred. Because the district court’s factual finding that a misrepresentation occur red without evidence or a finding that it was defendant that made the misrepresentation, it is in sufficient to support a conclusion that defendant violated her lea se. Plaintiff’s argument lacks merit.

Because of our resolution of the issues presented by defendant , we decline to address the additional issues raised by the Legal Services Association of M ichigan, as those issues are unnecessary to resolve the appeal.

Reversed. Defendant, the prevailing party, may tax costs. MC R 7.219.

/s/ Karen M. Fort Hood /s/ Peter D. O'Connell