Source: http://mn.gov/law-library-stat/archive/ctapun/0707/opa061257-0717.htm
Timestamp: 2018-01-20 02:57:55
Document Index: 287030578

Matched Legal Cases: ['§ 1437', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 982', '§ 645', '§ 982']

Rashay Rawlings, Relator, vs. Washington County Housing and Redevelopment Authority, Respondent. A06-1257, Court of Appeals Unpublished, July 17, 2007.
A06-1257
Rashay Rawlings,
Colleen Walbran, Michael Hagedorn, Southern Minnesota Regional Legal Services, Inc., 166 East Fourth Street, Suite 200, St. Paul, MN 55101 (for relator)
Jennifer A. Jameson, Kathleen M. Brennan, McGrann Shea Anderson Carnival Straughn & Lamb, Chartered, 800 Nicollet Mall, Suite 2600, Minneapolis, MN 55402 (for respondent)
Relator challenges respondent’s decision to terminate her housing voucher benefits for failure to report her partner’s income. Relator argues that the decision is legally erroneous, is not supported by substantial evidence, and was arbitrary and capricious. We affirm.
Respondent, Washington County Housing and Redevelopment Authority, administers the federal government’s Housing and Urban Development (HUD) Section 8, Housing Choice Voucher Program (voucher program). See 42 U.S.C. § 1437 (2000). Under the voucher program, “HUD pays rental subsidies so eligible families can afford decent, safe[,] and sanitary housing.” 24 C.F.R. § 982.1(a)(1) (2006). Relator, Rashay Rawlings, and her four children were recipients of voucher-program benefits. Sometime prior to July of 2003, relator added her then-boyfriend, Deondray Jenkins, to the household for purposes of receiving the voucher-program benefits.
Relator and Jenkins were required to annually recertify their income status in order to continue receiving assistance. They did so in 2003, 2004, and 2005. In March 2006, the county received a HUD Enterprise Income Verification (EIV) report documenting Jenkins’s receipt of unreported income from the third quarter of 2003 through the third quarter of 2005. After confirming Jenkins’s income with his previous employers, the county notified relator that it intended to terminate her voucher-program benefits.
Relator requested a hearing, and an informal hearing was administered by a hearing officer. Relator was represented by counsel and submitted evidence. After the hearing, the officer issued a written decision affirming the termination of relator’s benefits. This certiorari appeal follows.
Respondent is a public housing authority (PHA). When a PHA terminates an individual’s Section 8 housing-voucher rental benefits, it acts in a quasi-judicial capacity. Carter v. Olmsted County Hous. & Redev. Auth., 574 N.W.2d 725, 729 (Minn. App. 1998). “An agency’s quasi-judicial determinations will be upheld unless they are unconstitutional, outside the agency’s jurisdiction, procedurally defective, based on an erroneous legal theory, unsupported by substantial evidence, or arbitrary and capricious.” Id.
A. Legal Authority for Termination of Assistance
First, we consider whether the hearing officer’s decision is based on an erroneous theory of law. In particular, we must determine whether respondent may terminate benefits for a voucher holder on account of unreported household income, without first showing that the voucher holder had knowledge of the unreported household income.
Federal regulations direct the PHA’s administration of the voucher program and set forth “the obligations of a participant family under the [housing-choice voucher] program.” 24 C.F.R. § 982.551(a) (2006). In accordance with those obligations, “[t]he family must supply any information that the PHA or HUD determines is necessary in the administration of the program,” and “[a]ny information supplied by the family must be true and complete.” 24 C.F.R. § 982.551(b)(1), (4) (2006). Moreover, “[t]he family must supply any information requested by the PHA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition . . . .” 24 C.F.R. § 982.552(b)(2) (2006).
24 C.F.R. § 982.552 (2006) governs the denial or termination of voucher-program benefits. Under section 982.552, the PHA may deny or terminate voucher-program benefits on several grounds, including a family’s violation of “any family obligations under the program.” 24 C.F.R. § 982.552(c)(1)(i). Federal regulations vest the PHA with discretion to decide whether denial or termination of benefits is proper:
In determining whether to deny or terminate assistance because of action or failure to act by members of the family:
(i) The PHA may consider all relevant circumstances such as the seriousness of the case, the extent of participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial or termination of assistance or other family members who were not involved in the action or failure.
24 C.F.R. § 982.552(c)(2) (emphasis added).
Relator suggests that respondent is without legal authority to terminate assistance absent a specific determination that she had knowledge of Jenkins’s unreported income. But the hearing officer reasoned:
[W]hether [relator] was or was not aware of Mr. Jenkins[’s] income is irrelevant because, again, both adults in the household shared equal responsibility for complying with Section 8 program rules . . . . [Relator is] the voucher holder and is therefore responsible for the actions or inactions of members of the household.
Section 982.551 does not frame program participants’ obligations as individual or personal obligations. Rather, section 982.551 describes a “participant family[’s]” obligations. 24 C.F.R. § 982.551(a). Likewise, section 982.552 permits the administering PHA to deny or terminate assistance if a “family” violates any “family obligations.” 24 C.F.R. § 982.552(c)(1)(i). Finally, section 982.552(c)(2)(i) permits the PHA to consider the “extent of participation or culpability of individual family members” when determining whether to deny or terminate assistance. By allowing the PHA to consider an individual’s personal participation in the breach of an obligation as an exception to the rule, this section implicitly affirms the family’s corporate responsibility, independent of individual family member’s knowledge of the improper action or inaction justifying termination of assistance.
As a PHA, respondent adopted “Grounds for Denial or Termination of Assistance” consistent with the federal regulations. This policy statement provides that respondent may terminate assistance “[i]f the family violates any family obligations under the Section 8 program” or “[i]f any member of the family commits fraud, bribery, or any other corrupt or criminal act in connection with housing assistance programs.” On more than one occasion, respondent informed relator, as the voucher holder, that if her “family circumstances” changed she was responsible to report that information. Additionally, relator was explicitly informed that if Jenkins began receiving income, relator was responsible to report receipt of that income.
We conclude that the officer’s legal conclusion that respondent did not have to establish that relator actually knew of Jenkins’s income is correct. The hearing officer’s decision was not based on an erroneous theory of law.
B. Sufficiency of the Hearing Officer’s Written Decision
Next, we consider whether the hearing officer’s written decision is sufficiently specific. “Agency discretion is not unlimited and must be explained.” Carter, 574 N.W.2d at 729 (quotation omitted). The agency must explain the evidentiary basis for its decision and how that evidence is rationally related to its action. Hiawatha Aviation v. Minn. Dep’t of Health, 375 N.W.2d 496, 501 (Minn. App. 1985), aff’d, 389 N.W.2d 507 (Minn. 1986).
Relator cites Carter v. Olmstead County HRA in support of her argument that the hearing officer’s findings lack sufficient specificity. In Carter, we reversed the PHA’s termination of Carter’s housing assistance because the officer’s findings were not sufficiently specific. 574 N.W.2d at 730. There, the hearing officer’s decision “fail[ed] to mention Carter’s and [another individual’s] testimony or any of the documentary evidence that does not support [the officer’s] conclusion and gives no explanation as to why [the officer] chose to disregard it.” Id. In Carter we relied on the following statement in a United States district court decision:
To be legally sufficient, the [agency decision maker] must make an express credibility determination, must set forth the inconsistencies in the record which have led to the rejection of the [complainant’s] testimony, must demonstrate that all relevant evidence was considered and evaluated, and must detail the reasons for discrediting pertinent testimony. . . . These requirements are not suggestive guidelines, but are mandates which impose affirmative duties upon the deliberative process.
Id.at 729-30 (quoting Garthus v. Sec’y of Health & Human Servs., 847 F.Supp. 675, 689 (D. Minn. 1993)).
Here, the hearing officer’s written decision lists all of the evidence presented at the hearing and is followed by a decision paragraph explaining why termination of relator’s rental assistance was warranted. Relator argues that the officer’s decision “failed to consider the accounts of [relator] and other witnesses as to [relator’s] honesty and lack of knowledge of Mr. Jenkins’[s] income . . . [and] failed to make any credibility determination setting forth reasons for discrediting or disregarding these accounts.” But relator’s argument assumes that termination of relator’s benefits would only be proper if the officer found that relator knew of Jenkins’s income. As discussed previously, federal regulations and respondent’s policies do not require such a showing. Therefore, an express finding that relator had knowledge of Jenkins’s income is not required. And if such a finding is not required, then the officer is not required to make express credibility judgments regarding evidence offered on the issue of her knowledge.
We recognize that much of the hearing officer’s written decision simply lists the evidence presented at the hearing. And we caution hearing officers that a mere recitation of presented evidence is not equivalent to independent findings of fact. Dean v. Pelton, 437 N.W.2d 762, 764 (Minn. App. 1989). But, here, the evidence which relator argues that the officer ought to have explicitly considered was not relevant to Jenkins’s annual certification of zero income, his receipt of income, his inclusion in the family for purposes of the subsidy, or Jenkins’s and relator’s failure to report the income. Because these material facts were not disputed, we conclude that the hearing officer’s decision was sufficiently specific.
The next issue is whether respondent’s decision to terminate relator’s Section 8 housing-voucher benefits is supported by substantial evidence. Substantial evidence is: “(1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than some evidence; (4) more than any evidence; and (5) evidence considered in its entirety.” CUP Foods, Inc. v. City of Minneapolis, 633 N.W.2d 557, 563 (Minn. App. 2001), review denied (Minn. Nov. 13, 2001). We give substantial deference to administrative fact-finding, and relator bears the burden to prove that a decision is unsupported by substantial evidence. Id.
Relator argues that “the record lacks substantial evidence that [relator] acted or failed to act in violation of her Section 8 program obligation to supply the Washington County HRA with true and complete information about household income.” Here, it is undisputed that: (1) Jenkins was a member of relator’s household for purposes of the voucher program; (2) Jenkins and relator certified zero receipt of income in 2003, 2004, and 2005; (3) Jenkins received significant income from the third quarter of 2003 to the third quarter of 2005; and (4) relator and Jenkins failed to report receipt of that income. These facts alone establish realtor’s failure to report family income as required under the governing law. Accordingly, we conclude that the termination decision is supported by substantial evidence.
The final issue is whether respondent’s decision to terminate relator’s housing-voucher benefits was arbitrary and capricious. A decision is arbitrary and capricious only if the decision maker: (1) relied on factors not intended by the relevant legal authority; (2) entirely failed to take into account an important aspect of the issue; (3) justified its decision in a way that conflicts with the evidence; or (4) the decision is so implausible that it could not be explained as a difference in view or the result of the county’s expertise. Rostamkhani v. City of St. Paul, 645 N.W.2d 479, 484 (Minn. App. 2002).
Relator asserts that the respondent’s decision was arbitrary and capricious because the officer’s decision failed to consider “the seriousness of the alleged violation,” “[relator’s] culpability in the alleged violation,” “[relator’s] disability,” and “the hardship [relator] would likely experience” were she to lose the voucher-program benefits.
In contrast to relator’s position, the plain language of 24 C.F.R. § 982.552(c)(2) does not require the PHA to consider the mitigating circumstances outlined in that section. Rather, section 982.552 states that the administering PHA “may consider all relevant circumstances.” 24 C.F.R. § 982.552(c)(2)(i) (emphasis added). “‘May’ is permissive,” not mandatory. Cf. Minn. Stat. § 645.44, subd. 15 (2006). Accordingly, the plain language of section 982.552 gives the PHA discretion to determine whether mitigating circumstances excuse the income-reporting obligation. We cannot conclude that a PHA acts arbitrarily and capriciously when it fails to consider factors which it may choose to, but is not required to, consider.
Even if respondent was required to consider mitigating circumstances, here, the hearing officer described all of the evidence presented at the hearing including evidence of relator’s alleged disability, evidence of relator’s alleged ignorance of Jenkins’s income, evidence of the seriousness of relator’s failure to report income, and evidence of the hardship resulting from termination of assistance. Thus, relator’s assertion that the officer failed to consider these circumstances is overstated. From the record, it is clear that the hearing officer was aware of relator’s claims, and we do not presume otherwise. However, we note that generally it is helpful to a reviewing court if a hearing officer directly addresses alleged mitigating circumstances in her decision.
Here, the hearing officer did not thoroughly discuss these factors, but the evidence offered to establish mitigating circumstances was limited. Relator does not prove that her disabilities precluded her from complying with the county’s reporting requirements. The seriousness of the violation also does not favor relator. Respondent calculated that the amount of overpaid assistance over the course of two years was approximately $11,220. Moreover, respondent challenged the credibility of relator’s claim that she did not know of Jenkins’s income. Relator’s claim was supported by several letters. Offsetting the letters, the record indicates that for two years Jenkins was working and receiving income while living with relator. The record also indicates that during this period two cars had been purchased and were registered to both relator and Jenkins, and that because she was rarely working, relator was presumably home enough to know that Jenkins was working. Underlying the analysis is the reasonable expectation that individuals living in the same home know whether other household members are working and earning income.
Because 24 C.F.R. § 982.552 does not require that the hearing officer consider the factors outlined in that section, because the evidence offered to establish mitigating circumstances was limited, and because evidence of the violation and its seriousness was substantial, we conclude that the hearing officer’s decision was not arbitrary and capricious.