Opinion ID: 442820
Heading Depth: 2
Heading Rank: 2

Heading: GERMAIN v. RECHT-GOLDIN-SIEGEL PROPERTIES

Text: 10 Defendant Grant Park is a general partnership which owns Grant Park Square Apartments in South Milwaukee, Wisconsin. Grant Park Apartments is permanently financed by the Wisconsin Housing Financing Authority (the WHFA), a non-defendant public entity created pursuant to Wis.Stat. Secs. 234.01 et seq. The apartment project is a new construction project regulated under 24 C.F.R. Part 883. Grant Park entered into a Housing Assistance Payments (HAP) contract with WHFA for the receipt of Section 8 housing subsidies provided to WHFA by the Department of Housing and Urban Development (HUD). Plaintiffs Jesus Gonzales, Faye Sieg, and Milton Frankwick applied for housing at Grant Park Apartments. 11 Defendant North Meadows is a partnership and owner of North Meadows Apartments--No. 3, a Part 880 new construction project in Milwaukee, Wisconsin. As a Part 880 project, North Meadows entered into a HAP contract directly with HUD. Plaintiff Sandra Germain applied for housing at North Meadows. 12 Defendant Recht-Goldin-Siegel Properties is an unincorporated association and manages North Meadows Apartments and Grant Park Apartments pursuant to a contract with North Meadows and Grant Park. In this capacity, Recht-Goldin-Siegel assumed the management responsibilities of the owners and considered the applications of each of the named plaintiffs. 13 WHFA assumed the responsibility for project development and for supervision of the development, management and maintenance functions of Owners. 24 C.F.R. Sec. 883.302(a) (1978). See also 24 C.F.R. Sec. 883.201(b) (1983). WHFA's regulation of tenant selection is essentially the same as HUD's. While WHFA obtains a copy of approved applications, it does not review applications disapproved by owners. WHFA does not have any formal procedure by which applicants may challenge an owner's rejection of an application. 14 Recht-Goldin-Siegel reviewed plaintiffs' applications in accordance with its own tenant selection procedures. Upon receiving an application from an interested person, the application would be processed for a credit check, a landlord check and a check as to whether the person met the Section 8 eligibility requirements. Occasionally, if thought necessary, Recht-Goldin-Siegel would visit the home of the applicant. If an application is denied, the applicant is given the opportunity to meet with Recht-Goldin-Siegel, at which time the applicant is given a summary of the information forming the basis of the denial. In reaching these decisions, Recht-Goldin-Siegel follows what purports to be just the common sense approach. 15 In the case of Sandra Germain, Recht-Goldin-Siegel initially denied in a letter Ms. Germain's application for a duplex project operated by Recht-Goldin-Siegel. As explained in a subsequent letter, this denial was based on a home visit to plaintiff's apartment which was prompted by adverse comment from her then-current landlord. Subsequently, Ms. Germain applied for housing at North Meadows. This application was denied in a letter dated February 12, 1981, in which she was advised that the denial was based on confidential information received during the investigation of the application and that a more specific explanation could be obtained upon written request. After Ms. Germain requested more specific reasons for the denial, Recht-Goldin-Siegel explained that the denial was based on the previous denial and invited her to call if she had any further questions. In a subsequent telephone conversation, Ms. Germain was informed that the refusal was due to unfavorable landlord reports. 16 The application of Jesus Gonzales for housing at Grant Park was denied in May 1980. In response to Mr. Gonzales' request, in December Recht-Goldin-Siegel advised Mr. Gonzales in a letter that the denial was based on confidential information received during the investigation of the application and that a more specific explanation could be obtained upon written request. Eventually, Recht-Goldin-Siegel responded to an inquiry from legal counsel for Mr. Gonzales and advised that, Mr. Gonzales was denied because of an unfavorable renting record with a previous landlord. 17 Faye Seig's application for housing at Grant Park was denied in a May 1981 letter. The denial was based on Recht-Goldin-Siegel's judgment call when an investigation of her application revealed an unpaid judgment of $404.00, thereby suggesting poor credit and an alleged false representation by Ms. Seig that she had custody of one daughter when the daughter was in the foster care of a grandmother. These reasons were orally communicated to Ms. Seig and were confirmed in a letter in which Ms. Seig was advised that her application would be reconsidered if she could show that the problems had been rectified. 18 Plaintiff Milton Frankwick applied for housing at Grant Park and a non-Section 8 project operated by Recht-Goldin-Siegel. In May 1981, Recht-Goldin-Siegel called Mr. Frankwick and advised him that his application had not been processed because he was on a non-resident waiting list and residents were given preference at Grant Park Square. He was also advised that it appeared that [he] was in Sec. 8 housing and that R-G-S did not consider for Sec. 8 tenancy persons who were already in Sec. 8 housing. These reasons were confirmed by letter. 19 The Wisconsin plaintiffs filed their class action suit on May 8, 1981. They alleged that defendants had violated the due process clauses of the fifth and fourteenth amendments by failing to provide plaintiffs and other class members with various procedural and substantive rights. The complaint relied on 42 U.S.C. Sec. 1983 and also directly on the fifth amendment. The plaintiffs sought injunctive relief requiring the Secretary to promulgate regulations establishing various procedural rights, including a right to a prompt written determination of Section 8 eligibility based on ascertainable admission standards, a right to notice of denial detailing rational, non-arbitrary reason(s) and specific facts supporting a denial of eligibility, a right to notice of a meaningful hearing opportunity with HUD staff, and a right to a promptly scheduled administrative evidentiary hearing (with trial-type rights of cross-examination) before an impartial decisionmaker. In December 1982, plaintiffs moved to expand a previously certified class and for partial summary judgment seeking the declaratory and injunctive relief specified in the complaint. The Secretary and the private defendants opposed the plaintiffs' motion and moved for summary judgment. 20 In an order entered in July 1983, the district court granted the defendants' motion and dismissed the complaint holding that the plaintiffs did not have a legitimate claim of entitlement to the receipt of Section 8 benefits. 567 F.Supp. 384 (E.D.Wis.1983).