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                                        Appellate Court                            Date: 2017.10.02
                                                                                   12:00:21 -05'00'




                      Tolliver v. Housing Authority, 2017 IL App (1st) 153615



Appellate Court            CHERRISH TOLLIVER, Petitioner-Appellant, v. THE HOUSING
Caption                    AUTHORITY OF THE COUNTY OF COOK, Respondent-Appellee.



District & No.             First District, Fifth Division
                           Docket No. 1-15-3615


Rule 23 order filed        March 31, 2017
Motion to publish
granted                    May 17, 2017
Opinion filed              May 19, 2017



Decision Under             Appeal from the Circuit Court of Cook County, No. 13-CH-8364; the
Review                     Hon. Sophia H. Hall, Judge, presiding.



Judgment                   Circuit court reversed; hearing officer’s decision reversed; and cause
                           remanded with directions.



Counsel on                 Erin Solomon, Eric Shinabarger, and Delilah Flaum, of Winston &
Appeal                     Strawn LLP, and Patricia Nelson and Ian Turnipseed, of Chicago
                           Volunteer Legal Services, both of Chicago, for appellant.

                           Michael E. Kujawa and Deborah A. Ostvig, of Schain, Banks, Kenny
                           & Schwartz, Ltd., of Chicago, for appellee.
     Panel                    JUSTICE HALL delivered the judgment of the court, with opinion.
                              Presiding Justice Gordon and Justice Reyes concurred in the judgment
                              and opinion.


                                                OPINION

¶1         Petitioner Cherrish Tolliver appeals from a judgment of the circuit court affirming a
       decision of the respondent the Housing Authority of the County of Cook (HACC) terminating
       her federally subsidized housing voucher she was receiving pursuant to the Section 8 Housing
       Choice Voucher Program (HCV Program). For the reasons that follow, we reverse and remand
       with directions.

¶2                                          BACKGROUND
¶3         Petitioner became a participant in the HCV Program in 2007. The program is a
       federally-funded one in which the United States Department of Housing and Urban
       Development (HUD) provides rent subsidies to eligible families to assist them in renting
       privately-owned housing. See 42 U.S.C. § 1437f(o) (2006); 24 C.F.R. § 982.1(a)(1) (2006);
       Khan v. Bland, 630 F.3d 519, 523-25 (7th Cir. 2010). The program is governed by the Code of
       Federal Regulations (Federal Code) (24 C.F.R. § 982.1 et seq. (2006)) and is administered on
       the local level by governmental entities referred to as public housing agencies or PHA’s (24
       C.F.R. § 982.1(a) (2006)), such as the Chicago Housing Authority (CHA).1 Under the HCV
       Program, petitioner’s landlord received a voucher from the HACC to subsidize a portion of her
       rent for a house located at 13841 Kanawha Avenue, Dolton, Illinois. See 24 C.F.R. § 982.451
       (2006). As one of the conditions for participating in the HCV Program, petitioner agreed to
       report in writing within 30 days when there was an increase in her household income.
¶4         In October 2012, the HACC alleged that the petitioner violated this condition. In a letter
       dated October 16, 2012, the HACC notified petitioner that it intended to terminate her from the
       HCV Program, effective November 30, 2012, on the ground that she had failed to timely report
       an increase in household income from her employment with the Diamond Detective Agency.
¶5         Petitioner appeared pro se and challenged the termination at an informal administrative
       hearing held before a hearing panel. At the hearing, the HACC maintained that the petitioner
       had failed to report income she received from the detective agency in 2011 and 2012.
       Petitioner responded that she regularly informed her caseworker via telephone and fax about
       her sporadic employment situation with the detective agency and that the caseworker routinely
       accepted such notification. Petitioner explained that due to intermittent layoffs, her
       employment with the detective agency was sporadic during the years at issue.
¶6         On February 19, 2013, a hearing officer with the HACC concluded that the HACC had
       proven its case by a preponderance of the evidence. The hearing officer issued an order and
       decision upholding the HACC’s decision to terminate petitioner from the HCV Program.

             1
            The CHA is a municipal corporation operating under the Housing Authorities Act (310 ILCS 10/1
       et seq. (West 2012)) for the purpose of providing safe and decent housing for low income persons.
       Castro v. Chicago Housing Authority, 360 F.3d 721, 724 (7th Cir. 2004). HACC is a private company
       operating under contract with the CHA.

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¶7          On March 27, 2013, petitioner, acting pro se, filed a petition for judicial review by writ of
       certiorari in the circuit court. In her petition, petitioner claimed that the decision to terminate
       her from the HCV Program was contrary to the law.
¶8          On August 23, 2013, counsel from the law firm of Kirkland and Ellis and from Chicago
       Volunteer Legal Services filed a brief in support of the petitioner’s petition. The brief
       concluded in part that the HACC had “misapplied the statute in using a mandatory standard
       and not affording the Petitioner the statutorily required discretionary basis for decision.
       Finally, with the myriad of ways in which [the HACC] could have dealt with any alleged
       failure of Petitioner to timely report continued income, such as affording Petitioner the
       opportunity to repay any alleged overpayments, or consideration that Petitioner had never
       before failed to report any income, or that Petitioner’s three children would be adversely
       affected, the decision to terminate Petitioner was unusually harsh by being contrary to the
       HACC’s and HUD’s own Administrative Plan and guidebook.”
¶9          The circuit court agreed with the petitioner’s arguments, and on November 15, 2013,
       remanded the matter to the HACC, directing the housing agency to hold another informal
       hearing to consider mitigating circumstances. The court determined that the HACC had
       violated the petitioner’s due process rights by terminating her from the HCV Program without
       considering any mitigating circumstances. The court also held the HACC failed to provide
       petitioner with notice of termination regarding her unemployment benefits.
¶ 10        Upon remand, instead of holding an informal hearing in accordance with the circuit court’s
       order, the HACC sent petitioner another notice of termination, this time notifying her that she
       was being terminated from the HCV Program for allegedly failing to report that she had
       returned to work at the detective agency following layoff periods from 2009 through 2012.
¶ 11        On August 14, 2014, the HACC held a second informal hearing at which petitioner again
       challenged her termination from the program. On November 5, 2014, the HACC issued an
       order and decision upholding the termination.
¶ 12        On January 16, 2015, petitioner, through her attorneys, filed a second petition and
       supporting brief in the circuit court, contesting the HACC’s latest decision to terminate her
       from the HCV Program. Petitioner argued that the HACC failed to exercise discretion or
       consider mitigating circumstances prior to terminating her from the program. She maintained
       that these failures not only violated applicable federal law, but also violated the circuit court’s
       remand order. Petitioner claimed that the latest reasons the HACC gave for terminating her
       from the program were outside the scope of the circuit court’s remand order.
¶ 13        The circuit court again agreed with the petitioner and on April 3, 2015, reversed the
       HACC’s decision, and issued an order remanding the matter to the HACC, again directing the
       housing agency to properly consider mitigating circumstances. In response to the circuit
       court’s order, the HACC issued a third order and decision, this time offering a repayment plan
       in lieu of termination. The HACC stated that the petitioner could avoid termination and retain
       her housing voucher if she agreed to repay the HACC $13,586. Under the agreement,
       petitioner would have to enter into a repayment plan within 60 days and pay an up-front lump
       sum payment of $10,586.
¶ 14        On April 29, 2015, petitioner, again through her attorneys, filed a third petition and
       supporting brief in the circuit court, challenging the HACC’s decision. Counsel argued that the
       repayment plan was unreasonable and in violation of federal law, as well as the HACC’s own
       repayment policy. Counsel contended it was unreasonable to expect a voucher recipient

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       making $15,000 per year to make a $10,000 down payment within 60 days. Counsel further
       contended that the HACC’s failure to follow its own guidelines in holding interim
       reexaminations of the petitioner’s income status allowed the housing agency’s alleged
       overpayments to petitioner to unreasonably accumulate over several years, without any notice
       to petitioner. Counsel claimed that the petitioner did not intentionally misreport her income,
       and that it would be unreasonable to require her to pay over $10,000 up front, when she had
       accurately, and in good faith, reported her income.
¶ 15       The circuit court again agreed with the petitioner’s arguments, and on July 24, 2015, issued
       an order remanding the matter to the HACC for a third time, ruling that the repayment plan was
       not reasonable as required by HUD guidelines.
¶ 16       Upon remand, the HACC issued an amended order and decision on August 18, 2015. In
       this latest decision, the HACC stated that it would allow the petitioner to enter into a
       repayment agreement without requiring her to pay an up-front lump sum payment. The HACC
       stated that as a condition of her reinstatement, petitioner would be required to enter into a
       repayment agreement by September 30, 2015, to pay $13,586 in installments over 36 months.
       On September 15, 2015, the HACC revised the amount of overpayment petitioner was required
       to pay to $13,488 over 36 months.
¶ 17       On October 2, 2015, the petitioner filed a fourth petition and supporting brief in the circuit
       court, challenging the HACC’s decision for the same reasons given in her previous petition.
       On November 16, 2015, the circuit court affirmed the HACC’s decision to terminate the
       petitioner from the HCV Program and dismissed the case. This timely appeal followed.

¶ 18                                            ANALYSIS
¶ 19        This case is before us on appeal from a common-law writ of certiorari. The common-law
       writ of certiorari is used to obtain circuit court review of an administrative decision when the
       administrative agency’s enabling statute does not expressly adopt the Administrative Review
       Law (Review Law) (735 ILCS 5/3-101 et seq. (West 2010)) and provides no other method for
       reviewing the agency’s decisions. Outcom, Inc. v. Illinois Department of Transportation, 233
       Ill. 2d 324, 332-33 (2009). The CHA operates under the Housing Authorities Act (310 ILCS
       10/1 et seq. (West 2008)). See Landers v. Chicago Housing Authority, 404 Ill. App. 3d 568,
       571 (2010). The Housing Authorities Act did not adopt the Review Law and therefore the
       appropriate vehicle for review is a common-law writ of certiorari as was done in this case.
¶ 20        Following a circuit court ruling on a writ of certiorari seeking review of an administrative
       decision, we “ ‘treat th[e] appeal as we would any other appeal for administrative review.’ ”
       Lipscomb v. Housing Authority, 2015 IL App (1st) 142793, ¶ 11 (quoting Landers, 404 Ill.
       App. 3d at 571). In administrative review cases, we review the decision of the administrative
       agency, not the decision of the circuit court. Id.
¶ 21        Petitioner contends the HACC violated her due process rights by failing to provide her with
       proper notice required under federal law before terminating her participation in the HCV
       Program. We agree.
¶ 22        Participants in programs such as the HCV Program enjoy a property interest in continued
       occupancy of subsidized housing, which constitutes a statutory entitlement subject to
       procedural due process protections. See Robinson v. District of Columbia Housing Authority,
       660 F. Supp. 2d 6, 20 (D.D.C. 2009). “The essence of procedural due process is meaningful


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       notice and a meaningful opportunity to be heard.” Trettenero v. Police Pension Fund, 333 Ill.
       App. 3d 792, 799 (2002). In Goldberg v. Kelly, 397 U.S. 254, 266-71 (1970), the United States
       Supreme Court outlined procedural due process requirements of a pretermination hearing
       involving welfare benefits: (1) timely and adequate notice detailing the reasons for
       termination; (2) an opportunity to appear at the hearing, present evidence and oral argument,
       and confront and cross-examine adverse witnesses; (3) the right to be represented by counsel;
       (4) a right to a decision rendered by an impartial decisionmaker; (5) a right to have that
       decision based solely on rules of law and evidence presented at the hearing; and (6) a right to a
       statement by the decisionmaker, setting forth the reasons for the decision and the evidence
       upon which it was based.
¶ 23       Following Goldberg, the federal government promulgated rules in accordance with the
       Court’s decision. See 55 Fed. Reg. 28538, 28541 (July 11, 1990) (“PHAs must adopt written
       informal pretermination hearing procedures for participants, which fully meet the
       requirements of Goldberg v. Kelly.”). The Federal Code provides in relevant part that a PHA
       may terminate a participant’s Section 8 benefits if the family violates any family obligations
       under the program (24 C.F.R. § 982.552(c)(1)(i) (2006)). However, prior to any hearing for
       termination, the PHA must provide the family with “prompt written notice,” containing a
       “brief statement of reasons for the decision.” 24 C.F.R. § 982.555(c)(2)(i) (2008). Although
       the Federal Code does not discuss the amount of information that must be contained in the
       “brief statement,” courts have found that “the notice must, at the very least, inform the resident
       of the situation so that she can make an intelligent response.” Jones v. Lansing Housing
       Comm’n, No. 5:03-CV-123, 2003 WL 26118817, at *6 (W.D. Mich. Sept. 19, 2003).
¶ 24       The purpose of the written notice is “ ‘to inform the tenant of the allegations so that he can
       prepare a defense.’ ” Driver v. Housing Authority, 713 N.W.2d 670, 676 (Wis. Ct. App. 2006)
       (quoting Edgecomb v. Housing Authority, 824 F. Supp. 312, 314 (D. Conn. 1993)). The notice
       must be “ ‘sufficiently specific ... to enable [the tenant] to prepare rebuttal evidence to
       introduce at his hearing appearance.’ ” Edgecomb, 824 F. Supp. at 315 (quoting Billington v.
       Underwood, 613 F.2d 91, 94 (5th Cir. 1980)). In order to effectively rebut adverse evidence at
       the hearing, the notice must alert the tenant of the nature of this evidence. Driver, 713 N.W.2d
       at 676. “A notice that does not indicate the nature of the proscribed acts or when the acts were
       committed is insufficient.” Jones, 2003 WL 26118817, at *6 (citing Edgecomb, 824 F. Supp. at
       315).
¶ 25       A review of the HACC’s two termination letters clearly reveal that they failed to comply
       with the notice requirements of the Federal Code regulations or the Supreme Court’s mandate
       in Goldberg. The first letter merely alleged that the petitioner “failed to report income from the
       Diamond Detective Agency.” The letter is devoid of the dates on which the alleged unreported
       income was earned or any dollar amounts, much less any calculations or underlying data.
       Similarly, the second termination letter alleged, “You failed to report your return to work at
       Diamond Detective Agency following your layoff periods in 2009 through 2012.” Again, this
       letter is devoid of any specific dates on which the alleged unreported income was earned or any
       dollar amounts.
¶ 26       With such little information, it was virtually impossible for the petitioner to adequately
       prepare a defense, particularly since the second termination letter raised issues spanning a
       four-year time period and first put the petitioner on notice of issues concerning years 2009 and
       2010. In addition, the hearing conducted on August 14, 2014, was the first time the HACC

                                                   -5-
       notified petitioner that she had allegedly been overpaid the amount of $13,586. Prior to that
       hearing, the petitioner was not provided with this figure, and she was never given any
       information or data on how this figure was arrived at.
¶ 27       The HACC suggests that the petitioner’s procedural due process rights were not violated
       by the lack of notice because she came prepared at the hearings and was able to present her
       case to the hearing officer. We strongly disagree. First, the HACC, beyond its own opinion,
       provides no evidence establishing that the petitioner was “prepared” at the hearings. And
       second, and more importantly, the HACC’s alleged perception that the petitioner was so-called
       “prepared” at the hearings is both legally irrelevant and not a trustworthy guidepost as to
       whether she received sufficient notice.
¶ 28       It was the responsibility of the HACC to put petitioner on notice as to the precise conduct
       she allegedly engaged in that warranted terminating her participation in the HCV Program.
       Due process imposes the burden of providing adequate notice on the government, not on the
       individual. Driver, 713 N.W.2d at 678. Without any information such as the dates on which the
       alleged unreported income was earned or any calculations or underlying data, petitioner could
       not have known how to prepare rebuttal evidence to introduce at her hearings or to adequately
       defend against the claims and allegations asserted against her by the HACC. Due process
       “requires such information in order for the tenant to adequately prepare for the hearing and to
       understand what factors motivated the final decision, particularly where more than one
       potential ground for termination exists.” Id. at 680. In sum, the HACC violated the petitioner’s
       due process rights by failing to provide her with proper notice required under federal law
       before terminating her participation in the HCV Program.
¶ 29       Moreover, even if we found that the termination notices were not constitutionally deficient,
       we would still find the HACC violated the petitioner’s due process rights and its own
       administrative plan by failing to conduct interim reexaminations of the petitioner’s income
       after she notified the housing agency of changes in her employment status. HUD regulations
       and the HCV Program’s administrative plan require the HACC to conduct interim
       reexaminations every 90 days for families reporting zero income. See 24 C.F.R.
       § 982.516(b)(2) (2006); Housing Authority of the County of Cook, Housing Choice Voucher
       Program Administrative Plan 205 (2014) (“The HACC will schedule an interim reexamination
       every ninety (90) days for families reporting zero ($0) income.”).
¶ 30       A review of the petitioner’s recertification appointments shows the following. In 2009,
       petitioner reported that her income consisted solely of unemployment benefits. There was no
       follow-up by the HACC. In 2010, petitioner again reported that her income consisted solely of
       unemployment benefits. Petitioner checked boxes stating that she expected to work within the
       next year, expected to receive unemployment benefits, and expected to receive public aid.
       Once again, there was no follow-up by the HACC. In 2011, petitioner reported that she was
       employed by the Diamond Detective Agency, but expected to be relieved of her employment
       by the end of that month. She also checked boxes stating that she expected to receive
       unemployment benefits and public aid in the future. The HACC conducted no follow-up. In
       2012, petitioner reported zero income and checked boxes stating that she expected to receive
       unemployment benefits and public aid in the future. The HACC did not conduct an interim
       reexamination following this report of zero income.
¶ 31       The above shows that from 2010 to 2012, the petitioner reported zero income, had income
       consisting solely of unemployment benefits, or expected to lose her sporadic employment with

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       the detective agency. Petitioner reported zero income in 2012. Between 2009 and 2012, she
       repeatedly reported changes in her income based on her fluctuating employment status. Thus,
       under the HCV Program’s administrative plan, the housing agency was required to conduct
       interim reexaminations with petitioner every 90 days. However, the HACC did not pursue any
       follow-up or conduct a single reexamination in this time frame.
¶ 32       The HACC’s failure to provide this oversight allowed the housing agency’s alleged
       overpayments to petitioner to unreasonably accumulate over several years, without any notice
       to the petitioner. The HACC failed to comply with HUD regulations and its own policies
       designed to catch and prevent such alleged overpayments for individuals reporting zero
       income and whose financial circumstances substantially change. Such interim reexaminations
       would have alerted the HACC of the alleged overpayments to petitioner. The HACC’s failure
       to conduct these interim reexaminations allowed the alleged overpayments to accrue to a point
       where requiring petitioner to repay $13,488 in overpayments over 36 months, effectively
       equates to a de facto termination of her housing voucher.
¶ 33       “ ‘[R]ules promulgated by a federal agency, which regulate the rights and interests of
       others, are controlling upon the agency.’ ” Samirah v. Holder, 627 F.3d 652, 664 (7th Cir.
       2010) (quoting Montilla v. Immigration & Naturalization Service, 926 F.2d 162, 166 (2d Cir.
       1991)). In addition, administrative agencies must generally follow their own rules as written,
       without making ad hoc exceptions or departures from these rules when adjudicating. Mattoon
       Community Unit School District No. 2 v. Illinois Educational Labor Relations Board, 193 Ill.
       App. 3d 875, 881 (1990). “When an administrative agency has adopted rules and regulations
       under its statutory authority for carrying out its duties, the agency is bound by those rules and
       regulations and cannot arbitrarily disregard them.” Springwood Associates v. Health Facilities
       Planning Board, 269 Ill. App. 3d 944, 948 (1995). In sum, the HACC’s failure to comply with
       its own administrative plan removed a procedural safeguard relied upon by tenants like the
       petitioner and resulted in a deprivation of her of due process.
¶ 34       The HACC presents a number of arguments regarding its conduct in relation to the interim
       reexaminations, none of which are persuasive. The HACC argues that HUD regulations gave it
       the discretion to hold interim reexaminations when it determined they were necessary. It is true
       that under both HUD regulations and the HCV Program’s administrative plan, the HACC has
       the discretion to conduct interim reexaminations. But this discretion is not absolute. HUD
       regulations provide for discretionary interim reexaminations in some circumstances (24 C.F.R.
       § 982.516(c)(1) (2006)) and mandatory interim reexaminations in others (24 C.F.R.
       § 982.516(b)(2) (2006)). Therefore, the fact that the HACC may voluntarily conduct interim
       reexaminations on a discretionary basis does not lead to the logical conclusion that such
       reexaminations are discretionary in every instance.
¶ 35       The HACC next argues there is no evidence in the record showing that a 90-day interim
       reexamination of the petitioner’s income did not occur in the fall of 2012. Here, the HACC
       improperly attempts to place the burden on petitioner to prove a negative—that a
       reexamination did not occur. We do not believe that HUD intended to place such a burden on
       recipients of housing vouchers, and we decline the HACC’s invitation to do so under the
       factual circumstances in this case.
¶ 36       The HACC maintains that even if it had opted to conduct an interim reexamination of the
       petitioner’s income for the years 2009 to 2011, there is no guarantee she would have properly
       reported her income, and therefore, we should not disturb its decision to terminate her

                                                   -7-
       participation in the HCV Program. We strongly reject such an argument. Under the HACC’s
       logic, recipients of federal housing vouchers could be removed from the housing program
       without being afforded any procedural due process protections, simply because there was no
       guarantee the recipients would honestly report their income. Such a rule would render
       procedural due process protections meaningless for recipients of housing vouchers issued
       under the HCV Program.
¶ 37        Finally, we find that under the factual circumstances in this case, the latest repayment plan
       the HACC presented to the petitioner was unreasonable as a matter of law. A sanction imposed
       by an administrative agency may be reversed if it amounts to an abuse of discretion. Sonntag v.
       Stewart, 2015 IL App (2d) 140445, ¶ 19. “A sanction will be found to be an abuse of discretion
       if it is arbitrary and capricious, or if the sanction is overly harsh in view of the mitigating
       circumstances.” Kazmi v. Department of Financial & Professional Regulation, 2014 IL App
       (1st) 130959, ¶ 21.
¶ 38        After having reviewed the facts in this case, we believe the HACC abused its discretion by
       imposing a sanction that was overly harsh in view of the mitigating circumstances. The
       repayment plan requires the petitioner to pay $13,488 or $374.67 per month, over the short
       period of 36 months. This repayment contribution would be in addition to the petitioner’s
       mandated share of the rent, which is 30 percent of income, or $378.68 per month under the
       administrative plan.
¶ 39        According to the HACC, the petitioner made at most $15,147 in 2012, the last year noted in
       the record. This results in a gross income of $1262.25 per month. Thus, the HACC’s
       repayment plan would require the petitioner to pay $753.35 per month in rent or nearly 60
       percent of her total income, which is prohibitive and unreasonable on its face given the
       petitioner’s family needs and financial position.
¶ 40        Moreover, the current repayment plan is especially unreasonable in light of the fact that the
       HACC’s failure to follow HUD guidelines or comply with its own administrative plan allowed
       the housing agency’s alleged overpayments to petitioner to unreasonably accumulate over
       several years, without any notice to the petitioner. Added to this is the failure of the HACC to
       properly document the steps or record the data it utilized in calculating the alleged
       overpayments. The HACC also improperly considered reported income in its overpayment
       calculation. On her May 20, 2011 recertification, the petitioner reported that she was employed
       with the detective agency. Yet, the HACC improperly counted all subsequent income as an
       overpayment.
¶ 41        Accordingly, for the reasons set forth above, we reverse the order of termination and the
       judgment of the circuit court. We order the HACC to reinstate the petitioner’s housing voucher
       instanter. We remand the matter to the hearing officer to determine what, if any, overpayments
       were made to the petitioner. If a repayment agreement is required, the hearing officer shall
       consider the petitioner’s ability to pay and create a reasonable repayment plan.

¶ 42      Circuit court judgment reversed; hearing officer’s decision reversed; and cause remanded
       with directions.




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