2012 VT 82


Bennington Housing Authority v.
Danielle Lake; Bennington Housing Authority v. Sanders and Rousseau (2011-403;
2011-404)
 
2012 VT 82
 
[Filed 05-Oct-2012]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions by email at: JUD.Reporter@state.vt.us or by
mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801, of any errors in order that corrections may be made before this
opinion goes to press. 
 

2012 VT 82

 

Nos. 2011-403 & 2011-404

 

Bennington Housing Authority


Supreme Court


 


 


     v.


On Appeal from


 


Superior Court, Bennington
  Unit,


Danielle Lake


Civil Division


 


 


 


May Term, 2012


Bennington Housing Authority


 


 


     v.


 


Krista A. Saunders and Adam Rousseau

 
 
John P. Wesley, J.
 
K. James Malady, III, Bennington, for Plaintiff-Appellant.
 
Maureen A. O’Reilly, Vermont Legal Aid,
Inc., Rutland, for Defendants-Appellees.
 
 
PRESENT:   Dooley, Skoglund,
Burgess and Robinson, JJ., and Crawford, Supr. J.,
                    
Specially Assigned
 
 
¶ 1.            
SKOGLUND, J.  These consolidated cases concern a public
housing authority and three of its tenants.  Bennington Housing Authority
(BHA) appeals two trial court decisions dismissing ejectment
claims against tenants, and granting summary judgment to tenants on two
counterclaims: (1) that BHA failed to properly advise tenants of their right to
request a grievance hearing when it billed them for repairs and fines; and (2)
that BHA’s policy of fining tenants for open windows in the winter is
prohibited under federal regulations.  We affirm. 
¶ 2.            
The facts in these two cases are strikingly similar.  BHA is a
public housing authority (PHA) under 42 U.S.C. § 1437 that owns and
operates the Willowbrook apartment complex in Bennington,
Vermont.  In 2010, tenants Saunders and Rousseau were living in one Willowbrook apartment unit, while tenant Lake occupied
another Willowbrook unit.
¶ 3.            
 On June 14, 2010, BHA sent notice letters to tenants, informing
them that their respective tenancies would end on July 16, 2010 due to failure
to pay rent and various outstanding fines and fees.  Both lease
termination letters contained the same language: “Section 11, C of your lease
. . . states in part, ‘The notice of termination to tenant shall
state . . . the tenant’s right to examine management documents
directly relevant to the termination or eviction, and of his/her right to
request a hearing in accordance with management’s grievance procedure.’ ”  Both
letters also informed tenants that a private conference had been arranged with
BHA’s Executive Director, Deborah Reed, “at which time [tenants] will be given
an opportunity to make such reply or explanation as [they] may wish.”  
¶ 4.            
Lake and Saunders each attended a meeting with Director Reed.[1]  In the course of these meetings,
both tenants expressed their concern over BHA’s basis for eviction.
 Saunders told Reed she believed BHA had wrongly set her rent at too high
a percentage of her combined family income.  Reed then established a
payment schedule for Saunders that Saunders said she could not satisfy. 
Lake told Reed her economic circumstances had changed in recent months, and
that she was interested in working out a repayment plan for the money she
owed.  Both tenants stated that neither the letter nor their individual
meetings with Reed made clear that they could request a grievance hearing or a
hearing to challenge the charges to their accounts.  Both tenants felt
that they had no option but to pay BHA or be evicted.  
¶ 5.            
Following these meetings, Director Reed sent a letter summarizing their
discussion to Saunders, but evidently not to Lake.  In this letter, Reed
told Saunders: “If you stick to this agreement and make all the designated
payments, we will stop the termination.  If you do not make the agreed
payments, we will continue with the termination of your lease and you will have
to find another place to live.”  Reed did not make any mention of the
grievance procedure or tenant’s right to request a hearing. 
¶ 6.            
Neither tenant was able to make the payments demanded by BHA.  As a
result, in October 2010, BHA brought separate ejectment
claims against each tenant.   Tenants both filed answers to BHA’s
claims and asserted counterclaims against BHA for failing to adhere to federal
regulations with regard to the bills sent to tenants and for BHA’s policy of
fining for open windows.  Tenants moved for summary judgment on all
claims, which BHA opposed.  The trial court granted summary judgment and
found for the tenants on all claims.  The trial court held that: (1) BHA’s
termination notice was insufficient under federal law because it did not
adequately inform tenants of the grievance procedure; (2) the bills sent to
tenant for fines and repairs were insufficient because they did not provide
notice of the grievance procedure; and (3) BHA’s window-fines policy was
impermissible under federal regulations. The trial court also ordered BHA to
remove charges from tenants’ accounts for window fines and various
maintenance and repair costs.   BHA appeals.

¶ 7.            
This Court applies a de novo standard of review to motions for summary
judgment.  Madowitz v. Woods at
Killington Owner’s Ass’n, 2010 VT 37, ¶ 9, 188
Vt. 197, 6 A.3d 1117.  Summary judgment is appropriate only where “there
is no genuine issue of material fact and the movant
is entitled to judgment as a matter of law.”   Id.; see also
V.R.C.P. 56(c)(2). 
¶ 8.            
In this case, BHA argues that there are two genuine issues of material
fact: whether BHA informed tenants about their grievance rights in the
termination letter, and similarly, whether BHA informed tenants of their
grievance rights when billing for various fines and repair costs.  BHA
mischaracterizes these questions as issues of fact where they are actually
issues of law.  
¶ 9.            
A fact is defined as “an actual or alleged event or circumstance, as
distinguished from its legal effect, consequence, or interpretation.” 
Black’s Law Dictionary 628 (8th ed. 2004).  Here, the question before the
Court is not to determine the content of BHA’s communications or whether such
communications actually occurred; these would certainly be questions of
fact.  Instead, the Court must decide whether the undisputed content of
BHA’s communications to tenants meet the notice requirements of federal housing
law.  See, e.g., In re S. Burlington-Shelburne
Highway Project, 174 Vt. 604, 605, 817 A.2d 49, 51 (2002) (mem.) (“Statutory interpretation is a question of
law.”); Town of Hinesburg v. Dunkling, 167 Vt.
514, 521, 711 A.2d 1163, 1167 (1998) (addressing sufficiency of notice as a
question of law in an appeal from summary judgment).  Determining whether
BHA adhered to federal regulations in its communication with tenants requires
legal interpretation, not factual resolution, and thus, there are no genuine
issues of material fact.
¶ 10.         At
issue, then, is whether tenants are entitled to judgment as a matter of law.
 First, however, we must address what source of law applies in this case.
 BHA appears unconvinced that federal regulations of PHAs govern in this
case, and argues instead that case law interpreting constitutional due process
notice requirements should rule.  BHA contends that the federal
regulations promulgated by the Department of Housing Authority and Urban
Development (HUD) regarding PHAs were meant to ensure that tenants were granted
due process in their dealing with a housing authority.  BHA further argues
that because federal case law on general due process notice requirements set a
lower standard than the PHA regulations, BHA need meet only this lower
threshold.  We disagree.
¶ 11.         No
party asserts that the federal regulations at issue in this case violate
tenants’ due process rights; therefore, we do not address any constitutional
claims.  Brown v. Hous.
Auth. of Milwaukee, 471 F.2d 63, 64 (7th Cir. 1972) (stating that since the
court found the housing authority procedures had violated federal regulations,
it need not address whether the procedures also violated due process); Thorpe
v. Hous. Auth. of Durham, 393 U.S. 268, 284
(1969) (“We do not sit . . . to
decide abstract, hypothetical or contingent questions or to decide any
constitutional question in advance of the necessity for its decision.” (quotation and alterations omitted)).  HUD has been
granted broad rule-making authority.  Thorpe, 393 U.S. at
277.  As such, where HUD has promulgated regulations of PHAs under the
broad rule-making authority granted to it, those regulations are binding.
 Hess v. Ward, 497 F. Supp. 786, 798 (E.D. Pa.
1980).  There is no reason why these regulations cannot hold PHAs
to a higher standard than the constitution requires.  “Agencies are free
to grant additional procedural rights in the exercise of their discretion.”
 Vt. Yankee Nuclear Power Corp. v. Natural Res. Def.
Council, 435 U.S. 519, 524 (1978).  We therefore examine BHA’s
actions in this case against the applicable federal regulations.
I.
¶ 12.         All
PHAs are required to adopt a grievance procedure affording tenants the right to
a hearing where they might dispute any “action or failure to act” by the
housing authority that “adversely affect[s] the individual tenant’s rights,
duties, welfare or status.”  24 C.F.R. §§ 966.50,
966.52.  HUD’s intent in promulgating this regulation was to reduce
the amount of litigation between tenants and housing authorities by offering a
“decentralized, informal, and relatively non-adversarial administrative process.” 
Samuels v. Dist. of Columbia, 770 F.2d 184, 189 (D.C.
Cir. 1985).  Recognizing that there are moments when conflict
between a tenant and a housing authority is more likely than others, HUD has
identified times when the housing authority must particularly inform tenants of
their grievance rights.  24 C.F.R. § 966.4(e)(8)(ii). 
Specifically, § 966.4(e)(8)(ii) mandates that
where a housing authority is taking “adverse action” against a tenant, “[t]he
notice of proposed adverse action shall inform the tenant of the right to
request such hearing.”  Id.  Where such adverse action is a
lease termination, § 966.4(l)(3)(ii)
requires that the termination notice “shall also inform the tenant of the
tenant’s right to request a hearing in accordance with the PHA’s grievance
procedure.”  24 C.F.R. § 966.4(l)(3)(ii).

¶ 13.         BHA
maintains that simply having a grievance procedure in place, referenced in a
tenant’s lease, and providing a copy with the lease is enough to fulfill its
obligations under § 966.4.  This argument completely ignores the
plain language of the regulation, which requires a notice of lease termination
to “inform the tenant of the tenant’s right to request a hearing.” 
Id. (emphasis added).  Thus, although BHA has complied with
federal regulations by having a grievance procedure and providing a copy of the
grievance procedure to tenants with their lease, this fails, under the law, to
inform tenants of the right to a hearing in the actual termination
notice.  
¶ 14.         To
this end, the wording of BHA’s termination notice does not rise to the level of
“inform[ing] the tenant of the right to request such
hearing.”  24 C.F.R. § 966.4(e)(8)(ii). 
Though BHA made reference to the grievance procedure in its letter to tenants,
it did so in an indirect manner.  BHA’s letter refers tenants “to Section
11, C of [their] lease which states in part, ‘The notice of termination to
the tenant shall state . . . the
tenant’s right . . . to request a hearing in accordance with
management’s grievance procedure.’ ”  Using
such wording, BHA never directly informed tenants of their right to request a
hearing; rather, BHA informed them that the lease terms required BHA to inform
them of their right to request a hearing.  The construction of this
statement in conjunction with unnecessarily confusing legal language subverts
the informative purpose of 24 C.F.R. § 966.4(l)(3)(ii). 

¶ 15.         Why
BHA did not simply and directly state that tenants
have the right to a grievance hearing is somewhat mystifying.  BHA could easily
have made a direct assertion of tenants’ rights under the grievance procedure,
and yet it did not do so.  Instead, BHA made a circuitous and confusing
reference to the grievance procedure that failed to notify tenants of their
right to a grievance hearing.  “[A] tenant cannot be put in the position
of having to speculate on the meaning and legal effect of the landlord’s
actions.”  Andrus v. Dunbar, 2005 VT 48, ¶ 13,
178 Vt. 554, 878 A.2d 245 (mem.).  
This principle leads us to conclude that BHA’s statement to tenants in the
termination notice letters failed to inform tenants of their grievance
procedure rights as required by § 966.4(l)(3)(ii).  
¶ 16.         Even
if we did not find BHA’s actions insufficient under § 966.4(l)(3)(ii), we would still reject BHA’s claim on the basis
that the summary letter Director Reed sent violates 24 C.F.R.
§ 966.54.  That regulation requires that any informal grievance
discussion be followed by a summary letter that “shall specify the
procedures by which a hearing under § 966.55 may be obtained if the
complainant is not satisfied.”  24 C.F.R. § 966.54 (emphasis
added).  BHA’s summary letter to Saunders following their informal meeting
neither mentioned the grievance procedure, nor specified the procedure for
obtaining a grievance hearing.  This is a clear violation of the federal
regulation.  Likewise, BHA’s failure to send Lake any letter at all is an
even more pronounced violation of this law.  The fact that the regulations
require summary letters to specify the procedure for obtaining a grievance
hearing underscores the idea that tenants are intended to leave these meetings
with an understanding of their options.  Here, tenants felt they had no
choice but to comply with BHA’s demands.  Thus, because BHA failed to clearly
inform tenants of the grievance procedure in its notice of lease termination
letters, and because the summary letter BHA sent (if at all) failed to make any
mention of the grievance procedure or specify how to request a grievance
hearing, we affirm the trial court’s dismissal of BHA’s ejectment
claims against tenants. 
II.
¶ 17.         The
second issue we address is whether BHA properly apprised tenants of their
grievance rights in the bills sent to tenants for repairs and maintenance
costs.  Like a termination of lease notice, when a PHA charges a tenant
for maintenance or repair costs, the bill is considered an “adverse action”
under federal regulations.  24 C.F.R. § 966.4(e)(8)(i).  As such, § 966.4(e)(8)(ii)
requires that a tenant be afforded the opportunity for a grievance hearing
concerning the adverse action and states, “The notice of proposed adverse
action shall inform the tenant of the right to request such hearing.”  24
C.F.R. § 966.4(e)(8)(ii).  
¶ 18.         Again,
BHA ignores the plain language of the regulation and argues that its
obligations under § 966.4 are satisfied by providing tenants with the
grievance procedure when they sign their leases.  This is simply not
correct.  Section 966.4 unmistakably requires that PHAs inform tenants of
their right to a grievance hearing in the notice of proposed adverse action. 
Id.  A tenant’s lease is not a notice of proposed adverse action.
 A bill for maintenance and repair costs is.  In this case, BHA’s
bills do not reference the grievance procedure or tenants’ right to a grievance
hearing to contest the billing charges.  We agree with the trial
court that this violates 24 C.F.R. § 966.4 and affirm the court’s ruling
on this claim.
III. 
¶ 19.         We
turn now to the final issue in this case: whether BHA’s window-fine policy is
permissible under the regulations governing PHAs.  In response to rising
heat costs, BHA instituted a policy of fining tenants who open their apartment
windows when the outside temperature is below forty degrees Fahrenheit.  BHA’s
employees patrol the apartment complex daily and report any open windows to
management, who fine the tenant accordingly.  In a given season, the first
and second open-window violations are fined at fifty dollars, after which the
fine goes up to seventy-five dollars.  Tenants argue that this policy
exceeds the boundaries of permissible charges that public housing authorities
can impose on tenants under federal regulations.  We agree.
¶ 20.         Public
housing authorities are permitted to impose charges beyond rent on tenants in
two instances: (1) “for maintenance and repair costs beyond normal wear and
tear”; and (2) “for consumption of excess utilities.”  24 C.F.R.
§ 966.4(b)(2).   BHA contends that the
window fines are a charge for excess utility consumption.  Surcharges for
excess utilities provided by the housing authority are allowed for apartments
that do not have individual checkmeters installed,
but the housing authority “shall establish schedules of surcharges indicating
additional dollar amounts residents will be required to pay by reason of
estimated utility consumption attributable to resident-owned major appliances
or to optional functions of PHA-furnished equipment.”  24
C.F.R. § 965.506(b).  Windows are certainly not resident-owned
appliances; thus, in order for BHA’s window-fines policy to be permissible as a
surcharge for excess consumption of utilities, windows must be considered
“PHA-furnished equipment.” 
¶ 21.         Notwithstanding
BHA’s creative argument, windows are not PHA-furnished equipment.
 Section 965.505(b), which controls PHA utility allowance standards,
gives several different examples of “equipment” found in an apartment: “major
equipment,” which includes a “heating furnace” or “hot water heater,” “essential
equipment” such as a “range and refrigerator,” and “minor items of equipment”
that include “toasters and radios.”  24 C.F.R. 
§ 965.506(b).  All of these statutory examples of “equipment” are
stand-alone electrical or gas-operated appliances.  They are not existing
structural components of an apartment, but rather
 elements that are brought in and installed within the existing
construction of the apartment or apartment complex.  Air conditioners, for
example, are equipment under the regulations for which BHA rightfully can and
does assess a charge against tenants for excess electricity use.  A window
is not a piece of “equipment” in the same way that an air conditioner is; nor
do we think, based on the examples provided, that windows were intended to be
included in this category.  
¶ 22.         Furthermore,
the arbitrary cost assessed by BHA for open windows is enough to make BHA’s
policy impermissible under federal regulations.  Section 965.506(b) states
that where surcharges are assessed for excess utility consumption, they “shall
be based on the cost to the PHA of the utility consumption estimated to be
attributable to reasonable usage of such equipment.”  24
C.F.R.  § 965.506(b).  According to BHA, an open window
in the winter can cost up to an additional $965 per apartment, per heating
year.  By our calculations, however, if a tenant had her window open every
day of a thirty-day month, she could be fined $2200 that month alone—fifty
dollars per day for the first two days, and seventy-five dollars per day for
the next twenty-eight days.  Thus, in a single month, BHA’s fine rate is
more than twice its estimated excess cost for an entire heating year. 
Section 965.506(b) allows only for surcharges based on the cost of the
excess utility to the PHA.  Id.  The discrepancy between the
maximum monthly window fine to tenants and the yearly cost of excess heat to
BHA confirms the arbitrary nature of BHA’s surcharge amount, which is not
allowed based on the plain language of the federal regulations.[2]  Therefore, BHA’s policy of fining
tenants for open windows in winter is impermissible under federal regulations,
and we affirm the trial court’s ruling on this claim. 
¶ 23.         For
the reasons stated, we hold that BHA violated federal regulations for
insufficient notice of the grievance procedure in both the termination of lease
notices and the bills for maintenance and repair costs sent to tenants. We also
agree with the trial court that BHA’s window-fine policy is prohibited by
federal regulations.  BHA’s ejectment claims are
thus dismissed, and we affirm the trial court’s grant of summary judgment on
tenants’ counterclaims. 
Affirmed. 

 


 
 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Associate
  Justice

 





[1] 
In its brief, BHA claims that Lake never attended the meeting with Director
Reed but fails to support this assertion.  We second the trial court’s
lamentations that “to attempt to identify [BHA]’s evidentiary basis for the
disputed facts, the Court is required to flip back to [BHA]’s memorandum, and
then follow any references to the exhibits appended to Ms. Lake’s memorandum.”  Not
only is this exercise, in the trial court’s words, “laborious,” it is to no
avail.  Despite attempting to follow BHA’s paper trail, we cannot find
anything that states Lake did not attend the meeting with director Reed—we find
only Lake’s affidavit stating that she did.  Thus, even giving BHA the
benefit of the doubt that is accorded to the nonmovant
in an appeal from summary judgment, without any supporting documentation for
BHA’s claim we must take Lake’s account of events as true.  Boulton v. CLD Consulting Eng’rs,
Inc., 2003 VT 72, ¶ 5, 175 Vt. 413, 834 A.2d 37 (“It is not enough . . . for the nonmoving party to ‘rest
on allegations in the pleadings to rebut credible documentary evidence or
affidavits.’ ”) (quoting Gore v. Green Mountain Lakes, Inc., 140
Vt. 262, 266, 438 A.2d 373, 375 (1981)). 


[2] 
BHA contends that HUD has seen and approved its window-fines policy because HUD
approved BHA’s Five-Year Plan, including the BHA Resident’s Handbook,
which contains the window-fines policy. However, in the letter approving BHA’s
plan, HUD’s division director states, “This approval of the Plan does not
constitute an endorsement of the strategies and policies outlined in the Plan . . . .  BHA must comply with
the rules, standards, and policies . . .
provided in 24 C.F.R. Part 903 and other applicable regulations.” We thus
disregard BHA’s argument as unsupported.



