[Cite as Dayton Metro. Hous. Auth. v. Kilgore, 194 Ohio App.3d 767, 2011-Ohio-3283.]




         IN THE COURT OF APPEALS OF MONTGOMERY COUNTY, OHIO

DAYTON METROPOLITAN                                :
HOUSING AUTHORITY,
    Appellant,                                     :      C.A. CASE NO. 24250

v.                                                 :      T.C. CASE NO. 2010-CVG-1435

                                                   :      (Civil Appeal from
KILGORE,                                                  Municipal Court)
     Appellee.                            :

                                              .........

                                              OPINION

                            Rendered on the 30th day of June, 2011.

                                              .........

Christopher C. Green, for appellant.

Debra A. Lavey and Kelli A. Bartlett, for appellee.

                                              .........

        GRADY, Presiding Judge.

        {¶ 1} This is an appeal from a final order of the Dayton Municipal Court, entered in an

action for forcible entry and detainer.

        {¶ 2} Defendant-appellee, Rhonda Kilgore, is a tenant of a public housing facility

owned and operated by plaintiff-appellant, Dayton Metropolitan Housing Authority

(“DMHA”). Section XII(s)(1) of Kilgore’s lease obligates her to “refrain from engaging in *

* * any criminal activity that threatens the health, safety or right of peaceful enjoyment of

DMHA’s public housing premises by other residents or employees of DMHA.”                   The
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following notice is attached to that prohibition:

          {¶ 3} “NOTICE:     CRIMINAL ACTIVITY and or crimes of violence are serious

violations of the terms of this lease when a Tenant, member of his household, his guest or any

other person under Tenant’s control engages in any criminal activity that threatens the health,

safety or right to peaceful enjoyment of DMHA’s premises by other tenants or employees of

DMHA, or engages in any drug-related criminal activity or crime of violence on or off

DMHA’s premises.” (Emphasis added.)

          {¶ 4} Section XVII of the lease governs its termination. Paragraph (a) of that section

states:

          {¶ 5} “This lease may be terminated only for serious or repeated violations of material

terms of the Lease, such as failure to make payments due under the Lease or to fulfill Tenant

obligations set forth in Section XII above, failure to abide by any adopted policies, failure to

comply with community service requirements, making false or fraudulent statements in

regards to eligibility or income, and for other good cause.” (Emphasis added.)

          {¶ 6} Paragraph (c) of Section XVII of the lease governs procedures for termination of

the tenancy.     It provides for a notice of termination and a grievance hearing in certain

circumstances.

          {¶ 7} On March 11, 2010, DMHA commenced an action in forcible entry and detainer

against Kilgore in Dayton Municipal Court. DMHA sought restitution of the premises and

monetary award for damage to the premises for which Kilgore allegedly was responsible.

Concerning its claim for restitution of the premises, DMHA’s complaint alleged that on

February 18, 2010, Dayton Police officers who were dispatched to Kilgore’s unit on reports of
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drug activity “located 1.2 grams of marijuana in a soap box on top of the microwave oven and

a digital scale with cocaine residue on it in a trash can.” DMHA alleged that as a result,

Kilgore violated Section XII(s)(2) of the lease, and that Kilgore had been served with a notice

of termination.

       {¶ 8} A copy of the notice of termination attached to DMHA’s complaint states that

Kilgore is not entitled to a grievance hearing because the “violations involve criminal and/or

activity that threatens the health and safety of the premises,” and that “[t]he judicial eviction

procedure used by DMHA shall be under the provisions of Ohio Revised Code 1923.04 * *

*.”

       {¶ 9} DMHA’s claim for restitution of the premises was referred to a magistrate. A

hearing was conducted in which Kilgore testified that she was unaware of the drug activities

alleged in DMHA’s complaint and that the conditions and circumstances alleged involved the

conduct of two persons she had allowed into her apartment to clean while she went to a

doctor’s appointment. It was also established that Kilgore had cooperated in allowing the

search of her apartment performed by police. Kilgore was not charged with a criminal

offense.

       {¶ 10} The magistrate filed a written decision. The magistrate credited Kilgore’s

testimony that she had no knowledge of the criminal activities alleged in DMHA’s complaint

and on that basis, found that she had not breached her lease agreement. The decision

rendered judgment for Kilgore on DMHA’s claim for restitution of the premises.

       {¶ 11} DMHA filed objections to the magistrate’s decision. The trial court overruled

the objections and adopted the decision as the court’s order. The court wrote:
                                                                                                  4

       {¶ 12} “The Court does not find Plaintiff’s Objections well taken. While a public

housing authority can evict a tenant for drug-related crimes committed by her guests, even if

the tenant has no knowledge of them, eviction should be a last resort. Following Dept. of

Hous. & Urban Dev. v. Rucker (2002), 535 U.S. 125, 152 L.Ed.2d 258, 122 S.Ct. 1230, the

Secretary of Housing and Urban Development issued two letters advising public housing

authority directors that they should consider several factors before evicting a tenant: the

seriousness of the violation, the effect of eviction on household members unconnected with

the violation, and the willingness of the head of household to remove those who committed

the criminal activity from the lease. (Defendant’s Appendix B and C). Following Rucker,

trial courts still have the discretion to rule in favor of an innocent tenant on an eviction action.

 CMHA v. Harris (2006), 139 Ohio Misc.2d 96, paragraph 12.

       {¶ 13} “Here, the Magistrate was presented with evidence of an innocent tenant, who

did not know about and was not present during the drug-related activity or connected with it;

the parties responsible for the drug activity were temporary guests not on the tenant’s lease

and the tenant was willing to never have those guests in her apartment again; and Defendant

would suffer if she lost her public housing. The Magistrate properly denied restitution.”

       {¶ 14} DMHA filed a notice of appeal from the trial court’s final judgment.

                                  ASSIGNMENT OF ERROR

       {¶ 15} “The trial court erred when it held that the defendant did not breach her lease

when she had no knowledge of the criminal activity caused by the defendant’s guests even

when it was proven that her guests committed criminal drug activity in the defendant’s unit.”

       {¶ 16} The condition in Section XII(s)(1) of Kilgore’s lease prohibiting a tenant or any
                                                                                               5

other person under the tenant’s control from engaging “in any drug-related criminal activity *

* * on * * * DMHA’s premises” is a requirement imposed by Section 1437d(l)(6), Title 42,

U.S. Code. It provides that each “public housing agency shall utilize leases * * * provid[ing]

that * * * any drug related criminal activities on [federally assisted low income housing]

premises, engaged in by a public housing tenant * * * or any guest or other person under the

tenant’s control, shall be cause of termination of the tenancy.”

       {¶ 17} In Rucker, 535 U.S. 125, the Supreme Court held that an innocent-tenant

defense cannot prevail against a claim for restitution of the premises following a public

housing agency’s termination of a tenant’s lease for the causes a claim required by Section

1437d(l)(6), Title 42, U.S.Code involves.        The Supreme Court pointed out that HUD

regulations implementing the law provide that in deciding to terminate the tenancy, the

public-housing agency has discretion to “consider all of the circumstances of the case,”

including those drug-related situations in which “[t]he tenant did not know, could not foresee,

or could not control behavior by other occupants of the unit.” Id. at 129. Nevertheless,

“Congress’ decision not to impose any qualification in the statute, combined with its use of

the term ‘any’ to modify ‘drug-related criminal activity,’ precludes any knowledge

requirement * * * Thus, any drug-related activity engaged in by the specified persons is

grounds for termination, not just drug-related activity that the tenant knew, or should have

known, about.” Id. at 130-131.

       {¶ 18} Rucker also pointed out that “by ‘control,’ the statute means control in the

sense that the tenant has permitted access to the premises.” Id. at 131. “Thus, the plain

language of § 1437d(l)(6) requires leases that grant public housing authorities the discretion to
                                                                                              6

terminate tenancy without regard to the tenant’s knowledge of the drug-related criminal

activity.” Id. By conferring discretion to terminate on the public housing authority, the

statute “entrusts that decision to the local public housing authorities, who are in the best

position to take account of, among other things, the degree to which the housing project

suffers from ‘rampant drug-related or violent crime,’’ the seriousness of the offending action,’

and ‘the extent to which the leaseholder has * * * taken all reasonable steps to mitigate the

offending action.’ ” Id. at 134, which reflect the purposes of the legislation. Because

tenants who cannot control drug-related activity by those whom they invite into their premises

“threaten the health or safety of other residents * * * it was reasonable for Congress to permit

no-fault evictions in order to ‘provide public other federally assisted low-income housing that

is decent, safe, and free from illegal drugs.’ ” Id.

       {¶ 19} Finally, Rucker held that the public housing agency’s decision to terminate a

tenancy and seek eviction of the tenant is not subject to due-process requirements, because the

agency is not acting as a sovereign, attempting to criminally punish or civilly regulate tenants

as members of the general populace. The agency “is instead acting as a landlord of property

that it owns, invoking a clause in a lease to which (tenants) have agreed and which Congress

has expressly required.” Id., 535 U.S. at 135. Any deprivations of the tenant’s rights in his

tenancy will occur in state-court eviction proceedings, and “[a]ny individual factual disputes

about whether the lease provision was actually violated can, of course, be resolved in these

proceedings.” Id. at 136.

       {¶ 20} R.C. 1923.02(A)(9) authorizes actions in forcible entry and detainer “[a]gainst

tenants who have breached an obligation imposed upon them by a written rental agreement.”
                                                                                               7

R.C. 1923.09(A) provides that if after a hearing, “the judge concludes that the complaint is not

true, the judge shall enter judgment against the plaintiff for costs. If the judge finds the

complaint to be true, the judge shall render a general judgment against the defendant, in favor

of the plaintiff, for restitution of the premises and costs of suit.”

        {¶ 21} The written rental agreement between DMHA and Kilgore provides that

Kilgore must refrain from engaging in “criminal activity,” which occurs when the tenant or a

“person under the tenant’s control * * * engages in any drug-related criminal activity * * *.”

The lease further authorizes DMHA to terminate Kilgore’s tenancy for “serious violations,”

which include failure to fulfill the tenant’s obligation to refrain from engaging in criminal

activity.

        {¶ 22} The action DMHA brought was not to terminate Kilgore’s tenancy.                By

exercising its right in the lease to terminate Kilgore’s tenancy, DMHA extinguished that

tenancy. DMHA’s action was brought to recover possession of the premises. Rucker held

that the innocent-tenant defense is unavailable to a tenant in an eviction action, as a matter of

law. The trial court nevertheless considered Kilgore’s innocence in granting her equitable

relief from DMHA’s right of possession, relying on Cuyahoga Metro. Hous. Auth. v. Harris,

139 Ohio Misc.2d 96, 2006-Ohio-6918.

        {¶ 23} In Harris, a public-housing agency terminated the lease of a tenant following

the arrest of a guest in her apartment on a federal warrant. A search incident to the arrest

revealed a rock of crack cocaine in the guest’s pocket. The tenant was unaware that her guest

had drugs in his pocket. In an action for forcible entry and detainer brought by the agency,

the municipal court held that while the agency has discretion to terminate the lease, per
                                                                                               8

Rucker, courts nevertheless may weigh all equitable considerations in determining whether a

forfeiture is to be declared. The court held that because the tenant was innocent and had

cooperated with police, “[t]o permit eviction of Harris * * * would be to hold that

public-housing tenants can have no guests or, equally implausible, to hold that public-housing

tenants must conduct a thorough search of each guest every time guests enter (the agency’s)

property. This court is not prepared to make such a holding.” Id. at ¶ 13. The court entered

judgment for the tenant on a finding that “equity prohibits her eviction from the premises.”

Id. at ¶ 14.

        {¶ 24} Equity functions to supplement the law where it is insufficient. American

Jurisprudence 2d, Equity, Section 1. We have held that it is the responsibility of the court to

weigh the equitable considerations before imposing a forfeiture. Gorsuch Homes, Inc. v.

Wooten (1992), 73 Ohio App.3d 426. “Even where a cause of forfeiture is specifically

mentioned in the lease, equitable considerations enter into the determination of such forfeiture

and may relieve the lessee technically subject to forfeiture.” 41 Ohio Jurisprudence 3d,

Equity, Section 36.

        {¶ 25} “The maxim, ‘equity regards substance rather than form,’ under which relief is

granted against penalties and forfeitures and affirmative relief in aid of them is denied, does

not apply to positive statutes, but only to conventional acts of parties. With respect to an act

of the legislature, the maxim ‘equity follows the law’ governs the attitude of the court.” Id. at

Section 36. Positive statutes govern courts in the exercise of their equity jurisdiction, just as

in matters of law, and courts are not at liberty to apply an equitable interpretation of such

statutes in order to avoid a seemingly undesirable result. Id. at Section 60.
                                                                                              9

       {¶ 26} Section 1437d(l)(6), Title 42, U.S.Code, imposes an obligation on federally

funded public-housing agencies to include in their leases a right of termination if the tenant

engages in any drug-related criminal activities. In neither the present case nor in Harris did

the trial court impose an equitable bar to that statutory requirement. Rather, the court applied

equitable considerations to prohibit the agency from exercising its right of termination when

the tenant is actually innocent of the drug-related criminal activity concerned.

       {¶ 27} An agency’s exercise of its right of termination in a circumstance of this kind is

not the mere conventional act of a landlord, such as termination for unpaid rent or damage to

the property. See Gorsuch Homes, Inc., 73 Ohio App.3d 426. Rather, the agency is acting

on the authority Congress entrusted to it because, per Rucker, the agency is in “the best

position to take account of, among other things, the degree to which the housing project

suffers from ‘rampant drug-related or violent crime,’ ‘the seriousness of the offending action,’

and ‘the extent to which the leaseholder has * * * taken all reasonable steps to mitigate the

offending action.’ ” 535 U.S. at 134. By relying on the innocent-tenant defense, except as

the agency has applied it, courts run the risk of preventing operation of the enforcement

mechanism for which the statute provides, undermining the policy. That outcome would be

inconsistent with the obligation of equity to follow the law.

       {¶ 28} In Harris, the tenant was not only actually innocent of the drug-related activity

that occurred, there was also no way she reasonably could have known that her guest had

cocaine in his pocket.     Therefore, the tenant took all reasonable steps to mitigate the

offending action, as the trial court found. Neither had the tenant done anything that furthered

her guest’s criminal purposes, which were not particular to the apartment unit where they
                                                                                              10

occurred.

       {¶ 29} In the present case, Kilgore was likewise actually innocent of the drug-related

criminal activity of her two guests, and they apparently concealed from her their plans to

engage in it. However, by making her apartment open and available to them as she did,

Kilgore furthered her guests’ criminal purposes to use that location to engage in drug-related

activity. The federal statute makes no exception for inadvertence in relation to its purpose of

protecting residents of federally financed housing from drug-related criminal activity. The

result may appear draconian, but Rucker observed that “[s]trict liability maximizes deterrence

and eases enforcement difficulties.” 535 U.S. at 134.

       {¶ 30} We hold that the trial court abused its discretion when it granted judgment for

Kilgore in the action for forcible entry and detainer that DMHA commenced.                   The

assignment of error is sustained.     The cause is remanded to the trial court for further

proceedings on DMHA’s claims for relief.

                                                                             Judgment reversed

                                                                          and cause remanded.

       HALL, J., concurs.

       FAIN, J., dissents.



       FAIN, Judge, dissenting.

       {¶ 31} Although the issue is close, I would affirm the judgment of the trial court.

       {¶ 32} To begin with, I conclude that Section 1437d, Title 42, U.S.Code, is not

intended to displace state law governing the relations between landlords and tenants.
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       {¶ 33} The United States Supreme Court held as follows in Dept. of Hous. & Urban

Dev. v. Rucker (2002), 535 U.S. 125, 122 S.Ct. 1230, 152 L.Ed.2d 258:

       {¶ 34} “Section 1437d(l)(6) requires lease terms that give local public housing

authorities the discretion to terminate the lease of a tenant when a member of the household or

a guest engages in drug-related activity, regardless of whether the tenant knew, or should have

known, of the drug-related activity.” Id. at 136.

       {¶ 35} Significantly, in rejecting due-process concerns that had troubled the Ninth

Circuit Court of Appeals, the Supreme Court opined:

       {¶ 36} “The en banc Court of Appeals held that HUD’s interpretation ‘raise[s] serious

questions under the Due Process Clause of the Fourteenth Amendment,’ because it permits

‘tenants to be deprived of their property interest without any relationship to individual

wrongdoing.’ [Citations omitted.] But both of these cases deal with the acts of government as

sovereign. * * * The situation in the present cases is entirely different. The government is not

attempting to criminally punish or civilly regulate respondents as members of the general

populace. It is instead acting as a landlord of property that it owns, invoking a clause in a

lease to which respondents have agreed and which Congress has expressly required.”

(Emphasis added.) Id., 535 U.S. at 135, 122 S.Ct. 1236.

       {¶ 37} Consistently with this statement that in administering public housing, the

federal government is acting as landlord, not as a sovereign, the very next paragraph in the

opinion in Rucker continues:

       {¶ 38} “The Court of Appeals sought to bolster its discussion of constitutional doubt

by pointing to the fact that respondents have a property interest in their leasehold interest,
                                                                                              12

citing Greene v. Lindsey, 456 U.S. 444, 102 S.Ct. 1874, 72 L.Ed.2d 249 (1982). This is

undoubtedly true, and Greene held that an effort to deprive a tenant of such a right without

proper notice violated the Due Process Clause of the Fourteenth Amendment. But, in the

present cases, such deprivation will occur in the state court where [the public-housing

authority] brought the unlawful detainer action against respondents. There is no indication

that notice has not been given by [the public-housing authority] in the past, or that it will not

be given in the future. Any individual factual disputes about whether the lease provision was

actually violated can, of course, be resolved in these proceedings. [Footnote omitted].” Id.,

535 U.S. at 135-136, 122 S.Ct. 1236.

       {¶ 39} From the two paragraphs in Rucker quoted above, I conclude that Section

1437d, Title 42, U.S.Code, the statute upon which DMHA relies, is intended to govern the

administration of public-housing leases by public-housing authorities, as landlords, not to

displace state law governing the legal relations between landlords and tenants.

       {¶ 40} Next, I conclude that the trial court properly weighed the equities and found

that they weighed against the equitable remedy of eviction in this case, which work a

forfeiture of Kilgore’s housing subsidy. Equity abhors a forfeiture. Manhattan Life Ins. Co.

v. Smith (1886), 44 Ohio St. 156, 167; Stephenson v. Haines (1866), 16 Ohio St. 478, 487.

When a tenant raises equitable defenses, a court must balance the equities to determine

whether a forfeiture of the lease is warranted. S. Hotel Co. v. Miscott, Inc. (1975), 44 Ohio

App.2d 217, 221. This is especially so where, as in the case before us, the breach of the lease

has been cured. Id. See also Gorsuch Homes, Inc. v. Wooten (1992), 73 Ohio App.3d 426.

       {¶ 41} DMHA argues that the trial court did not weigh the equities, but instead
                                                                                           13

decided, inconsistently with HUD v. Rucker, that a tenant’s lack of knowledge of her guests’

drug-related activities is an absolute defense to eviction for that reason.

        {¶ 42} The magistrate’s decision would provide support for DMHA’s argument in this

regard. But the trial court, in overruling DMHA’s objection to the magistrate’s decision, took

a different tack:

        {¶ 43} “[DMHA] claims that the Magistrate should have granted restitution because it

was established that [Kilgore] was in violation of her DMHA lease.

        {¶ 44} “In Response, [Kilgore] claims that restitution should not have been granted

because she was not in her apartment at the time of the drug-related incident, she had no

knowledge of any drug activity, and she did not act maliciously or willfully. [Kilgore] argues

that the Rucker Court held that 42 USC §1437d vests the public housing authority with the

discretion not to terminate the tenancy of an innocent tenant and following Rucker, the

Secretary of HUD urged public housing authorities to be guided by compassion and common

sense in responding to illegal drugs and to only use eviction as a last option. (Defendant’s

Appendix B and C). [Kilgore] maintains that the Dayton Municipal Court has held that a

DMHA tenant, with no previous knowledge of drug-related activity of guests, was not in

breach of the tenant’s DMHA lease.          DMHA v. Baldwin (Dec. 15, 2005), D.M.C. No.

05CVG1338. (The Court held that Baldwin did not act maliciously or willfully, in that she

had no knowledge of the criminal activity, and she had a substantial interest in her public

housing subsidy and would suffer extreme hardship if evicted.)

        {¶ 45} “The Court has reviewed the record, the Transcript and evidence, and the law

and agrees with the Magistrate that [DMHA] should not be granted restitution.             The
                                                                                                 14

testimony from the Transcript indicated that [Kilgore] had the guests in her apartment from

the night before when they cleaned for her, she was going to take them home after her

appointment because she was running late, she was at her appointment and was not in her

apartment when the police discovered the guests and the drug-related activity, she did not

know her guests were involved with drugs, and the guests would never be welcome back

because of the drugs and items they carried into her apartment.

       {¶ 46} “The Court does not find [DMHA]’s Objections well taken. While a public

housing authority can evict a tenant for drug-related crimes committed by her guests, even if

the tenant has no knowledge of them, eviction should be a last resort. Following Rucker, the

Secretary of Housing and Urban Development issued two letters advising public housing

authority directors that they should consider several factors before evicting a tenant: the

seriousness of the violation, the effect of eviction on household members unconnected with

the violation, and the willingness of the head of household to remove those who committed

the criminal activity from the lease. (Defendant’s Appendix B and C.) Following Rucker,

trial courts still have the discretion to rule in favor of an innocent tenant on an eviction action.

 CMHA v. Harris (2006), 139 Ohio Misc.2d 96, paragraph 12.

       {¶ 47} “Here, the Magistrate was presented with evidence of an innocent tenant, who

did not know about and was not present during the drug-related activity or connected with it;

the parties responsible for the drug activity were temporary guests not on the tenant’s lease

and the tenant was willing to never have those guests in her apartment again; and [Kilgore]

would suffer if she lost her public housing. The Magistrate properly denied restitution.”

       {¶ 48} Although the trial court never expressly declared in its decision that it was
                                                                                           15

weighing the equities, reading its decision persuades me that this was exactly what it was

doing. And I conclude that the trial court did not abuse its discretion by concluding that the

equities weighed in Kilgore’s favor.

        {¶ 49} I would overrule DMHA’s sole assignment of error, and affirm the judgment of

the trial court.
