Anderson v. Denny

• Decision Date: 24 September 1973
• Docket Number: Civ. A. No. 73-C-10-C.
• Citation: 365 F. Supp. 1254
• Court: U.S. District Court — Western District of Virginia
• Parties: Beatrice ANDERSON and Barbara Long, on behalf of themselves and on behalf of those similarly situated, Plaintiffs, v. L. John DENNY et al., Defendants.

365 F. Supp. 1254

Beatrice ANDERSON and Barbara Long, on behalf of themselves and on behalf of those similarly situated, Plaintiffs, v. L. John DENNY et al., Defendants.

Civ. A. No. 73-C-10-C.

United States District Court, W. D. Virginia, Charlottesville Division.

September 24, 1973.

Ronald R. Tweel, Charlottesville-Albemarle Legal Aid Society, Charlottesville, Va., for plaintiffs.

John Dezio, Gilmer & Dezio, Charlottesville, Va., for defendants.

OPINION

TURK, District Judge.

Since May, 1972, Barbara Long and her family have been tenants at Oak Ridge Garden Apartments in Charlottesvilla, Virginia. On February 20, 1973, Mrs. Long was served with a notice terminating her tenancy as of April 1, 1973. This notice alleged various acts of misconduct on the part of Mrs. Long and her husband. When Mrs. Long did not vacate her apartment, an unlawful detainer warrant was obtained in the General District Court in Charlottesville, but prior to obtaining this warrant, the present action was begun in this court. By agreement of the parties, the eviction proceedings in the state court have been stayed pending the outcome of this action.

Beatrice Anderson and her four children rented an apartment at Oak Ridge Garden from February 3, 1972, pursuant to a month-to-month oral lease. A written notice dated September 29, 1972, was sent to Mrs. Anderson directing her to vacate the apartment within five days because of "gun play that occurred in your apartment." Mrs. Anderson was served with an unlawful detainer warrant subsequent to this notice, and she vacated her apartment on October 7, 1972.

Oak Ridge Gardens is a limited partnership formed in April, 1969, by defendant John Denny as general partner and Rosalind Denny and Raymond V. Long, Jr. as limited partners.¹ This limited partnership owns Oak Ridge Garden Apartments which it operates through Alcova Management Corporation. It is a multi-family apartment complex of approximately 200 units catering to low and moderate income tenants. It was constructed and financed pursuant to section 236 of the National Housing Act of 1968, 12 U.S.C. § 1715z-1.

This case involves the procedural protections to be accorded the tenants of Oak Ridge Gardens before they may be evicted. Plaintiff Long purports to represent the class of tenants currently renting apartments at Oak Ridge Gardens, and plaintiff Anderson purports to represent those tenants who have been "improperly" evicted from Oak Ridge Gardens. It appears that the requirements of a class action as set forth in Rule 23 of the Federal Rules of Civil Procedure are satisfied in the case of Mrs. Long and the sub-class she purports to represent, and accordingly those tenants now residing at Oak Ridge Gardens will be treated as a class for purposes of this suit. In the case of Mrs. Anderson, this court is of the opinion that the requisites of a class action have not been satisfied. The testimony at the hearing in this case as well as the evidence and pleadings indicate that on September 4, 1972, Mrs. Anderson was given an oral five-day notice of termination. This was followed on September 29 with a written notice from an attorney for Oak Ridge Gardens which specified that she was being evicted "because of gun play that occurred in your apartment." Mrs. Anderson apparently chose not to contest this eviction and left the premises on October 7, 1972. This was ostensibly a voluntary act on her part, and although, as this opinion will make clear, she had certain constitutional rights which limited the defendants' rights to arbitrarily evict her, there was no requirement that she be apprized of those rights or that she challenge her eviction. Mrs. Anderson now asserts that she should be given relief because she was not aware of her rights at the time of her eviction. Aside from the practical difficulty of displacing present tenants in order to return her to her tenancy at Oak Ridge Gardens, this court is of the opinion that her voluntary act in leaving after being notified that she was being evicted because of gun play occurring in her apartment, makes any claim for relief on her part moot. Accordingly, not only would Mrs. Anderson not adequately protect the interests of the class she claims to represent, but there is no basis for relief in her individual case. Thus Mrs. Anderson's claim for relief is denied and the remainder of this opinion will consider the claims of Mrs. Long and the class she represents.

I

The substance of Mrs. Long's claim is that before any tenant may be evicted from Oak Ridge Gardens the due process clauses of the Fifth and the Fourteenth Amendments to the United States Constitution require that certain procedural requisites be complied with. The initial question thus posed by this action is whether the Fifth and Fourteenth Amendments are applicable to this case for the due process clauses of those amendments limit the action of "any state" in the case of the Fourteenth Amendment and the state and federal governments in the case of the Fifth Amendment. The defendants have taken the position that what is involved in this case is purely private action which, of course, would not be limited by those amendments. The question is thus whether the state or the federal government, or both, have become so involved in the conduct of this otherwise private enterprise that its actions are also the actions of these governments and performed under their aegis without the private body necessarily becoming either their instrumentality or their agent in a strict sense. Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959 (4th Cir. 1963), cert. denied, 376 U. S. 938, 84 S.Ct. 793, 11 L.Ed.2d 659 (1964). Decision on this question requires consideration of § 236 of the National Housing Act of 1968 as well as the involvement of the state and local governments in the activities of the defendants.

The benefits received from the federal government by qualifying as a § 236 project include reduction in the interest rate paid on the mortgage to one percent per annum, rent supplements for 20% of the tenants, provision for up to 95% of the funds needed during construction by the Federal National Mortgage Association in participation with an originating mortgagee, provision for the purchase of the mortgage by the Federal National Mortgage Association or the Government National Mortgage Association upon completion of construction, guaranteed builders' fees, and certain tax benefits including accelerated depreciation with limited recapture as ordinary income.²

Quite understandably such inducements to private entrepreneurs to encourage them to provide housing for low income families result in federal control. The statute pursuant to which Oak Ridge Gardens qualified for federal subsidies provides that the owners "shall operate the project in accordance with such requirements with respect to tenant eligibility and rents as the Secretary may prescribe." 12 U.S.C. § 1715z-1(e). In addition, the Secretary is given the power "to make such rules and regulations, to enter into such agreements, and to adopt such procedures as he may deem necessary or desirable to carry out the provisions of the statute." 12 U.S.C. § 1715z-1(h). Restrictions on the management of § 236 projects are set forth in 24 C.F.R. § 236.1 et seq. The defendants in this case are restricted in the following particulars among others: (1) the amount of rent that may be charged; (2) admission to the project is limited to persons of specified income levels; (3) the landlord cannot discriminate on account of children in a family; (4) preference in admission must be given to families displaced by government activities; (5) the landlord cannot convey, transfer or encumber the property; (6) without written approval of the Federal Housing Administration, the landlord cannot convey a beneficial interest in the property or convey a right to manage it or collect its rents nor can he remodel, add to or destroy a portion of the property; (7) the landlord must maintain the mortgaged property in good condition subject to FHA inspection; (8) the owners cannot voluntarily go into bankruptcy; and (9) the owners must furnish monthly occupancy reports and must answer questions relative to income, assets, liabilities, contracts, operation and condition of the property and the status of the mortgage.

State participation in the Oak Ridge Gardens development is also present. On March 3, 1969, the Charlottesville City Council passed a resolution which granted approval for the defendants to participate in the Federal Rent Supplement Program. The stated purpose of this resolution was to enable Oak Ridge Gardens to participate in the rent supplement program as provided in section 101 of the Housing and Urban Development Act of 1965. Even more direct, state involvement in this case flows from the fact that defendants have attempted to evict plaintiff from her tenancy pursuant to state law which permits eviction without just cause upon the giving of proper notice. Va.Code Ann. § 55-222 (1969 Repl.Vol.).

Although the question of exactly what degree of participation by the government in private activity is sufficient to constitute "state action" defies a precise answer, compare Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S. Ct. 856, 6 L.Ed.2d 45 (1961) with Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), this court is of the opinion that the government involvement mentioned above quite clearly brings the actions of defendants within the ambit of "state action." There is ample precedent for such a conclusion from factually similar cases involving housing built under the aegis of federal law. Previous decisions have dealt primarily with housing built under § 221(d)(3) of the Housing Act of 1961, 12 U.S.C. § 1715l. E. g., Joy v. Daniels, 479 F.2d 1236 (4th Cir. 1972); McQueen v. Druker, 317 F.Supp. 1122 (D.Mass.), aff'd in part, 438 F.2d 781 (1st Cir. 1971);...