Auracle Homes, LLC v. Lamont
Decision Date | 07 August 2020 |
Docket Number | No. 3:20-cv-00829 (VAB),3:20-cv-00829 (VAB) |
Parties | AURACLE HOMES, LLC, et al., Plaintiffs, v. Ned LAMONT, Governor of Connecticut, Defendant. |
Court | U.S. District Court — District of Connecticut |
Cara Christine Pavalock, The Law Offices of Cara C. Pavalock, Bristol, CT, Craig C. Fishbein, Fishbein Law Firm, LLC, Wallingford, CT, Doug Dubitsky, North Windham, CT, for Plaintiffs.
Maria C. Rodriguez, Philip Miller, Office of the Attorney General, Hartford, CT, for Defendant.
RULING AND ORDER ON MOTION FOR EMERGENCY TEMPORARY RESTRAINING ORDER OR PRELIMINARY INJUNCTION
Auracle Homes, LLC; Buckley Farms, LLC; Orange Capitol, LLC; 216 East Main Street Meriden, LLC; BD Property Holdings, LLC; Prime Management, LLC; and Haberfeld Enterprises, LLC (collectively "Plaintiffs") are residential landlords; and they have sued Ned Lamont, the Governor of the State of Connecticut ("Defendant") over several executive orders issued to address the novel coronavirus known as COVID-191 : specifically, certain sections of Executive Order Nos. 7G, 7X, and 7DD (collectively, the "Executive Orders").2
These Executive Orders seek to temporarily limit the ability of residential landlords to initiate eviction proceedings against tenants and allow tenants to apply security deposit funds to past due rents, provided the security deposit amount exceeds the value of one month's rent.
Plaintiffs seek a temporary restraining order or preliminary injunction, alleging that Governor Lamont's Executive Orders violate their rights under the U.S. Constitution's Equal Protection Clause, Contracts Clause, Due Process Clause, and Takings Clause; and they allege that the Executive Orders are ultra vires.
For the reasons that follow, their motion is DENIED .
On July 22, 2020, the Court conducted a hearing on Plaintiffs’ motion for a preliminary injunction. As a result of the parties’ written submissions3 and oral arguments, the Court finds the following:
Connecticut General Statutes §§ 47a-1 through 47a-74 address landlord-tenant relations in Connecticut. In Connecticut, a lease can provide for the payment of money (or "rent") by the tenant to the landlord; absent a lease, a landlord and a tenant can also agree on a rent for a tenancy. Joint Stip. of Facts ¶¶ 3–4, ECF No. 33 (July 19, 2020) () .
If the tenant fails to pay the rent, the landlord may terminate the tenancy and regain possession of the property by following established procedures. Id. ¶ 5. Under Connecticut General Statutes § 47a-15a, the landlord may serve a Notice to Quit Possession, which is followed by a summary process eviction action under Connecticut General Statutes § 47a-23 et seq. Id. ¶ 6. The landlord is subject to significant penalty for failing to follow the statutory eviction process to dispossess the tenant. Id. ¶ 7.
On March 10, 2020, under the statutory authority granted to him by Connecticut General Statutes §§ 19a-131a and 28-9, Governor Lamont issued a declaration of public health and civil preparedness emergencies, and proclaimed a state of emergency due to the COVID-19 outbreak in the United States and Connecticut. Id. ¶ 11. Among the powers of the Governor under section 28-9 is the power to "modify or suspend in whole or in part, by order as hereinafter provided, any statute ... whenever the Governor finds such statute ... is in conflict with the efficient and expeditious execution of civil preparedness functions or the protection of the public health." Conn. Gen. Stat. § 28-9(b)(1).
Since his declaration and proclamation, Governor Lamont has issued over sixty executive orders aimed at reducing the threat of COVID-19 to Connecticut.4 At issue here are Executive Orders 7G, 7X, and 7DDD. On March 19, 2020, Governor Lamont issued Executive Order 7G, which suspended non-critical court operations and associated requirements. Joint Stip. Facts ¶ 13. On March 20, 2020, Governor Lamont issued Executive Order 7H, which ordered all non-essential businesses to either close or work from home. Id. ¶ 14. As a result, Connecticut's unemployment rate increased significantly from 3.8% in February to 9.8% in June.5
On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief and Economic Security act ("CARES"), which provided numerous forms of relief to affected industries and individuals. Joint Stip. Facts ¶ 15. The CARES Act also included protections for renters and homeowners, including a prohibition against new eviction cases filed by housing providers who participate in certain federal housing rental programs on the basis of nonpayment of rent. 15 U.S.C. §§ 9056 – 58. Under 15 U.S.C. § 9056(b), homeowners with a "federally backed mortgage loan" may seek a 180-day forbearance on their loan, with an additional 180-day extension at the homeowner's request. Section 9056(c) placed a sixty-day foreclosure moratorium on services of federally backed mortgage loans beginning on March 18, 2020. 15 U.S.C. § 9056(c). On June 17, 2020, the Federal Housing Administration extended this moratorium until August 31, 2020.6 Similar protections are available for multifamily borrowers. 15 U.S.C. § 9057(a) ().
On March 31, 2020, Governor Lamont announced an agreement with over fifty Connecticut credit unions and banks to offer up to ninety days of mortgage-payment forbearance, with no late fees, new foreclosure sales, or evictions for ninety days. Press Release, Office of Gov'r Ned Lamont, Governor Lamont Announces Mortgage Payment Relief During COVID-19 Crisis (Mar. 31, 2020), https://portal.ct.gov/Office-of-the-Governor/News/Press-Releases/2020/03-2020/Governor-Lamont-Announces-Mortgage-Payment-Relief-During-COVID19-Crisis. This agreement with most banks and credit unions was recently extended to apply until July 30, 2020.7
On April 10, 2020, Governor Lamont issued Executive Order 7X,8 which included numerous protections for residential renters impacted by COVID-19 for the duration of the declared public health and civil preparedness emergencies. Joint Stip. Facts ¶ 16. As relevant to this case, Executive Order 7X included the following provisions:
On June 29, 2020, Governor Lamont issued Executive Order 7DDD,9 which extended protections for residential renters impacted by COVID-19. Id. ¶ 27. As relevant to this case, Executive Order 7DD included the following provisions:
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