Barnes v. Metropolitan Housing Assistance Program

• Decision Date: 22 May 1997
• Citation: 425 Mass. 79,679 N.E.2d 545
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Shanena BARNES & another 1 v. METROPOLITAN HOUSING ASSISTANCE PROGRAM.

Page 545

679 N.E.2d 545

425 Mass. 79

Shanena BARNES & another ¹ v. METROPOLITAN HOUSING ASSISTANCE PROGRAM.

Supreme Judicial Court of Massachusetts Suffolk.

Argued March 6, 1997.

Decided May 22, 1997.

Mark P. Sutliff, Assistant Attorney General (Alice G. Winn, Assistant Attorney General with him), for defendant.

Martin Kantrovitz, Boston (Tammi Tuve with him), for plaintiffs.

Martin J. Rooney, Boston, for the Medford Housing Authority & another, amici curiae, submitted a brief.

Before WILKINS, C.J., and ABRAMS, LYNCH, FRIED and MARSHALL, JJ.

FRIED, Justice.

The plaintiffs, tenants in a federally subsidized rental assistance program, commenced an action against the Metropolitan Housing Assistance Program (METHAP), the State agency administering the program, for breach of its obligations to inspect for and provide safe housing. The plaintiffs allege that this breach led to lead poisoning of the minor plaintiff because of lead-based paint ingestion at the leased premises. A judge in the Boston Division of the Housing Court Department denied METHAP's motion for summary judgment. The parties filed a joint motion to request the judge to report his order and, in addition, to report certain underlying questions to the Appeals Court. The judge allowed the motion, and reported his ruling for a determination of its correctness. See Mass. R. Civ. P. 64, 365 Mass. 831 (1974). We transferred the case to this court on our own motion and vacate the denial of summary judgment.

I

The Federal government, through the United States Department of Housing and Urban Development (HUD), provides rental subsidies to low income tenants under the Section 8 Housing Assistance Program (HAP) of the United States Housing Act, 42 U.S.C. §§ 1437 et seq. (1994 & Supp. I 1995). The purpose of the act is to provide "decent, safe, and sanitary dwellings for families of lower income." 42 U.S.C. § 1437 (1994). This program is administered through agreement with HUD by State and local agencies (public housing agencies or PHAs). METHAP is one such local agency. Administration of HAP is the subject of Federal statutory and regulatory provisions with which these agencies must comply. In Ayala v. Boston Hous. Auth., 404 Mass. 689, 696-697, 536 N.E.2d 1082 (1989), we described the obligations of the PHA under Section 8 and its implementing regulations. For all relevant purposes they had not been changed at the time the contracts in this case were signed. These obligations include the obligation to inspect or to cause to be inspected the premises before occupancy by a Section 8 tenant, ² to assure that the unit is safe, to require the owner of the unit to make repairs before the owner receives a contract with the PHA, and to reinspect the unit on an annual basis thereafter. 24 C.F.R. §§ 882.209(h)(1) and (2) (1990); 24 C.F.R. § 882.211(b) (1990). The regulations specify that "immediate" lead paint hazards must be eliminated prior to occupancy. 24 C.F.R. § 35.24(b)(2)(i) (1990). The regulations define such hazards as paint which "is cracking, scaling, chipping, peeling or loose" in housing constructed at a time when lead-based paint was commonly used. 24 C.F.R. § 22 (1990).

Under the Section 8 program, the PHA enters into a HUD approved contract with the owner, a housing assistance payments contract (HAP contract), and an annual contributions contract (AC contract) that set out the terms by which the PHA will make rental subsidy payments to the owner, and, among other things, obligates the owner to maintain the premises in a decent, safe, and sanitary condition. The tenant, having been approved by the PHA for participation in the program, executes a HUD prescribed lease with the owner. The lease obliges the owner to provide decent, safe, and sanitary housing in accordance with applicable HUD regulations and the State sanitary code and to make necessary repairs accordingly. This lease is signed by the tenant and owner. Additional provisions relating to other good cause termination of the tenancy by the owner, security deposits, and certain prohibited lease provisions are contained in an addendum, which provides that the PHA initial the addendum.

Barnes had applied to METHAP, and, after her eligibility was determined, housing search workers for the shelter where she was living with her children informed her of a vacancy. Prior to receiving housing, she attended a mandatory orientation program which informed her of the dangers of lead poisoning and advised her to have her children tested for lead poisoning every six months. At the completion of the program, she signed a HUD form entitled "Watch out for Lead Paint Poisoning." Angela Barnes's lease provided that the rent for the apartment in issue here would be $700 a month of which she would pay $39 and the balance would be paid by the PHA. A METHAP inspector inspected the premises prior to the occupancy, which began in May, 1989. Barnes stated that the inspector checked for chipped or cracked paint, and that he stated that the apartment was "up to standard." Some months after moving in, the ceiling in her daughter's room "caved in" because of a leak in an upstairs apartment. METHAP insisted that repairs be made, and the owner eventually made some repairs, which METHAP inspected and approved. Barnes also testified that she had found chips of paint in the window areas and that paint chips would appear every time she opened the windows. About eighteen months after she moved in, an inspection revealed the need for extensive deleading, and, two months later, her two year old daughter was diagnosed as having elevated levels of lead in her blood. Because of these problems, the family quit the premises.

The plaintiffs brought this suit against METHAP, stating two distinct grounds. Count I states that METHAP "had a contractual relationship with the plaintiffs ... obligat[ing it] to provide plaintiffs with safe, habitable and fit housing," and that the minor's lead poisoning was the result of METHAP's breach of its obligations. Count II states that METHAP "owe[d] a duty of reasonable care to the plaintiffs [to provide them with] leadfree housing and [to do] reasonable and appropriate lead inspections." The judge in the Housing Court ruled that, following our decision in Ayala, supra, METHAP was obligated to the plaintiffs as third-party beneficiaries of its HAP contract and AC contract with the owners to provide them with lead-free housing or at least to inspect and protect them against lead hazards. Although the HAP contract and the AC contract had clauses explicitly excluding METHAP's liability to third parties, ³ which the contracts in Ayala did not, the Housing Court held on the authority of Ayala, supra [425 Mass. 83] at 701, 536 N.E.2d 1082, that such exclusionary language was against public policy. The judge then considered the effect of G.L. c. 258, § 10, and especially § 10 (f ), which was enacted in 1993. The judge stated that he had "no doubt that the Legislature, in adopting [§ 10 (f ) ] sought to overturn the Ayala decision." ⁴ Nevertheless, the judge declined to give the legislation retroactive effect, because he found that METHAP's contractual duties to the plaintiffs had vested prior to the enactment and the contract clause of the United States Constitution, art. 1, § 10, subjects "a state-created impairment of its own obligations ... to strict constitutional scrutiny," which it cannot survive. ⁵

As to plaintiffs' second count, "in looking at the document provided by the plaintiffs, the [judge ruled that he] cannot find that explicit and specific assurance, as defined in G.L. c. 258, § 10(j)(1)," which would be necessary to impose liability on METHAP for breach of its duty to the plaintiffs apart from any contractual obligation.

The judge denied summary judgment, stating that he was "not finding that the statute as applied is unconstitutional." ⁶ The judge then reported his order to the Appeals Court to determine its correctness. The judge also reported six questions to the Appeals Court. A trial judge, unlike a single justice of this court, may not report a question of law in a civil action, but may, in the circumstances described in Mass. R. Civ. P. 64, report the propriety of a ruling or an order as the judge did here. In such cases, we disregard the questions and evaluate the propriety of the ruling or order. See Jacobson v. Mailboxes Etc. U.S.A., Inc., 419 Mass. 572, 574 n. 4, 646 N.E.2d 741 (1995); Roberts v. Worcester, 416 Mass. 804, 805 n. 3, 625 N.E.2d 1365 (1994).

II

A

METHAP owed no contractual duty to the plaintiffs. The Housing Court judge and the plaintiffs rely on our decision in the Ayala case for the proposition that Section 8 tenants are the intended beneficiaries of the contracts that public agencies like METHAP make with landlords to provide "decent, safe, and sanitary dwellings"--that include dwellings free from lead-based paint hazards. In Ayala, the local agency administering the HAP was the Boston Housing Authority (BHA), which had failed to inspect for lead paint hazards the premises it approved for the plaintiffs' use. The BHA was obligated by its AC contract with the owner to inspect the premises to make certain that it posed no lead paint hazard. We held that Section 8 tenants were intended third-party beneficiaries of this contractual obligation:

"Recognizing a right to enforce these promises against the BHA 'is appropriate to effectuate the intention of the parties.' Flattery v. Gregory, 397 Mass. 143, 148, 489 N.E.2d 1257 (1986).... When faced with liability for breach of its contractual duty to inspect for, and oversee the remedying of, lead paint hazards, the BHA will have a strong incentive to achieve the goals of the Federal statutes and regulations. We conclude also that HUD, the promisee, intended the plaintiffs to benefit. Id. To rule that these plaintiffs were not intended beneficiaries would mock the very goals which Congress and HUD...