Cooper v. Tazewell Square Apartments, Ltd.

• Decision Date: 12 January 1984
• Docket Number: Civ. A. No. 83-04584A.
• Citation: 577 F. Supp. 1483
• Parties: David COOPER, Plaintiff, v. TAZEWELL SQUARE APARTMENTS, LTD., Defendant.
• Court: U.S. District Court — Western District of Virginia

577 F. Supp. 1483

David COOPER, Plaintiff, v. TAZEWELL SQUARE APARTMENTS, LTD., Defendant.

Civ. A. No. 83-04584A.

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

January 12, 1984.

Martin Wegbreit, Castlewood, Va., for plaintiff.

Dennis Heileman, Tazewell, Va., for defendant.

MEMORANDUM OPINION

GLEN M. WILLIAMS, District Judge.

The case is before the court on plaintiff's motion for a preliminary and permanent injunction and defendant's motions to dismiss and to dissolve the temporary restraining order. The plaintiff, David Cooper, brought this action for temporary and permanent injunctions and declaratory judgment pursuant to 28 U.S.C. §§ 2201, 2202 and 42 U.S.C. § 1983, alleging that the defendant, Tazewell Square Apartments, Ltd., denied plaintiff his due process rights guaranteed to him under 42 U.S.C. § 1485 and 7 C.F.R. §§ 1944.551-.559 (1983). After an ex parte hearing on October 13, 1983, this court granted plaintiff's motion for a temporary restraining order and enjoined the defendant from evicting him through an action brought in General District Court in Tazewell County, Virginia, without first granting Mr. Cooper his due process rights under 42 U.S.C. § 1480(g) and 7 C.F.R. §§ 1944.551-.559. Jurisdiction over this case is based upon 28 U.S.C. §§ 1331 and 1343.¹

The court extended the temporary restraining order until October 28, 1983 pursuant to an Agreed Order. On October 28, 1983, the court held a hearing regarding plaintiff's motion for a preliminary injunction and defendant's motions to dismiss and to dissolve the injunction, at which time the court consolidated the hearing with the trial of the action on the merits pursuant to Fed.R.Civ.P. 65(a)(2). At the conclusion of the trial, the court granted another extension of the injunction and took the case under advisement. As the parties have filed their discovery, admissions and memoranda of law, this case is ready for disposition. The issue is whether the court should issue a permanent injunction prohibiting the defendant from evicting the plaintiff until the defendant gives him a hearing before an impartial decision maker.

The plaintiff seeks relief under the Rural Rental Housing Loan Program of the Housing Act of 1949, as amended, 42 U.S.C. §§ 1471-1490h. Under the Act,

the Secretary is authorized to insure loans made to any individual, corporation, association, ... or partnership to provide rental or cooperative housing and related facilities for elderly or handicapped persons or families or other persons and families of moderate income in rural areas, in accordance with the terms and conditions substantially identical with those specified in section 1472 of this title; ....

42 U.S.C. § 1485(b). Section 1472 provides for the terms of the loan; if the Secretary determines that an applicant is eligible for assistance and that the applicant can repay the full amount of the loan, the loan may be made. 42 U.S.C. § 1472(a). Under Section 1490a, the Secretary is authorized not only to "make and insure loans under ... section 1485 ... of this title to provide rental or cooperative housing and related facilities for persons and families of low income in multifamily housing projects" but also to "make, and contract to make, assistance payments to the owners of such rental congregate, or cooperative housing in order to make available to low-income occupants of such housing rentals at rates commensurate to income and not exceeding 25 per centum of income." 42 U.S.C. § 1490a(a)(2)(A).

To carry out the provisions of subchapter III entitled Farm Housing, the Secretary has specific powers which Congress gave him. 42 U.S.C. § 1480. Under a general provision the Secretary is empowered "to make such rules and regulations as he deems necessary to carry out the purposes of this subchapter." § 1480(j). In the Housing and Community Development Amendments of 1978, Congress amended the act to add a new provision which provides that:

The Secretary shall have the power to — (g) Rules and regulations for written notice of denial or reduction of assistance issue rules and regulations which assure that applicants denied assistance under this subchapter or persons or organizations whose assistance under this subchapter is being substantially reduced or terminated are given written notice of the reasons for denial, reduction or termination and are provided at least an opportunity to appeal an adverse decision and to present additional information relevant to that decision to a person, other than the person making the original determination, who has authority to reverse the decision ....

42 U.S.C. § 1480(g) (emphasis added.)

Using this power, the Secretary promulgated regulations entitled Farmers Home Administration Tenant Grievance and Appeals Procedure. 7 C.F.R. §§ 1944.-551-.559². The stated objective of this procedure is "to ensure the fair treatment of tenants while providing for an equitable manner by which borrowers can operate, maintain, and safeguard rental projects." 7 C.F.R. § 1944.552. Generally, this regulation provides a grievance and appeals process which satisfies due process requirements of notice and an opportunity to be heard to protect the right or prospective right of a tenant or an applicant to rural rental housing. With this statutory and regulatory background, the court turns to the factual setting in this case.

Tazewell Square Apartments, Ltd., a partnership organized under the laws of Virginia, entered into an agreement on October 8, 1983 with the Farmers Home Administration (FmHA), United States Department of Agriculture, for a loan made or to be made under the Rural Rental Housing Loan Program pursuant to §§ 515(b) and 521(a) of the Housing Act of 1949, as amended, 42 U.S.C. § 1485(a). Under the terms of the agreement, the loan is available "to provide rental housing and related facilities for eligible occupants." On August 1, 1981, the defendant and FmHA entered into a rental assistance agreement pursuant to § 521(a)(2)(A) of the Housing Act of 1949, as amended, whereby the government agreed to provide rental assistance for twenty-two units of housing for a term of five years or "upon the accumulated disbursement and/or credit to the borrower's account." The agreement is subject to present and future regulations of FmHA. Tazewell Square constructed the apartments from funds derived from the insured loan made under 42 U.S.C. § 1485(b), and it pays monthly mortgage payments to FmHA and submits certain required forms pursuant to 7 C.F.R. § 1930.124.

The plaintiff, David Cooper, pays $29.00 a month to live in an apartment at Tazewell Square, and the government subsidizes the remainder of the fair rental value. In a letter dated September 16, 1983, Kathy Mitchell, the property manager of Tazewell Square Apartments, Ltd., notified Mr. Cooper that he had breached the lease agreement by disturbing the peace and tranquility of other tenants, by failing to maintain a clean apartment and by violating the house rules. The manager requested that the plaintiff vacate the premises on or before October 1, 1983 and informed him of the right to a hearing pursuant to 7 C.F.R. § 1944.556 (Exhibit 1).

In response, the plaintiff filed a grievance in a letter dated September 19, 1983 which the manager received September 16, 1983 (Exhibit 2). In an undated letter, Ms. Mitchell informed him that "we will hold an informal hearing on September 26, 1983 at 9:00 a.m. ... in the office of Tazewell Square Apartments, Ltd. ... You may present your grievance at this time." (Exhibit 3).

Subsequently, Kathy Mitchell, Betty Whittaker, Beulah Long, David Cooper, and Martin Wegbreit attended the meeting on September 26. The evidence shows that the first three people serve on a standing hearing panel provided for under 7 C.F.R. § 1944.556. Two of them are permanent members: Beulah Long is the borrower's panelist, and Kathy Mitchell is a mutual panelist. Betty Whittaker is an alternate panelist for the tenants. After the meeting, the panel sent the plaintiff an undated copy of a summary of the meeting which states that "eviction stands as is for failure to comply with Lease Provisions and House Rules." Other occupants had filed later complaints about the noise from Mr. Cooper's apartment. (Exhibit 4). The plaintiff received the summary on October 4, 1983. An outline of the procedures for obtaining a hearing accompanied the summary. It advised the tenant that if he was dissatisfied with the decision, he could ask for a hearing by sending a written request to Tazewell Square Apartments within ten days after he received the summary. The procedures indicate that a standing hearing panel is available to conduct the hearing and that the panelists will hear the grievance within fifteen days after receiving the request. "The hearing will be an informal proceeding before a hearing officer or hearing panel at which both parties will have an opportunity to present their sides of the dispute." Both parties may have counsel present and may cross-examine all witnesses. (Exhibit 4).

On October 5, 1983, the following day, the defendant caused the General District Court of Tazewell County to issue a summons for unlawful detainer to have the plaintiff removed for non-compliance with the terms of his lease and for the monthly rent of $29.00 due October 1, 1983. A hearing was set for October 17, 1983. (Exhibit 5). Then, in a letter dated October 11, 1983, the plaintiff, through his attorney, requested a grievance hearing as provided in 7 C.F.R. § 1944.556(a). He also objected to the standing hearing panel because the members were partial decision makers and requested a complete, readable copy of his file. (Exhibit 6). When it became apparent that the defendant would prosecute the action in General District Court rather than grant the plaintiff an informal hearing, plaintiff sought declaratory and injunctive relief in this court. Consequently, the defendant had the...