Daniels v. Hous. Auth. of Prince George's Cnty.

• Decision Date: 17 April 2013
• Docket Number: Civil Action No. 11–cv–02938–AW.
• Citation: 940 F.Supp.2d 248
• Parties: Virna M. DANIELS, Plaintiff, v. HOUSING AUTHORITY OF PRINCE GEORGE'S COUNTY, et al., Defendants.
• Court: U.S. District Court — District of Maryland

940 F.Supp.2d 248

Virna M. DANIELS, Plaintiff,

v.HOUSING AUTHORITY OF PRINCE GEORGE'S COUNTY, et al., Defendants.

Civil Action No. 11–cv–02938–AW.

United States District Court,

D. Maryland,

Southern Division.

April 17, 2013.

Lori Leibowitz, Legal Aid Bureau Inc., Riverdale, MD, for Plaintiff.

John C. Fredrickson, McMillan Metro PC, Rockville, MD, Barbara Wachter Needle, Reno and Cavanaugh PLLC, Washington, DC, Susan Zuhowski, O'Malley Miles Nylen and Gilmore PA, Calverton, MD, for Defendants.

MEMORANDUM OPINION

ALEXANDER WILLIAMS, JR., District Judge.

On October 14, 2011, Plaintiff brought suit against Defendants pursuant to 42 U.S.C. § 1983 for alleged deprivations of her rights under the Fourteenth Amendment Due Process Clause and the Housing Choice Voucher Program, 42 U.S.C. § 1437f. A bench trial was held on March 4 and March 7, 2013. The Court has carefully considered the parties' exhibits, the testimony of the witnesses, the pretrial submissions and post-trial briefs, and the oral arguments of counsel. The following constitutes this Court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. For the reasons articulated below, the Court will enter judgment in favor of Defendants on Counts IV and V and in favor of Plaintiff on Count VI. The Court will award Plaintiff $24.00 in damages on Count VI and $1.00 in nominal damages for Defendants' liability on Count I.

I. BACKGROUND

The Housing Choice Voucher Program (“HCVP”), also known as Section 8, is a federal program created to help low-income families obtain affordable housing. See42 U.S.C. § 1437f. Defendants Housing Authority of Prince George's County (“HAPGC”) and Eric C. Brown, in his official capacity as Executive Director of HAPGC, administer the program for Prince George's County. Plaintiff Virna Daniels, a participant in the HCVP homeownership program, alleged six counts against Defendants in her Amended Complaint, all of which were brought pursuant to 42 U.S.C. § 1983. See Doc. No. 24. In Count I, Plaintiff alleged that Defendants deprived her of her constitutional rights under the Due Process Clause of the Fourteenth Amendment by failing to provide her with an informal hearing to challenge the alleged underpayment of her housing subsidy in 2010. Similarly, in Count II, Plaintiff alleged that Defendants deprived her of her federal right under Section 8 and regulations implemented by the Departmentof Housing and Urban Development (HUD) by failing to provide her with an informal hearing to challenge the alleged 2010 underpayment.

In Counts III, IV, V, and VI, Plaintiff alleged that Defendants deprived her of her federal right to a properly calculated housing subsidy under Section 8 and implementing HUD regulations. Specifically, Plaintiff alleged that Defendants failed to timely process her monthly payment for August 2010, which resulted in a prorated subsidy that month (Count III); erroneously used her son's 2009 income as a basis for her anticipated household income for 2010, thereby reducing her monthly subsidy payments from August 2010 through December 2010 (Count IV); failed to timely remove her son from the household in December 2010, thereby reducing her subsidy payment in December 2010 (Count V); and failed to properly credit her for all her medical expenses, thereby reducing her monthly subsidy payments from May 2011 through the present (Count VI).

On August 24, 2012, Plaintiff filed a Motion for Partial Summary Judgment as to liability on Counts I, IV, V, and VI. Doc. No. 28. The Court held a hearing on Plaintiff's Motion on November 16, 2012. Doc. No. 33. With respect to Count I, it was not disputed that Plaintiff requested an informal hearing to challenge Defendants' calculation of her subsidy on August 16, 2010, and that her attorney reiterated that request on multiple occasions in the months that followed. In their opposition brief, Defendants attempted to characterize August 12, 2010 and December 21, 2010 meetings between Defendants and Plaintiff and her counsel as “informal hearings.” However, during the November 16 hearing, counsel for Defendants presented nothing convincing to challenge Plaintiff's argument that informal hearings in accordance with the HAPGC Administrative Plan were never held. Accordingly, the Court held that Defendants were liable on Count I:

In denying Daniels an informal hearing, Defendants failed to comply with the due process requirements of Goldberg v. Kelly, 397 U.S. 254, 266–71 [, 90 S.Ct. 1011, 25 L.Ed.2d 287] (1970), applicable HUD regulations, e.g.,24 C.F.R. § 982.555, and corresponding provisions of the governing Administrative Plan, see Doc. No. 30–1 at 16–14—16–22. Accordingly, the Court finds that Defendants are liable under 42 U.S.C. § 1983 for violating Plaintiff's procedural due process rights.

Doc. No. 34 at 2. The Court also dismissed Count II without prejudice when counsel for Plaintiff acknowledged that it was duplicative of Count I, and denied Plaintiff's Motion with respect to Counts IV, V, and VI. Id. at 1–2. A bench trial was scheduled to determine damages on Count I and liability and damages on Counts III, IV, V, and VI. Id. at 3.

The bench trial was held on March 4 and March 7, 2013. At the close of Plaintiff's case, Defendants moved for judgment on all Counts. The Court entered judgment in favor of Defendants on Count III pursuant to Rule 52(c) of the Federal Rules of Civil Procedure, but denied Defendants' Motion with respect to the remaining Counts. The Court made the following findings of fact with respect to Count III: (1) Plaintiff's realtor, Joan Singh, sent communications to Defendants in June 2010 informing them that the closing on Plaintiff's home was scheduled for June 25, 2010; (2) The Housing Quality Standards (HQS) inspection of Plaintiff's home was not scheduled until after the closing; (3) The first HQS inspection, which Plaintiff's home failed, occurred on July 21, 2010; (4) A second HQS inspection was scheduled for August 4, 2010, at which time Plaintiff's home passed inspection; and (5) Plaintiff's subsidy payment was prorated for the month of August 2010 on the grounds that her home did not pass inspection until August 4, 2010.

Under HUD regulations, a prerequisite for receiving a subsidy under the Section 8 program is that the participant's home pass HQS inspection. 24 C.F.R. § 982.628(a)(4). Accordingly, Defendants were not authorized by federal law to pay Daniels a subsidy until August 4, 2010. Neither § 1437f nor the HUD regulations cited by Plaintiff provided her with a right to have an inspection prior to her closing date or a right to an immediate inspection. Furthermore, the Court could not conclude that the passage of two weeks between inspections was due to Defendants' misconduct or was otherwise unreasonable. Accordingly, Plaintiff failed to show that she was deprived of a federal right, and Count III was dismissed.

The following findings of fact and conclusions of law are made with respect to the remaining claims in this case: liability and damages on Counts IV, V, and VI, and damages on Count I.

II. FINDINGS OF FACT

By letter dated April 13, 2010, the Maryland Department of Housing and Community Development informed Plaintiff Virna Daniels that she had pre-qualified to purchase a home under the Homeownership for Individuals with Disabilities Program. The April 13 correspondence indicated that the prequalification was based on Daniels's receipt of a Housing Choice Voucher subsidy from Defendant HAPGC in an estimated amount of $1,433.92. On May 7, 2010, Daniels signed a contract to purchase the property located at 13100 Glasgow Way, Fort Washington, Prince George's County. The contract was ratified on May 10, 2010, and the projected settlement date for the property was June 25, 2010. Prior to the settlement date, Carolyn Floyd, homeownership specialist for HAPGC, contacted Daniels to set up an appointment to certify her participation in the Section 8 Program, administered by Defendants in Prince George's County. The parties stipulated that since certification, Floyd acted according to HAPGC practice and policy in verifying Daniels's income and expenses and calculating her housing subsidy.

At all relevant times, Defendants were required to calculate Section 8 participants' assistance payments in accordance with the terms of the governing Administrative Plan adopted by HAPGC. Chapter 6 of the Plan provided the policies and methods that HAPGC was required to use to ensure that only eligible families received housing assistance and that no family paid more or less than its obligation under HUD regulations. That chapter specified the sources of income to include and exclude in computing a family's annual income, how to subtract deductions such as medical expenses to arrive at adjusted income, and the methodology for calculating the family's monthly assistance payment. Chapter 7 of the Plan governed Defendants' methodology for verification of the participating family's information, including income, household composition, and medical expenses. Several provisions of the Plan quoted, cited, or otherwise expressly relied upon the terms of administrative regulations and guidance documents promulgated by HUD. These and other relevant provisions of the Administrative Plan will be discussed in substantial detail in the Court's Conclusions of Law.

Daniels met with Floyd at HAPGC on June 23, 2010 for her certification appointment. Daniels provided several documents relating to the income earned by her son, Dahvae Akers, who was self-employed as a newspaper carrier. Akers's income was relevant to calculating Daniels's subsidy because he resided with his mother, and Section 8 participants' subsidy calculations are based on the income earned by all members of the household. At the June 23 meeting, Daniels submitted Akers's 2009 income tax return, which indicated that his gross income for 2009 was $37,986...