In re Kwon.

• Decision Date: 23 February 2011
• Docket Number: No. 09–366.,09–366.
• Citation: 19 A.3d 139,2011 VT 26
• Parties: In re SOON KWON.
• Court: Vermont Supreme Court

19 A.3d 139

2011 VT 26

In re SOON KWON.

No. 09–366.

Supreme Court of Vermont.

Feb. 23, 2011.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

ENTRY ORDER

¶ 1. Landlord appeals from a superior court order affirming the Burlington Housing Board of Review's decision directing landlord to return tenants' security deposit. Landlord contends the court erred in: (1) declining to hold a de novo hearing; (2) concluding that landlord failed to provide proper notice of the security-deposit statement; (3) determining the amount of the deposit to be returned; (4) upholding the Board's authority to conduct a hearing before a single hearing officer; and (5) concluding that questions posed by the Board's clerk during the hearing did not invalidate the proceeding. We affirm.

¶ 2. The material facts are not in dispute: In June 2006, landlord and six tenants, who were university students, entered into a one-year lease for a rental unit on Colchester Avenue in Burlington. Tenants provided a security deposit of $2970. In early 2007, the parties entered into a second one-year lease. Although the second lease recited a security deposit of $3180, there was no evidence that any additional security was provided beyond the original $2970. In June 2008, following the expiration of the second lease and after tenants had moved out, landlord sent a statement to tenants indicating that he held a remaining security deposit of $852.11, based upon deductions for damages allegedly caused during the first lease term, and that tenants had caused certain additional damage to which he was applying the remaining $852.11 deposit. Landlord sent the statements regarding the remaining security deposit to the addresses of the emergency contacts listed on tenants' rental applications. Landlord mailed five of the six letters via regular mail and sent only one letter via certified mail.

¶ 3. Three tenants, purporting to speak for all, challenged the effectiveness of landlord's security-deposit statement. These tenants filed a request for hearing form with the Burlington Housing Board of Review (Board) on July 3, 2008 in which they stated that their reason for requesting a hearing was “to dispute security deposit.” On July 22, 2008, the Board sent both landlord and tenants a “Notice of Hearing” form in which it gave notice of the date and time of the hearing and stated that “Each party will be given the opportunity to present the facts ... and to make legal arguments. The Board will hear testimony and ‘other evidence’ in support of each party's position. ‘Other evidence’ includes notices, receipts for repairs, written lease, move-in checklist and correspondence between the parties.” ^*

¶ 4. Following an August 18, 2008, hearing before a hearing officer, the Board issued a written decision concluding that landlord had forfeited his right to retain the security deposit by failing to send the deposit statements by certified mail to tenants' last known address, as required by Vermont's Landlord and Tenant Act (Act), 9 V.S.A. §§ 4451–4468, and the Burlington Housing Code. See id. § 4461(e) (stating that if landlord fails to send security-deposit statement and funds within fourteen days of end of lease term, “the landlord forfeits the right to withhold any portion of the security deposit”). Landlord appealed the ruling pursuant to 24 V.S.A. § 5006, which allows an appeal to the superior court by any person aggrieved by a decision of the Board. The trial court conducted an on-the-record review and issued a thorough ten-page ruling affirming the Board's decision. This appeal followed.

¶ 5. As a threshold argument, landlord asserts that the trial court erred in declining to conduct a de novo evidentiary hearing or, alternatively, in reviewing the Board's conclusions independently. This Court reviews the superior court's legal conclusion with regard to the proper standard of review de novo. Rhoades Salvage/ABC Metals v. Town of Milton Selectboard, 2010 VT 82, ¶ 6, ––– Vt. ––––, 9 A.3d 685 (mem.).

¶ 6. The trial court correctly determined that landlord's appeal to the superior court was pursuant to V.R.C.P. 74, “which governs appeals from governmental agencies when the right to appeal is given by statute,” Conservation Law Found. v. Burke, 162 Vt. 115, 125, 645 A.2d 495, 501 (1993), and therefore was “on the record and not de novo.” Id. at 126, 645 A.2d at 502; see also Dep't of Taxes v. Tri–State Indus. Laundries, Inc., 138 Vt. 292, 294–95, 415 A.2d 216, 218–19 (1980) (stating that judicial review of agency decisions is presumed to be on-the-record absent specific statutory authorization to the contrary). In such cases, the court's task is solely to determine whether there was “any reasonable basis for the [agency's] finding [s].” Tri–State Indus. Laundries, Inc., 138 Vt. at 294, 415 A.2d at 218; see also Town of Victory v. State, 2004 VT 110, ¶¶ 16–17, 177 Vt. 383, 865 A.2d 373 (stating that “we presume that judicial review of administrative decisions is deferential absent a clear statement of contrary intent,” and noting that on-the-record review is particularly appropriate in “contested cases where there has been an adjudication in the agency” and where the adjudicative body has special expertise). The courts “employ a deferential standard of review” of an agency's interpretation and application of its own regulations. Burke, 162 Vt. at 121, 645 A.2d at 499. Accordingly, we find no error in the court's method or standard of review.

¶ 7. With regard to landlord's subsequent arguments, our standard of review is the same as the superior court's when reviewing board findings, which is to say, we employ on-the-record, as opposed to de novo, review. Id. at 126, 645 A.2d at 502. Like the superior court, we also apply a deferential standard of review to agency decisions. In re Williston Inn Grp., 2008 VT 47, ¶ 11, 183 Vt. 621, 949 A.2d 1073 (mem.). When reviewing the superior court's conclusions as to issues of law, our review is de novo. Borden v. Hofmann, 2009 VT 30, ¶ 9, 185 Vt. 486, 974 A.2d 1249.

¶ 8. Turning to the merits of the case, landlord contends that the trial court and Board erred in concluding that landlord failed to comply with the notice requirements of the Act and the city ordinance. As an initial matter, we briefly consider whether tenants waived the notice defense entirely when they failed to specifically raise it in the first instance at the Board. The trial court addressed the issue of waiver in the context of landlord's June 2007 letter but did not consider it with regard to the June 2008 letter. In considering administrative hearings, this Court has generally held that parties must be given “reasonable” advance warning of the issues that will be raised at the hearing, and notice of such issues need not meet the exacting requirements of judicial proceedings. In re Vermont Health Serv. Corp., 155 Vt. 457, 461, 586 A.2d 1145, 1147 (1990): In re Hot Spot, Inc., 149 Vt. 538, 540, 546 A.2d 799, 801 (1988). It is critical to a fair hearing that parties be given an adequate opportunity to prepare and respond to all issues that will be raised at a hearing. In re Green Mountain Power Corp., 131 Vt. 284, 293, 305 A.2d 571, 577 (1973). In this case, while it is true that on their official request for hearing form tenants did not specifically challenge landlord's compliance with the security deposit notice requirements, landlord was given fair warning by the Board's July 22, 2008, notice of hearing that “notices” and “correspondence between the parties” would be considered as part of the security-deposit hearing. The notice of hearing that the Board sent to landlord provided “reasonable” notice to landlord that the inadequacies in the way he provided tenants with security-deposit statements would be considered, and we therefore hold that tenants' failure to specifically raise the issue of notice did not lead to a waiver of the issue.

¶ 9. Given that tenants' notice defense was not waived, we consider landlord's argument that he did not fail to comply with the notice requirements of the Act and the city ordinance. In construing the Act and city ordinance, we “look first to the plain, ordinary meaning of the language”; and we “defer to the construction of a statute by the agency responsible for implementing it.” Borden, 2009 VT 30, ¶ 10, 185 Vt. 486, 974 A.2d 1249 (quotation omitted).

¶ 10. The relevant provision of the Act requires that landlord provide notice of the security-deposit statement “by hand-delivering or mailing the statement ... to the last known address of the tenant.” 9 V.S.A. § 4461(d). The ordinance supplements this requirement with two additional provisions: one requires that tenants “furnish the owner a forwarding address to enable the owner to return all or part of the deposit as required,” and the other provides that landlords “shall comply with this section by hand-delivering or sending by certified mail the statement and any payment required to the last-known address of the tenant, which may be the rental unit if no forwarding address has been provided.” Burlington Code of Ordinances § 18–120(c).

¶ 11. Although landlord contested the claim, tenants testified, and the Board found, that tenants had provided landlord with their forwarding addresses in writing. The Board concluded that landlord's failure to use these addresses, rather than the emergency contact addresses provided by tenants in their rental applications two years earlier, constituted a violation of the Act and the ordinance. The Board's factual finding was supported by the record, and its conclusion that a tenant's “last-known address” should be the forwarding address provided by the tenant was consistent with the statute and ordinance and therefore must be upheld. See Burke, 162 Vt. at 121, 645 A.2d at 499 (“We employ a deferential standard of review of an agency's interpretation of its own regulations.”).

¶ 12. In addition, the trial...