Reyes-Garay v. Integrand Assurance Co., Civil No. 10–1477 (DRD).

• Court: United States District Courts. 1st Circuit. District of Puerto Rico
• Writing for the Court: DANIEL R. DOMINGUEZ
• Citation: 818 F.Supp.2d 414
• Parties: Ana REYES–GARAY, et al., Plaintiffs, v. INTEGRAND ASSURANCE COMPANY, et al., Defendants.
• Docket Number: Civil No. 10–1477 (DRD).
• Decision Date: 30 September 2011

818 F.Supp.2d 414

Ana REYES–GARAY, et al., Plaintiffs,
v.
INTEGRAND ASSURANCE COMPANY, et al., Defendants.

Civil No. 10–1477 (DRD).

United States District Court, D. Puerto Rico.

Sept. 30, 2011.

[818 F.Supp.2d 416]

Carlos C. Santiago–Gonzalez, Carlos C. Santiago Law Office, San Juan, PR, for Plaintiffs.

[818 F.Supp.2d 417]

Wigberto Lugo–Mender, Centro Internacional De Mercadeo, Guaynabo, PR, for Defendants.

OMNIBUS OPINION AND ORDER DANIEL R. DOMINGUEZ, District Judge.

Plaintiffs Ana Reyes–Garay, her husband, José Rosa–Rivera, and their conjugal partnership (collectively, “Plaintiffs” or “Tenants”) have resided in Section 8 housing in Old San Juan, Puerto Rico for over twenty years. In April of 2010, the concrete from the ceiling in their apartment became detached and fell on Ana Reyes. Plaintiffs bring this instant suit under Section 8 of the U.S. Housing Act, 42 U.S.C. § 1437f, and regulations promulgated thereunder, specifically, 24 C.F.R. § 982.162(a)(3) and 24 C.F.R. § 982.456(b)(2), 42 U.S.C. § 1983 (“Section 1983”), Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and the Fair Housing Act (Title VIII of the Civil Rights Act of 1968), 42 U.S.C. § 3601 et seq. Plaintiffs further bring claims arising under the laws of Puerto Rico which are attached to the instant case via the exercise of the Court's supplemental jurisdiction. Plaintiffs are suing, amongst other entities, Old San Juan # 1 DLP Associates, who own the Old San Juan apartment building (“Landlord”), their insurance company Integrand Assurance Company, the Puerto Rico Housing Finance Authority (“PHA”), and PHA's Executive Director, George R. Joyner–Kelly, and PHA's Manager of Inspections and Appraisals, Luis A. Rivera (collectively, the “Individual Defendants”), who are sued in both their official and individual capacities.

I. RELEVANT FACTUAL BACKGROUND

Tenants have resided at 207 Luna Street, Apartment 1–E, in Old San Juan, Puerto Rico for over twenty years. Plaintiffs' participated in the U.S. Department of Housing and Urban Development's (“HUD”) Section 8 Housing Choice Voucher Program.¹

On September 27, 2004, Tenants and Landlord executed a lease agreement that included a Tenancy Addendum.²

On April 2, 2010, the concrete in Plaintiffs' ceiling detached and collapsed on top of 71 year old Ana Reyes. She suffered cuts and various fractures to her right leg, resulting in several surgeries and 43 days of hospitalization. ³

On April 12, 2010, Plaintiffs had their own structural engineer examine the premise. Two days later, on April 14, 2010, PHA performed a “Special Inspection” of the unit. The PHA found numerous issues that needed to be rectified before Plaintiffs could safely reoccupy the dwelling.

On April 16, 2011, at Plaintiffs' request, Landlord offered Plaintiffs the right to re-occupy an apartment within the same building. José Rosa–Rivera accepted the Landlord's offer and occupied a third floor unit. However, Ana Reyes decided to recuperated

[818 F.Supp.2d 418]

elsewhere as she was unable to climb stairs to the third floor unit.

On the same date, PHA requested that Landlord procure an Expert Certification regarding the repairs performed to the ceiling in order to maintain the tenancy assistance.

On May 12, 2010, Landlord informed Tenants that the PHA had suspended their tenancy assistance with respect to their former apartment pending Landlord's compliance with the applicable safety regulations.

On May 21, 2010, PHA reinspected the dwelling to certify if Landlord corrected the deficiencies reported during the April of 2010 Special Inspection.

On May 24, 2010, Tenants petitioned the PHA to delay deciding whether the Landlord's repairs are adequate until Tenants' structural expert inspects the repairs and submits a report.

On May 28, 2010, the PHA agreed to delay its decision, but requested that Tenants submit their expert report no later than June 4, 2010. On the same date, Landlord requested that Tenants supply three potential dates for their expert to inspect the dwelling.

On June 1, 2010, Tenants informed PHA and Landlord that their expert would need to inspect the unit no later than tomorrow, June 2, 2010, to comply with the PHA's proposed deadline. Further, Tenants reiterated a prior request to review the Landlord's Expert Certification provided to the PHA.

Also on June 1, 2010, PHA informed Tenants that their rental assistance had been reinstated.

On June 4, 2010, Landlord alleged to Tenants that PHA had approved of the unit and thus the dwelling was “ready for immediate occupation.” Landlord also advised Tenants to move back so their expert could perform his inspection at their convenience. Landlord further informed Tenants that, as they had commenced the instant litigation, their Expert Certification would be turned over in accordance with the Federal Rules of Civil Procedure.

On June 7, 2010, Tenants stated to Landlord that they should not be forced to reoccupy the dwelling until their expert is allowed perform an inspection to ascertain the unit's habitability and structurally soundness.

On June 17, 2010, PHA informed Tenants that its June 1, 2010 letter was sent in error and thus Tenants' rent subsidy remained cancelled. PHA additionally stated that it had agreed to postpone any evaluation of Landlord's repairs until reviewing their expert's report. PHA also stated that it had requested that Landlord coordinate with Tenants to provide an inspection no later than June 25, 2010.

The following day, Tenants sent the PHA a letter reiterating that Landlord had not yet provide their Expert Certification, thus Tenants could not comply with the June 25, 2010 deadline.

On June 22, 2010, Landlord invited Tenants' expert to inspect the unit. Landlord also stated that PHA had revoked the reinstatement of the Tenants' subsidy in order to wait for Tenants' expert's report. Landlord additionally remarked that “[i]f a favorable determination is not reached by the expert and the agency within the time table provided by Mr. Rivera in his June 17, 2010 letter[,] we shall understand the unit is not suitable to be occupied.”

On June 25, 2010, Tenants requested that the Court order Landlord to produce its Expert Certification (Docket No. 18) and Landlord complied on August 17, 2010 (Docket No. 28).

On July 6, 2010, PHA notified Landlord that the tenancy assistance for Apartment 1–E was canceled and that Tenants must now find a new housing unit.

[818 F.Supp.2d 419]

On August 12, 2010, Landlord requested that Tenants remove all of their belongings from both their first floor unit and their third floor unit by August 25, 2010.

II. PROCEDURAL HISTORY

On September 15, 2010, Landlord filed a motion to dismiss (Docket No. 62), which was responsive to Plaintiffs' Second Amended Complaint. Landlord advances that there is no private right of action under Section 8 or under the regulations promulgated thereof. Landlord further argues that Plaintiffs lack an implied right of action under federal common law. Lastly, Landlord posits that Plaintiffs are not, as Plaintiffs allege, third party beneficiaries of the HUD Contract and Regulatory Agreement.

On September 20, 2010, PHA filed a motion to dismiss (Docket No. 66), also responsive to Plaintiffs' Second Amended Complaint. Therein, PHA reiterate Landlord's lack of a private cause of action under Section 8 argument and further alleges that the Eleventh Amendment of the Constitution shields PHA from liability. PHA also contends that there is not a private right of action for tenants to enforce HUD benefits and privileges. PHA additionally avers that Plaintiffs have failed to state cognizable claim under Section 1983 as Section 8 does not provide an individual right of action to tenants of federally funded housing.

PHA also argues that the Fifth Amendment's Due Process Clause does not provide Plaintiffs with a remedy as the Fifth Amendment only applies to the federal government and Plaintiffs have not alleged that any defendant is a federal actor. Further, PHA states that the Eleventh Amendment provides PHA, and Joyner and Rivera, in their official capacities, with immunity. PHA advances that, as a public institution that receives substantial funding from the government of Puerto Rico, it is an instrumentality of the Commonwealth of Puerto Rico; thus qualifying as an “arm” of the state for Eleventh Amendment purposes.

On October 15, 2010, Plaintiffs filed the Third Amended Complaint (Docket No. 84). Therein, Plaintiffs allege that Landlord's and PHA's failure to promptly restore Plaintiffs to their original apartment violates Section 8 and the implementing regulations, specifically the HQS. Plaintiffs also state that under the regulations, Plaintiffs may exercise any right or remedy against Landlord, pursuant to their lease agreement and Landlord's obligations under the tenancy addendum; the tenancy addendum provides that Landlord and PHA must maintain the unit in accordance with the HQS. In support of their Section 1983 claim, Plaintiffs further aver that they have a constitutionally protected property interest in their federal subsidized housing and in their leased dwelling. Plaintiffs also claim that Landlord is a state actor.

On October 31, 2010, Plaintiffs opposed PHA's motion to dismiss (Docket No. 107) and echoed previously advanced arguments. Plaintiffs state that HUD regulation § 982.456(b)(2) provides Tenants with the right to enforce Landlord's obligations under the Tenancy Addendum of their lease agreement “in accordance with Federal law and regulation.” Plaintiffs allege that under these rights, Tenants can enforce the Landlord's obligation to comply with HQS. Plaintiffs aver that Landlord is denying them this right to enforce the HQS and thus denying them the right to verify if the ceiling repairs are truly adequate. Plaintiffs also contend that while the PHA delayed making a determination on the safety of their unit until their structural engineer submitted his report, the PHA gave an...