Walker v. Dep't of Hous.

• Citation: 422 Md. 80,29 A.3d 293
• Decision Date: 23 September 2011
• Docket Number: 2010.,Sept. Term,No. 97,97
• Parties: Tonya WALKERv.DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT.
• Court: Court of Appeals of Maryland

422 Md. 80

29 A.3d 293

Tonya WALKER

v.DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT.

No. 97

Sept. Term

2010.

Court of Appeals of Maryland.

Sept. 23, 2011.

Robert McCraig (Legal Aid Bureau, Inc., Salisbury, MD), on brief, for appellant.Kathleen E. Wherthey, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, Baltimore, MD; Gary W. Desper, Asst. Atty. Gen., Maryland Department of Housing and Community Development, Crownsville, MD), on brief, for appellee.Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS, and BARBERA, JJ.BARBERA, J.

In this case we are asked to consider whether, prior to the termination of housing assistance benefits administered pursuant to the “ Section 8 Housing Program,” ¹ the Department of Housing and Community Development (“Department”) must, upon request, provide a “contested case” hearing in accordance with Maryland's Administrative Procedure Act, Md.Code (1984, 2009 Repl.Vol.), §§ 10–101 through 10–305 of the State Government Article (“S.G.”). This question is of much interest to Appellant Tonya Walker, whose housing benefits were terminated by the Department for her alleged violations of certain “family obligations” ² required to be satisfied for continued participation in the Section 8 program. Appellant challenged that decision at an informal administrative hearing at which, pursuant to Departmental and federal regulation, a hearing officer appointed by the Department presided. The hearing officer affirmed the Department's decision.

Appellant sought judicial review of the Department's decision, asserting that the informal hearing was intended to be a “contested case” under Maryland's APA, see SG § 10–202(d), to which certain rights and procedures apply, but were not followed in her case. The Circuit Court rejected Appellant's contention and affirmed the Department's decision. Appellant noted a timely appeal to the Court of Special Appeals. Before argument in that court, we, on our initiative, issued a writ of certiorari.

I.The Federal Housing Choice Voucher Program

The Section 8 Housing Program, otherwise known as the Housing Choice Voucher Program (hereinafter “HCVP”), was enacted for the purpose of “aiding low-income families in obtaining a decent place to live....” 42 U.S.C. 1437f(a). The HCVP is administered by the Department of Housing and Urban Development (“HUD”), the regulations for which are found in 24 C.F.R Part 982. Under the HCVP, HUD enters into contracts with, and provides funding to, state public housing agencies (“PHAs”) for the purpose of providing rental subsidies to eligible program participants.

Each PHA must adopt an Administrative Plan that conforms with the statutory requirements and HUD regulations. Individuals seeking to participate in the HCVP program must apply to the designated PHA. The PHA, in conformance with criteria set forth by 42 U.S.C. § 1437f( o )(4), HUD regulations, and the procedure established by its Administrative Plan, is responsible for processing and qualifying the low income applicants. See 42 U.S.C. § 1437f( o )(6).

Once an applicant is approved by the PHA, he or she is provided a HUD voucher and approval form. The participant is then responsible for locating housing. Once a participant identifies rental housing and reaches an agreement with the landlord, the participant must obtain tenancy approval from the PHA. To be approved, the apartment must meet housing quality standards established by HUD, see 42 U.S.C. § 1437f( o )(8)(B); 24 C.F.R § 982.305(a); the rent must be reasonable, see 42 U.S.C. § 1437f( o )(10)(A); and the lease must conform to HUD requirements, including as an attachment a memorandum prepared by HUD explaining the rights and responsibilities of the landlord and tenant, see 42 U.S.C. § 1437f( o )(7)(F). Once the PHA approves the lease, the PHA then enters into a housing assistance payment agreement with the landlord, whereby the PHA arranges to pay the difference between the participant's base rental payment and the actual rent for the housing unit.

When a family is selected to participate in the HCVP program, the PHA is required to “give the family an oral briefing” to explain family and owner responsibilities. 24 C.F.R. § 982.301(a). The PHA must also provide the family with an information packet setting forth, inter alia, “[f]amily obligations under the program,” and explaining the right of a participant to request an informal hearing before the PHA to challenge certain PHA actions and how and when that right may be exercised. 24 C.F.R. § 982.301(b).

Pursuant to the statute and HUD regulation, participants in the HCVP must meet, at the outset and on an ongoing basis, specified family obligations. See 24 C.F.R. § 982.551. Two of those obligations are relevant to the present case: Pursuant to 24 C.F.R. § 982.551(d) participants are required to allow the PHA to inspect the unit on an annual basis to ensure that the unit meets housing quality standards, see also 42 U.S.C. § 1437f( o ) (8)(D) (requiring PHAs to conduct annual inspections); and pursuant to 24 C.F.R. § 982.551(b), participants are obligated to provide “true and complete” information as required by the PHA and HUD, including “family income and composition.”

Part 24 C.F.R. § 982.552(c)(1) lists the grounds upon which a PHA may terminate program assistance. That regulation provides:

The PHA may at any time deny program assistance for an applicant, or terminate program assistance for a participant, for any of the following grounds:

(i) If the family violates any family obligations under the program (see § 982.551). See § 982.553 concerning denial or termination of assistance for crime by family members.

* * *

(v) If the family currently owes rent or other amounts to the PHA or to another PHA in connection with Section 8 or public housing assistance under the 1937 Act.

* * *

(vii) If the family breaches an agreement with the PHA to pay amounts owed to a PHA, or amounts paid to an owner by a PHA. (The PHA, at its discretion, may offer a family the opportunity to enter an agreement to pay amounts owed to a PHA or amounts paid to an owner by a PHA. The PHA may prescribe the terms of the agreement.)

24 C.F.R. § 982.552(c)(1).

The requirement of a pre-termination hearing

24 C.F.R. § 982.555(a)(1) provides that, prior to making a determination to terminate assistance, “a PHA must give a participant family an opportunity for an informal hearing to consider whether the [ ] PHA decision[ ] ... [is] in accordance with the law, HUD regulations and PHA policies....” Part 24 C.F.R. § 982.555(e) directs the PHA to establish procedures for conducting informal hearings and provides a general framework for conducting the proceeding. The regulation provides the following: Prior to the hearing, the participant must be given the opportunity to examine all relevant PHA documents. Id. At the hearing, the participant, at his or her own expense, is entitled to legal representation. Id. The PHA may appoint “any person” to serve as the hearing officer for the hearing, so long as that person is not the person “who made or approved the decision under review or a subordinate of this person.” Id. Although there are no formal evidentiary rules at the hearing, both the PHA and the participant have the opportunity to “present evidence, and may question any witnesses.” Id. The regulation requires all factual determinations to be made by a preponderance of the evidence standard, and it directs the hearing officer to “issue a written decision, stating briefly the reasons for the decision.” Id.

Maryland's PHA

The Maryland Department of Housing and Community Development is the PHA responsible for administering the HCVP program in Wicomico County, Maryland. ³ As required by the federal statute and HUD regulations, the Department has adopted an Administrative Plan governing the administration of the HCVP program.⁴ Consistent with the various HUD regulations discussed above, the Administrative Plan provides for, inter alia, the possible termination of a participant's assistance payments for failing to comply with family obligations, failing to provide an accurate report of family income, and failing to repay the Department for any overpayments. Also consistent in all material aspects with HUD regulations, the Administrative Plan provides that, prior to the termination of a participant's housing assistance benefits, the participant must be given an opportunity for an informal hearing. In accordance with 24 C.F.R. 982.555(e), the Administrative Plan specifies the rights afforded to a participant at the informal hearing and how that informal hearing is to be conducted.

II.

This litigation arises out of Appellant's alleged failure to comply with her family obligations, as required by the Administrative Plan and HUD regulations. In 2009, Appellant resided with her four children in a house she rented in Salisbury, Maryland. Because Appellant was at the time an HCVP participant, her rental payments were supplemented by payments made directly from the Department to Mary Anne Johnson, the property manager of Appellant's rental unit. The Department, alleging that Appellant was in violation of her family obligations, notified Appellant that her rental assistance payments were being terminated. As a result of the termination, Appellant requested and was given an informal hearing to appeal the termination decision, as required by the Administrative Plan and HUD regulations. On August 27, 2009, that hearing was held at the office of Joy Chestnutt, a local property manager appointed by the Department to serve as the hearing officer.

The Hearing

Ms. Chestnutt (hereinafter, “the hearing officer”) took testimony from Ms. Barbara Bialk, a housing subsidy officer representing the Department, and from Appellant and her father, Avery Walker. The hearing officer also received certain documentary evidence from the Department and Appellant. Given the purely legal...