Hartman v. Hous. Auth. of Lawrence

1

Kristan Hartman v. Housing Authority of the County of Lawrence, Appellant

No. 164 C.D. 2021

Commonwealth Court of Pennsylvania

November 2, 2023

OPINION NOT REPORTED

BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE ELLEN CEISLER, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

MEMORANDUM OPINION

BONNIE BRIGANCE LEADBETTER, JUDGE

Appellant the Housing Authority of the County of Lawrence, appeals from the order of the Court of Common Pleas of Lawrence County sustaining the statutory appeal of Kristan Hartman Applicant, from the Authority's decision denying her application for assistance under the Housing Choice Voucher Program, commonly known as "Section 8."^[1] The trial court remanded the matter to the Authority to reconsider her application,^[2] directing that the Authority was prohibited from considering a previous criminal charge in determining her eligibility for Section 8 housing. We affirm.

The trial court found as follows. In September 2018, Applicant applied for Section 8 benefits from the Authority, which administers Lawrence County's Section 8 program under United States Department of Housing and Urban Development (HUD) regulations. Applicant was placed on a waiting list. After informing the Authority of her continued interest in the program, on July 31, 2020, Applicant was notified that she had been declared "inactivated" and removed from consideration for Section 8 benefits. Applicant requested to be reactivated and the Authority's Section 8 coordinator advised that her inactivation was due to a background check showing "welfare fraud" and that reactivation would be denied until she had paid back all restitution in her criminal case. Applicant requested an informal hearing with the Authority, which request was granted; no record was made of this proceeding. Subsequently, the Authority issued a formal denial letter, again citing Applicant's criminal charge and an outstanding restitution balance. The Authority again informed Applicant that if she paid off her remaining restitution, she could reapply for Section 8 benefits.

The criminal charge in question-the basis of the Authority's decision-was one count of fraudulently obtaining food stamps or other public assistance in violation of Section 481 of the Human Services Code,^[3] a felony of the third degree. Applicant applied for admission to the Accelerated Rehabilitative Disposition (ARD) program in August 2016, which was granted by the trial court in October 2016. Applicant's acceptance into ARD came with conditions, including a term of probation and payment of $7,118 in restitution to the Pennsylvania Department of Human Services. Two years later, on September 21, 2018, her ARD admission was revoked but immediately reinstated by the trial court. As of early 2021, Applicant owed over $5,000. Although the trial court noted the Authority's contention that Applicant will continue to be in ARD "for some time" because she is paying restitution at the rate of $30 per month (Trial Ct. Op. at 4), we take judicial notice of the criminal docket in her case which indicates that while she continues to make restitution payments, she completed ARD as of October 30, 2018 [Docket Entries, Com. v. Hartman (C.C.P. Lawrence, Docket No. CP-37-CR-0000684-2016, printed December 9, 2020), Reproduced R. (R.R.) at 26a].

Applicant filed a statutory appeal in the trial court, as permitted by Section 752 of the Local Agency Law, 2 Pa.C.S. § 752, to which the Authority responded with an answer and new matter and, eventually, a motion for judgment on the pleadings. A hearing was conducted on the matter on January 13, 2021, during which counsel made arguments but presented no testimony or other evidence. Thus, the record before the trial court consisted of the pleadings and attached documents.

The trial court issued an opinion and order on February 3, 2021. It determined that the case "boils down to . . . whether the [Authority] was permitted to use [Applicant's] 2016 criminal case as a basis for denying her request for Section 8 benefits." (Trial Ct. Op. at 4.) The trial court noted that the matter was governed by HUD regulation found at 24 C.F.R. § 982.553. The trial court explained that under HUD regulation, which is incorporated nearly verbatim into the Authority's administrative plan for its Section 8 program, there are criminal activities which result in mandatory or permissive denial of admission to the program. Of those activities, the Authority argued that it appropriately exercised its discretion to deny Applicant's application due to her criminal record under the following regulatory provisions:

(A) The [Public Housing Authority (PHA)] may prohibit admission of a household to the program if the PHA determines that any household member is currently engaged in, or has engaged in during a reasonable time before the admission:

. . . .

(3)Other criminal activity which may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity; or

(4)Other criminal activity which may threaten the health or safety of the owner, property management staff, or persons performing a contract administration function or responsibility on behalf of the PHA (including a PHA employee or a PHA contractor, subcontractor or agent).

24 C.F.R. § 982.553(a)(2)(ii)(A)(3)-(4). The trial court noted that the Authority's administrative plan considers mitigating circumstances, such as the nature of the crime(s), how much time has elapsed since the offense(s), whether the crime(s) ended with or without a conviction, and the connection of the applicant to the crime(s). (Trial Ct. Op. at 5.) The trial court concluded that the Authority had acted in error and abused its discretion because there was no evidence that Applicant's unproven welfare fraud charge threatened the health, safety, and right to peaceful enjoyment of her prospective neighbors or Authority personnel and that there was no showing of a nexus between her charge and such threat. The trial court, as stated at the outset, sustained Applicant's appeal and ordered that upon remand to the Authority for reconsideration of her application, the Authority was prohibited from considering the welfare fraud charge.

The Authority filed the instant appeal and the trial court issued an order for the filing of a concise statement of matters complained of on appeal, with which the Authority complied. The trial court rejected the Authority's arguments in an opinion issued under Rule 1925(a) of the Pennsylvania Rules of Appellate Procedure, Pa. R.A.P. 1925(a). The instant appeal ensued.

On appeal, the Authority raises the following issues:

1. Whether the [t]rial [c]ourt erred as a matter of law and abused its discretion in sustaining [Applicant's] statutory appeal, because the . . . Authority was permitted to deny her admission to the Section 8 [p]rogram pursuant to federal regulations and . . . Authority [p]olicy . . . .

2. Whether the [t]rial [c]ourt erred as a matter of law and/or abused its discretion in failing to establish an evidentiary record and sustaining [Applicant's] appeal.

(Authority Br. at 3.)

The Authority first argues that it was permitted to deny Applicant admission to the Section 8 program pursuant to federal regulation and Authority policy. The Authority cites the HUD regulation's permissive prohibitions as authority, pointing out that "a household member is 'currently engaged in' criminal activity if the person has engaged in the behavior recently enough to justify a reasonable belief that the behavior is current." 24 C.F.R. § 982.553(a)(2)(C)(2). The Authority notes that the regulations permit termination of assistance for criminal activity by a household member "regardless of whether the household member has been arrested or convicted for such activity." 24 C.F.R. § 982.553(c). The Authority insists that Applicant's felony charge "provided sufficient grounds for the Authority to deny her admission to the Section 8 [p]rogram, as the applicable regulations do not require a conviction, and as a result [Applicant's] entry into the ARD program is irrelevant."^[4] (Auth. Br. at 12.)

As we stated in Bray v. McKeesport Housing Authority, 114 A.2d 442, 453 (Pa. Cmwlth. 2015), "[b]ecause a public housing authority's decision to grant or deny applications must be in accordance with the statutory and regulatory criteria, the public housing authority's discretion is certainly not 'unfettered' and therefore, should not be 'unassailable.'" Id. [quoting Caba v. Weaknecht, 64 A.3d 39, 63 (Pa. Cmwlth. 2013)]. We have further held that under HUD regulations (and the plans of agencies incorporating those standards) as they apply in similar terms to family members of a household in Section 8 housing,^[5] it is not criminal activity alone that forms a sufficient basis to terminate Section 8 benefits. Rather, an authority "must prove, and the court must find that the tenant: (1) engaged in criminal activity (and/or alcohol abuse); and (2) such activity threatens the health, safety, or right to peaceful enjoyment of residents and/or persons in the immediate vicinity thereof."^[6] Cox v. Johnstown Housing Auth., 212 A.3d 572, 579 (Pa. Cmwlth. 2019). "The second element demands proof of a threat to the health, safety or right to peaceful enjoyment of residents and/or persons in the immediate vicinity on or near the Section 8 [p]rogram leased premises." Id. Thus, where a Section 8 participant was found guilty of public drunkenness 1.9 miles from his apartment,

[I]t is not the occurrence of the criminal . . . act that is needed to jeopardize [a resident's] assistance or the possibility that it could occur, but there must also be proof that the health, safety

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