Carter v. Olmsted County Housing

Citations: 574 N.W.2d 725; 1998 Minn. App. LEXIS 128; 1998 WL 37609Docket: C4-97-978

Court: Court of Appeals of Minnesota; February 3, 1998; Minnesota; State Appellate Court

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Chelice Carter challenged the termination of her section 8 rental voucher by the Olmsted County Housing and Redevelopment Authority (HRA), which was based on the addition of Romeo Reccarro to her household. Carter signed a "Statement of Tenant Responsibilities," agreeing to notify the HRA of any changes in her household composition. In August 1995, she added Reccarro to her voucher, stating he had no income. In May 1996, Carter’s landlord reported that Reccarro was looking to purchase a house, leading to concerns about his residency status. At her termination hearing, Carter asserted that Reccarro was not a permanent resident and that she had added him to avoid landlord complaints. After an irate exchange with her caseworker regarding Reccarro's income and residency, Carter requested his removal from the voucher, which the HRA complied with. A subsequent letter warned Carter that her voucher would be terminated if Reccarro was found to be occupying the unit. There is a lack of clarity about Reccarro's residency from July to September 1996, but he provided a notarized statement indicating he moved in with another individual in October 1996. The Court of Appeals of Minnesota ultimately reversed the termination ruling, indicating insufficient evidence and findings to support the HRA's action.

Correspondence regarding Reccarro's termination from the school district was directed to West's address, while two documents were sent to Carter's address between July 1996 and March 1997: an insurance application on November 10, 1996, and a collection notice on January 25, 1997. West's affidavit states that she evicted Reccarro on March 14, 1997. Prior to this, on March 10, Reccarro instructed a food stamp worker to send benefits to Carter's address and listed it on STRIDE work program paperwork on March 11. A deposit slip for Reccarro's bank account was also sent to Carter's address on March 14. On March 17, Carter requested that Reccarro be added back to her household voucher, leading to a new caseworker informing her of a required background check and interview. Carter reacted negatively, expressing anger and vulgarity when informed of the consequences of not complying. Later that day, Reccarro confronted the caseworker, demanding an appointment and claiming interference with his civil rights.

The HRA subsequently notified Carter that a "visitor" is defined as someone with a permanent residence. The day after, Reccarro called the HRA claiming to have submitted the wrong envelope, which the caseworker opened, revealing his resume detailing his employment history. On March 31, the caseworker requested Reccarro's 1995 and 1996 tax returns, but on April 10, Reccarro sent a letter indicating he was moving out of Carter's residence, including letters confirming his move to Ronnie Williams' residence. On April 15, the HRA terminated Carter's assistance, citing Reccarro's unauthorized occupancy and failure to provide tax returns. During a subsequent hearing, both Carter and Reccarro explained his initial intent to move in but subsequent decision to leave to avoid a background check. Reccarro clarified that the positions on his resume were unpaid with only transportation reimbursements, and he had not filed taxes in 1995 or 1996 due to low income. The HRA did not verify his employment claims. A hearing officer upheld the termination based primarily on HRA documentation.

The hearing officer's decision omitted references to the testimonies of Carter and Reccarro, as well as supporting documents. He concluded that Reccarro was living with Carter based on three points: no other permanent address was provided, Reccarro's inability to "move out" without residing there, and his receipt of mail at Carter's address. Additionally, the officer determined that Reccarro had income during a period when he signed a zero income statement, citing his resume, Carter's failure to present his tax returns, and Reccarro's intention to purchase a house. The officer also noted that Carter and Reccarro had been "threatening and abusive" towards HRA personnel. Carter contested the findings' sufficiency and the use of alleged misconduct as grounds for termination without prior notice. The hearing officer later described Reccarro's testimony as vague and defensive, suggesting a combative demeanor.

The appeal raised two issues: whether the findings were sufficiently specific to support the termination, and whether the officer abused discretion in deeming the evidence adequate. It was established that the HRA operated in a quasi-judicial capacity, and such determinations must be upheld unless they are unconstitutional, procedurally flawed, legally erroneous, unsupported by substantial evidence, or arbitrary. To ensure appellate review, an agency must articulate the facts and conclusions clearly and demonstrate how evidence leads to its decisions. The ruling referenced case law mandating that hearing officers must assess credibility, identify record inconsistencies, evaluate all relevant evidence, and explain reasons for discrediting testimony. This requirement applies equally to lay hearing officers and trained judges, reflecting federal due-process standards.

In White Bear Rod & Gun Club v. City of Hugo, the Minnesota Supreme Court examined the adequacy of an agency's findings when the city denied a gun club's application for a special use permit. The denial was based on various factors, including a council member's letter, a petition against the club, prior court cases, information from governmental agencies, state statutes, the city's Comprehensive Plan, materials from a public hearing, the Hugo City Code, and additional information on file. The court noted a lack of clarity regarding how the city council assessed the evidence presented, including expert testimony from the gun club and proposals to limit shooting times.

The findings from the hearing officer, while slightly more detailed than those in White Bear, failed to meet the standards set by Hiawatha Aviation and Garthus. The hearing officer did not address certain testimonies or evidence that contradicted his conclusion and did not explain his rationale for disregarding them. Additionally, a "Statement of Proceedings" submitted on appeal lacked approval from the parties involved, diminishing its validity. 

The court reiterated that decisions without proper findings are deemed "prima facie arbitrary," placing the burden on the decision-making body to prove the correctness of their findings on appeal. The definition of "substantial evidence" requires more than minimal evidence; it must be adequate for a reasonable mind to accept as supporting a conclusion. Furthermore, the court emphasized that it cannot uphold a decision based solely on supporting evidence without considering contradictory evidence. Lastly, U.S. Supreme Court precedent regarding welfare benefits indicates that the government bears the initial burden of proof in cases involving essential benefits.

The determination of Reccarro's residency in Carter's household hinges on the interpretation of the Statement of Tenant Responsibilities signed by Carter. The HRA contends that Carter required permission to have Reccarro live with her due to his lack of a "regular nighttime residence" elsewhere; however, this specific language is absent from the signed statement and relevant federal regulations. The statement stipulates that any individual not listed on the application must not reside in the home without prior notice to the HRA and that the tenant must notify the HRA within 30 days if anyone moves in. Thus, a violation occurs only if the tenant fails to seek the addition of a new resident within 30 days of their arrival.

Carter applied to add Reccarro to her voucher on two occasions, August 31, 1995, and March 17, 1997, complying with the 30-day notification rule. Evidence from August 1995 and March 1997 will not be considered regarding possible violations since Carter reported Reccarro's residence within the required timeframe. Three pieces of evidence suggest Reccarro may have resided with Carter beyond the allowed periods: a July 1996 phone message from the landlord's daughter claiming Reccarro was "still there," an insurance application sent to Carter's address in November 1996, and an insurance notice from January 1997 indicating Reccarro failed to respond to previous correspondence.

Contrarily, additional correspondence from the Rochester school district indicates Reccarro was residing at a different address during this time. The evidence concerning the insurance application and notice is deemed insufficient, lacking substantial support given the entirety of the record. The hearsay from the landlord's daughter does not definitively establish Reccarro's residency status. The hearing officer's conclusion that Reccarro's lack of a permanent address and mail sent to Carter's address were sufficient to uphold allegations against Carter is considered legally insignificant, and Reccarro's own statement about "moving out" can align with Carter's account of temporary residence. Thus, the evidence does not meet the preponderance standard necessary to revoke Carter's housing assistance.

The record does not contain substantial evidence to support the Housing Authority's (HRA) claim that Reccarro lived with Carter in violation of Section 8 regulations. Although the HRA's argument regarding Reccarro's unreported income presents a closer case, it remains inadequate. The hearing officer's determination relied on Reccarro's resume and claims of plans to purchase a house, yet evidence such as Reccarro's application for an unpaid job contradicts the notion he was earning two paid incomes. Additionally, evidence indicated that the house purchase did not occur, and the resume contained exaggerations about Reccarro's employment. Carter's strong denial of intent to relinquish her Section 8 housing and her prompt eviction of Reccarro further support her lack of involvement in any income accumulation.

Carter acknowledged not providing Reccarro's tax returns, which could justify termination for failing to meet income requirements. However, termination cannot be based solely on this failure without evidence that tax returns should exist. Imposing such an obligation without basis would be arbitrary. Moreover, even if there was some indication of unreported income, there is no evidence that Reccarro's income reached the threshold requiring tax return filing. 

Lastly, the HRA conceded that the hearing officer's reference to alleged "threatening and abusive" behavior by Carter and Reccarro was improper, as Carter had not been informed of this termination ground.

The court determined that it was unnecessary to address whether any errors in the case were harmless or to consider Carter's due process claim regarding her inability to examine witnesses against her. The ruling concluded that the hearing officer's failure to adequately justify his decision to disregard evidence supporting Carter's claims resulted in legally insufficient findings. Furthermore, the evidence presented by the Housing Redevelopment Authority (HRA) did not meet the substantial evidence standard needed to justify the termination of Carter's Section 8 certificate, leading to a reversal of the decision.

Additional notes highlighted that the hearing officer's credibility determination regarding Reccarro's use of multiple names did not negate the supporting documentary evidence for both Reccarro's and Carter's claims. The HRA's interpretation of Reccarro using Carter's address was challenged by West's affidavit, which did not indicate that Reccarro was evicted without notice. An undated note from Reccarro suggested he intended to move back in with Carter, potentially following an eviction notice from West. Lastly, the HRA's argument about the admissibility of certain evidence under Minnesota rules was found lacking, as the relevant provisions apply solely to statements made by public officials, which did not extend to the landlord's daughter's statements.