EASTERN CAROLINA REGIONAL HOUSING AUTHORITY v. SHERBREDA LOFTON
No. 32PA15
IN THE SUPREME COURT
Filed 19 August 2016
369 N.C. 8 (2016)
Lаndlord and Tenant—public housing—drug activity—ejectment—exercise of discretion by landlord
Summary ejectment was inappropriate in a case involving drug activity in federally subsidized housing where plaintiff-Housing Authority did not exercise discretion before pursuing defendant’s eviction, as required by federal law.
Justice ERVIN did not partiсipate in the consideration or decision of this case.
On discretionary review pursuant to
Ward and Smith, P.A., by Michael J. Parrish and E. Bradley Evans, for plaintiff-appellant.
Robinson, Bradshaw & Hinson, P.A., by John R. Wester, Thomas Holderness, and Erik Randall Zimmerman, pro hac vicе; and Legal Aid of North Carolina, Inc., by John Keller, Theodore O. Fillette, III, Peter Gilbert, and Andrew Cogdell, for defendant-appellee.
Brownlee Law Firm, PLLC, by William K. Brownlee, for Apartment Association of North Carolina, amicus curiae.
John R. Rittelmeyer and Yasmin Farahi for Disability Rights North Carolina, amicus curiae.
Francis Law Firm, PLLC, by Charles T. Francis and Ruth Sheehan, for Housing Authority of the City of Raleigh, amicus curiae.
In this case we consider whether public housing authorities must exercise discretion when pursuing evictions that are not otherwise mandated by federal law. Recognizing that public housing is the housing of last resort, Congress intended public housing authorities to exercise discretion in certain eviction proceedings, such as the lease violation at issue here arising from the actions of a third party. The trial court’s findings establish that plaintiff failed to exercise its discretion before pursuing defendant’s eviction. Accordingly, plaintiff has not established its right to summary ejectmеnt. Nonetheless, because the Court of Appeals erred by imposing an unconscionability analysis, we modify and affirm the decision of that court.
Defendant often asked Cory Smith to baby-sit her children while she worked at night. On 26 April 2013, Smith arrived at defendant’s apartment to watch the children while defendant slept before work and later while she worked. While defendant slept, law enforcement entered the apartment and arrested Smith for outstanding child support warrants. Officers searched Smith incident to his arrest and found four small bags of marijuana in his pocket.
Defendant consented to a search of her apartment, during which officers discovered a partially prepared “marijuana blunt” in plain sight, marijuana in plain sight on the kitchen counter, plastic bags for packaging marijuana for sale, and fourteen more bags of marijuana behind a pan on the kitchen counter. Smith admitted that the marijuana belonged to him, and he was charged with felony possession with intent to sell and delivеr a controlled substance. Defendant was not charged.
On 22 May 2013, plaintiff notified defendant in writing that she had breached the lease because of the drug-related activity that had occurred in her apartment by Smith, a person under her control. Plaintiff stated it had terminated defendant’s lease and ordered her tо vacate her apartment. When defendant failed to comply, plaintiff sought summary ejectment. Following a hearing, the magistrate entered judgment for plaintiff, entitling plaintiff to take possession.3
Upon appeal to the District Court, Wayne County, for a trial de novo, defendant admitted that Smith placed marijuаna in various places in the apartment, that Smith was under her control, and that her lease made her “responsible for the conduct of her guests or persons under her control.” Plaintiff’s manager testified that she believed any drug-related criminal activity required eviction. In its order the trial court noted defendant’s аcknowledgement that “drug-related criminal activity” occurred in her apartment and that such activity would “authorize Plaintiff to evict her from her apartment” despite “her lack of knowledge of” the criminal activity. Nonetheless, the trial court found in part:
8. Plaintiff did not produce evidence that it considered аny mitigating factors or used any discretion in making its decision
to terminate Defendant’s lease. The only decision Plaintiff considered was whether Defendant met the criteria for having a person under her control who engaged in drug-related criminal activity. 9. It did not appear that Plaintiff, through its two witnesses, understood that it evеn had the authority or duty
to consider other factors other than whether Defendant met the criteria for lease termination.
The trial court denied plaintiff’s request to evict defendant, concluding that federal law required plaintiff to exercise discretion in making its decision. Plaintiff appealed the trial cоurt’s order to the Court of Appeals.
The Court of Appeals affirmed the decision of the trial court on a different basis, concluding that plaintiff must prove that evicting defendant was not unconscionable under North Carolina law. E. Carolina Reg’l Hous. Auth. v. Lofton, ___ N.C. App. ___, 767 S.E.2d 63 (2014). We allowed plaintiff’s petition for discretionary review.
Contrary to the Court of Appeals’ decision, the equitable defense of unconscionability is not a consideration in summary ejectment proceedings. To prevail in a summary ejectment proceeding under North Carolina law, a landlord must establish by a preponderance of the evidence that a tenant breached the lease. See
If the lease at issue related to a private landlord-tenant relationship, our analysis would end here. When the government is the landlord, however, certain duties arise under applicable law. Federal statutes and regulations govern federally subsidized public housing and require public housing authorities to incorporate certain provisions into their leases. In its role as the final forum for review of government housing decisions, the Court is not to second-guess or replace plaintiff’s discretionary decisions but to ensure procedural and substantive compliance with the federal statutory framework. See Charlotte Hous. Auth. v. Patterson, 120 N.C. App. 552, 555, 464 S.E.2d 68, 71 (1995) (“In federally subsidized housing cases, the court decides whether applicable rules and regulations have been followed, and whether termination of the lease is рermissible.” (citation omitted)). “A trial court’s findings of fact are binding on appeal if supported by competent evidence.” Durham Hosiery, 217 N.C. App. at 592, 720 S.E.2d at 427 (citation omitted). The trial court found that plaintiff, believing Smith’s drug-related activity mandated defendant’s eviction, did not exercise discretion. Thus,
the sole remaining question is whether under federal lаw plaintiff was required to exercise some degree of discretion in its eviction decision.
Federally subsidized public housing is a safety net designed to provide homes to those least able to afford other housing options. Like everyone else, individuals who live in federally subsidized housing are entitled to be free from “аny criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises.”
Under federal law, public housing leases must “allow the agency . . . to terminate the tenancy,”
In the seminal case interpreting public housing law, Department of Housing & Urban Development v. Rucker, 535 U.S. 125, 122 S. Ct. 1230, 152 L. Ed. 2d 258 (2002), some tenants questioned the extent of agency officials’ authority to evict residents from public housing. The Supreme Court of the United States held that a housing authority could evict a tenant and her family as a result of a guest’s illegal activity even when the tenant was unaware of the activity and had no reason to suspect it. Id. at 136, 122 S. Ct. at 1236, 152 L. Ed. 2d at 270; see also id. at 131, 122 S. Ct. at 1234, 152 L. Ed. 2d at 267 (“[T]he plain language of
The decision in Rucker, however, emphasizes the importance of housing officials exercising discretion before pursuing these “no-fault” evictions. Id. at 134-36, 122 S. Ct. at 1235-36, 152 L. Ed. 2d at 268-70. In particular,
[t]he statute does not require the eviction of any tenant who violated the lease provision. Instead, it entrusts that decision to the local public housing authorities, who are in the best position to take account of, among other things, the degree to which the housing project suffers from “rampant drug-rеlated or violent crime,” “the seriousness of the offending action,” and “the extent to which the leaseholder has . . . taken all reasonable steps to prevent or mitigate the offending action.” [A] local housing authority may sometimes evict a tenant who had no knowledge of the drug-related activity.
Id. at 133-34, 122 S. Ct. at 1235, 152 L. Ed. 2d at 268 (first alteration in original) (quoting
Shortly after the decision in Rucker, the federal Department of Housing and Urban Development (HUD) described the discretion given to public housing authоrities to seek no-fault evictions based upon the actions of third parties. While characterizing the power as “a strong tool,” HUD emphasized that no-fault
Discrеtion “involve[s] an exercise of judgment and choice, not an implementation of a hard-and-fast rule exercisable at one’s own will or judgment.” Discretionary, Black’s Law Dictionary (10th ed. 2014). Here the trial court concluded that plaintiff failed to exercise its discretion before seeking defendant’s eviction. The trial court found that plaintiff was unaware of its responsibility to exercise discretion; therefore, plaintiff only considered whether the facts permitted eviction, thereby omitting the critical step of determining whether eviction should occur in this case. Neither the federal statutory framework nor plaintiff’s lease or policies compel eviction; they only delineate the grounds or cause for eviction. Though the decision to evict lies in plaintiff’s discretion, which courts will not second-guess, plaintiff does not exercise discretion when it is unaware it has a choice. See Hous. Auth. of Covington v. Turner, 295 S.W.3d 123, 129 (Ky. Ct. App. 2009) (Moore, J., concurring) (“[D]iscretion must be exercised, rather than a blind application of the law because
While we affirm the outcome of the Court of Appeals’ decision, namely that summary ejectment was inappropriate in this case, we do so for a different reason. We hold that plaintiff failed to exercise its
discretion as required by fedеral law before pursuing defendant’s eviction. Accordingly, we modify and affirm the decision of that court.
MODIFIED AND AFFIRMED.
Justice ERVIN did not participate in the consideration or decision of this case.