ELLEN LIPTON HOLLANDER, District Judge.
Melissa Sager, plaintiff, resides in an apartment that is owned and operated by the Housing Commission of Anne Arundel County (the "Commission" or "HCAAC"), as part of the federal public housing program. See 42 U.S.C. §§ 1437 et seq.; 24 C.F.R. ch. IX. She has sued the Commission; its executive director, Clifton Martin; and the Commission's senior property manager, Diana Flynn, defendants, alleging violations of federal and Maryland law.
Count I of the Complaint (ECF 2) alleges violations of the Maryland Consumer Protection Act ("CPA"), Md.Code (2005 Repl. Vol., 2011 Supp.), §§ 13-101 et seq. of the Commercial Law Article ("C.L."), which bars "unfair or deceptive trade practices." C.L. § 13-301. Count II asserts a violation of Md.Code (2010 Repl. Vol., 2011 Supp.), § 8-208(d)(1) of the Real Property Article ("R.P."), which prohibits the inclusion in a residential lease of any provision authorizing a confessed judgment against the tenant. Count III claims several violations of the United States Housing Act, 42 U.S.C. §§ 1437 et seq., and its implementing federal regulations, governing the operation of public housing. In Count IV, plaintiff alleges discrimination in housing on the basis of disability, in violation of the federal Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601 et seq. And, in Count V, she claims deprivation of due process of law, as guaranteed by the Fourteenth Amendment to the United States Constitution.
Defendants have filed a "Motion to Dismiss or in the Alternative Motion for Summary Judgment" (ECF 8), as well as a supporting memorandum (ECF 8-1) (collectively, "Motion"), to which plaintiff has filed an opposition (ECF 9) and a supporting memorandum (ECF 10) (collectively, "Opposition" or "Opp."). After the Court directed the parties to address whether the Court should abstain from exercising jurisdiction (ECF 11), defendants filed a Reply (ECF 12), and, by leave of Court, see Local Rule 105.2(a), plaintiff filed a Surreply (ECF 13).
No hearing is necessary to resolve the issues presented. See Local Rule 105.6. For the reasons that follow, the Court will not abstain from exercising jurisdiction at this juncture, and defendants' Motion will be granted in part and denied in part.
The Housing Commission of Anne Arundel County is a public housing agency ("PHA") that operates federally subsidized public housing. The Commission is recognized under Maryland state law as a "public body corporate and politic," pursuant to Md.Code (2006, 2011 Supp.), § 14-102 of the Housing and Community Development Article ("H.C."), and is the state-designated "housing authority" for Anne Arundel County under Title 12 of the H.C. Article. See H.C. §§ 12-101 et seq. (providing for a housing authority in each political subdivision of Maryland, and establishing requirements for housing authorities generally); H.C. § 14-101 (providing that Title 12 of the H.C. Article applies to the HCAAC); see also Anne Arundel County Code (2005, Dec. 2011 Supp.), §§ 3-4-101 et seq. (authorizing HCAAC to function in the County, under designation of "Housing Authority"); H.C. § 14-101 (recognizing name change of HCAAC from "Authority" to "Commission").
The federal public housing program is authorized by the United States Housing Act of 1937, codified, as amended, at 42 U.S.C. §§ 1437 et seq. Under the public housing program, the United States Department of Housing and Urban Development ("HUD") provides operating subsidies to local PHAs, such as the Commission, which own and operate housing for eligible low-income families and individuals. See 42 U.S.C. § 1437a(b)(6) (defining "public housing agency" for purposes of the public housing program as "any State, county, municipality, or other governmental entity or public body (or agency or instrumentality thereof) which is authorized to engage in or assist in the development or operation of public housing"). Tenants of public housing pay their PHAs monthly rent that is substantially below the cost of rental housing in the open market. See generally 42 U.S.C. § 1437a(a) (establishing income eligibility standards and methods of rent calculation for residents of public housing); 24 C.F.R. part 960 (same).
The operation of public housing by PHAs is subject to comprehensive federal regulation. Among other things, federal law dictates much of the content of public housing leases, requiring the inclusion of various provisions and prohibiting other provisions. See 42 U.S.C. § 1437d(l); 24 C.F.R. part 966, subpart A. In general, PHAs are prohibited from including "unreasonable
Leases in public housing are "automatically renewed" on an annual basis, 42 U.S.C. § 1437d(l)(1), and cannot be terminated by a PHA except for "serious or repeated violation of the terms or conditions of the lease or for other good cause." Id. § 1437d(l)(5); see also 24 C.F.R. § 966.4(a)(2), (l)(2). The right of a public housing tenant to remain in his or her housing is "entitled to due process protection." Caulder v. Durham Hous. Auth., 433 F.2d 998, 1003 (4th Cir.1970) (citing Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970)), cert. denied, 401 U.S. 1003, 91 S.Ct. 1228, 28 L.Ed.2d 539 (1971); see also Carroll v. Hous. Opportunities Comm'n of Montgomery County, 306 Md. 515, 525, 510 A.2d 540, 545 (1986) (holding that resident of public housing "has a right to remain in her townhouse indefinitely until the [PHA] can establish good cause for eviction"). Except in cases of eviction for certain types of dangerous or drug-related criminal activity, federal law requires a PHA that intends to terminate a tenant's lease to afford the tenant an opportunity for a hearing, pursuant to grievance procedures that each PHA must adopt. See 42 U.S.C. § 1437d(k); 24 C.F.R. §§ 966.4(l)(3), 966.51(a)(2).
The grievance procedures apply not only to lease terminations, but also to any other "dispute which a tenant may have with respect to PHA action or failure to act in accordance with the individual tenant's lease or PHA regulations which adversely affect the individual tenant's rights, duties, welfare or status." 24 C.F.R. § 966.53(a); see also 42 U.S.C. § 1437d(k). Federal regulations permit each PHA to craft its own procedures for hearing of grievances within certain parameters, including the requirement that the PHA provide an opportunity for "[i]nformal settlement of grievances," 24 C.F.R. § 966.54, followed by the opportunity for a more formal hearing, "if the complainant is not satisfied." Id.; see 24 C.F.R. §§ 966.55, 966.56, 966.57 (regulations governing procedures for formal hearing of grievances).
On or about May 17, 2010, Ms. Sager entered into a lease agreement with the
Ms. Sager is obligated under the Lease to pay rent of $192 per month, due on the first day of each month. Lease, § II.B, at 1. She is also "responsible for the payment of certain other charges specified in this lease," including "late charges" equal to the lesser of $10 or 5% of the monthly rent for any rent payment made after the tenth day of a given month, and "maintenance costs" for services or damages beyond normal wear and tear. Id., § III.A-D, at 2. The Lease requires the Commission to provide written notice of the amount and due date of "other charges," and provides that such charges may be due "no sooner than two weeks after Tenant receives the PHA's written notice of the charge." Id., § III, at 2. Further, the Lease states, id.:
Plaintiff claims that, on or about November 8, 2010, the Commission's property manager, Ms. Flynn, induced her to sign a "Vacate Agreement" obligating her to terminate her Lease and vacate the Property, effective as of noon on December 8, 2010. Complaint ¶¶ 9-10; see also Vacate Agreement, Ex. 1 to Complaint (ECF 2-1). The Vacate Agreement, which was also signed by Ms. Flynn, purported to "satisf[y] the written notice requirement" for termination, contained in the Lease, and stated: "If I [i.e., plaintiff] should violate this agreement, I realize that the Housing Commission will proceeds [sic] with the filing of a PETITION — FOR WARRANT OF RESTITUTION with the Courts to move forward and accomplish the eviction process with the Sheriff." Vacate Agreement at 1. According to the Complaint, Ms. Sager "was not represented by counsel" when she signed the Vacate Agreement. Complaint ¶ 10.
Plaintiff explains the circumstances that led to the execution of the Vacate Agreement by quoting from a "7 page lease termination letter dated November 29, 2010," authored by Ms. Flynn (the "Termination Letter").
On or about November 29, 2010, Ms. Sager's brother notified the Commission in writing that a complaint had been filed with HUD regarding the process by which Ms. Sager had been induced to sign the Vacate Agreement. Id. ¶ 12. The same day, Ms. Flynn sent the Termination Letter to plaintiff, stating that her Lease was terminated, effective December 8, 2010, because of "`violations of material terms of [her] lease.'" Id. ¶ 13 (quoting Termination Letter at 1).
The Termination Letter articulated the alleged breaches in detail. In brief, most of the alleged violations cited by Ms. Flynn consisted of several occasions in October and November 2010, in which plaintiff either left the water in her kitchen sink running, causing flooding and water damage in her apartment and other nearby apartments, or left her stove on, creating smoke and causing a fire hazard and, in one instance, a fire. During many of these incidents, plaintiff allegedly was incoherent and delusional, and her apartment also contained serious housekeeping deficiencies, including trash spread throughout the apartment and open and spoiled food on the floors and counters. See generally Termination Letter at 3-6. Plaintiff attributes these incidents, in part, to her "mental health disabilities," which she claims were exacerbated by "recent traumatic events in her life including the death of her mother in August" 2010. Complaint ¶ 16.
As noted, the Termination Letter purported to terminate Ms. Sager's Lease "effective
Along with the Termination Letter, the Commission sent Ms. Sager an invoice for three maintenance charges, totaling $380, for "kitchen sink," "excessive cleaning," and "flooding." Ex. 2 to Complaint ("November 2010 Invoice") (ECF 2-2) (capitalization altered). The November 2010 Invoice informed Ms. Sager that the charges were "due and payable with [her] rent," and advised that she had the right, within ten working days, to request an "informal hearing" regarding the matter, pursuant to the Commission's grievance procedure. Id. The November 2010 Invoice also stated: "If you do not request a hearing as stated above, you will be deemed to have waived your right to dispute the charges." Id.
On or about December 6, 2010, Ms. Sager sent the Commission a written request for an "informal grievance hearing" as to the termination of her Lease. Complaint ¶ 15. It was held on December 9, 2010, before Diane Haislip, a "hearing officer." Ms. Sager was not represented by counsel, but "presented evidence regarding her mental health disabilities, the recent traumatic events in her life including the death of her mother in August, and the supports [sic] and treatment that she was receiving at the time." Complaint ¶ 16. Ms. Sager also informally requested transfer to another apartment. Id. In a letter issued on or about December 21, 2010, Ms. Haislip upheld Ms. Flynn's determination to terminate plaintiff's Lease. Id. ¶ 17.
On or about December 26, 2010, Ms. Sager requested a formal grievance hearing. Id. ¶ 18. At the hearing, conducted on February 14, 2011, by hearing officer John Harris, Ms. Sager was represented by counsel. Id. ¶ 19.
On February 16, 2011, Ms. Flynn sent plaintiff a letter via certified mail, on behalf of the Commission, regarding the "results for [the] formal grievance hearing," which stated, in its entirety: "This is to officially inform you that the decision of the Housing Commission of Anne Arundel County was upheld as a result of the hearing on Monday, February 14, 2011 at 1:00 p.m." Ex. 3 to Complaint (ECF 2-3) (capitalization and emphasis omitted); see Complaint ¶ 23. The same day, the Commission filed a Complaint for Breach of Lease against Ms. Sager in the District Court of Maryland for Anne Arundel County (District 7), docketed as Case No. 0702-SP-00442-2011 (the "Breach of Lease Case"). Complaint ¶ 22; see Md. Code (2006 Repl. Vol., 2011 Supp.), § 1-602(7) of the Courts and Judicial Proceedings Article ("C.J.").
On or about March 3, 2011, Ms. Sager filed a written request for transfer to a different apartment building operated by the Commission. Complaint ¶ 24; see also Ex. 4 to Complaint ("March 2011 Transfer Request") (ECF 2-4). The Commission denied the request on March 22, 2011. Complaint ¶ 29; see also Ex. 8 to Complaint (ECF 2-8). On March 29, 2011, plaintiff's counsel wrote to the Commission's counsel, asserting that Ms. Sager was now receiving additional professional services for her disabilities and was "stable." Her attorney also requested that the Commission offer plaintiff a "reasonable accommodation" for her disabilities, in the form of "accepting Ms. Sager's good faith efforts and subsequent success in proactively addressing her medical needs," and urged voluntary dismissal of the Breach of Lease Case. Ex. 9 to Complaint (ECF 2-9); see Complaint ¶ 30. The Commission would not agree to this request, and the Breach of Lease Case proceeded.
In the meantime, on or about March 2, 2011, Ms. Sager tendered to the Commission a money order in the amount of $192, a sum equal to her monthly rent for March. Complaint ¶ 25. According to the Commission's ledger, however, the Commission applied the payment to the $380 in outstanding maintenance charges. Id. (citing Ex. 5 to Complaint (ECF 2-5)).
The same day, March 15, 2011, HCAAC initiated a summary ejectment action against Ms. Sager for failure to pay rent, which was docketed in the District Court of Maryland for Anne Arundel County as Case No. S. Ej. 1172-0000-7364 (the "First Rent Case").
On March 21, 2011, the Commission sent another letter to plaintiff, generally containing the same contents as the letter of March 15, 2011, but this time asserting that a total of $498.36 was due and owing. Ex. 7 to Complaint (ECF 2-7); see also Complaint ¶ 28. The basis for the $17 increase, over and above the amount stated in the previous letter, was that the Commission now alleged that $95 in "Legal" fees was due and owing. Ex. 7 to Complaint. Handwritten on the letter was the notation, "Court 3/22/11 Please pay by 7:00 AM." Id.
In early April 2011, Ms. Sager tendered to the Commission a money order in the amount of $192, a sum equal to her monthly rent for April.
On April 15, 2011, the Commission filed a second ejectment action against Ms. Sager, docketed in the District Court of Maryland for Anne Arundel County as Case No. 1172-0000-9803 (the "Second Rent Case"). Complaint ¶ 34. In its complaint, HCAAC alleged that $384 in rent was due and owing (i.e., two months' worth of rent, at the monthly rate of $192), plus $10 in late fees. Id.
On April 18, 2011, the Commission sent Ms. Sager a fourth letter regarding her account balance, reflecting that her payment of $192 had been applied to the maintenance charges. Ex. 11 to Complaint (ECF 2-11). According to the fourth letter, Ms. Sager owed a total of $508.36, comprised of $384 in rent; $19.60 in "Late & Other" fees; $95 in "Legal" fees; and $9.76 for "Maintenance." Id. Otherwise, the content of the fourth letter was the same as the prior letters, except that there was no handwritten notation. See id.
Trial was held in the Second Rent Case on April 22, 2011. Complaint ¶ 36. Again, Ms. Sager appeared without counsel and presented a receipt for her April payment. Id. This time, however, the District Court granted judgment for possession of the premises in favor of the Commission. Id. According to plaintiff, the court accepted the Commission's argument that a provision of the Lease, quoted supra, permitted the Commission to apply rental payments to other outstanding charges unless the words "rent" or "for rent" were written on the instrument of payment.
On April 27, 2011, Ms. Sager noted an appeal in the Second Rent Case to the
The following day, April 28, 2011, the District Court denied Ms. Sager's Motion to Stay by marginal order, stating: "Denied — not filed — once rent is paid — court will vacate judgment."
Nevertheless, on the same day, the Commission filed a petition for a warrant of restitution in the District Court, contending that $401 was due, consisting of $384 in rent and $17 in costs. Complaint ¶ 40. The Commission never sought to execute the warrant, however, due to Ms. Sager's $384 payment and because, on May 4, 2011, one of the Commission's property managers, Lisa Hahn, credited
As noted, trial of the Breach of Lease Case was set for September 1, 2011. On August 18, 2011, Ms. Sager, represented by counsel, initiated this lawsuit by filing her Complaint in the Circuit Court for Anne Arundel County, Maryland, docketed as Case No. 02-C-11-163554. On the same date, Ms. Sager filed in the Breach of Lease Case a "Motion to Consolidate Cases," which she also attached as Exhibit 15 to her Complaint in the circuit court. See Ex. 15 to Complaint (ECF 2-15). In that motion, plaintiff requested that the Breach of Lease Case, then awaiting trial in the state District Court, be consolidated with this case, then pending in state circuit court. In support of her request, plaintiff contended that the Breach of Lease Case would "require the same proof and witnesses" as this case, and that it was "in the interest of justice and judicial economy that the cases be consolidated" in the circuit court proceeding. Id. ¶¶ 16-17. Defendants report that the District Court denied the consolidation motion. See Motion at 2.
Trial commenced in the Breach of Lease Case on September 1, 2011, but was not completed on that date. See Motion at 2. It was scheduled to resume on November 30, 2011. Id. In the meantime, on September 14, 2011, defendants timely removed this case from state circuit court to this Court, on the basis of federal question jurisdiction. See Notice of Removal (ECF 1); see also 28 U.S.C. §§ 1331, 1441. Thereafter, they filed the pending Motion.
The parties have not notified this Court regarding any further proceedings in the Breach of Lease Case. The unofficial public docket for that case, available on the Maryland Judiciary's "Case Search" website (http://casesearch.courts.state.md.us/), indicates that the trial was again continued to January 30, 2012, and that, on that date, the District Court entered judgment in favor of Ms. Sager. However, the "Case Search" docket does not reflect the basis for the District Court's ruling, nor have the parties provided any information about it.
Defendants' Motion is styled as a motion to dismiss under Fed.R.Civ.P. 12(b)(6), "or in the alternative" for summary judgment under Fed.R.Civ.P. 56. A motion styled in this manner implicates the court's discretion under Rule 12(d) of the Federal Rules of Civil Procedure. See Kensington Vol. Fire Dept., Inc. v. Montgomery County, 788 F.Supp.2d 431, 436-37 (D.Md.2011). Ordinarily, a court "is not to consider matters outside the pleadings or resolve factual disputes when ruling on a motion to dismiss." Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007). However, under Rule 12(b)(6), a court, in its discretion, may consider matters outside of the pleadings, pursuant to Rule 12(d). If the court does so, "the motion must be treated as one for summary judgment under Rule 56," and "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d). When the movant expressly captions its motion "in the alternative" as one for summary judgment, and submits matters outside the pleadings for the court's consideration, the parties are deemed to be on notice that conversion under Rule 12(d) may occur; the court "does not have an obligation to notify parties of the obvious." Laughlin v. Metro. Wash. Airports Auth., 149 F.3d 253, 261 (4th Cir.1998).
Nevertheless, a district judge has "complete discretion to determine whether or not to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not consider it." 5C WRIGHT & MILLER, FEDERAL PRACTICE & PROCEDURE § 1366, at 159 (3d ed. 2004, 2011 Supp.). This discretion "should be exercised with great caution and attention to the parties' procedural rights." Id. at 149. In general, courts are guided by whether consideration of extraneous material "is likely to facilitate the disposition of the action," and "whether discovery prior to the utilization of the summary judgment procedure" is necessary. Id. at 165-67.
Ordinarily, summary judgment is inappropriate "where the parties have not had an opportunity for reasonable discovery." E.I. du Pont, supra, 637 F.3d at 448-49. However, "the party opposing summary judgment `cannot complain that summary judgment was granted without discovery unless that party has made an attempt to oppose the motion on the grounds that more time was needed for discovery.'" Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th Cir.2002) (quoting Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 961 (4th Cir.1996)). To raise adequately the issue that discovery is needed, the non-movant typically must file an affidavit or declaration pursuant to Rule 56(d) (formerly Rule 56(f)), explaining why, "for specified reasons,
Notably, "`Rule 56(d) affidavits cannot simply demand discovery for the sake of discovery.'" Hamilton v. Mayor & City Council of Baltimore, 807 F.Supp.2d 331, 342 (D.Md.2011) (quoting Young v. UPS, No. DKC-08-2586, 2011 WL 665321, at *20, 2011 U.S. Dist. LEXIS 14266, at *62 (D.Md. Feb. 14, 2011)). "Rather, to justify a denial of summary judgment on the grounds that additional discovery is necessary, the facts identified in a Rule 56 affidavit must be `essential to [the] opposition.'" Scott v. Nuvell Fin. Servs., LLC, 789 F.Supp.2d 637, 641 (D.Md.2011) (alteration in original) (citation omitted). A non-moving party's Rule 56(d) request for additional discovery is properly denied "where the additional evidence sought for discovery would not have by itself created a genuine issue of material fact sufficient to defeat summary judgment." Strag v. Bd. of Trs., Craven Cmty. Coll., 55 F.3d 943, 954 (4th Cir.1995); see Amirmokri v. Abraham, 437 F.Supp.2d 414, 420 (D.Md.2006), aff'd, 266 Fed.Appx. 274 (4th Cir.), cert. denied, 555 U.S. 885, 129 S.Ct. 259, 172 L.Ed.2d 147 (2008).
In her Opposition, plaintiff strenuously insists that summary judgment is premature, because "multiple material facts are in dispute in all of the Plaintiff's causes of action," Opp. at 13, and the "parties have not engaged in discovery yet, so [plaintiff] cannot state all of the facts in dispute at this time." Opp. at 14 n. 6. Nevertheless, plaintiff has not filed an affidavit under Rule 56(d). Moreover, several of the purported disputes of material fact that plaintiff proffers are actually legal disputes. For instance, the "parties dispute whether the lease provisions constitute a confessed judgment." Opp. at 14. Other factual matters raised by plaintiff do not actually appear to be in dispute. To illustrate, plaintiff argues that, "on page 14 [of their memorandum in support of the Motion], Defendants state that HCAAC denied Ms. Sager's transfer request, while on page 17 Defendants state they did offer her a transfer." It is evident, however, that on the referenced pages the defendants were referring to two separate transfer requests. Under Fourth Circuit precedent, more is required to oppose a properly presented request for conversion to summary judgment.
Despite the inadequacy of plaintiff's opposition to conversion, I will exercise my discretion under Rule 12(d) not to convert the motion to one for summary
Accordingly, I will review the Motion under the well established standards for consideration of motions to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The purpose of a Rule 12(b)(6) motion is "`to test the sufficiency of a complaint.'" McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir.2010) (citation omitted). A Rule 12(b)(6) motion constitutes an assertion by the defendant that, even if the facts that the plaintiff alleges are true, the complaint fails, as a matter of law, "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6).
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "A court decides whether this standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to relief. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir.2011), cert. denied, ___ U.S. ___, 132 S.Ct. 1960, 182 L.Ed.2d 772 (2012). Dismissal "is inappropriate unless, accepting as true the well-pled facts in the complaint and viewing them in the light most favorable to the plaintiff, the plaintiff is unable to `state a claim to relief.'" Brockington v. Boykins, 637 F.3d 503, 505-06 (4th Cir.2011) (citation omitted).
Because the Breach of Lease Case remained pending when this case was initiated and when the Motion was filed, I directed the parties to address whether the Court should abstain from resolving the merits of their dispute. See ECF 11. In particular, I asked the parties to consider the applicability of two abstention doctrines: the doctrine of Younger abstention, which counsels against federal judicial interference in certain ongoing state judicial proceedings, and the Wilton-Brillhart doctrine, which affirms that the pendency of parallel state proceedings is a factor in a federal court's inherent discretion to abstain from issuing declaratory relief. Both sides argue that abstention is unnecessary here. See Reply at 12-14; Surreply at 1-9. As I shall explain, I agree.
Upon careful consideration, I conclude that Younger abstention is unwarranted here. First, although the Breach of Lease Case was pending when this suit was initiated, it appears that the Breach of Lease Case has now been resolved. Therefore, there is no longer "an ongoing state judicial proceeding." Nivens, 444 F.3d at 241. Notably, "`Younger requires that the state proceeding must be ongoing at the time the district court enters its order regarding abstention.'" Tony Alamo Christian Ministries v. Selig, 664 F.3d 1245, 1250 n. 3 (8th Cir.2012) (citation omitted). Therefore, "[a]bsent any pending proceeding in state tribunals... application by the lower courts of Younger abstention [is] clearly erroneous." Ankenbrandt v. Richards, 504 U.S. 689, 705, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992) (emphasis in original). See also Edwards v. Illinois Bd. of Admissions to the Bar, 261 F.3d 723, 727-28 (7th Cir.2001) (stating, where state judicial proceedings concluded between issuance of district court's order and federal appellate court's decision reviewing order: "Abstention is only appropriate `when there is an ongoing state proceeding,' thus `abstention is no longer appropriate' here ....") (citations omitted); Nat'l Pharmacies, Inc. v. Feliciano-de-Melecio, 221 F.3d 235, 240 (1st Cir. 2000) ("A federal court cannot be expected to defer to local proceedings that either no longer exist or in which the decisionmakers have clearly indicated their preference that the federal court act. Thus, the district court correctly declined to abstain under Younger."); Reaching Hearts Int'l, Inc. v. Prince George's County, 584 F.Supp.2d 766, 793 & n. 20 (D.Md.2008) (holding Younger abstention inapplicable "because the state proceedings are no longer pending"), aff'd, 368 Fed.Appx. 370 (4th Cir.2010).
Consideration of the Wilton-Brillhart abstention doctrine is also appropriate. In Wilton v. Seven Falls Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995), the Supreme Court reaffirmed its prior holdings that "`[o]rdinarily it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties.'" Id. at 282, 115 S.Ct. 2137 (quoting Brillhart v. Excess Ins. Co., 316 U.S. 491, 495, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942)). Fourth Circuit decisions subsequent to Wilton have considered the pendency of parallel state court proceedings as one of several factors that federal district courts should consider in deciding whether to exercise jurisdiction in a declaratory proceeding. See, e.g., Aetna Cas. & Surety Co. v. Ind-Com Elec. Co., 139 F.3d 419 (4th Cir.1998). Here, of course, plaintiff seeks not only declaratory relief, but also damages. The Fourth Circuit has held that "the Brillhart/Wilton standard does not apply when a declaratory judgment claim is joined with a nondeclaratory claim, such as a claim for damages or injunctive relief." Great American Ins. Co. v. Gross, 468 F.3d 199, 211 (4th Cir. 2006). The Court explained: "Because a court is required to address nondeclaratory claims, ... the benefit derived from exercising discretion not to grant declaratory relief is frustrated" in such a case. Id. Moreover, as already discussed, the Breach of Lease Case is no longer pending. Therefore, Wilton-Brillhart abstention is not warranted.
A federal court considering abstention from a matter over which it has jurisdiction must always be mindful of the "basic proposition that `abstention from the exercise of federal jurisdiction is the exception, not the rule.'" Emp'rs Res. Mgmt. Co. v. Shannon, 65 F.3d 1126, 1134
For all of the foregoing reasons, the Court will not abstain from exercising its jurisdiction, and will address the merits.
Preliminarily, defendants claim that plaintiff "is not legally entitled to any of the relief she seeks." Motion at 22. They claim that Count III of plaintiff's Complaint, which alleges violations of the Housing Act, 42 U.S.C. §§ 1437 et seq., and its implementing regulations, is deficient because the Housing Act does not contain a private right of action. Motion at 16. In addition, they assert that none of the statutes on which plaintiff's suit is based permits an award of treble damages, or damages for pain and suffering. Motion at 12-13. Finally, defendants assert that at least some of plaintiff's claims are barred due to her alleged failure to exhaust administrative remedies. Motion at 10-11. I will consider these arguments in turn.
Defendants' challenge to Count III is unavailing. It is true that the Housing Act does not, itself, contain an express private right of action, and courts have held that it does not support direct implication of a cause of action. See Perry v. Hous. Auth. of City of Charleston, 664 F.2d 1210, 1211-17 (4th Cir.1981). However, the Supreme Court has held that particular provisions of the Housing Act, which provide residents of public housing with "specific or definable rights" that are not "beyond the competence of the judiciary to enforce," are "enforceable rights under... [42 U.S.C.] § 1983."
Plaintiff expressly invokes § 1983 as the mechanism for her cause of action as to "rights conferred by federal law." See Complaint ¶ 5. To the extent that she asserts violations of specific and definable rights conferred on residents of public housing by the Housing Act, her claims do not fail for want of a private right of action.
However, defendants are correct in asserting that treble damages are not available to plaintiff; there is no statutory entitlement to treble damages, per se, in a suit under § 1983.
In contrast, both § 1983 and the CPA permit recovery of damages for emotional distress or pain and suffering, under certain circumstances. The Supreme Court has held that "mental and emotional distress" caused by the denial of federal civil rights "is compensable under § 1983," provided that there is "proof that such injury actually was caused," which is "evidenced by one's conduct and observed by others." Carey v. Piphus, 435 U.S. 247, 264 & n. 20, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978); see also Memphis Community Sch. Dist. v. Stachura, 477 U.S. 299, 307-08, 106 S.Ct. 2537, 91 L.Ed.2d 249 (1986). In Price v. City of Charlotte, 93 F.3d 1241, 1254 (4th Cir.1996), cert. denied, 520 U.S. 1116, 117 S.Ct. 1246, 137 L.Ed.2d 328 (1997), the Fourth Circuit held that a § 1983 plaintiff who seeks damages for emotional distress "must establish that the plaintiff suffered demonstrable emotional distress, which must be sufficiently articulated; neither conclusory statements that the plaintiff suffered emotional distress nor the mere fact that a constitutional violation occurred supports an award of compensatory damages." The Price Court also articulated several factors to "aid triers of fact in determining the propriety of awarding compensatory damages for emotional distress." Id.
Similarly, the Maryland Court of Appeals has held that "noneconomic damages," which include damages for pain and suffering, are available under the CPA, up to the limits established by C.J. § 11-108, Maryland's statutory cap on noneconomic
As noted, defendants argue that plaintiff's failure to file grievances as to various contentions she raises, by way of the Commission's grievance procedure, "amounts to a waiver" of her claims. Motion at 10. Defendants also observe that plaintiff did not challenge the Commission's actions in Maryland state court within thirty days of each action, via the "administrative mandamus" procedure provided under Maryland Rules 7-401 et seq. Contending that plaintiff's "failure to exhaust her available administrative remedies bars her right" to proceed, defendants invoke the "`long settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.'" Motion at 11 (quoting Thetford Props. IV Ltd. P'ship v. HUD, 907 F.2d 445, 448 (4th Cir.1990)). However, although defendants cite cases, including Thetford, that endorse the general principle of administrative exhaustion, they have produced no authority for the proposition that administrative exhaustion applies to the public housing grievance procedure.
In response, plaintiff notes that, in fact, she initiated a grievance proceeding with the Commission, and asserts that it is unclear which of her claims defendants contend have not been exhausted administratively. In any event, she counters that failure to request a grievance hearing under public housing regulations does not waive a resident's right to challenge judicially an adverse action by a PHA. See Opp. at 6-9. Moreover, plaintiff argues that Maryland's administrative mandamus procedure does not apply to housing authorities because a PHA is not an "administrative agency" within the meaning of Maryland Rule 7-401(b). See Opp. at 5-6.
PHAs are required by federal law to "establish and implement an administrative grievance procedure" for residents of public housing to challenge "any proposed adverse public housing agency action." 42 U.S.C. § 1437d(k). The grievance procedure must conform to federal regulations codified in 24 C.F.R. part 966, subpart B. In particular, if a resident's grievance cannot be resolved through an informal meeting, see 24 C.F.R. § 966.54,
The hearing procedure gives tenants an opportunity to challenge adverse actions by the PHA and to bind the PHA to the result. But, the procedure cannot be used by the PHA to bind a tenant. In this respect, the grievance procedure is a one-way street. Notably, the regulations expressly state that "failure to request a hearing shall not constitute a waiver by the complainant of his right thereafter to contest the PHA's action in disposing of the complaint in an appropriate judicial proceeding." 24 C.F.R. § 966.55(c). Moreover, a "decision by the hearing officer, hearing panel, or [PHA's] Board of Commissioners in favor of the PHA or which denies the relief requested by the complainant in whole or in part shall not constitute a waiver of, nor affect in any manner whatever, any rights the complainant may have to a trial de novo or judicial review in any judicial proceedings, which may thereafter be brought in the matter." Id. § 966.57(c).
In contrast, a "decision of the hearing officer or hearing panel shall be binding on the PHA which shall take all actions, or refrain from any actions, necessary to carry out the decision." Id. § 966.57(b). There are, however, two narrow exceptions. The PHA's Board of Commissioners may overturn a grievance decision if (1) the grievance does not concern a matter that is subject to the grievance procedure, i.e., it does not involve "PHA action or failure to act in accordance with or involving the complainant's lease [or] PHA regulations, which adversely affect the complainant's rights, duties, welfare or status," id. § 966.57(b)(1); see also id. § 966.53(a) (definition of "grievance"); or (2) the "decision of the hearing officer or hearing panel is contrary to applicable Federal, State or local law, HUD regulations or requirements of the annual contributions contract between HUD and the PHA." Id. § 966.57(b)(2).
Given that the regulations expressly provide that neither failure to initiate the grievance procedure nor an adverse decision in the grievance procedure waives or limits a tenant's right to obtain judicial relief, it is not surprising that the Court
As the foregoing cases have explained, the conclusion that exhaustion of the public housing grievance procedure is not required is consonant with the "general rule" that "plaintiffs proceeding under § 1983 need not exhaust state administrative remedies before filing suit." Anderson v. XYZ Corr. Health Servs., Inc., 407 F.3d 674, 676 (4th Cir.2005) (citing Porter v. Nussle, 534 U.S. 516, 523, 122 S.Ct. 983, 152 L.Ed.2d 12 (2002), and Patsy v. Board of Regents, 457 U.S. 496, 516, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982)).
In accordance with the plain text of the applicable federal regulations and the case law I have reviewed, I conclude that the doctrine of exhaustion of administrative remedies does not apply to the public housing grievance procedure required by 42 U.S.C. § 1437d(k) and 24 C.F.R. part 966, subpart B.
I turn to the parties' contentions regarding plaintiff's particular substantive claims.
In several of the counts of her Complaint, plaintiff challenges the legality of the Lease provision that permits the Commission to apply payments received to unpaid "other charges" (such as maintenance fees, late fees, or legal fees), rather than to rent, unless the payment is "specifically designated, in written notation, as `rent' or `for rent.'" Lease § III, at 2. As plaintiff sees it, the provision constitutes an agreement to entry of a confessed judgment, which violates the CPA (Count I), the Real Property Article (Count II), and federal regulations implementing the Housing Act (Count III).
It is clear that an authorization for entry of confessed judgment is generally prohibited by each of the legal provisions
Under Maryland law, a confessed judgment is a "device designed to facilitate collection of a debt." Schlossberg v. Citizens Bank, 341 Md. 650, 655, 672 A.2d 625, 627 (1996). A confession of judgment clause, occasionally described more archaically as a "cognovit," is a provision that is sometimes included in a debt instrument, by which the debtor "agree[s] to the entry of judgment against [the debtor] without the benefit of a trial in the event of default on the debt instrument." Id.; accord 24 C.F.R. § 966.6(a) (defining "[c]onfession of judgment," for purposes of federal public housing prohibition, as "[p]rior consent by the tenant to any lawsuit the landlord may bring against him in connection with the lease and to a judgment in favor of the landlord") (italics omitted); see also BLACK'S LAW DICTIONARY 296, 339 (9th ed. 2009) (definitions of "cognovit" and "confession of judgment").
In Maryland circuit courts, confessed judgments are governed by Maryland Rule 2-611 (or, in the District Court, by Maryland Rule 3-611, which is substantively identical to its circuit court counterpart). See Schlossberg, 341 Md. at 655, 672 A.2d at 627; NILS, LLC v. Antezana, 171 Md.App. 717, 726, 912 A.2d 45, 50 (2006), cert. denied, 397 Md. 397, 918 A.2d 469 (2007). The rules provide that an action seeking a confessed judgment is initiated by filing a complaint, accompanied by a copy of the written debt instrument containing an authorization by the debtor to confession of judgment and an affidavit in a prescribed form, in which the plaintiff must provide, inter alia, a statement of the amount due and owing under the instrument and proof of how that amount was determined. See Md. Rules 2-611(a) & 3-611(a). Thereafter, the state court must review the complaint and affidavit for sufficiency and ascertain whether "the pleadings and papers demonstrate a factual and legal basis for entitlement to confessed judgment"; if so, the court must direct entry of judgment. Md. Rules 2-611(b) & 3-611(b). "Promptly upon entry of a judgment by confession, the clerk, instead of a summons, shall issue a notice informing the defendant of entry of judgment and of the latest time for filing a
"As a general rule, a judgment by confession is `entitled to the same faith and credit, as any other judgment.'" Schlossberg, 341 Md. at 655, 672 A.2d at 627 (quoting Keiner v. Commerce Trust Co., 154 Md. 366, 370, 141 A. 121, 122 (1927)). Like a money judgment entered in any other judicial proceeding, a "confessed judgment operates as a lien against the real property of the defendant located in the county where the judgment is entered." Schlossberg, 341 Md. at 655, 672 A.2d at 627. Confessed judgments may have res judicata effect (i.e., claim preclusion), although they often will not support collateral estoppel, or issue preclusion, because typically "`[i]n the case of a judgment entered by confession ... none of the issues is actually litigated.'" United Book Press, Inc. v. Md. Composition Co., 141 Md.App. 460, 477, 786 A.2d 1, 11 (2001) (quoting Restatement (Second) of Judgments § 27, Comment (e)) (emphasis in original); see also id. at 477-79 & nn.3-4, 786 A.2d at 11-12 & nn.3-4 (discussing collateral estoppel as applied to confessed judgments).
Maryland courts have recognized that, in some circumstances, "a confessed judgment note serves a salutary purpose." NILS, 171 Md.App. at 729, 912 A.2d at 52. "When unchallenged or not successfully challenged," a confessed judgment "permits
As noted, the Lease provision of which plaintiff complains states, Lease § III, at 2:
Plaintiff has not cited any authority for the proposition that this Lease provision constitutes a confession of judgment, and I have found none. I conclude, as a matter of law, that this provision is not a confession of judgment.
To be sure, the provision permits the Commission, in some circumstances, to apply a tenant's payment to "other charges" under the Lease without obtaining a judicial determination that the "other charges" are due and owing. But, that does not render it a confession of judgment. Unlike a confessed judgment clause, the Lease provision does not permit the Commission to obtain a judgment in its favor for the "other charges," with all of the implications with regard to liens on property, claim or issue preclusion, and entitlement to full faith and credit that a money judgment typically entails.
Moreover, the provision does not necessarily deprive the tenant of the opportunity to challenge the Commission's imposition of "other charges." For one thing, the Lease provision only applies to payments which the tenant has not expressly designated as rent. For another, in accordance with applicable federal regulations, see 24 C.F.R. § 966.4(b)(4), (e)(8), the Lease obligates the Commission to give the tenant written notice of the imposition of any "other charges" at least two weeks before the charges are due, see Lease
Because the Lease provision at issue is not a confession of judgment, Count II of plaintiff's Complaint, which solely alleges a violation of the prohibition of confessed judgment clauses in residential leases, R.P. § 8-208(d)(1), will be dismissed, with prejudice. In addition, Counts I and III will also be dismissed, with prejudice, to the extent that they allege violations of the CPA's ban on confessed judgment clauses in contracts related to consumer transactions, C.L. § 13-301(12) (as to Count I), and the federal regulatory ban on confessed judgment clauses in public housing leases, 24 C.F.R. § 966.6(a) (as to Count III).
To be clear, however, I express no conclusion as to whether the Lease provision permitting the Commission to allocate otherwise unallocated payments to "other charges," before allocation to overdue rent, might be legally infirm on other grounds. Although it does not appear that any regulation issued by HUD expressly prohibits the Lease provision, there is no regulation that requires or expressly permits it. The Lease provision regarding application of payments potentially could be challenged under the Housing Act's general prohibition of "unreasonable terms and conditions" in public housing leases. 42 U.S.C. § 1437d(l)(2).
Count III of plaintiff's Complaint argues generally that various practices of the Commission violate the Housing Act, but plaintiff does not expressly invoke 42 U.S.C. § 1437d(l)(2). Her Complaint alleges, in conclusory fashion, that the Commission's practice and procedure of "applying payments to various charges," rather than rent, constitutes an "improper and
Arguably, the Lease provision regarding application of payments is an attempt to allow the Commission to accomplish indirectly what the Brooke Amendment prevents it from doing directly: recover "other charges" by means of a summary ejectment proceeding for nonpayment of rent under R.P. § 8-401.
In comparison to either of those options, a proceeding under R.P. § 8-401 gives substantially greater leverage to the landlord and incentive for payment to the tenant, because of the speed at which the proceeding operates and the fact that the tenant will be swiftly evicted if she fails to pay the amounts found due and owing.
Similarly, perhaps one could argue that the Lease provision regarding allocation of payments constitutes an "unfair or deceptive trade practice" under the CPA for some reason other than the ban on confessed judgment clauses, C.L. § 13-301(12). However, it does not appear that plaintiff has made such an allegation in Count I of her Complaint. Moreover, Count III of plaintiff's Complaint does not expressly invoke either § 1437d(l)(2) or the Brooke Amendment, and her fleeting mention of the Brooke Amendment in her Surreply cannot suffice to plead a theory not mentioned in the Complaint and not previously argued by either party. See, e.g., Arbitraje Casa de Cambio, S.A. v. U.S. Postal Serv., 297 F.Supp.2d 165, 170 (D.D.C.2003) ("It is axiomatic that a complaint may not be amended by the briefs in opposition to a motion to dismiss."). Accordingly, I do not consider the Complaint to have adequately asserted a challenge to
Plaintiff contends that certain other statements made by defendants are "[f]alse ... or misleading oral or written statement[s] ... which [have] the capacity, tendency, or effect of deceiving or misleading consumers," C.L. § 13-301(1), in violation of the CPA. In particular, Ms. Sager alleges two violations of C.L. § 13-301:(1) Ms. Flynn's statements inducing Ms. Sager to sign the Vacate Agreement "by making false oral statements that if the eviction process were carried out, she would not be able to reapply for public housing," Complaint ¶ 47; and (2) the statement in the November 2010 Invoice, that "`If you do not request a hearing as stated above [in accordance with the grievance procedure] you will be deemed to have waived your right to dispute the charges.'" Complaint ¶ 51 (quoting November 2010 Invoice). In plaintiff's view, these statements are "[u]nfair or deceptive trade practices" under the CPA. C.L. § 13-301.
Maryland courts consider two components in analyzing whether a statement violates C.L. § 13-301(1). A misrepresentation "falls within the scope of C.L. § 13-301(1) if it is `false' or `misleading' and it has `the capacity, tendency, or effect of deceiving or misleading' consumers." McGraw v. Loyola Ford, Inc., 124 Md.App. 560, 577, 723 A.2d 502, 510 (emphasis in original), cert. denied, 353 Md. 473, 727 A.2d 382 (1999). In Maryland, whether a statement is "misleading" is judged from the point of view of a reasonable, but unsophisticated consumer. See Luskin's, Inc. v. Consumer Protection Div., 353 Md. 335, 356-57, 726 A.2d 702, 712 (1999). In assessing the "capacity, tendency, or effect" of a statement to deceive or mislead, courts consider whether "a significant number of unsophisticated consumers would find [the] information [at issue] important in determining a course of action." Green v. H & R Block, Inc., 355 Md. 488, 524, 735 A.2d 1039, 1059 (1999). Put another way, a court should ask whether the information is "`important to consumers and, hence, likely to affect their choice.'" Luskin's, 353 Md. at 359, 726 A.2d at 713 (citation omitted). In this respect, a statement "cannot be viewed in a vacuum"; rather, it must be viewed in the context in which it was made, along with other representations to the consumer. McGraw, 124 Md.App. at 580, 723 A.2d at 511.
Defendants urge dismissal of plaintiff's CPA contentions, claiming that the statements at issue, if made, were true and accurate. See Motion at 4-5. They focus on the first prong of C.L. § 13-301: whether a statement is "false" or "misleading." With regard to the statement that, if the eviction were carried out, plaintiff would be unable to reapply for public housing, defendants cite federal regulations regarding tenant selection criteria that apply to the public housing program, see 24 C.F.R. part 960, subpart B, as well as to the Housing Choice Voucher Program ("Voucher Program"),
The regulations applicable to the public housing program require PHAs to "establish and adopt written policies for admission of tenants," 24 C.F.R. § 960.202(a)(1), that, inter alia, preclude "admission of applicants whose habits and practices reasonably may be expected to have a detrimental effect on the residents or the project environment." Id. § 960.202(a)(2)(iii). Moreover, the regulations state, at 24 C.F.R. § 960.203(c):
Similarly, the regulations for the Voucher Program provide that a PHA may "deny program assistance for an applicant," among other bases, if "any member of the family has been evicted from federally assisted housing in the last five years." 24 C.F.R. § 982.552(c)(1)(ii).
Based on these regulations, defendants argue that "a participant who is terminated from the program is not eligible for participation again for some public housing programs and for others the reason for termination may be relied upon in denying an application." Motion at 5. "Conversely," they claim, "if a tenant chooses to vacate in lieu of a termination by the public housing authority, the tenant's record remains clear and their eligibility for participation in public housing or the public voucher program remains unclouded." Motion at 7. Therefore, in defendants' view, even if Ms. Flynn made the statement alleged by plaintiff, it was consistent with applicable regulations and thus was "not a false statement," in violation of the CPA. Id.
In focusing on the truth of Ms. Flynn's alleged statement that an eviction would result in Ms. Sager's ineligibility for federally assisted housing, defendants omit that Ms. Flynn also allegedly asserted that, if Ms. Sager vacated her apartment voluntarily, her eligibility for assisted housing would not be affected. That conclusion is not supported by regulations upon which defendants rely. Indeed, they suggest the opposite: the regulations instruct a PHA to consider an applicant's "record of disturbance of neighbors, destruction of property, or living or housekeeping habits at prior residences," 24 C.F.R. § 960.203(c)(2), and to impose policies barring the admission of tenants whose "habits and practices reasonably may be expected to have a detrimental effect on the
With respect to the statement in the November 2010 Invoice that failure to request a grievance hearing would be deemed a waiver of the right to contest the charges, defendants argue that this statement, too, is accurate. In defendants' view, if failure to request a grievance hearing did not result in a waiver, "it would have the effect of rendering the entire grievance process superfluous and a nullity," because "all complainants could avoid any agency action by simply `not grieving' and not having hearing[s]." Motion at 10.
Defendants are incorrect. As I have already discussed in the context of defendants' administrative exhaustion argument, neither a failure to request a grievance hearing nor an adverse decision in the grievance process results in a waiver of the tenant's right to challenge a PHA's action in court. See 24 C.F.R. §§ 966.55(c), 966.57(c).
Defendants' argument, that tenants could prevent a PHA from acting simply by not filing grievances, is misplaced. The applicable regulations provide that "the PHA shall not take the proposed [adverse] action until the time for the tenant to request a grievance hearing has expired." 24 C.F.R. § 966.4(e)(8)(ii)(B). It follows that, once the time to request a grievance hearing has expired, the PHA may take a proposed adverse action. Nevertheless, under 24 C.F.R. § 966.55(c), the tenant retains her right to "contest the PHA's action ... in an appropriate judicial proceeding." There is nothing inconsistent in these regulations, which authorize the PHA to act in the absence of a timely grievance complaint, but do not abrogate the tenant's right to challenge the PHA's action judicially.
Of course, the facts at this juncture are construed in the light most favorable to plaintiff. See, e.g., LeSueur-Richmond Slate Corp. v. Fehrer, 666 F.3d 261, 264 (4th Cir.2012). The statement in the November 2010 Invoice that failure to request a grievance hearing would constitute a waiver of the tenant's right to contest the charges was a misstatement of applicable law. Therefore, it was "false" or "misleading" within the meaning of C.L. § 13-301(1).
For the foregoing reasons, I decline to dismiss Count I with respect to the two
In Count III, plaintiff alleges that the federal regulations prohibit a PHA from "having a lease provision which obligates the tenant to pay all legal fees regardless of outcome." Complaint ¶ 66. She contends that the Commission has "charged Ms. Sager numerous legal fees in violation of this provision." Id.
The regulation at issue is found in 24 C.F.R. § 966.6(h).
Defendants argue that this claim should be dismissed because the Commission "has not charged Plaintiff attorneys' fees in those cases where it has not prevailed." Motion at 19. They also state: "HCAAC even credited Plaintiff back for those fees where the Court has not yet reached a decision in its favor." Id.
The facts, as alleged in plaintiff's Complaint and her exhibits, are that the Commission applied charges to Ms. Sager's account in the amount of the filing fees and service fees for the First Rent Case ($17) and the Breach of Lease Case ($78). The charges were applied to Ms. Sager's account contemporaneously with the Commission's initiation of the relevant state District Court cases, before any determination could have been made as to whether
Section 966.6(h) effectively prohibits charging a tenant for legal fees when suit is filed because, at that time, it cannot be known whether the PHA will prevail. A PHA is only permitted to collect costs under the regulation when the PHA is the prevailing party. Therefore, plaintiff's Complaint adequately alleges a violation of 24 C.F.R. § 966.6(h).
To be sure, under the facts alleged, the Commission subsequently cured the violations by crediting the charges back to Ms. Sager. Without more, however, that does not vitiate or render moot Ms. Sager's claim for declaratory relief.
At this juncture, defendants have not shown, nor have they even asserted, that the violations of 24 C.F.R. § 966.6(h) alleged by plaintiff cannot reasonably be expected to recur. Accordingly, their Motion will be denied as to this claim.
Plaintiff also challenges several aspects of the Commission's grievance process, as it was applied to her. These claims are asserted in Count III of the Complaint, under the Housing Act and its implementing regulations. Plaintiff contends that the Commission violated the applicable statutory and regulatory requirements by "failing to provide a written decision that provided the reasons for terminating Ms. Sager's housing," by "demonstrating the appearance of bias in the hearing officer by submitting documentary evidence that appears to have been sent to the hearing officer prior to the hearing," and by "using the informal hearing officer as a primary witness in the formal hearing." Complaint ¶ 67.
These claims also form the basis of Count V of plaintiff's Complaint, which alleges deprivation of due process of law under the Fourteenth Amendment. Ms. Sager does not suggest that the Fourteenth Amendment requires any process other than the grievance process under the regulations, nor does she allege that her constitutional claim entitles her to any greater or different relief than Count III. Accordingly, I will consider her claims in the context of the Housing Act and its regulations.
As noted, courts have held that tenants have a right enforceable under 42 U.S.C. § 1983 to grievance hearings that are conducted in accordance with the Housing Act and its implementing regulations. See, e.g., Farley v. Philadelphia Hous. Auth., supra, 102 F.3d 697, 702-04 (3d Cir.1996); Mananioba v. Fairmont Hous. Auth., supra, 922 F.2d 836 (4th Cir.1991) (unreported) (per curiam); Samuels v. District of Columbia, supra, 770 F.2d 184, 197
Other features of the process are also relevant. The regulations require a formal grievance hearing "by an impartial person or persons appointed by the PHA, other than a person who made or approved the PHA action under review or a subordinate of such person." 24 C.F.R. § 966.55(b)(1); see also 42 U.S.C. § 1437d(k)(2). However, a hearing officer may be "an officer or employee of the PHA." 24 C.F.R. § 966.55(b)(2)(ii). The PHA's method of selection of hearing officers or panel members must be specified in the PHA's grievance procedure. Id. § 966.55(b)(2). HUD permits hearing officers and panel members to be selected either by vote of the tenants, see id. § 966.55(b)(2)(i), or by appointment by the PHA, with the input of resident organizations. See id. § 966.55(b)(2)(ii), (b)(3).
A formal grievance hearing must result in a "decision based solely and exclusively upon the facts presented at the hearing." Id. § 966.56(b)(5). Of import here, the hearing officer or panel must "prepare a written decision, together with the reasons therefor," which must be "sent to the complainant and the PHA." Id. § 966.57(a); see also 42 U.S.C. § 1437d(k)(6).
One of plaintiff's claims in Count III lacks merit. She challenges the Commission's use of "the informal hearing officer as a primary witness in the formal hearing." Complaint ¶ 67. However, plaintiff does not further elucidate the basis for this claim, nor does she explain how the testimony of the informal hearing officer could have violated her federal rights. It is not a per se violation of the regulations for the person who conducted the "informal grievance hearing," or meeting for informal settlement of grievance, under 24 C.F.R. § 966.54 to testify and provide evidence at a formal grievance hearing. Without more specificity as to the exact nature of the alleged violation, this aspect of plaintiff's claim does not state a claim upon which relief can be granted, and will be dismissed.
However, plaintiff's other challenges to the grievance procedure withstand defendants' Motion. Under the facts as alleged by plaintiff in her Complaint and supporting exhibits, the written decision sent to plaintiff stated only that "the decision of the Housing Commission of Anne Arundel County was upheld as a result of the hearing." Ex. 3 to Complaint; see also Complaint ¶ 23. The decision did not provide even a minimal statement of the hearing panel's reasons for its decision. This plainly does not comport with the requirement that the written decision emanating from a grievance hearing must contain "the reasons therefor." 24 C.F.R. § 966.57(a).
Even if I can consider the "Hearing Summary" from the hearing, see note 9, supra, despite the fact that it was not included with plaintiff's Complaint, the "Hearing Summary" does not defeat plaintiff's claim for the following reasons. First, there is no allegation or indication that the Hearing Summary was sent to Ms. Sager. Thus, the Hearing Summary cannot suffice as the "written decision" of the hearing panel, containing the "reasons therefor," which must be "sent to the complainant." 24 C.F.R. § 966.57(a). Second, the content of the Hearing Summary contains very little in the way of "reasons," so as to satisfy the requirements of 24 C.F.R. § 966.57 and due process. Indeed, what little content there is raises additional concerns
The Hearing Summary consists of a printed form that has partially been completed by hand. A checked box indicates that the "Decision" is "Approved." ECF 8-4 at 58. In the section labeled "Reasons: The panel gives the following summary of it's [sic] reasons supporting its decision," the Hearing Summary states: "It has been established at the hearing that the Resident has [f]ailed to do the following: Be coherent on a reg. basis [illegible] May problems from [illegible]." ECF 8-4 at 58 (italics indicate handwritten matter). Another box is checked affirming the statement that the "facts referred to above constitute a breach by the Resident of the resident's lease agreement entitling the Commission to the relief requested and hereby approved by the decision." ECF 8-4 at 59. There is no discussion of the evidence presented at the hearing or the reasons why that evidence supported the Commission's decision.
The Hearing Summary provides little more than an incomprehensible sentence fragment, which does not amount to adequate "reasons" for the decision. 24 C.F.R. § 966.57(a). Indeed, the sentence fragment indicates that the panel based its decision not on any particular acts of misconduct by Ms. Sager, but on her failure to be "coherent on a reg[ular] basis." Yet, there is no provision in the Lease establishing "coherence" as an obligation of the Tenant. And, to the extent that Ms. Sager's alleged failure to be "coherent" was a symptom of her disability, the Hearing Summary failed to consider the potential for reasonable accommodation of Ms. Sager's disability. Accordingly, even if I can consider the Hearing Summary, it does not defeat plaintiff's claim.
Finally, plaintiff alleges that an "Incident Inquiry Report" (which has not been submitted as an exhibit) that was entered into evidence at the hearing bore a fax header indicating that it had been faxed to "JohnH." In her view, this raised a question as to whether the hearing officer, John Harris, had received the document on an ex parte basis, thereby calling into question whether Mr. Harris was "impartial," 24 C.F.R. § 966.55(b)(1), and able to render a decision "based solely and exclusively upon the facts presented at the hearing." Id. § 966.56(b)(5). Defendants argue that this claim fails because "the three person hearing panel, not the hearing officer, reached the decision." Motion at 18. However, they cite no authority for this proposition, and the role of the hearing officer in the process appears to be a question of fact that I cannot resolve at the motion to dismiss stage.
More broadly, defendants argue that Ms. Sager's arguments regarding the grievance procedure are "premature" because, at the time the Motion was submitted, the "termination ha[d] yet to occur." Motion at 18. In their view, if plaintiff's "termination comes to pass, it will be as a result of a lengthy trial" in the Breach of Lease Case, in which Ms. Sager will receive a full panoply of due process protections. Id. at 19. To the extent that the Commission argues that the due process protections attendant at a trial in a breach of lease case in state court can cure any procedural deficiencies in a prior grievance proceeding, I disagree. Rather, I find persuasive the conclusion of the federal court in the Western District of Washington when faced with similar arguments. In Shepherd v. Weldon Mediation Services, Inc., 794 F.Supp.2d 1173 (W.D.Wash.2011), that court found that the refusal of a PHA's hearing officer to consider "legal arguments" in grievance proceedings violated the tenants' federal rights. It said, id. at 1183-84:
Accordingly, I decline to dismiss plaintiff's claims regarding deficiencies in the grievance process on the grounds advanced by defendants. I am cognizant, however, that the state court Breach of Lease Case apparently has now concluded in Ms. Sager's favor. Although the record is inadequate for me to determine the effect of this outcome on plaintiff's claims here, it may well be that the decision in the state Breach of Lease Case has rendered moot plaintiff's claims, at least in certain respects (e.g., damages). However, as with plaintiff's contention regarding the Commission's assessment of legal fees, a claim is not moot if there is no assurance that the challenged actions will not recur. Moreover, it may be that the state court considered and resolved plaintiff's contentions regarding procedural deficiencies in the grievance proceedings, thereby potentially calling into play concerns of res judicata, collateral estoppel, or the Rooker-Feldman doctrine. Because I lack any information in the record as to the decision of the state court in the Breach of Lease Case, it would be premature to resolve these questions at this juncture.
Plaintiff alleges that defendants discriminated against her on the basis of her alleged disability by refusing "to make a reasonable accommodation in its rules, policies, practices and services, as necessary to afford Ms. Sager equal opportunity to enjoy her apartment dwelling." She asserts this claim in Count IV, under the Fair Housing Act, 42 U.S.C. §§ 3601 et seq.
Among other things, the FHA "protects people with disabilities against discrimination in housing." Bryant Woods Inn, Inc. v. Howard County, 911 F.Supp. 918, 928 (D.Md.1996), aff'd, 124 F.3d 597 (4th Cir.1997). Discrimination on the basis of disability or, in the words of the FHA, on the basis of "handicap,"
Defendants seek summary judgment as to this claim, contending that the "undisputed facts show that Plaintiff has not identified that she was entitled to a reasonable accommodation or that HCAAC's offer of a reasonable accommodation was deficient under Federal law." Motion at 14. With respect to Ms. Sager's March 2011 Transfer Request, which was submitted as Exhibit 4 to the Complaint, the Commission correctly asserts that nowhere in the request (which Ms. Sager apparently completed without the assistance of counsel) did Ms. Sager request an accommodation on the basis of disability. Indeed, although the transfer request was submitted on a form that contains a checkbox to request an accommodation on the basis of a "disability or handicap," Ms. Sager did not check the box. Instead, she checked a box marked "Other" as the basis for her request, and wrote that she "feels physical safety is in jeopardy under constant surveillance from staff and feels harassed by staff and other tenants. Not compatible with present community." ECF 2-4 at 1. As a matter of law, this request was not a request for a reasonable accommodation under the FHA. To the extent that plaintiff's claim is based on this request, it fails to state a claim upon which relief can be granted.
However, as noted, later in March 2011, plaintiff's counsel submitted a letter to the Commission's counsel that expressly requested an accommodation on the basis of disability. See Ex. 9 to Complaint. Defendants claim that their attorney responded to this request with a counter-offer of a reasonable accommodation, "by which [Ms. Sager] would agree to have a full time live-in-aid [sic] reside with her, would continue complying with her medical care as recommended by her mental healthcare, and would remain bound by all other material terms of her housing contract." Motion at 16. They also claim that they offered to relocate Ms. Sager to a larger public housing unit that could accommodate both her and a full-time aide, or to provide her with a voucher through the Housing Choice Voucher Program that would give her a subsidy to rent to such a unit from a private landlord. Id. at 17. According to defendants, Ms. Sager rejected this offer. Id.
In this connection, defendants have submitted two letters from the Commission's counsel to Ms. Sager's counsel, outlining this offer of accommodation. See Ex. F & Ex. G to Martin Aff. (ECF 8-4 at 75-79, ECF 8-5 at 1-4). But, these letters constitute matters outside of the pleadings that cannot be considered unless the Court considers the Motion on a summary judgment basis, pursuant to Fed.R.Civ.P. 12(d) and 56. In my view, it would be inappropriate, at this juncture, to render judgment on the fact-intensive issue of whether the Commission's offer constituted a reasonable accommodation. As noted, the record as to the disposition of the Breach of Lease Case is not yet before me, and plaintiff expressly asserts that she raised the issue of reasonable accommodation as a defense in that case. See Surreply at 3-4.
Nevertheless, to the extent that the District Court considered and resolved Ms. Sager's reasonable accommodation defense, her FHA claim in this lawsuit may be subject to considerations of res judicata, collateral estoppel, mootness, or the Rooker-Feldman doctrine. Until the record of the District Court's decision in the Breach of Lease Case is placed before me, I decline to resolve defendants' arguments for summary judgment as to Count IV. Therefore, defendants' Motion as to Count IV (and Count III, to the extent it implicates a reasonable accommodation claim) will be denied, without prejudice to the defendants' right to renew their arguments based on a complete record.
Defendants also argue that plaintiff's claims against Mr. Martin and Ms. Flynn should be dismissed. In support, they cite a single decision from this district, Pathways Psychosocial v. Town of Leonardtown, 133 F.Supp.2d 772, 780 (D.Md.2001), which applied the doctrine announced by the Supreme Court in Will v. Michigan Department of State Police, 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989), to the effect that states and state agencies are not "persons" that are subject to suit for money damages under § 1983.
The aspect of Will upon which defendants rely is the Will Court's extension of its holding to state officials sued in their official capacities. The Court said: "Obviously, state officials literally are persons. But a suit against a state official in his or her official capacity is not a suit against the official but rather is a suit against the official's office. As such, it is no different from a suit against the State itself." Id. at 71, 109 S.Ct. 2304. However, the Will doctrine is subject to a significant exception, which is relevant here. The Will Court stated that § 1983 actions for prospective relief, such as declaratory judgment, may proceed against state officials in their official capacities. See id. at 71 n. 10, 109 S.Ct. 2304 (citing, inter alia, Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985), and Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908)); see also Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635, 645, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002) (holding that declaratory relief, even as to the legality of past action, is "prospective" for purposes of Ex parte Young, and thus may be obtained against state officials sued in their official capacities). Thus, even if the Will doctrine applied to this case, it would not bar plaintiff's declaratory claims.
But, more important, defendants' argument overlooks a major premise: in order for Will to apply, I would need to determine that the Commission is a state agency for purposes of § 1983 liability, and that, consequently, its officials are state officials. In contrast to state agencies, local and municipal governments are "persons" that "can be sued directly under § 1983 for monetary, declaratory, or injunctive relief." Monell v. Dept. of Soc. Servs. of City of N.Y., 436 U.S. 658, 690, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978).
For purposes of liability under state law, housing authorities in Maryland are ordinarily considered local government agencies, not state agencies. See, e.g., Mitchell v. Hous. Auth. of Baltimore City, 200 Md.App. 176, 189-90, 26 A.3d 1012, 1020, cert. denied, 423 Md. 452, 31 A.3d 920 (2011). Moreover, although the Court is unaware of a case expressly deciding whether Maryland housing authorities are state agencies, it is by no means unprecedented for Maryland housing authorities to be sued under § 1983. See, e.g., Dorsey v. Hous. Auth. of Baltimore City, supra, 984 F.2d 622; Vance v. Hous. Opportunities Comm'n of Montgomery County, 332 F.Supp.2d 832 (D.Md.2004); Diggs v. Hous. Auth. of City of Frederick, supra, 67 F.Supp.2d 522. In any event, defendants have not cited any authority for the proposition, nor have they asserted that the Commission is a state agency that is not subject to suit under § 1983. Further, they have not expressly claimed that Mr. Martin and Ms. Flynn are state officials. In the absence of a demonstration that Mr. Martin and Ms. Flynn are state officials, the fact that they have been sued only in their official capacities does not compel dismissal of the claims against them.
For the foregoing reasons, defendants' Motion will be granted in part and denied in part. In particular, plaintiff's claim for treble damages and her claims that defendants have violated prohibitions on confessed judgments also will be dismissed, with prejudice. This disposes of Count II in its entirety, and parts of Counts I and III. The Motion will be denied with respect to plaintiff's allegations in Count I concerning the allegations that Ms. Flynn induced plaintiff to sign the Vacate Agreement and as to the Commission's assertion in the November 2010 Invoice that failure to request a grievance hearing would waive plaintiff's right to contest the charges. In all other respects, Count I will be dismissed, without prejudice. The Motion will be denied with respect to plaintiff's remaining allegations in Count III and Count V regarding the charging of legal fees and procedural deficiencies in the grievance proceeding, except that plaintiff's claim as to the testimony of the informal hearing officer will be dismissed, without prejudice. The Motion will also be denied as to Count IV (and Count III, to the extent it alleges a denial of reasonable accommodation as to disability), except that any claim of disability discrimination in connection with the denial of plaintiff's March 2011 Transfer Request will be dismissed. Plaintiff's remaining claims against Mr. Martin and Ms. Flynn in their official capacities are not dismissed. An Order implementing these rulings follows.
For the reasons stated in the accompanying Memorandum Opinion, it is, this 11th day of April, 2012, by the United States District Court for the District of Maryland, ORDERED:
Mr. Martin and Ms. Flynn are sued only in their official capacities. See Complaint ¶¶ 3-4 (ECF 2). Unless otherwise noted, I will refer to all defendants collectively as the "Commission" or "HCAAC."
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress....
Until very recently, confessed judgments were entered by the clerk of court as a ministerial act, upon the filing of the plaintiff's complaint, and were not scrutinized by the state court until and unless the defendant moved to open, modify, or vacate the judgment. See, e.g., Garliss v. Key Fed. Sav. Bank, 97 Md.App. 96, 103, 627 A.2d 64, 67-68 (1993) ("Confession of judgment is not a judicial act, but rather the pro forma entry of a judgment by the clerk of the circuit court."). The procedure discussed above, specifying the documentation that must be submitted and requiring judicial review before entry of judgment, was adopted by the Maryland Court of Appeals in 2010, upon the recommendation of the Chief Judge of the District Court of Maryland, to address the concern that confessed judgments were too easily obtained on the basis of illegal contracts or fraudulent misrepresentations. See Rules Order of Mar. 9, 2010, 37 Md. Reg. 531 (Mar. 26, 2010); see also Md. Standing Cmte. on Rules of Practice & Procedure, 163rd Report, at 88 (Jan. 13, 2010) (reporter's note to proposed amendments to Md. Rules 2-611 & 3-611); SunTrust Bank v. Goldman, 201 Md.App. 390, 399-400 & nn. 3-4, 29 A.3d 724, 729 & nn. 3-4 (2011) (discussing 2010 amendments to confessed judgment rules).
The current provisions applicable in Maryland state courts under the Maryland Rules are analogous to this Court's procedures with respect to confessed judgments. See Local Rule 108.1.
To the extent that plaintiff's claim regarding the "PETITION — WARRANT OF RESTITUTION" is that the Commission would not actually have been entitled to seek a warrant of restitution unless and until it obtained a judgment of possession from the District Court, this is a mere inaccuracy in terminology that, without more, cannot rise to the level of a violation of the CPA; there is no indication or allegation that the statement had the "capacity, tendency, or effect of deceiving or misleading" plaintiff as to the Commission's intention to seek eviction if she did not comply with the Vacate Agreement.
