This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
a Minnesota Limited Partnership,
Filed July 24, 2001
Dakota County District Court
File No. CX-00-15666
Chad McKenney, Donohue McKenney & Harlan, LTD., 990 Lumber Exchange Building, 10 South Fifth Street, Minneapolis, MN 55402 (for appellant)
Lisa Hollingsworth, Michael Hagedorn, 16174 Main Avenue, Prior Lake, MN 55372 (for respondent)
Considered and decided by Halbrooks, Presiding Judge, Willis, Judge, and Hanson, Judge.
U N P U B L I S H E D O P I N I O N
On appeal in this unlawful detainer proceeding involving a HUD-subsidized housing complex, appellant landlord challenges the district court’s finding that respondent tenant’s failure to promptly report changes in his employment and income had not been shown to be fraudulent. We affirm.
Respondent Stanley Edwards lives at appellant Chancellor Manor (the Manor), a HUD-subsidized housing complex. Under the terms of his lease, Edwards was required to recertify his eligibility to reside in HUD-subsidized housing by reporting changes in employment and income. Edwards failed to report a change in income and employment until four months after he began that employment. The Manor considered Edwards’ failure to promptly report these changes as material noncompliance with the lease and delivered a notice of termination of the lease to Edwards.
Edwards requested an internal appeal hearing with the property manager, as provided in the lease. At the internal appeal hearing, Edwards stated to the Manor’s property manager that his failure to report changes in income and employment was based upon his misunderstanding of the requirements and, in part, upon his disability. He provided a copy of a social security determination of disability based on mood disorder, depression and mild mental retardation. The property manager concluded that Edwards’ nondisclosure was fraudulent and, thus, violated the lease. When Edwards subsequently refused to vacate the apartment, the Manor commenced this unlawful detainer action.
The district court found that the Manor failed to prove that Edwards’ nondisclosure was fraudulent and ordered judgment dismissing the action. This appeal followed.
On appeal, this court gives the district court great deference and will not set aside the district court’s findings of fact unless those findings are clearly erroneous. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 102 (Minn. 1999). “Findings of fact are considered clearly erroneous only if they are not reasonably supported by the evidence.” Id. “If there is reasonable evidence to support the district court’s findings, we will not disturb them.” Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999) (citation omitted).
Edwards argues that this court should dismiss the appeal because Manor incorrectly appealed from the district court’s order of December 22, 2001, rather than from the judgment entered February 1, 2001. This court, however, issued an order dated March 2, 2001, construing the appeal to be from the February 1, 2001, judgment. Accordingly, we will determine the appeal on the merits.
The Manor argues that the record does not support the district court’s finding that the Manor failed to prove that Edwards’ nondisclosure was fraudulent. Where the landlord seeks to oust a tenant from HUD-subsidized housing for noncompliance with the lease term requiring the tenant to report a change in employment or income, the landlord must prove, by a preponderance of the evidence, that the noncompliance was fraudulent. Chancellor Manor v. Thibodeaux, ___ N.W.2d ___, 2001 WL 537002, at *3 (Minn. App. 2001).
Our review is made in the context of the HUD regulations which are made a part of the lease agreements for HUD-subsidized housing. Those regulations require tenants to complete an Initial Notice of Recertification (INR) before moving into HUD-subsidized housing, to determine their eligibility for HUD assistance. Thereafter, tenants must annually complete a new INR and an Annual Recertification Questionnaire (ARQ) to recertify their eligibility. In addition, if the tenant obtains new employment or the tenant’s monthly household income increases by more than $40, the tenant must report those changes in an ARQ for interim recertification.
The HUD Handbook explains that when a tenant fails to disclose such changes, HUD staff must distinguish between nondisclosures that are due to tenant error, and are not grounds for termination, and those nondisclosures that are deliberately deceitful and fraudulent, and are grounds for termination. HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs, subd. 5-19(a). The regulations remind HUD staff that
many of the tenants assisted under the housing payments assistance programs may have difficulty with the language [of the recertification documents] and/or marginal educational backgrounds and may be confused by the paperwork process[.]
Id. at 5-21(g). The handbook states that “[t]he strongest proof of fraudulent intent is an admission by the tenant.” Id. at 5-19(a)(2). Fraudulent intent can also be demonstrated by proving the tenant (1) failed to disclose on other occasions, (2) falsified documents, such as a name or social security number, (3) omitted material facts or (4) admitted the omissions to others. Id. at 5-19(d)(2)(a)-(e). In the absence of the above indicators of fraudulent intent, the landlord is instructed to treat the violation as an unintentional error. Id. at 5-19(d)(2)(f). The landlord is not without a remedy for such an unintentional error, because it is authorized to recalculate the subsidy and collect any excess subsidy provided as a result of the error. Id. at 5-22.
The Manor points out that, while Edwards started working for Cub Foods on March 21, 2000, he did not report this change in his income and employment until July 11, 2000. It is undisputed that, between these two dates, Edwards submitted an ARQ on March 30, 2000, and an INR on May 2, 2000, and neither of these documents reported the Cub Foods employment. The Manor argues that these facts require a finding of fraud as a matter of law.
The district court found that “[t]he Plaintiff has failed to prove the Defendant committed fraud in his disclosure of income.” This finding is supported by the record. First, while Edwards admitted he failed to report his change in employment for nearly four months, he did not admit to any intent to deceive the Manor, but claimed that his failure was due to his inability to understand the requirements. Second, there is no evidence that Edwards failed to disclose on other occasions. To the contrary, the Manor’s site manager, who testified that she was very familiar with Edwards, characterized him as a “gentleman” and indicated that she had no reason to believe he was a liar. Third, the Manor does not contend that Edwards ever used false identifying information. Fourth, Edwards ultimately self-reported his change in employment.
The district court also found that Edwards correctly completed the March 30, 2000, ARQ. The ARQ requires a tenant to “[l]ist all sources of annual or periodic income received in household * * * .” The district court pointed out that the word “received” is in the past tense and that there was no evidence that Edwards had received any income from his new job by the time he completed the form. The district court’s findings were not clearly erroneous and it did not err in applying the law.
The Manor argues that the district court’s written findings were inadequate because they only referred to Edwards’ nondisclosure of “income,” and did not specifically address Edwards’ nondisclosure of “employment.” We acknowledge that the district court must make specific findings regarding whether a failure to report was fraudulent. Thibodeaux, 2001 WL 537002, at *3. We prefer that the district courts’ findings be clear, specific, complete and pertinent to the issues to provide a basis for legal conclusions and to allow proper appellate review. Woodrich Constr. Co. v. State, 287 Minn. 260, 263, 177 N.W.2d 563, 565 (1970). But where the factual findings are imprecise, we will construe them “in the light of the entire record, including the evidence, to ascertain the intention of the trial court.” Stevens v. Minneapolis Fire Dept. Relief Ass’n, 219 Minn. 276, 282, 17 N.W.2d 642, 646 (1945); see also Nat’l Union Fire Ins. Co. v. Evenson, 439 N.W.2d 394 (Minn. App. 1989) (interpreting district court’s factual findings in light of record where record adequate to provide meaningful review); Hoyt v. Brokaw, 359 N.W.2d 310, 311 (Minn. App. 1984) (“where the record is reasonably clear and the facts not seriously disputed, the trial court's judgment may be upheld in the absence of findings”). No useful purpose would be served in remanding a matter for more specific findings where the district court’s intent was clear and can be reviewed. cf. Grein v. Grein, 364 N.W.2d 383, 387 (Minn. 1985) (refusing to remand custody modification for lack of adequate findings where doing so would not change result).
We are satisfied that the district court intended its finding on the failure to prove fraud to apply to both the nondisclosure of income and the nondisclosure of employment. The evidence and the arguments before the district court focused on both. The lease terms relied upon by the Manor referred to the obligation to report both. The reporting forms claimed by Manor to be fraudulent (the ARQ of March 30, 2000, and the INR of May 2, 2000) refer to both. Since Edwards admitted that he had failed to disclose both his employment and the income to be derived from that employment, the critical question was whether his nondisclosure was fraudulent. That question focused on Edwards’ intent, which would be the same for the nondisclosure of income and the nondisclosure of employment.
Moreover, while the district court’s written findings are brief, the record discloses considerable discussion between the court and counsel concerning the question of fraud and that discussion related both to the nondisclosure of income and of employment. After the Manor had presented its evidence (including an offer of proof of a further witness the Manor intended to call), the district court was impressed that Edwards had “self-disclosed the employment on July 11, 2000” and concluded that “there is no basis to proceed in fraud.” This conclusion applied equally to the nondisclosure of income and employment.
Because the evidence reasonably supports the district court’s finding that the Manor failed to prove fraud, the district court’s finding is not clearly erroneous.