This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
a Minnesota Limited Partnership,
Dakota County District Court
File No. C20113209
Chad McKenney, Donohue McKenney & Harlan, Ltd., 990 Lumber Exchange Building, 10 South 5th Street, Minneapolis, MN 55402 (for respondent)
Lisa Hollingsworth, Southern Minnesota Regional Legal Services, Inc., 16174 Main Avenue, Prior Lake, MN 55372 (for appellant)
Considered and decided by Halbrooks, Presiding Judge, Shumaker, Judge, and Stoneburner, Judge.
Appellant Fadumo Qandid challenges her eviction from a Department of Housing and Urban Development (HUD) subsidized apartment on the grounds that the district court failed to make an explicit finding of fraudulent nondisclosure of changes in employment and income and that the record does not support such a finding. Because we conclude that the district court made the findings required by the HUD regulations to justify the termination of appellant’s tenancy and that the record supports those findings, we affirm.
Respondent Chancellor Manor owns and maintains a HUD-subsidized apartment complex. Appellant first entered into a lease with Chancellor Manor on October 21, 1998. Appellant and Chancellor Manor entered into their most recent lease agreement on January 13, 1999. As part of the application process, and annually thereafter, tenants are required to complete a questionnaire that asks for a listing of all sources of household income. If any change in employment or income occurs mid-year, a tenant must immediately report any such change in writing. This reporting requirement is reinforced by the following language contained in the questionnaire:
I/we certify that all adult members of our household have filled out the above statements, and that they are true and complete. I/we understand that it is our responsibility to report to management, such as changes in income, assets, and changes in household members whenever they occur.
Paragraph 19a(3) of the lease requires a tenant to advise Chancellor Manor immediately if the tenant’s household’s monthly income increases by $40 or more. With respect to termination, lease paragraph 22 provides that
[k]nowingly giving [respondent] false information regarding income or other factors considered in determining [appellant’s] eligibility and rent is a material noncompliance with the lease subject to termination of tenancy.
Appellant filled out her first “Annual Recertification” questionnaire on July 18, 2000, reporting monthly income of $420 from the Minnesota Family Investment Program (MFIP) and also listing KBS as her employer. Respondent later determined that she earned $240 from KBS every two weeks.
On August 21, 2000, appellant began working at J.C. Penney, averaging $519 every two weeks. Appellant acknowledges that she never reported this change to Chancellor Manor in writing, but she claims that she orally informed the assistant site manager about her change in employment and that the manager responded that it was unnecessary to fill out a questionnaire. The manager denied that appellant ever reported any change.
On October 25, 2000, appellant, appellant’s son, and Chancellor Manor appeared in court before a different trial judge on Chancellor Manor’s charge that appellant’s son had not reported his new job and income. The trial court found that appellant’s son, but not appellant, intentionally violated paragraph 19 of the lease by his failure to report and ordered him to move out. Appellant was allowed to continue living at Chancellor Manor but was required by the trial court to enter into a repayment agreement.
Appellant stopped working at J.C. Penney on January 13, 2001. One month later, she signed another “Annual Recertification” questionnaire, this time listing her income as “about $500 mth” without identifying an employer. Assuming that appellant still worked at KBS, Chancellor Manor contacted KBS to determine how much appellant was earning. It was then that Chancellor Manor learned about appellant’s job at J.C. Penney.
Chancellor Manor served appellant with a notice of violation of the disclosure rules and intent to terminate the lease. Appellant requested an internal appeal meeting with the property manager. Following that meeting, the property manager affirmed Chancellor Manor’s preliminary finding that appellant’s conduct amounted to intentional fraud.
When appellant did not move out, Chancellor Manor brought an unlawful detainer action. Following a hearing, the trial court found that appellant’s income from J.C. Penney was substantially more than she earned at KBS and that appellant knew of the reporting requirement and failed to follow it. As a result, the court held that appellant intentionally violated paragraph 19 of the lease agreement. The court ordered that the premises be returned to Chancellor Manor. This appeal follows.
D E C I S I O N
Appellant’s challenge is based on her contention that the trial court failed to make an explicit finding of fraud, which she characterizes as an essential finding for termination of a lease. The trial court found that “[appellant] intentionally violated Paragraph 19 of the lease by not reporting her change of employment and income in a timely manner to [Chancellor Manor].” (Emphasis added.) Appellant argues that this finding is insufficient because Chancellor Manor v. Thibodeaux, 628 N.W.2d 193, 196 (Minn. App. 2001), requires a finding of a fraudulent failure to report, not merely an intentional failure.
Whether the district court made an essential finding is a question of law, which this court reviews de novo. See Frost-Benco Elec. Ass’n v. Minn. Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn. 1984) (holding that a reviewing court need not defer to a district court’s legal determinations). In Minnesota, HUD regulations are incorporated into leases for HUD-subsidized housing. Thibodeaux, 628 N.W.2d at 196. Chancellor Manor is bound by the HUD regulations in any determination of material compliance. Under those regulations, a building owner who becomes aware that a tenant may have provided inaccurate information that affects rent or eligibility must document the findings in writing to the tenant. HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs, § 5-18(b). The tenant is then given an opportunity to meet with a designated representative of the owner. Id. If the owner ultimately determines that a tenant has acted fraudulently, it is grounds for termination. Id. at § 5‑20(b).
Fraud is defined in the regulations as “an intentional deception; it cannot be committed accidentally.” Id. at § 5-19(b). If fraud is the basis for a tenant’s termination, the file must contain documents showing that:
(1) the tenant was made aware of program requirements and prohibitions * * * and
(2) the tenant violated the law by intentionally misstating or withholding some material information. * * * Fraudulent intent can also be demonstrated by proving:
* * * *
d. the tenant omitted material facts which were known to the tenant (e.g., employment of self or other household members) * * * .
Id. at § 5-19(d).
Here, the trial court did not use the specific term “fraudulent” in its findings. But the trial court made findings that appellant knew of the requirement to report any change in her income by October 2000, when the trial concerning her son’s nondisclosure occurred, if not before, and that she intentionally failed to do so. Because this fits squarely within HUD’s definition of “fraudulent,” we conclude that the trial court made the finding necessary to support appellant’s eviction for material noncompliance with the lease.
Appellant next argues that, even if the court made the essential finding of fraud, it is unsupported by the record because she orally reported the change to the assistant manager and she was unaware of any requirement to report in writing. The terms of appellant’s lease state that monthly income changes of $40 or more must be reported. Although appellant disputed that any such change had to be reported in writing, the evidence presented by Chancellor Manor at trial was that the appellant was informed of this requirement at the time she signed her lease and, annually thereafter, when she completed the recertification questionnaires. The evidence included a letter from a Chancellor Manor management representative that denied any oral reporting by appellant. In addition, appellant conceded that, as a result of the trial involving her son, which took place while she was employed at J.C. Penney, she knew that she had to report any income changes in writing.
This court affords great deference to the trial court’s factual findings and will not reverse those findings unless they are clearly erroneous. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 102 (Minn. 1999). Credibility determinations are best made by the fact-finder, who has the firsthand opportunity to observe the witnesses. State v. Dickerson, 481 N.W.2d 840, 843 (Minn. 1992).
The trial court determined that appellant’s biweekly income increased from $240 to $519 when she started working at J.C. Penney. The trial court made several findings in support of its conclusion that appellant knew of, and intentionally violated, the rules requiring her to report changes in her income: (1) the lease required appellant to report when her monthly income increased by $40 or more; (2) Chancellor Manor’s agents orally informed appellant that she must report these changes in writing before she started working at J.C. Penney; and (3) if appellant did not know of these requirements before, she learned them as a result of the trial concerning her son’s failure to report income.
Finally, appellant, who is Somalian, alleges that her difficulty with the English language prohibited her from adequately understanding Chancellor Manor’s instructions. But this claim is contradicted by the trial court’s findings in the matter involving appellant’s son, where the court specifically held that “[appellant] is at a competency level in English to understand the terms of the Lease, including the obligation to report any change in employment.” Thus, appellant cannot now claim that a language barrier led to her failure to report.
The record adequately supports the trial court’s findings in this matter and the court’s findings adequately support its conclusions of law.