C6-02-1761

Charles A. Okabue,

Relator,

vs.

Metropolitan Council HRA,

Respondent.

Filed May 20, 2003

Affirmed

Hudson, Judge

Metropolitan Council of St. Paul

Charles A. Okabue, 1255 Tenth Street Northwest, Apartment 104, St. Paul, Minnesota 55112 (pro se relator)

Mary G. Dobbins, Mary G. Dobbins & Associates, 7400 Metro Boulevard, Suite 100, Edina, Minnesota 55439 (for respondent)

Considered and decided by Hudson, Presiding Judge, Kalitowski, Judge, and Minge, Judge.

U N P U B L I S H E D O P I N I O N

HUDSON, Judge

In this certiorari appeal, relator Charles A. Okabue challenges the denial of his application for federally subsidized housing assistance. Because the agency acted within the bounds of its authority when it denied relator’s application based on relator’s poor rental and credit history, we affirm.

FACTS

Relator Charles A. Okabue appeals from a denial of access to federally subsidized housing. The facts are undisputed. Okabue applied for subsidized housing with respondent Metropolitan Council HRA (Metro Council). Metro Council requires that prospective tenants demonstrate that they meet the minimum standards set forth in its Family Affordable Housing Program (FAHP) Admission & Continued Occupancy Policies handbook. The handbook provides in pertinent part:

1. Lease Compliance: * * * The Metro HRA or designee will deny admission to any applicant whose habits and practices reasonably may be expected to have a detrimental effect on other tenants, the FAHP unit, the neighborhood environment, or on the financial stability of the FAHP. At a minimum, eligible applicants must possess the following in a form that can be documented in the applicant's file:

a. positive rental history of at least 12 consecutive months within the previous two years

b. history of timely, full payment of rents

c. history of cooperation with management and other residents

d. history of abiding by all other lease terms

e. history of no property damage

* * * *

B. Basis for Denial of Admission: A record or history of any of the following may be sufficient cause for Metro HRA or designee to deny admission to the household:

* * * *

3. Non-payment of rightful obligations, including rent and utilities or other amounts owed to the Metro HRA.

In 1997, Okabue moved out of the Georgetown Apartments leaving significant property damage, including a broken window. Apparently, the landlord withheld Okabue’s damage deposit and charged him an additional $1,347. This amount appeared on Okabue’s credit report as unpaid, in addition to three unpaid civil judgments and seven accounts in collections. Okabue does not dispute that these unpaid debts appear on his credit report, but as to the $1,347 owed to Georgetown Apartments, he asserts that the landlord wrongfully withheld his damage deposit and refused to repair damages in the apartment. As a result, Okabue refused to pay the outstanding amount to his previous landlord.[1]

Based on this information, on June 5, 2002, Metro Council denied Okabue admission to FAHP. Okabue appealed this decision. On July 29, 2002, Metro Council held an informal hearing where both parties submitted argument and evidence. On August 12, 2002, Metro Council issued its decision affirming the earlier denial of Okabue’s application. This certiorari appeal followed.

DECISION

I

Because Metro Council held a hearing and received testimony and documentary evidence, it acted in a quasi-judicial manner and we review its decision under agency standards. Carter v. Olmstead County Hous. and Dev. Auth., 574 N.W.2d 725, 729 (Minn. App. 1998).

An agency's quasi-judicial determinations will be upheld unless they are unconstitutional, outside the agency's jurisdiction, procedurally defective, based on an erroneous legal theory, unsupported by substantial evidence, or arbitrary and capricious.

Id. (citation omitted). Agency decisions enjoy a presumption of correctness and we defer to an agency’s expertise. In re Petition of Hyman Freightways, Inc., 488 N.W.2d 503, 504 (Minn. App. 1992). But this court thoroughly reviews how and why decisions were made by quasi-judicial agencies and those decisions must be supported by substantial evidence. Id. A party challenging agency findings bears the burden of demonstrating that the findings are unsupported when considered in light of the evidence as a whole. Id. “Agency action must be ‘based on objective criteria * * * . [Agency] discretion is not unlimited and must be explained.’” Carter, 574 N.W.2d at 729 (citation omitted). To facilitate review by this court, an agency decision must list the facts and conclusions drawn “with clarity and completeness.” Id. Finally, an agency must state the evidence it relied on in reaching its decision. Id.

Metro Council issued a three-page decision following the hearing. In the decision, the agency listed the evidence presented in the form of testimony and documents. The decision lists the basis for denial of Okabue’s application as “[n]on-payment of rightful obligations.” While “Mr. Okabue vehemently objected to Metro [Council]’s interpretation of ‘rightful obligation’ since he disputes his obligation to the Georgetown Apartments,” Metro Council nonetheless affirmed its initial decision. The hearing officer stated that Okabue’s document to the credit bureau challenging the $1,347 owed to his previous landlord did not establish that the delinquent debt had actually been removed from his credit report, only that he disputed the listed amount. The hearing officer did not consider Okabue’s conciliation court filing in its decision because Okabue submitted that document approximately two months after the informal hearing.

Okabue asks this court to reverse Metro Council’s decision denying him access to subsidized housing, despite his negative rental and credit history. Okabue contends that the credit history relied on by Metro Council is stale, and that, although he owes money to a private landlord, there is no evidence that Okabue owes any money to Metro Council or any other public housing authority. Okabue’s contention is misplaced.

As Metro Council notes, its reliance on credit and rental performance is fully in accordance with federal law. See e.g., 24 C.F.R. § 960.202 (2002) (public housing agency must adopt written admission policies); 24 C.F.R. § 960.203 (c)(1) (2002) (admission criteria include “applicant’s past performance in meeting financial obligations, especially rent”). The admission policies Metro Council adopted comply with federal regulations.

Okabue’s reliance on the staleness of his credit history is similarly misplaced, as is the distinction he draws between debts owed to private landlords and agencies who provide subsidized housing. Federal law does not require that a public housing agency look only at an applicant’s previous performance in paying rent to subsidized-housing agencies. 24 C.F.R. § 960.203 (c)(1). When determining eligibility for subsidized housing, Metro Council looks at an applicant’s past credit and rental history. The guidelines relied on by Metro Council state that the applicant bears the burden of showing (s)he is a good tenant with a history of full and timely payment of “rightful obligations.” As a matter of common sense, a rental agency looks at past behavior as an indicator of future behavior. That is, if an applicant has been a problem tenant with a history of not paying his or her bills in a timely manner, a rental agency might reasonably assume these patterns will continue. It was neither arbitrary nor capricious for Metro Council to refuse an applicant who has damaged property, refused to pay for it, and generally has a poor record of paying bills.

Significantly, Okabue only challenged the amount owed to his previous landlord after his application for subsidized housing was rejected. Okabue simply let the $1,347 debt remain undisturbed for five years because he claimed he disagreed with it; but he did not take any action consistent with his claim until he was forced to do so. While five years of good rental history is a positive mark in Okabue’s favor, it is not dispositive in these proceedings. In addition, we note that Okabue’s credit report showed that he also had three unpaid civil judgments and seven accounts in collection. We hold that there is substantial evidence in the record to support the agency’s decision to deny Okabue’s application for federally subsidized housing.

II

An agency ruling is arbitrary and capricious where the decision: (1) relied on factors the legislature had not intended; (2) failed to consider an important aspect of the problem; (3) offered an explanation contrary to the evidence; or (4) decided the issue implausibly, not attributable to difference in point of view or agency expertise. Trout Unlimited, Inc. v. Minn. Dep’t of Agric., 528 N.W.2d 903, 907 (Minn. App. 1995), review denied (Minn. Apr. 27, 1995). Additionally, an agency decision is considered arbitrary and capricious where it represents the agency’s will rather than its judgment. Pope County Mothers v. Minn. Pollution Control Agency, 594 N.W.2d 233, 236 (Minn. App. 1999).

Okabue argues that Metro Council’s decision is arbitrary and capricious because the decision was racially motivated. Here, there is no evidence in the record that Metro Council based its decision on anything other than Okabue’s negative credit ratings and the sum owed to his previous landlord. Metro Council rejected Okabue’s application because he did not meet the minimum standards set forth in the admission policies. The admission policies Metro Council relied on are in accordance with federal law. We conclude that the agency properly decided Okabue’s application for federally subsidized housing and that its actions were neither arbitrary or capricious.

Affirmed.

[1] After Metro Council issued its decision affirming the hearing officer's decision, Okabue submitted a copy of a conciliation court document indicating he had filed an action against his previous landlord for $461.