STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1302

Veronica Hicks,
Relator,

vs.

Dakota County Community Development Agency,
Respondent.

Filed August 28, 2007

Reversed and remanded

Stoneburner, Judge

Dakota County Community Development Agency

JaPaul J. Harris, Michael Hagedorn, Southern Minnesota Regional Legal Services, Inc., Suite 200, 166 East Fourth Street, St. Paul, MN 55101-1448 (for relator)

Mary G. Dobbins, Mary G. Dobbins & Associates, Suite 100, 7400 Metro Boulevard, Edina, MN 55439-2925 (for respondent)

Considered and decided by Toussaint, Chief Judge; Stoneburner, Judge; and Wright, Judge.

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

STONEBURNER, Judge

Relator seeks review of termination of her Section 8 rental assistance, arguing that (1) the record does not support a determination that she failed to abide by program requirements; (2) the hearing officer failed to make adequate findings regarding credibility determinations; and (3) the hearing officer acted in an arbitrary and capricious manner. Because the hearing officer failed to make adequate findings and failed to consider mitigating circumstances, we reverse and remand.

FACTS

Respondent, the Dakota County Community Development Agency (CDA), administers federal-housing-assistance programs, including the Section 8 Housing Choice Voucher Program (voucher program). Relator Veronica Hicks, who suffers from fibromyalgia and depression, and her two special-needs children have participated in the voucher program since 2000. Program participants are required to annually provide information to CDA regarding household composition and income. Participants are required to sign a Certification and Statement of Tenant Responsibilities which includes, in relevant part, the participant’s acknowledgement that the participant “must notify the CDA within 10 days if anyone moves in or out of [the] housing unit” and that failure to abide by the listed responsibilities “will result in termination of . . . housing assistance.”

Hicks’s niece, C.H., was frequently at Hicks’s residence to assist Hicks with her medical problems and with the children. In September 2005, Hicks took C.H. to the CDA so that C.H. could apply for housing assistance. On her pre-application, C.H. listed Hicks’s address as her address. In November 2005, CDA notified C.H. by letter addressed to Hicks’s address, that C.H. was on the housing-assistance waiting list, and in December 2005, CDA notified C.H. that it had reached her number on the waiting list and that she should come in and fill out an application. C.H. met with CDA information specialist Tim Johnson and filled out the application on January 11, 2006, again using Hicks’s address as her address. Fai-Yee Xiong, CDA housing specialist who worked with Hicks, later testified that he learned from Johnson that C.H. and her grandmother had been living with Hicks since September 2005.[1]

On January 16, 2006, Hicks filled out a recertification application listing only herself and her two children as household members. At some unidentified date, Xiong performed an inspection in connection with Hicks’s recertification. Hicks later testified that prior to this inspection, and again at the inspection, she asked Xiong about adding C.H. to her household, and he said that he would send the necessary papers. Xiong confirmed that Hicks had asked him about adding C.H. to the household but stated that this was after Hicks became aware that she was being investigated for failure to report C.H.’s addition to her household. Both Hicks and C.H. testified that C.H. moved in with Hicks in mid-January.

On February 10, 2006, CDA told C.H. that she needed to provide a copy of a lease indicating that she lived at the address (Hicks’s address) she had listed on her applications. C.H. was later removed from eligibility for assistance for failure to provide the lease. On February 16, 2006, Hicks wrote to Xiong stating that C.H. and her baby were living with her and that she had informed the landlord. On February 28, 2006, Hicks wrote to Xiong stating that she would like to add C.H. to her lease. Xiong’s notes of a telephone call with Hicks on March 14, 2006, show that Hicks again told Xiong that she wanted to add C.H. to her household. According to the notes, Xiong told Hicks that her file was under review and that her report was “just recent,” to which Hicks replied that C.H. was undecided about staying with her in the past and was “in and out.” Xiong told Hicks that he would prepare a termination for her case and that she could request a hearing. Xiong’s file notes also indicate that he recommended termination of Hicks’s housing assistance on March 20, 2006, and that the recommendation was approved on March 23, 2006.

On March 24, 2006, CDA notified Hicks that her housing assistance was terminated “because [she] failed to report an additional person moved into [her] housing unit.” Hicks appealed, and an informal hearing took place on April 28, 2006. The hearing officer upheld the termination of housing assistance. This appeal followed. There is no transcript of the proceedings. The hearing officer filed a copy of the decision upholding the termination of Hicks’s housing assistance as “a complete and accurate record of the proceedings.”

D E C I S I O N

As a public-housing authority, CDA acts in a quasi-judicial capacity when it terminates an individual’s Section 8 housing assistance after an informal hearing. Carter v. Olmsted County Hous. & Redev. 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.

I. Sufficiency of evidence

Hicks first argues that the hearing officer’s determination that she violated CDA’s policy regarding changes in household size is unsupported by substantial evidence. Substantial evidence is “(1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than some evidence; (4) more than any evidence; and (5) evidence considered in its entirety.” CUP Foods, Inc., v. City of Minneapolis, 633 N.W.2d 557, 563 (Minn. App. 2001), review denied (Minn. Nov. 13, 2001); see also Carter, 574 N.W.2d at 730. Considerable judicial deference is given to administrative fact-finding, and the burden to prove that a decision is unsupported by substantial evidence is on the relator. CUP Foods, Inc., 633 N.W.2d at 563. “On appeal, the [relator] must demonstrate that the administrative agency’s findings are not supported by the record when considered in its entirety, and this court applies an abuse of discretion standard.” Carter, 574 N.W.2d at 730.

Federal regulations governing Section 8 housing assistance allow for the termination of a family’s benefits “[i]f that family violates any family obligations under the program.” 24 C.F.R. § 982.552(c)(1)(i) (2006). One of those obligations is that “a family must supply any information requested by the [housing authority] . . . for use in a regularly scheduled reexamination or interim reexamination of family income and composition in accordance with HUD requirements.” 24 C.F.R. § 982.551(b)(2) (2006).

Hicks relies on Carter, in which this court determined that there was insufficient evidence to support a hearing officer’s finding that a person was an unauthorized resident of a Section 8 recipient’s household, to argue that, in this case, the hearing officer’s decision is not supported by substantial evidence. In Carter,the hearing officer’s findings failed to even mention evidence offered by relator and failed to explain why relator’s evidence was disregarded. We concluded that the findings were legally insufficient. 574 N.W.2d at 730-33.

In this case, although the hearing officer summarized the testimony of all witnesses, including Hicks, C.H., and another witness who supported Hicks, the hearing officer failed to make any findings of fact. See Dean v. Pelton, 437 N.W.2d 762, 764 (Minn. App. 1989) (stating that merely reciting the parties’ claims does not constitute findings adequate for review). The hearing officer’s decision states that: (1) Hicks was aware of the reporting requirements regarding adding a member to her household; (2) as early as September 2005 C.H. was using Hicks’s address as her address; and (3) that “no request was made to the CDA to add [C.H.] to [Hicks’s] assisted household until February of 2006.” But the record does not support a finding that no request was made prior to February 2006, because there was no testimony about the dates of Hicks’s oral requests. Implicit in the decision is a conclusion that C.H. was actually living with Hicks from September 2005, despite the testimony of Hicks and C.H. that this was not true and the testimony of Hicks’s social worker that she did not see C.H. on any of her twice-monthly visits. The hearing officer did not explain why this testimony was rejected.

On appeal, CDA argues that even if C.H. did not move in with Hicks until January 2006, the evidence provided by Hicks demonstrates that she did not notify CDA within ten days or obtain CDA’s prior approval for adding C.H. to her household which is also required by CDA. But CDA’s notice of termination to Hicks cited only the ten-day reporting requirement as a violation and did not mention failure to obtain prior approval. We therefore decline to address the issue of prior approval because it was not addressed at the hearing. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that this court will generally not consider matters raised for the first time on appeal). And Hicks testified that prior to her February 16 written report that C.H. was living with her, she had twice orally reported to Xiong that C.H. was going to live with her. Xiong testified that Hicks did not orally report until after CDA began to investigate her for failure to report, but the only evidence in the file indicating that Hicks was notified that her file was being looked into is the memo of Xiong’s March 14 telephone call with Hicks, which occurred after she had given written notice that C.H. was living with her.

“In order to facilitate appellate review, an administrative agency must state the facts and conclusions essential to its decision with clarity and completeness.” Carter, 574 N.W.2d at 729. “The agency must explain on what evidence it is relying and how that evidence connects rationally with its choice of action.” Id.

To be legally sufficient, the [hearing officer] must make an express credibility determination, must set forth the inconsistencies in the record which have led to the rejection of the [relator’s] testimony, must demonstrate that all relevant evidence was considered and evaluated, and must detail the reasons for discrediting pertinent testimony. These requirements are not suggestive guidelines, but are mandates which impose affirmative duties upon the deliberative process.

Id. at 729-30 (quotation omitted). Despite the language of Carter, we have held that even if “the [hearing officer’s] findings and credibility determinations are somewhat vague, the overarching concern of the appellate court is that the record be sufficient to facilitate meaningful review.” Cole v. Metropolitan Council HRA, 686 N.W.2d 334, 338 (Minn. App. 2004). In this case, there are no findings or credibility determinations, and we are unable to conduct a meaningful review of the decision. Carter, 574 N.W.2d at 730; Dean, 437 N.W.2d at 764.

II. Arbitrary and Capricious

Hicks further asserts that the hearing officer’s decision was arbitrary and capricious because the hearing officer failed to consider highly relevant mitigating circumstances. An agency ruling is arbitrary and capricious if the agency entirely failed to consider an important aspect of a problem. White v. Minn. Dep’t of Natural Res., 567 N.W.2d 724, 730 (Minn. App. 1997), review denied (Minn. Oct. 31, 1997). An “agency’s conclusions are not arbitrary and capricious so long as a rational connection between the facts found and the choice made has been articulated.” In re Excess Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d 264, 277 (Minn. 2001) (quotation omitted).

In determining whether to deny or terminate assistance because of action or failure to act by members of the family: . . . The [housing authority] may consider all relevant circumstances such as the seriousness of the case, the extent of participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial or termination of assistance on other family members who were not involved in the action or failure.

24 C.F.R. § 982.552(c)(2)(i) (2006) (emphasis added).

CDA argues that because the regulation makes consideration of mitigating circumstances permissive, failure to consider mitigating circumstances cannot be challenged. We disagree. The permissive nature of the regulation does not preclude a determination that mitigating circumstances are an important factor that must be considered in a particular case.

In this case, the hearing officer’s recitation of testimony demonstrates that the hearing officer was aware of Hicks’s physical and mental problems, the special needs of the children, the assistance provided by C.H. to the household, Hicks’s need for assistance, and the fact that C.H. apparently could have been added to the lease but for the reporting issue caused by C.H.’s use of Hicks’s address. But neither the findings nor the decision gives any indication that the hearing officer gave any thought to whether termination of assistance was appropriate in light of the nature of the violation, the degree of Hicks’s culpability, or the effects of termination of assistance on Hicks’s children, who were not involved in any violation. Under the circumstances of this case, we conclude that the hearing officer’s failure to even consider mitigating circumstances is a failure to consider an important aspect of the case. Therefore, on remand, mitigating circumstances shall be considered.

Reversed and remanded.

[1] This is the only reference to C.H.’s grandmother living with Hicks.