DEAL v. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

This is an appeal from a Superior Court judgment affirming (after review pursuant to G. L. c. 30A, § 14) a decision of the Department of Housing and Community Development (DHCD). In affirming a decision of the Marblehead Housing Authority (MHA), the DHCD concluded that the plaintiff, Kelly Deal, was disqualified from participation in the elderly and handicapped low-income housing program (chapter 667 housing ² ). On appeal, Deal argues that DHCD erred as a matter of law in its decision that her failure to pay her electricity bill for nine years at her last apartment was a disqualifying “material breach of the terms of [her] prior tenancy.” For the following reasons, we vacate the judgment of the Superior Court and order that DHCD's decision be vacated and the matter be remanded to it for further proceedings.

Background. Deal is a forty-eight year old woman who is disabled due to a brain injury incurred over twenty years ago. From 2005 until 2014, she rented an apartment unit at 17 Creesy Street in Marblehead as a tenant at will. Her total gross income, provided solely through the Social Security Administration, was approximately $ 10,132. Her unreimbursed monthly medical expenses were approximately $ 1,201; her monthly rent was $ 1,050, including heat and hot water. When her former roommate moved out in 2013, Deal struggled to make her rent payments.

In June, 2013, Deal applied for chapter 667 housing with the MHA. On October 2, 2014, MHA notified Deal that she was ineligible for State-aided housing on three separate grounds: (1) Deal's history of nonpayment of rent, (2) her failure to meet material lease terms or the equivalent at a prior residence, and (3) her verbal abuse of MHA staff during the application process. See 760 Code Mass. Regs. §§ 5.08(l)(e), (f), and (i) (1996), respectively. Pursuant to 760 Code Mass. Regs. § 5.13(l) (1996), Deal made a timely request for a conference with the MHA to review its decision; she met with its executive director on February 11, 2015. On February 19, 2015, MHA notified Deal of its decision affirming its prior ineligibility determination.

Deal then requested a DHCD review of MHA's decision pursuant to 760 Code Mass. Regs. §§ 5.13(4)-(5) (1996), and a hearing was held on June 8, 2015, at which Deal was represented by counsel. Deal testified that she originally took the apartment because she believed, based on an advertisement for the unit, that all utilities were included; that her failure to pay was an oversight rather than a willful, material breach of her tenancy; and that, once she learned that electricity was not included in her rent, she began making monthly twenty-five dollar payments to the electric company. It is undisputed that Deal's electricity continued uninterrupted during the nine years of her tenancy because Deal exercised her statutory right, as a person who is indigent and has a serious medical condition, to keep her power on.³ Deal argued that, should she obtain an MHA housing unit, she was “fully commit[ted] to paying her utilities at MHA, and if she needs financial assistance to do so she w[ould] seek it through the appropriate channels.”

On September 2, 2015, DHCD upheld MHA's decision, solely on the ground that Deal's failure to pay her electric bill for nine years constituted a “material breach of the terms of [her] prior tenancy,” sufficient to disqualify her for housing pursuant to 760 Code Mass. Regs. § 5.08(1)(f) (1996).⁴ DHCD reasoned that “an electric supplier can refuse to open a new account for her at a new tenancy on account of her unpaid balance. It is indisputable that ․ the inability to get utilities as a new tenant creates a health concern in the premises and a significant problem for the landlord.” As to the MHA's other two grounds for having disqualified Deal, DHCD (1) ruled that she could not be disqualified for nonpayment of rent, but (2) did not reach the question whether she could be disqualified based on her verbal abuse of MHA staff. Deal had argued that her behavior was caused by her disability, for which she requested a reasonable accommodation.

Deal sought judicial review of DHCD's decision pro se, and a Superior Court judge affirmed on April 14, 2017, based solely on Deal's failure to pay her electric bill for nine years.⁵ Despite the fact that there is no copy of any lease governing Deal's prior tenancy in the administrative record, the judge found “that substantial evidence existed for [DHCD] to disqualify Deal from public housing” because “Deal's failure to pay her electric bill was a material breach of the terms of her lease.”

Discussion. An appellate court may affirm, set aside, or modify an agency decision, or remand the matter for further proceedings before the agency, if it determines that “ ‘the substantial rights of any party may have been prejudiced’ because the agency decision is ․ based on an error of law,” among other reasons. Rivas v. Chelsea Hous. Auth., 464 Mass. 329, 334 (2013), quoting G. L. c. 30A, § 14 (7). Here, we conclude that DHCD committed an error of law, requiring a remand.

The relevant regulation, in pertinent part, disqualifies an applicant who has “a history of failure to meet material lease terms or the equivalent at one or more prior residences.” ⁶ Here, however, DHCD made no finding of fact that there was any lease governing Deal's prior tenancy,⁷ let alone a “material lease term” requiring her to pay for electricity.⁸ Nor did DHCD make any factual finding of a history of failure to meet “the equivalent” of a material lease term. “An administrative agency must make findings on each factual issue essential to its decision.” Reavey v. Director of the Div. of Employment Sec., 377 Mass. 913, 914 (1979), citing G. L. c. 30A, § 11(8). Because DHCD did not find the existence of either of the facts that would trigger the regulation, DHCD erred as a matter of law in ruling that the regulation disqualified Deal.

DHCD's decision did state that “[t]he failure to pay her electric bill was ․ a material breach of the terms of Ms. Deal's prior tenancy.” But that statement, whether viewed as a finding of fact or a conclusion of law, was not a sufficient basis to disqualify Deal. It did not refer (as the regulation does) either to “material lease terms” or to “the equivalent,” and it referred to a “material breach,” whereas the regulation focuses on the materiality of a lease term itself (or its equivalent). To the extent that the phrase was intended to express DHCD's conclusion about an agreement between Deal and her prior landlord, DHCD made no subsidiary finding that Deal had any agreement with the landlord (as opposed to the electric company) that she would pay the electric bill. “An adequate statement of reasons must contain not only the department's factual conclusions, but also supporting subsidiary findings of fact.” NSTAR Elec. Co. v. Department of Pub. Utils., 462 Mass. 381, 390 (2012).

Conclusion. The judgment of the Superior Court affirming DHCD's decision is vacated, and a new judgment shall enter vacating DHCD's decision and remanding the case to DHCD for further proceedings consistent with this memorandum and order.

So ordered.

Vacated and remanded.

FOOTNOTES

2.   See St. 1954, c. 667; G. L. c. 121B, § 39.

3.   Pursuant to G. L. c. 164, § 124A, and 220 Code Mass. Regs. § 25.03 (2008), no electric company may shut off or fail to restore electric service in a residence of one who has an appropriately documented serious illness and who “cannot afford to pay any overdue bill because of financial hardship.” G. L. c. 164, § 124A.

4.   “An applicant ․ shall be disqualified ․ [if] (f) [t]he applicant ․ has a history of failure to meet material lease terms or the equivalent at one or more prior residences, and such failure, if repeated by a tenant of public housing, would be detrimental to the [Local Housing Authority] or to the health, safety, security or peaceful enjoyment of other tenants or of LHA employees.” 760 Code Mass. Regs. 5.08(1) (1996). DHCD adopted that regulation as directed by a provision of the essentially identically-worded statute governing public housing eligibility, G. L. c. 121B, § 32 (f).

5.   This appeal is limited to a review of that sole issue.

6.   760 Code Mass. Regs. § 5.08(1)(f) (1996). See note 3, supra.

7.   If anything, DHCD's decision suggests that there was no lease. In resolving another issue in the case, DHCD concluded that “[b]ecause [Deal] was a tenant-at-will, the landlord was not required to prove a breach of lease in order to terminate [her] tenancy.”

8.   This case is thus distinguishable from DHCD's 1998 decision in its Case No. 741, on which DHCD relied as precedent. There DHCD found that “nonpayment of utilities is sufficient grounds to disqualify an Applicant for housing pursuant to 760 Code Mass. Regs. 5.08[1][f] [1996]” where “[t]he failure to pay utilities is a material breach of the terms of [the Applicant's] written Tenancy-At-Will Agreement with the Landlord” (emphasis added). Here, in contrast, DHCD made no finding that any written agreement between Deal and the landlord required her to pay for electricity.