SOMERSET HOMES v. CARLA WOODARD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

SOMERSET HOMES,

Plaintiff-Respondent,

v.

CARLA WOODARD,

Defendant-Appellant.

________________________________

Telephonically argued May 22, 2014 Decided June 10, 2014

Before Judges Fuentes, Fasciale and Haas.

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. LT-021118-13.

Felipe Chavana argued the cause for appellant (Essex-Newark Legal Services, attorneys; Maria D. Castruita and Mr. Chavana, on the brief).

Erin R. Ehrlich argued the cause for respondent (Ehrlich, Petriello, Gudin & Plaza, attorneys; Ms. Ehrlich, on the brief).

PER CURIAM

Defendant Carla Woodard appeals from a final judgment of possession entered in favor of plaintiff Somerset Homes for defendant's non-payment of rent, and from an order denying her motion to vacate that judgment. Having considered the arguments presented in light of the applicable legal standards, we reverse.

Plaintiff owns and operates a federally-subsidized housing complex in Newark. Defendant and her teenage daughter have resided in an apartment in the complex since October 2005.

Department of Housing and Urban Development (HUD) regulations require a tenant to cooperate with his or her landlord in completing the forms required for annual recertification for federal rent assistance. The policies and procedures that govern this process are set forth in a handbook published by HUD entitled, "HUD Handbook 4350.3-CHG 19: Occupancy Requirements of Subsidized Multifamily Housing Programs" (HUD Handbook). The HUD Handbook "is a one-source 'rule book' on the occupancy policies and procedures governing the subsidized multifamily programs" of HUD. Kuzuri Kijiji, Inc. v. Bryan, 371 N.J. Super. 263, 265 (App. Div. 2004).

Section 7-7A of the HUD Handbook requires owners to provide tenants with four written notices "about the tenants' responsibility to provide information about changes in family income or composition necessary to properly complete an annual recertification." The owner must provide the tenant with an "Initial Notice" each year that "serves to ensure that tenants understand that they will need to report to the property's management office by the specified date the following year to prepare for their next recertification." Id. at 7-7B.1. "The tenant must sign and date the initial notice to acknowledge receipt; the owner or manager must sign and date the notice as a witness" and "[t]he owner must maintain the notice with original signatures in the tenant's file and provide a copy of the signed notice to the tenant." Id. at 7-7B.1.b and c.

In addition, the owner must send the tenant three reminder notices as the recertification date approaches. The first reminder notice must be sent 120 days prior to the tenant's recertification anniversary date and is intended to advise the tenant of "the cutoff date by which the tenant must contact the owner and provide the information and signatures necessary for the owner to process the recertification." Id. at 7-7B.2.a and 7-7B.2.b(5).

If the tenant does not respond to this notice by appearing at the property's management office, the owner must send a second reminder notice at least ninety days prior to the annual recertification date. Id. at 7-7B.3.a. Finally, if the tenant still has not completed the required paperwork for recertification, the owner must send a third reminder notice at least sixty days prior to the recertification date. Id. at 7-7B.4.a. This notice must "[s]pecify the amount of rent the tenant will be required to pay if the tenant fails to provide the required recertification information by the recertification anniversary date and state that this rent increase will be made without additional notice." Id. at 7-7B.4.b(2). The owner must keep a copy of each of these notices "in the tenant file documenting the date the notice was issued." Id. at 7-7B.2.c; 7-7B.3.c; and 7-7B.4.c.

If the owner provides all the required notices and "[t]he tenant reports for the recertification interview on or after the recertification anniversary date[,]" then the "[t]enant is out of compliance." Id. at 7-8D.3.a. If this occurs, the tenant loses his or her federal subsidy and "must begin paying the market rent." Id. at 7-8D.3.b. However, a tenant may still apply for recertification and have his or her subsidy reinstated if: "(1) [a]ssistance is available at the property; (2) [t]he tenant submits the required information; and (3) [t]he owner determines that the tenant qualifies for assistance." Id. at 7-8D.3.c.

Of particular significance to the issues presented in this appeal, Section 7-8D.4 of the HUD Handbook states that "[w]hen a tenant fails to provide the required recertification information by the recertification anniversary date, an owner must inquire whether extenuating circumstances prevented the tenant from responding prior to the anniversary date." (Emphasis added). "Extenuating circumstances" are defined as "circumstances beyond the tenant's control." Id. at 7-8D.4.a. "Examples of extenuating circumstances include, but are not limited to: (1) [h]ospitalization of the tenant[;] (2) [t]enant out of town for a family emergency (such as the death or severe illness of a close family member)[;] (3) [t]enant on military duty overseas." Ibid. (Emphasis added).

"If the tenant indicates that extenuating circumstances were present, the tenant must promptly provide the owner with evidence of" the circumstances. Id. at 7-8D.4.b(2). "When a tenant provides evidence of extenuating circumstances, the owner must determine whether the information provided shows that" extenuating circumstances exist. Id. at 7-8D.4.c. (Emphasis added). The owner "must provide the tenant with a written notice of the decision. The notice must inform the tenant of his/her right to appeal the owner's decision if the owner determines that extenuating circumstances were not present." Id. at 7-8D.4.d. (First emphasis added). If an appeal is requested, the proceeding must be conducted by "a person[] who was not part of the original determination[.]" Id. at 7-8D.4.e. If the appeal fails, the tenant may still seek recertification but is required to pay market rent for the apartment until the process is completed. Id. at 7-8D.4.f. However, "[i]f the owner determines that extenuating circumstances were present[,]" the subsidy will be reinstated "retroactively to the recertification anniversary date." Id. at 7-8D.5.b.

Defendant had been recertified for her subsidy each year since 2005. The federal assistance defendant received paid her entire rent each month and defendant was not required to make any additional payments.

With regard to the present case, defendant was required to complete her annual recertification by January 1, 2013. She did not meet this deadline and the circumstances under which this occurred were addressed at a trial before the Special Civil Part after plaintiff filed a complaint against defendant seeking a judgment of possession when she failed to pay her rent. We glean the following facts from the record presented at trial.

As defendant's January 1, 2013 recertification date approached, plaintiff's representative, Rocio Vega, testified that "[t]he manager" sent defendant the initial notice required by regular mail. This notice was not introduced as an exhibit at the trial and there is no evidence that either plaintiff or defendant signed it as required by HUD Handbook, 7-7B.1.b and c. Vega testified that the first reminder notice was sent to defendant by regular mail on October 1, 2012; the second was sent by regular mail on November 1, 2012; and the third was sent on an unspecified date by both regular and certified mail. None of these notices were introduced in evidence. Vega testified that the post office had not returned any of the four notices. Plaintiff's attorney stated that plaintiff had received "a receipt" for the final notice, but it was also not entered in evidence as an exhibit.1

Defendant denied ever receiving the first three notices. However, she acknowledged receiving the final notice, which was dated November 29, 2012, although she stated that she did not review it until July 2013. That notice advised her that she had not yet completed the recertification process; that her "present subsidy is hereby terminated retroactive back to the effective date of your ANNUAL Certification January 1, 2013 due to your failure to execute/complete the recertification process[;]" and that she was "now responsible to pay the HUD Approved Market Rent as of that date." However, the notice also informed defendant that "[i]f you complete all the necessary recertification papers and your recertification application is approved by HUD (the contract administrator) on or before December 15, 2012 your landlord will waive its right to collect the full market rent from you personally." Defendant stated that, even though she did not immediately review this notice, she knew she was due for recertification on January 1, 2013.

Defendant did not complete her recertification before January 1, 2013. However, she presented two extenuating circumstances to explain why the recertification did not occur by that date. First, defendant's father, who she was caring for, died on December 14, 2012. On December 16, 2012, the father of defendant's child was confronted by two armed men outside of the apartment, forced into the apartment at gunpoint, and then murdered. Both defendant and her daughter were in the apartment when the murder occurred. The apartment was treated as a crime scene from December 16, 2012 until March 2013 and defendant was not allowed to visit it without a police escort. Defendant and her daughter lived at another location during this period. Defendant certified that she was "traumatized from the incident" and "received treatment."

Nevertheless, defendant testified that she went to plaintiff's office during the first week of January 2013 to complete the recertification process. Defendant stated that she spoke to Vega, who "told [her] that [the] apartment was already rented out." Vega did not dispute this account at the trial. There is nothing in the record to indicate that Vega considered the extenuating circumstances presented by the death of defendant's father on December 14, 2012; the murder of the father of defendant's child in the apartment on December 16, 2012; or the fact that defendant no longer had free access to the apartment because it was a crime scene. Plaintiff did not provide defendant with a written decision denying her request for recertification based on these extenuating circumstances. Plaintiff also did not give defendant any document stating that her federal subsidy had been terminated.2

Defendant and her daughter returned to live in the apartment in March 2013. On March 29, 2013, plaintiff sent defendant a "30-Day [HUD] Notice to Quit" that alleged she had violated the terms of her lease "for illegal activities." Specifically, plaintiff asserted:

On December 16, 2012, the Newark Police Department was dispatched for a homicide that occurred on your premises. The incident was a planned kidnapping of the victim in which firearms were used to threaten and force the victim into your apartment. Numerous gunshots were heard fired and ultimately the victim was found dead by the Newark Police Department. Besides being undoubtedly illegal, the use of a firearm on the premises endangered the welfare of the building and the safety of your neighbors. These acts also disturb the peace and quiet enjoyment of the premises by your neighbors.

On May 15, 2013, plaintiff filed an eviction action against defendant based on the events of December 16, 2012. Because she was the victim of a crime, rather than a perpetrator, defendant filed a motion to dismiss. However, plaintiff voluntarily dismissed the eviction action.

On June 25, 2013, plaintiff filed another eviction action against defendant in which it sought possession of the apartment because defendant had not paid the market rent since January 2013. Plaintiff asserted that $6782 in rent was due.

We have already summarized the pertinent testimony that was presented at the bench trial that followed. The trial focused solely on the issue of whether plaintiff had sent defendant the required notices concerning the recertification process. The judge did not make detailed findings of fact and conclusions of law. Instead, at the end of the trial, the following brief colloquy occurred between the judge and defendant:

THE COURT: I believe that [plaintiff] did comply or satisfy the requirements of law and that your rent goes to market rent, which is really not a termination of the tenancy, it's a termination of the subsidy.

If you're ready, willing and able to pay the market rent you can stay there. Otherwise, I'm afraid I have to enter the judgment for possession and authorize the eviction.

Do you have any question[s]?

[DEFENDANT]: No.

THE COURT: Tenants have both rights and obligations. One of the obligations of a tenant is that when a landlord makes an effort to get a notice to the tenant, especially by mail, if you are not able to get the mail because you're not living there, to notify the Post Office and/or the landlord where to send the mail to you. Did you give them any such notice?

[DEFENDANT]: No.

THE COURT: I'm afraid I have to enter the judgment for possession. I find that the landlord did comply with the requirements of law. And that means you may be evicted. It cannot be sooner than eight days. It will probably be more like two to three weeks. I wish you luck[.]

Defendant obtained counsel and filed an order to show cause seeking to vacate the judgment of possession. Defendant alleged that the payment of market rent "could not be required of her because her subsidy had not been properly terminated." The judge denied defendant's request with no explanation other than that "one of my material reasons for doing that is . . . this matter was tried, judgment was entered pursuant to the trial or following the trial, pursuant to the evidence[.]" Stating that "the issue appears to be one of law[,]" however, the judge stayed the judgment of possession pending appeal.

On appeal, defendant argues there were extenuating circumstances that excused her failure to complete the recertification process prior to January 1, 2013. In addition, because plaintiff did not comply with the HUD Handbook's requirements concerning this matter, defendant contends that her federal subsidy should not have been terminated and, therefore, she was not responsible for paying market rent for her apartment. We agree.

A party seeking to overturn a judgment of possession must demonstrate on appeal that the judge abused his or her discretion in entering the judgment. Cmty. Realty Mgmt. v. Harris, 155 N.J. 212, 236 (1998). When reviewing a decision resulting from a bench trial, "[t]he general rule is that [factual] findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998) (citing Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)). We do not disturb the factual findings of the trial judge unless we are "convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Id. at 412 (quoting Rova Farms, supra, 65 N.J. at 484); see also Beck v. Beck, 86 N.J. 480, 496 (1981). It is also well-established that our review of a judge's conclusions of law is plenary. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").

As previously stated, "[u]nder federal law, an owner landlord is required to satisfy specific requirements when attempting to terminate a subsidized tenancy. We have held federal requirements to be jurisdictional prerequisites to the establishment of good cause for eviction in state court." Riverview Towers Assocs. v. Jones, 358 N.J. Super. 85, 88 (App. Div. 2003) (citing Hous. Auth. of Newark v. Raindrop, 287 N.J. Super. 222 (App. Div. 1996)).

Here, there is no evidence in the record that plaintiff complied with the provisions of the HUD Handbook concerning the clear extenuating circumstances that prevented defendant from completing the recertification process by January 1, 2013. The father of defendant's child was murdered in the apartment just two weeks prior to the recertification deadline; the apartment became a crime scene; and defendant and her daughter were forced to live elsewhere. Defendant's father also died during December. These were plainly "circumstances beyond [defendant's] control" and should have excused her failure to obtain recertification. HUD Handbook, 7-8D.4.a.

However, the uncontradicted testimony at trial established that, when defendant met with Vega in the first week of January 2013 to confirm her continued eligibility for the subsidy, Vega did not: (1) inquire about the extenuating circumstances presented by defendant; (2) determine whether the tragedies suffered by defendant in December 2012 constituted "extenuating circumstances;" or (3) give defendant a written notice of any decision finding that extenuating circumstances were not present. Vega also did not advise defendant that she had the opportunity to appeal any adverse decision to a neutral person, and never provided her with a copy of a decision stating that her federal subsidy had been terminated. All of these basic due process requirements are specifically set forth in, and required by, Sections 7-8D.4.c, d, and e of the HUD Handbook. Because these federal requirements were not met, we conclude that the trial judge mistakenly exercised his discretion in entering the judgment of possession. Riverview Towers Assocs., supra, 358 N.J. Super. at 88.

Plaintiff argues that this is merely a failure to pay rent case and, because it is clear defendant did not pay her rent, the trial court had no alternative but to terminate her tenancy by issuing the judgment of possession. We disagree. Defendant's entire monthly rent obligation was met by her federal subsidy. Without that subsidy, she had no ability to pay the rent. Thus, the issue of defendant's recertification for rental assistance was clearly subsumed within plaintiff's complaint for non-payment of the rent it claims was due. Indeed, the entire trial was devoted, not to an examination of the amount of the unpaid rent, but to a consideration of whether plaintiff had served the required recertification reminder notices upon defendant. Because the recertification process was not properly handled by plaintiff, its claim for unpaid rent, which was caused by its failure to comply with the HUD Handbook, lacked merit and should have been dismissed.

Finally, we are compelled to comment on the manner in which the trial was conducted. As previously noted, no exhibits were marked for identification and none were formally accepted into evidence. Rule 1:2-3 provides that "[t]he verbatim record of the proceedings shall include references to all exhibits and, as to each, the offering party, a short description of the exhibit stated by the offering party or the court, and the marking directed by the court." We have said that "the trial judge has the ultimate responsibility of conducting adjudicative proceedings in a manner that complies with required formality in the taking of evidence and the rendering of findings." N.J. Div. of Youth & Family Servs. v. J.Y., 352 N.J. Super. 245, 264 (App. Div. 2002) (noting, among other things, the trial judge's review and consideration of documents "without any identification for the record"). The failure to identify documents for the record "not only violate[s] basic rules of trial practice, R. 1:2-3, but inhibit[s] the appellate process by depriving the appellate court of a complete record on appeal." Ibid.

Here, we have no record of the documents on which the judge relied in concluding that plaintiff served the four required recertification notices upon defendant. We only know that documents were reviewed and mentioned by Vega during her testimony. Because plaintiff's failure to comply with the HUD Handbook concerning the extenuating circumstances defendant presented requires a reversal, it is not necessary for us to consider whether defendant received the required notices, a task which would not have been be possible in view of the lack of properly identified exhibits.

The judge also failed to give either party the opportunity for cross-examination. "It has long been held that cross-examination is the 'greatest legal engine ever invented for the discovery of truth.'" State ex rel J.A., 195 N.J. 324, 342 (2008) (quoting California v. Green, 399 U.S. 149, 158, 90 S. Ct. 1930, 1935, 26 L. Ed. 2d 489, 497 (1970) (internal quotation omitted)). Although the credibility of the parties concerning the service of the recertification reminders would have been a significant issue if plaintiff had complied with the extenuating circumstances provisions of the HUD Handbook, the judge did not permit either party to cross-examine the opposing witness.

Finally, the judge failed to make sufficient findings of fact to support his decision that plaintiff served the four recertification reminder notices upon defendant. He merely stated his conclusion that this occurred, without explaining the factual basis for his ruling. The judge's denial of defendant's motion to vacate the judgment of possession was also not supported by an adequate statement of his findings.

Rule 1:7-4(a) clearly states that a trial "court shall, by an opinion or memorandum decision, either written or oral, find the facts and state its conclusions of law thereon . . . on every motion decided by a written order that is appealable as of right[.]" See Shulas v. Estabrook, 385 N.J. Super. 91, 96 (App. Div. 2006) (requiring an adequate explanation of the basis for a court's action). "'Meaningful appellate review is inhibited unless the judge sets forth the reasons for his or her opinion.'" Strahan v. Strahan, 402 N.J. Super. 298, 310 (App. Div. 2008) (quoting Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div. 1990)). The failure to provide findings of fact and conclusions of law "'constitutes a disservice to the litigants, the attorneys and the appellate court.'" Curtis v. Finneran, 83 N.J. 563, 569-70 (1980) (quoting Kenwood Assocs. v. Bd. of Adjustment of Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976)).

Because it is so clear that the judgment of possession was incorrectly entered in violation of the requirements contained in the HUD Handbook, it is only necessary that we reverse and vacate the judgment of possession. Defendant shall promptly submit, and plaintiff shall properly consider, an application for recertification.

1 The notices were also not attached to plaintiff's complaint for possession as required by Rule 6:3-4(d).

2 At the trial, plaintiff's attorney stated that she had "a notice" from HUD terminating defendant's "tenancy." However, that notice was never introduced in evidence and is not part of the record before us.