Kolio v. Hawaii Public Housing Authority. , 135 Haw. 267 ( 2015 )


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  •    *** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
    Electronically Filed
    Supreme Court
    SCWC-13-0000785
    06-MAY-2015
    09:13 AM
    IN THE SUPREME COURT OF THE STATE OF HAWAI#I
    ---o0o---
    FETU KOLIO,
    Petitioner/Appellant/Plaintiff-Appellant,
    vs.
    HAWAI#I PUBLIC HOUSING AUTHORITY,
    Respondent/Appellee/Defendant-Appellee.
    SCWC-13-0000785
    CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
    (CAAP-13-0000785; CIV. NO. 12-1-2339-09)
    MAY 6, 2015
    RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON JJ.
    OPINION OF THE COURT BY NAKAYAMA, J.
    This appeal concerns Fetu Kolio’s (Kolio) eviction from
    Mayor Wright Homes (Mayor Wright), a federally-subsidized public
    housing project, which is owned and operated by Hawai#i Public
    Housing Authority (HPHA).      While living at Mayor Wright, Kolio
    served as the president of the Mayor Wright Homes Tenant
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    Association (Association) and misappropriated approximately
    $1,400 in Association funds.      He later pled guilty to second
    degree theft.   HPHA evicted Kolio from Mayor Wright, alleging
    that Kolio’s theft of Association funds violated a term in his
    lease that stated: “Tenant . . . shall not engage in . . . any
    criminal activity . . . that threatens the health, safety or
    right to peaceful enjoyment of Management’s public housing
    premises by other public housing residents or neighboring
    residents.”   On appeal, both the Circuit Court of the First
    Circuit (circuit court) and the Intermediate Court of Appeals
    (ICA) affirmed.
    On review of the record, HPHA failed to carry its
    burden of showing that Kolio’s theft threatened the health,
    safety, or peaceful enjoyment of the premises.          Additionally,
    Kolio’s theft did not meet the definition of criminal activity
    given in Hawai#i Administrative Rules (HAR) § 17-2020, which
    governs the practice and procedure for terminating the tenancy of
    a person occupying a unit in a project that is owned or operated
    by HPHA.   Therefore, we hold that the ICA gravely erred in
    affirming the Eviction Board, and we reverse the Eviction Board’s
    Order.
    I.   BACKGROUND
    In 2004, Kolio entered into a rental agreement with
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    HPHA (Rental Agreement) under which he became a tenant of Mayor
    Wright, a federally-subsidized housing project.            The project is
    under the jurisdiction of the U.S. Department of Housing and
    Urban Development (HUD) and under the ownership and operation of
    HPHA.     From 2009 until 2011, Kolio served as the President of the
    Mayor Wright Tenant Association.1          On July 27, 2010, Kolio
    received a check for $1,400 from HPHA to be used for resident
    participation activities as required by HUD.2            In 2011, Kolio
    failed to comply with HPHA’s requests for financial documentation
    of the Association checking account, and HPHA’s Financial
    Management Office confirmed that the check had been cashed and
    deposited into Kolio’s personal account.           Kolio was charged with
    Theft in the Second Degree, a Class C felony in January 2012 and
    he pled guilty to the charge on May 29, 2012.3
    A.    HPHA Proceedings
    On February 27, 2012, HPHA sent Kolio a Notice of
    Violation of Rental Agreement and Proposed Termination of Rental
    1
    The Association is referred to as a “resident council” by HUD.
    Pursuant to 24 C.F.R. § 964.18, housing authorities like HPHA must assist
    residents in establishing and maintaining a resident council upon the request
    of the residents. Participation in resident councils is voluntary, and the
    governing board is democratically elected. 24 C.F.R. § 964.115.
    2
    These funds had been provided to the Association by HUD under 24
    C.F.R. § 964.150(a)(1). These funds were to be used for purposes set forth in
    24 C.F.R. § 964.
    3
    As a result, Kolio was sentenced to 30 days of incarceration, five
    years probation, and directed to pay $1,400 in restitution to HPHA.
    3
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    Agreement (Non-Rent Violation) (Notice) stating that HPHA would
    proceed to terminate Kolio’s tenancy because he violated, among
    other sections, Section 8(p)(1) of the Rental Agreement.
    Section 8(p)(1) stated that it was a tenant’s obligation to
    (p) Assure that Tenant, any member of the household, a guest
    or another person under Tenant control, shall not engage in:
    (1) Any criminal activity or alcohol abuse that
    threatens the health, safety or right to peaceful
    enjoyment of Management’s public housing premises by
    other public housing residents or neighboring
    residents or employees of Management[.]
    The Notice further referred to Kolio’s misappropriation of
    Association funds.
    After the parties were unable to settle the dispute
    through the grievance process prescribed by Hawai#i
    Administrative Rules (HAR) § 17-2021, a hearing was scheduled
    before the Oahu Eviction Board A of HPHA on September 11, 2012 to
    determine whether the Rental Agreement should be canceled and
    terminated due to the alleged violations.         In addition to
    providing evidence of Kolio’s theft and his conviction, the
    Manager’s Report to the Eviction Board stated that “Theft in the
    Second Degree is defined as a felony which constitutes criminal
    activity in violation of Section 8(p)(1) of the Rental
    Agreement.”   The Report also stated that the “Association funds
    which were to be used solely for the benefit of the individual
    residents that Mr. Kolio represented, caused mistrust within the
    community causing a [threat to] health, safety or right to
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    peaceful enjoyment of Management’s public housing premises by
    other public housing residents or neighboring residents.”
    Kolio argued that he did not violate Section 8(p)(1) of
    the lease because that Section referred only to activity that
    “(1) meets the definition of ‘criminal activity’ as understood in
    the context of public housing evictions and (2) ‘threatens the
    health, safety, or right to peaceful enjoyment of the premises’
    by others.”    He asserted that the argument that tenant safety and
    health were threatened because the Association did not possess
    the stolen funds was purely speculative, and “‘[a] legal
    conclusion should not rest on a foundation of entirely fictitious
    events.’”
    At the hearing, HPHA Project Manager Joanna Renken
    (Renken) testified that:
    A lot of times, we feel that peaceful enjoyment or, or any
    kind of threat of health and safety is a lot times physical,
    but what people don’t know [is] that it can also mean
    emotional as well. So, I’m speaking on behalf of the
    residents of Mayor Wright Homes, and Mr. Kolio did violate
    the Rental Agreement.
    When responding to a question about what the Association funds
    were to be used for, Renken stated:
    Usually the resident participation fund is given by the HUD
    . . . and that specific fund is supposed to be used to
    generate programs for the residents within the community to
    gain either employment or anything to make them become self
    sufficient, or to provide anything that would be a benefit
    to the residents within the community.
    She also testified that the funds Kolio stole were supposed to be
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    used for any kind of services “from computer classes to sewing
    classes to reading classes, anything that would benefit the, not
    the association, the residents” and were not for personal use.
    In its Findings of Fact, Conclusions of Law, Decision
    and Order, the Eviction Board found that Kolio violated Section
    8(p)(1) of the Rental Agreement and noted that Kolio had held a
    position of trust and had deprived the Association and residents
    of “the funds and resources that could have been used for the
    health, safety and welfare of all the residents . . . .”              The
    Board ordered that Kolio be evicted.
    B.    Circuit Court Proceedings
    Kolio appealed to the circuit court.4          Following the
    notice of appeal, Kolio filed a Motion to Stay Writ of Possession
    Pending Appeal, which was denied by the circuit court.              Kolio was
    evicted from his home.       Following oral argument on Kolio’s
    appeal, the circuit court affirmed the Eviction Board’s Findings
    of Fact, Conclusions of Law, Decision and Order.
    C.    Proceedings Before the ICA
    Kolio then appealed to the ICA, and the ICA affirmed
    the circuit court.      The ICA held that:
    Kolio’s criminal theft misappropriated [Association funds]
    that were already allocated and were now unavailable for
    purposes that included the benefit of the health, safety,
    4
    The Honorable Rhonda A. Nishimura presided.
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    and peaceful enjoyment of the Mayor Wright Housing
    residents. Kolio’s theft thus constituted the kind of
    criminal activity that posed a “threat” within the meaning
    of section 8(p)(1) of the Rental Agreement and provided
    sufficient grounds for the Eviction Order.
    II.   STANDARDS OF REVIEW
    A.    Review of Administrative Agencies’ Findings and Conclusions
    We review the appeal of an administrative decision for
    grave errors of law, applying the same standard that the ICA
    applied:
    Review of a decision made by the circuit court upon
    its review of an agency’s decision is a secondary appeal.
    The standard of review is one in which [the appellate] court
    must determine whether the circuit court was right or wrong
    in its decision, applying the standards set forth in HRS
    § 91-14(g) [(1993)] to the agency’s decision.
    HRS § 91-14, entitled “Judicial review of contested
    cases,” provides in relevant part:
    (g)   Upon review of the record the court may
    affirm the decision of the agency or remand the case
    with instructions for further proceedings; or it may
    reverse or modify the decision and order if the
    substantial rights of the petitioners may have been
    prejudiced because the administrative findings,
    conclusions, decisions, or orders are:
    (1)    In violation of constitutional or
    statutory provisions; or
    (2)    In excess of the statutory authority or
    jurisdiction of the agency; or
    (3)    Made upon unlawful procedure; or
    (4)    Affected by other error of law; or
    (5)    Clearly erroneous in view of the reliable,
    probative, and substantial evidence on the
    whole record; or
    (6)    Arbitrary, or capricious, or characterized
    by abuse of discretion or clearly
    unwarranted exercise of discretion.
    [U]nder HRS § 91-14(g), conclusions of law are reviewable
    under subsections (1), (2), and (4); questions regarding
    procedural defects under subsection (3); findings of fact
    under subsection (5); and an agency’s exercise of discretion
    under subsection (6).
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    United Pub. Workers, AFSCME, Local 646, AFL-CIO, v. Hanneman, 106
    Hawai#i 359, 363, 
    105 P.3d 236
    , 240 (2005) (quoting Paul’s Elec.
    Serv., Inc. v. Befitel, 104 Hawai#i 412, 416, 
    91 P.3d 494
    , 498
    (2004)).
    When determining whether an agency abused its
    discretion pursuant to HRS § 91-14(g)(6), the court must first
    “determine whether the agency determination under review was the
    type of agency action within the boundaries of the agency’s
    delegated authority.”     Paul’s Elec. Serv., 104 Hawai#i at 
    417, 91 P.3d at 499
    .    If the determination was within the agency’s realm
    of discretion, then the court must analyze whether the agency
    abused that discretion.     
    Id. If the
    determination was not within
    the agency’s discretion, then it is not entitled to the
    deferential abuse of discretion standard of review.           
    Id. In regards
    to the abuse of discretion standard of
    review, this court has held that “[a]gency determinations, even
    if made within the agency’s sphere of expertise, are not
    presumptively valid; however, an agency’s discretionary
    determinations are entitled to deference, and an appellant has a
    high burden to surmount that deference[.]”         
    Id. at 419,
    91 P.3d
    at 501.    This court has further described an agency’s proper
    exercise of discretion as “not arbitrarily or willfully, but with
    regard to what is right and equitable under the circumstances and
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    the law, and directed by the reason and conscience of the judge
    to a just result.”      S. Foods Grp., L.P. v. State, Dep’t of Educ.,
    89 Hawai#i 443, 452, 
    974 P.2d 1033
    , 1042 (1999) (internal
    quotations and citations omitted).          Therefore, “[a] hearings
    officer abuses his or her discretion when he or she ‘clearly
    exceeds bounds of reason or disregards rules or principles of law
    or practice to the substantial detriment of a party.’”              
    Id. (quoting Craft
    v. Peebles, 78 Hawai#i 287, 301, 
    893 P.2d 138
    , 152
    (1995)).
    III.   DISCUSSION
    The issue before the court is whether the Eviction
    Board abused its discretion when it determined that Kolio’s theft
    constituted criminal activity that threatened the health, safety,
    or peaceful enjoyment of the premises by other residents or HPHA
    employees.
    A.    The Determination of the HPHA Eviction Board Was Within Its
    Realm of Discretion.
    This court has held that “[t]he boundaries of an
    agency’s discretion are established by the legislature . . . and
    these statutory boundaries will likely assist a reviewing court
    in defining ‘discretion’ when that court examines an agency’s
    action for an abuse of discretion.”          Paul’s Elec. Serv., 104
    Hawai#i at 
    417-18, 91 P.3d at 499-500
    (internal citations
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    omitted).   HRS § 356D-94(a)(2006) provides that HPHA has the
    discretion to terminate a public housing tenancy “[i]f it is
    proven to the satisfaction of the eviction board that there is
    cause to terminate a lease or rental agreement and evict the
    tenant . . . .”    HRS § 356D-92(a)(2006) limits this discretion by
    prescribing the causes for termination of a lease.           Relevant to
    this case, HRS § 356D-92(a)(2) allows for termination if there is
    a “[v]iolation of any of the provisions of a lease, rental
    agreement, permit, or license[.]”        Additionally, HAR § 17-2020-
    5(a)(2004)(amended 2014) states that the examiner or eviction
    board “shall determine whether there are sufficient grounds for
    termination of the rental agreement[,]” and a “[s]erious or
    repeated violation of material terms of the rental agreement” is
    listed as a ground for termination in HAR § 17-2020-5(b)(1).
    Pursuant to this legislative authority, it was within
    the Eviction Board’s delegated authority to determine whether
    Kolio violated the Rental Agreement and to evict him based on its
    conclusion that he had.     See Paul’s Elec. Serv., 104 Hawai#i at
    
    417, 91 P.3d at 499
    .     Thus, the next step in the analysis is to
    consider whether the Eviction Board nonetheless abused its
    discretion by making a determination that was arbitrary or
    capricious.   See HRS § 91-14(g)(6).
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    B.    The Eviction Board Abused Its Discretion When It Determined
    that Kolio’s Theft Was Criminal Activity that Threatened the
    Health, Safety, or Peaceful Enjoyment of the Premises.
    Although HPHA is given discretion to determine whether
    grounds for eviction exist, this discretion is not unlimited.
    HPHA is required to liberally construe the rules governing
    eviction practice and procedure so that “the rights of the
    parties are preserved in a just and timely resolution of every
    hearing.”     HAR § 17-2020-1.     Here, Kolio was evicted from his
    home and has had to live apart from his wife, who was allowed to
    remain at Mayor Wright, because neither of them can afford to
    live outside of public housing.         And even though HPHA has an
    important interest in maintaining the peace and safety of the
    projects, HPHA must abide by the rules and provisions that create
    the boundaries of its discretion, especially where the
    consequences of its actions are so dire.           In this case, it is
    clear that HPHA abused its discretion when it found that Kolio’s
    theft violated Section 8(p)(1) of the Rental Agreement.
    Section 8 of the Rental Agreement lists obligations of
    the tenant.     Section 8(p) states that it is a tenant’s obligation
    to “[a]ssure that Tenant . . . shall not engage in: (1) Any
    criminal activity or alcohol abuse that threatens the health,
    safety or right to peaceful enjoyment of Management’s public
    housing premises by other public housing residents or neighboring
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    residents or employees of Management[.]”         HPHA is required by HUD
    to include this tenant obligation in its rental agreements, and
    the language of Section 8(p)(1) traces the language of 24 C.F.R.
    § 966.4(f)(12)(i)(A)(2001).5      However, neither the Rental
    Agreement nor HUD regulations define “criminal activity that
    threatens the health, safety, or right to peaceful enjoyment.”
    The phrase “that threatens the health, safety, or
    peaceful enjoyment of the premises” clearly qualifies the kind of
    criminal activity that violates the provision.          There must be a
    showing of a nexus between the tenant’s criminal activity and the
    threat to health, safety, or enjoyment of the premises by other
    residents or management employees.        D.C. Hous. Auth. v.
    Whitfield, No. 04-LT-410, 
    2004 WL 1789912
    , at *6 (D.C. Super. Ct.
    Aug. 11, 2004)(“To hold [that a nexus is unnecessary] would
    require the court to adopt the position that a public housing
    agency has blanket authority to evict its residents for any
    criminal behavior committed anywhere, regardless of whether such
    behavior posed a threat to the health and safety of the other
    5
    24 C.F.R. § 966.4 reads:
    (f) Tenant’s obligations. The lease shall provide that the tenant
    shall be obligated:
    . . .
    (12)(i) To assure that no tenant, member of the tenant’s
    household, or guest engages in:
    (A) Any criminal activity that threatens the health,
    safety, or right to peaceful enjoyment of the premises
    by other residents . . . .
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    residents where the tenant lives . . . [and] allow [a public
    housing authority] to effectively evict without cause, any person
    who has a criminal record.”).
    It appears that Hawai#i courts have not defined the
    language of this provision, nor have they addressed HPHA
    evictions pursuant to it.6       However, because HUD requires the
    inclusion of this standardized provision in all lease agreements
    between public housing authorities and tenants of federally-
    subsidized projects, other jurisdictions have addressed evictions
    under the same or substantially similar language to Section
    8(p)(1).    These cases are instructive as to what a public housing
    authority must show in order to prove that a tenant violated this
    provision.
    In Guste Homes Resident Management Corp. v. Thomas,
    Thomas leased an apartment from the Housing Authority of New
    Orleans, which was managed by Guste and subject to the same HUD
    6
    The closest Hawai#i case appears to be Williams v. Hawai#i Housing
    Authority. 
    5 Haw. App. 325
    , 
    690 P.2d 285
    (1984). In that case, the tenants’
    adult sons were involved in two altercations on project premises, one of which
    was a fatal stabbing. 
    Id. at 331,
    690 P.2d at 290. The ICA held that the
    tenants were properly evicted under a lease provision that required tenants to
    “cause other persons who are on the premises with his consent to conduct
    themselves in a manner which will not disturb his neighbors’ peaceful
    enjoyment of their accommodations and will be conducive to maintaining the
    project in a decent, safe, and sanitary condition . . . .” 
    Id. at 326,
    690
    P.2d at 287. While the case implies that altercations on project premises are
    conduct that disturbs residents’ “peaceful enjoyment” of their accommodations,
    the ICA noted that the tenants “were evicted not on account of the incidents
    per se, but because they failed to control the actions of their sons as
    evidenced by the long list of complaints” preceding and including the two
    altercations. 
    Id. at 332,
    690 P.2d at 290.
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    regulations under 24 C.F.R. § 966.4.        
    116 So. 3d 987
    , 988 (La.
    Ct. App. 2013).    Upon investigation, Guste learned that Thomas
    had been charged with theft and illegal possession of stolen
    goods following an incident at the New Orleans Arena.            
    Id. Guste determined
    that this criminal activity was a breach of the lease
    agreement and served Thomas with a notice of termination.              
    Id. at 989.
      At a trial on the merits of the eviction, Guste’s evidence
    of the lease violation consisted of Thomas’s misdemeanor theft
    conviction and the testimony of the property manager.            
    Id. at 988.
      The trial court concluded that the theft was not a threat
    to the health, safety, or peaceful enjoyment of the premises.
    
    Id. at 989.
      Although the property manager testified that she
    believed that Thomas’s theft was a threat, when the trial court
    asked her how it specifically threatened other residents, she was
    unable to give support for her belief with testimony or evidence.
    
    Id. at 991.
      Although the record indicated that residents
    reported the theft to Guste after it was exposed by the local
    news, none of them stated that they felt threatened or concerned
    for their individual health, safety, or peaceful enjoyment of the
    premises.   
    Id. at 991-92.
        The Louisiana Court of Appeal affirmed
    the trial court’s decision holding that evidence of an actual
    threat was “a necessary element to demonstrate that Mr. Thomas’
    actions warrant eviction,” and Guste failed to meet its burden of
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    proof to evict Thomas.        
    Id. at 991.
    In Sumet I Associates, LP v. Irizarry, the tenant’s
    lease was terminated for “‘criminal activity by a tenant . . .
    that threatens the health, safety, or right to peaceful enjoyment
    of the premises by other residents.’”           
    959 N.Y.S.2d 254
    , 255
    (N.Y. App. Div. 2013).        The tenant spray-painted graffiti in a
    common area stairwell.        
    Id. When the
    tenant failed to vacate the
    premises, a summary holdover proceeding was brought, and a
    videotape from the security camera capturing the tenant’s
    vandalism was presented as evidence.           
    Id. The New
    York Supreme
    Court held that even though the landlord demonstrated the
    tenant’s criminal activity, because the graffiti was on the
    stairwell landing leading to the roof and there was no evidence
    that any resident’s peaceful enjoyment was threatened, the
    landlord failed to demonstrate that the lease term was violated.
    
    Id. In Housing
    Authority of City of Bangor v. Bush, the
    housing authority claimed that the tenant’s guest violated the
    same standardized lease provision when he removed a stop sign
    near the residence.        No. AP-00-22, 
    2001 WL 1719230
    , at *2 (Me.
    Super. Feb. 2, 2001).        The court held that this criminal activity
    did not threaten the health, safety, or peaceful enjoyment of the
    premises by other residents because there was no evidence
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    regarding the environment where the traffic sign had been
    erected.   
    Id. The court
    held that although in some
    circumstances, the removal of a stop sign could pose a threat, in
    other circumstances, such as in a remote area or on a road closed
    to traffic, the removal of a stop sign would not be a threat.
    
    Id. (“[E]ven though
    [removal of the sign] was criminal, its
    effects on others is entirely a function of specific facts not
    set out in the present record.”).
    Kolio has cited to Boston Housing Authority v. Bryant,
    
    693 N.E.2d 1060
    (Mass. App. Ct. 1998), throughout his appeal in
    support of his argument that his theft did not threaten the
    health, safety, or peaceful enjoyment of the premises.            In
    Bryant, the tenant committed larceny by false pretenses when she
    used the identity of a housing authority employee to apply for
    credit cards, on which she ran up substantial charges.            
    Id. at 1061.
      The Boston Housing court ruled that the tenant violated
    the same HUD standardized lease provision prohibiting criminal
    activity that threatened the health, safety, or peaceful
    enjoyment of the premises.      
    Id. HPHA and
    the ICA majority
    asserted that Bryant is distinguishable from the present case
    because the Boston Housing Authority used summary eviction
    proceedings pursuant to a Massachusetts statute.           
    Id. at 1062.
    The court in Bryant held that summary proceedings were
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    inappropriate because “the right of peremptory termination of a
    lease is limited by statute to violations of provisions that
    forbid crimes that are physically destructive, violent,
    associated with violence, or visibly asocial[,]” and Bryant’s
    conduct did not fall under this statute.         
    Id. at 1062-63.
    However, while the present case is somewhat distinguishable
    because there is no comparable Hawai#i statute allowing for
    summary proceedings, Bryant’s discussion of the lack of evidence
    supporting an actual threat is still instructive.           The Boston
    Housing Court judge reasoned that Bryant’s crime was a threat
    because if the employee’s credit had been exceeded and the
    employee had been unable to use it in an emergency, Bryant’s
    conduct would have threatened the employee’s health and safety.
    
    Id. at 1062.
      However, the Appeals Court disagreed and reversed
    the Boston Housing Court stating, “[t]he difficulty with this
    reasoning is that it rests on a chain of conjecture about
    hypothetical facts . . . [a] legal conclusion should not rest on
    a foundation of entirely fictitious events.”          
    Id. Taken together,
    these cases all support the conclusion
    that the mere showing of some criminal activity is not enough to
    violate this provision; there must be evidence supporting a
    finding of an actual threat to the health, safety, or peaceful
    enjoyment of the premises by other residents or management.             A
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    conclusory assertion that the removal of a stop sign is a threat
    to resident safety, or that graffiti is a threat to peaceful
    enjoyment, or that one resident’s theft is a threat to the health
    and safety of the others is not enough.          If it were enough, a
    violation of the provision could rest on a public housing
    authority’s assumption of facts and circumstances not in the
    record and would render the limiting phrase “that threatens the
    health, safety, or peaceful enjoyment of the premises”
    inoperative.    Almost any criminal activity could hypothetically
    pose a threat to others.       Whether criminal activity actually
    threatens health, safety, or peaceful enjoyment of the premises
    is a fact-driven analysis, and there must be evidence to support
    these facts.
    In this case, the evidence supporting a conclusion that
    Kolio’s theft threatened the health, safety, or peaceful
    enjoyment of the premises was limited to Manager Renken’s report
    to the Eviction Board asserting that Kolio’s theft caused
    mistrust within the community and Renken’s oral testimony at the
    eviction hearing about what the funds could have been used for.7
    However, there was no evidence of any tenant who reported feeling
    threatened by Kolio’s theft.       Additionally, there was no evidence
    7
    
    See supra
    Part I.A regarding Renken’s testimony at the eviction
    hearing.
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    as to what kind of programs the funds had been used for in the
    past or what programs were planned but then canceled due to the
    absence of funds.    It cannot be assumed that Kolio’s theft was or
    would have been a threat, and HPHA failed to carry its burden of
    proving that Kolio violated Section 8(p)(1) of the Rental
    Agreement.
    Therefore, although the HPHA Eviction Board was acting
    within its realm of discretion when it determined that Kolio’s
    theft violated Section 8(p)(1) of the Rental Agreement, there was
    no evidence on which they could have reasonably relied in making
    that determination.     An assumption that Kolio’s theft was a
    threat, without supporting factual evidence, is not enough.
    Therefore, the ICA gravely erred in affirming the Eviction
    Board’s Order because the Eviction Board abused its discretion.
    Furthermore, as a matter of public policy, it should be
    noted that administrative agencies are bound to abide by the
    administrative rules that govern that particular agency.            Here,
    HAR § 17-2020 contains the rules governing the practice and
    procedure for terminating the tenancy of a person occupying a
    unit in a project that is owned or operated by HPHA.            HAR § 17-
    2020-1.   A definition of criminal activity can be found in HAR §
    17-2020-2.   Although the definition was changed in 2014, the
    definition of criminal activity at the time that Kolio was
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    evicted stated the following:
    “Criminal activity” means the tenant, any member of
    the tenant’s household, a guest or another person under the
    tenant’s control has engaged in:
    (1) the illegal manufacture, sale, distribution, or
    use of a drug, or the possession of a drug with intent to
    manufacture, sell, distribute, or use the drug; or
    (2) any illegal activity that has as one of its
    elements the use, attempted use, or threatened use of
    physical force substantial enough to cause, or be reasonably
    likely to cause, serious bodily injury or property damage;
    regardless of whether there has been an arrest or conviction
    for such activity and without satisfying the standard of
    proof used for a criminal conviction.
    HAR § 17-2020-2 (effective 2004-2014).         Kolio’s misappropriation
    of Association funds did not involve drugs or the use of force,
    and accordingly, it did not constitute criminal activity for
    which Kolio could have been evicted under the rules controlling
    evictions by HPHA.
    IV.   CONCLUSION
    In conclusion, the Eviction Board erred when it held
    that Kolio violated the Rental Agreement.         Accordingly, we
    reverse the ICA’s June 25, 2014 judgment on appeal, reverse the
    circuit court’s April 12, 2013 judgment, and reverse the HPHA’s
    September 21, 2012 Findings of Fact, Conclusions of Law, Decision
    and Order.
    Philip W. Miyoshi                        /s/ Mark E. Recktenwald
    for petitioner
    /s/ Paula A. Nakayama
    Craig Iha, John C. Wong,
    Diane K. Taira and                       /s/ Sabrina S. McKenna
    Jennifer R. Sugita
    for respondent                           /s/ Richard W. Pollack
    /s/ Michael D. Wilson
    20
    

Document Info

Docket Number: SCWC-13-0000785

Citation Numbers: 135 Haw. 267, 349 P.3d 374, 2015 Haw. LEXIS 88

Judges: Recktenwald, Nakayama, McKenna, Pollack, Wilson

Filed Date: 5/6/2015

Precedential Status: Precedential

Modified Date: 10/19/2024