United States District Court, D. Massachusetts
For Kimberly P. DeCambre, Plaintiff: J. Whitfield Larrabee, LEAD ATTORNEY, Attorney at Law, Brookline, MA.
For Brookline Housing Authority, Matthew S. Baronas, Janice McNiff, Carole Brown, Defendants: Amy M. McCallen, John Egan, LEAD ATTORNEYS, Rubin & Rudman, LLP, Boston, MA.
MEMORANDUM OF DECISION FINDINGS OF FACT AND RULINGS OF LAW
William G. Young, United States District Judge.
In a case involving a beneficiary's special needs trust and federal housing benefits, this Court is faced with determining whether such a trust, designed to prevent beneficiaries from losing their Medicaid and Social Security eligibility, should also protect beneficiaries from losing their income-based federal housing vouchers despite statutory language to the contrary. The issue before the Court turns on the interpretation of HUD regulations for calculating annual income for housing assistance eligibility purposes; specifically, whether income should include disbursements from a special needs trust that was funded by lump-sum settlements from a personal injury lawsuit. The plaintiff before the Court, Kimberly DeCambre (" DeCambre" ), a Brookline, Massachusetts resident and participant in the Section 8 Housing Choice Voucher Program (" Section 8" ), alleges that the Brookline Housing Authority (" BHA" ) unlawfully calculated
her annual income in violation of the federal regulations pertaining to Section 8, as well as in violation of her substantive due process rights under the Fourteenth Amendment of the United States Constitution, 42 U.S.C. § 1983, 42 U.S.C. § 3604(c) (the Fair Housing Act), 29 U.S.C. § 701 (the Rehabilitation Act), and 42 U.S.C. § 12131 (the Americans with Disability Act). Her allegations of disability-based discrimination were also raised against three BHA employees: Matthew Baronas (Assistant Executive Director), Janice McNiff (Leased Housing Representative), and Carole Brown (Director of the Leased Housing Department) (collectively with BHA, " Defendants" ). DeCambre further requested a preliminary injunction against the BHA to stop it from including certain trust disbursements towards the calculation of her income for Section 8 eligibility. This Court heard oral arguments at a case stated hearing on September 19, 2014, which greatly assisted the Court in assessing the parties' claims. The Court, first, rules that DeCambre does not have a section 1983 claim because the BHA's income determination was not arbitrary and capricious, and further denies DeCambre's motion for a preliminary injunction, with an order that her case be remanded for reconsideration before the BHA. The Court's reasoning is laid out below as required by Federal Rule of Civil Procedure 52(a).
II. FINDINGS OF FACT
A. DeCambre's Disability Status
DeCambre is fifty-nine years old, and presently lives with her adult son in a Brookline, Massachusetts apartment. See First Am. Verified Compl. & Demand Trial Jury (" Compl." ) ¶ 11, ECF No. 9; see also Pl.'s Mem. Supp. Mot. Emergency Prelim. Inj. (" Pl.'s Mem." ), Ex. G, Aff. Kimberly P. DeCambre ¶ 2, ECF No. 5-7. Since 2005, DeCambre has been a recipient of housing vouchers through her participation in Section 8, which is administered locally by the BHA and directly funded by HUD. As described on its website, Section 8 provides housing vouchers to " low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market." Housing Choice Vouchers Fact Sheet, HUD.gov (Sept. 17, 2014), http://portal.hud.gov/hudportal/HUD?src=/topics/housing_choice_voucher_program_section_8; see also 42 U.S.C. § 1437(f) et seq. These vouchers are administered by local agencies and housing subsidies are paid directly to landlords by the agencies. See 42 U.S.C. § 1437(f) et seq. The amount of the rent subsidy typically is the amount of the gross rent, " minus 30 percent of monthly adjusted income." Id. The BHA, which issues these rent subsidies in vouchers, is a local housing authority pursuant to Massachusetts General Law, chapter 121B, section 3, and a recipient of federal funding for subsidizing rent for its participants through an Annual Contributions Contract with HUD. Compl. ¶ 3.
It is undisputed that DeCambre is disabled as she is currently a recipient of Medicaid and Social Security benefits. Stipulated Factual R.: Case Stated (" Stip. Factual R." ) ¶ 8, ECF No. 16. She currently
receives Supplemental Security Income (" SSI" ) in the amount of $835.39 per month from the Social Security Administration, which provides supplemental income for " aged, blind, or disabled individual[s]." 42 U.S.C. § § 1382c(a)(1), (a)(3); see Pl.'s Mem. 2. She also receives Medicaid administered by MassHealth. Id. at 5. DeCambre's " major disabilities" stem from kidney disease, which her treating physician describes as " recurrent kidney stones, severe hypokalemia (low potassium) requiring high dose daily potassium supplements, which is thought due to medullary sponge disease and/or Gitelman's syndrome." Pl.'s Mem., Ex. C2, Dr. Hsiao Letter, ECF No. 5-1. Her physician also stated that DeCambre suffered from " unusual skin patterns, which is presumed to be primary/secondary erythromelalgia," id., while a second physician noted that DeCambre required " access to heat and central air conditioning to ensure temperature regulation" due to her " numerous medical conditions," Pl.'s Mem., Ex. C2, Dr. Crombie Letter, ECF No. 5-3. In her complaint, DeCambre further elaborates on her ailments as also including post traumatic stress disorder, fibromyalgia, arthritis, torn labrum in the hips, shoulder and elbow injuries, and a history of depression. See State Ct. R., Ex. A, Verified Compl. & Demand Trial Jury 5, ECF No. 12.
B. Special Needs Trust
DeCambre is the beneficiary of an irrevocable Special Needs Trust (" Trust" ) under 42 U.S.C. § 1396p(d)(4)(A) and (C), which is defined as a trust " containing the assets of an individual under age 65 who is disabled . . . and which is established for the benefit of such individual by . . . a court." Pl.'s Mem. 2. As an irrevocable trust under section 1396p(d)(4)(C), DeCambre has no control over the Trust corpus, and the Trust itself earns " little or no interest." Id. The Trust was funded entirely from a series of lump-sum settlements from a personal injury and property damage lawsuit, and created by the Suffolk Superior Court for DeCambre in 2010. Id. at 3; see also Defs.' Opp'n Pl.'s Mot. Prelim. Inj. (" Defs.' Mem." ) 3, ECF No. 10. The total amount of the settlement is estimated to be $330,000. Stip. Factual R. ¶ 7. DeCambre's counsel in this case, J. Whitfield Larrabee (" Larrabee" ), is also the trustee of the Trust. Pl.'s Mem., Ex. C1, Letter to Joseph, ECF No. 5-3. Based on an expenses chart submitted by DeCambre, principal from the Trust has been used to pay for administrative trustee fees; cell phone, cable, and internet bills; veterinary care for cats; dental and medical costs; and travel expenses. See Pl.'s Mem., Ex. F, Kimberly DeCambre Supplemental Needs Trust Payments 12-1-2012 to 11-04-2013 (" Trust Expenses" ), ECF No. 5-6.
C. DeCambre's Section 8 Eligibility
DeCambre has been a participant in the Section 8 housing assistance program since 2005, and effective December 1, 2012, her monthly rental payment for her apartment was $312.00. Pl.'s Mem., Ex. A, Notice Rent Adjustment 2012, ECF No. 5-1. The fair market or contract rent totaled $1,595.00 per month, and she received $1,283.00 in housing assistance program payments. Id. On October 28, 2013, the BHA adjusted DeCambre's rent to $435 per month, explaining that certain disbursements from her Trust could not be classified as exempt medical expenses. Stip. Factual R., Ex. 4, Notice Rent Adjustment 2013, ECF No. 16-4. Upon request for the submission of statements from the Trust for their annual re-certification process, Stip. Factual R., Ex. 5, Letter from Lea Luz Rios, ECF No. 16-5, DeCambre submitted various trust-related documents to the BHA on November 12,
2013, Stip. Factual R., Ex. 6, Letter from Larrabee to Dalia Joseph, ECF No. 16-6.
Upon conducting their annual recertification in the fall of 2013, the BHA determined that DeCambre was no longer eligible to receive housing assistance because her income was too high. Defs.' Mem. 3. DeCambre self-reported her gross annual income to include $2,004 from food stamps, $9,748.68 from social security, $200 from her son's earnings, and $445 from ABCD Fuel Assistance, totaling $12,397.68 for 2013. Stipulated Factual R., Ex. 3, Appl. for Continued Occupancy, Sept. 10, 2013, ECF No. 16-3. The BHA, however, based on submitted income tax returns from DeCambre's attorney, found that DeCambre received approximately $200,000 in distributions from the Trust between 2011 and 2013, and that her 2011 income tax return reported an income of $108,322. Defs.' Mem. 4. Further, the BHA found that the Trust disbursements totaled $31,749.01 in 2012 and totaled $62,828.99 between January and November 2013 -- which they determined should have been reported as income for purposes of recertification. Id. The BHA's yearly gross household income limit for a two-person household is $22,600. Section 8 -- Housing Choice Vouchers, Brookline Housing Authority (Oct. 31, 2014), http://www.brooklinehousing.org/sect8.html. As a result, DeCambre was notified in a letter dated December 18, 2013, that effective February 1, 2014, she would be responsible for the full amount of her contract rent, totaling $1,560.00, and would no longer be eligible for housing assistance. Pl.'s Mem., Ex. B, Notice Rent Adjustment 2013, ECF No. 5-2. On January 13, 2014, DeCambre's counsel emailed the BHA indicating that she would appeal the rent adjustment decision. Stip. Factual R., Ex. 10, Larrabee Email of Jan. 14, ECF No. 16-10. A meeting was scheduled between the parties for February 7 to review her file. Stip. Factual R., Ex. 11, McNiff Letter of Jan. 24, ECF No. 16-11. Meanwhile, DeCambre failed to pay the total amount of her adjusted rent ($2,200.00 in arrears), and received a notice to quit for non-payment of rent from her landlord in March 2014. Pl.'s Mem., Ex. G, Mar. Notice to Quit, ECF No. 5-7.
D. Request for Reasonable Accommodation and Hearing Officer's Decision
On March 14, 2014, DeCambre submitted a Request for Reasonable Accommodation to the BHA, as well as a request for a hearing. Pl.'s Mem., Ex. C2, Req. Reasonable Accom., ECF No. 5-3; see also Stip. Factual R., Ex. 16, Req. for Hearing, ECF No. 16-16. In it, she requested that " [the BHA] exclude from counting the expenditure of trust money" that was used towards DeCambre's car purchase, her cell phone and landline bills, and veterinary costs for the care of her cats, which she argued should be categorized as medical expenses, and thus be exempt from income calculation. Req. Reasonable Accom. DeCambre argued her car was a medical necessity because she could not be exposed to hot or cold temperatures outdoors, her cell phone and landline were needed in case of an emergency due to her " medically precarious condition," and her cats were necessary as " companion animals for her
mental health, mental and physical disabilities." Id.
An informal hearing was held at the BHA on May 27, 2014, with counsel for both sides present. Def.'s Mem. 5. The Assistant Executive Director of the BHA, Matthew Baronas, served as a hearing officer and issued a written decision on June 9, 2014. Id. In his decision, Baronas determined that the BHA had correctly calculated DeCambre's income and rental share, based upon their interpretation of HUD regulations. Stip. Factual R., Ex. 33, Baronas Decision, ECF No. 16-33. Citing to 24 C.F.R. § 5.609, he ruled that, although DeCambre's personal injury settlement is not considered income under HUD regulation, when these assets were placed in an irrevocable trust, the distributions from the trust must then be " considered income unless specifically excluded by regulation." Id. Baronas also determined that the BHA provided a timely hearing in good faith. Id. at 5-6.
DeCambre made a second Reasonable Accommodation Request on July 8, 2014, upon which she was notified by the BHA that she was missing a medical professional certification " attesting to the nexus between Ms. DeCambre's disability and the accommodation she claims to need." Defs.' Mem. 6. Initially, Larrabee signed this certification himself, arguing that no medical professional was needed, Stip. Factual R., Ex. 45, Larrabee Email of July 21, ECF No. 16-45, and submitted a certification from another physician who treated DeCambre for a hip and shoulder injury in May 2010, Stip. Factual R., Ex. 25, Certification of Med. R. John Doherty, Jr. M.D., ECF No. 16-25. Larrabee eventually submitted a certification from DeCambre's primary care physician on August 6, 2014. Stip. Factual R., Ex. 52, Larrabee Email of Aug. 6, ECF No. 16-52. On August 12, 2014, DeCambre received another notice to quit, stating that she was $1,502.00 in arrears. Pl.'s Mem., Ex. G, Aug. Notice to Quit, ECF No. 5-7.
E. Procedural History
DeCambre filed a complaint against the Defendants with the Massachusetts Commission Against Discrimination (" MCAD" ) on June 19, 2014, Stip. Factual R., Ex. 23, Mass. Comm'n Against Discrimination Charge Discrimination, ECF No. 16-35, and subsequently withdrew the complaint on August 26, 2014 as a result of pursuing her claims in court, Stip. Factual R., Ex. 30, Dismissal & Notification of Rights, ECF No. 16-30. On August 8, 2014, DeCambre filed this lawsuit against the BHA in the Massachusetts Superior Court sitting in and for the County of Norfolk, seeking $1,000,000 for damages, judicial review, and declaratory and injunctive relief arising from the BHA's decision to withhold her Section 8 Housing Assistance Program (" HAP" ) payments. State Ct. R., Ex. A, Verified Compl. & Demand Trial Jury 1, ECF No. 12. This action was removed to this Court on August 21, 2014. See State Ct. R., Notice of Removal 3, ECF No. 12.
DeCambre filed her motion for preliminary injunction on August 22, 2014. Pl.'s Mot. Prelim. Inj., ECF No. 4. The case stated hearing was heard on September 4, 2014. Elec. Clerk's Notes, ECF No. 11.
F. Claims Raised
Along with the allegations that BHA miscalculated the amount of her Total Tenant Payment and refused to make reasonable accommodations for her disability upon request, in violation of the federal regulations governing Section 8 and her substantive due process rights, DeCambre also asserts breach of lease, interference with quiet use and enjoyment, declaratory and injunctive relief, and a writ of mandamus
and judicial review. Def.'s Mem. 7. Both parties' arguments, however, were limited to the motion for preliminary injunction based on just her first two counts: (1) violation of federal civil rights under section 1983, and (2) disability discrimination under Massachusetts General Law chapter 151B as well as the related federal statutes. Id. As a preliminary matter, this Court finds that DeCambre did not adequately prove each element of her breach of lease and interference with quiet use and enjoyment claims, and therefore cannot prevail on these causes of action.
Adjacent to the central dispute over the HUD provisions and regulations, DeCambre claims that the BHA's determination " knowingly and willfully" violated her federal civil rights because it arbitrarily terminated her participation in Section 8 housing in a decision that was " not based on a preponderance of the evidence." Compl. ¶ ¶ 54-60. Second, she claims that the BHA denied her benefits " by reason of her disability" in violation of the Rehabilitation Act, Title II of the ADA, and the Fair Housing Act. Id. ¶ ¶ 65-68. Third, she moves for a preliminary injunction to enjoin the BHA from counting her Trust disbursements towards the calculation of her total ...