Judge James C. Chalfant, Case Number: 22STCP04201, Date: 2023-10-31 Tentative Ruling

Petitioner Deborah Smith (“Smith”) seeks writ of mandate compelling Respondents City of Inglewood Housing Authority and Artie Fields in his capacity as City Manager and Housing Authority Executive Director (collectively, “HA”) to reverse the decisions to terminate Smith’s Section 8 voucher, to collect the overpayment HA has assessed against her, and to deny her reasonable accommodation request.

The court has read and considered the moving papers, opposition, and reply, and renders the following tentative decision.

Petitioner Smith filed the Petition for writ of administrative mandamus on November 28, 2022. The operative pleading is the Second Amended Petition (“SAP”) filed on April 3, 2023, alleging two causes of action for administrative mandamus. The FAP alleges in pertinent part as follows.

Smith is a 61-year-old low-income resident who lives in HA’s jurisdiction and is qualified for Section 8 assistance. She lives with her 37-year-old daughter (“Jessica”) and Jessica’s 14- and 15-year-old sons. Smith’s monthly income is $1100, all from SSI and SSDI. Since 2019, Jessica has been one of her two In-Home Supportive Services (“IHSS”) care providers.

In August 2022, Smith received notice that HA would terminate her Section 8 voucher for unreported income and as a repeat offender. Because Jessica had failed to report income from a job she had secured in August 2021, HA had overpaid $16,000 in rental subsidies for her between August 2021 and August 2022.

The notice asserted that under 24 Code of Federal Regultations (“C.F.R.”) section 982.552(a)(5), HA must deny or terminate assistance because of the family’s action or failure to act. 24 C.F.R. section 982.552(a)(5) does not exist, and the quoted language does not appear in the Section 8 legislation. The letter also did not inform Smith she had the right to request a reasonable accommodation.

Jessica’s work position was remote, allowing her to work from home. Until Smith received the August 2022 notice, she did not know that Jessica had obtained outside employment. Smith testified to that fact during an HA informal hearing on October 27, 2022. Jessica testified that she had been overwhelmed by the death of her uncle, her grandfather’s hospitalization and cancer diagnosis, her mother’s recurring hospitalizations, and her son’s health issues.

HA asserted that it had no choice but to automatically terminate Smith’s benefits because she was already in a repayment program and HA could not offer her a second one. This automatic termination is not codified in HA’s Administrative Plan. In any case, Smith had already repaid HA in full under the existing plan. The panel relied on the HA’s representation and did not consider mitigating circumstances like Smith’s disability, the seriousness of case, and the effects termination would have on non-culpable family members.

On October 31, 2022, HA terminated Smith’s Section 8 voucher, effective November 30, because Jessica failed to report all her income during an annual recertification. HA also assessed an overpayment of $16,734 but would not let Smith repay it. HA later admitted this assessment was incorrect and that Smith owed at most $8,082.

Although the termination was effective November 30, 2022, HA stopped paying the Section 8 subsidy in September 2022. Smith has had to pay her full unsubsidized rent beginning September 2022. HA later admitted it should have paid a $757 subsidy per month from September through November 2022.

On November 17, 2022, Smith submitted a request for reasonable accommodation. She claimed that (1) disabilities prevented her from finding adequate affordable housing without her voucher, (2) only Jessica was responsible for violations of the Family Obligations, and (3) both facts are also mitigating circumstances which HA must consider but did not do so in its decision.

On December 2, 2022, HA issued a denial of the reasonable accommodation request. Smith failed to show a connection between her disabilities and the failure to report her daughter’s full income. Allowing Smith to cure her defect just by removing a culpable family member would set a precedent that would fundamentally alter the nature of the Section 8 program. Smith had been notified of her obligation to report income and not commit fraud. Yet, fraud was not a reason stated in the termination notice, and the termination process did not result in a finding of fraud.

Smith requested an informal hearing on the denial of her reasonable accommodation request. HA held that hearing on December 20, 2022. On January 3, 2023, the hearing officer issued a decision affirming the denial of the request.

Smith seeks a writ of administrative mandate compelling HA to (1) set aside the decision terminating her voucher and assessing $16,734 overpayment and reinstate her membership in the Section 8 program; (2) reimburse her for all months that HA did not pay rental assistance beginning September 2022; (3) set aside the decision denying the reasonable accommodation request; and (4) pay her attorney’s fees and costs.

On November 30, 2022, the court denied Smith’s ex parte application to stay Section 8 termination. The court ordered that, if Smith renews the application or makes a noticed motion for a stay, she must comply with 1008(b) except for its requirement that she show due diligence.

On February 7, 2023, the court denied Smith’s renewed motion to stay Section 8 termination.

On April 6, 2023, Smith filed and served her SAP. On April 24, 2023, the court granted Smith’s unopposed application for leave to do so.

CCP section 1094.5 is the administrative mandamus provision which structures the procedure for judicial review of adjudicatory decisions rendered by administrative agencies. Topanga Ass’n for a Scenic Community v. County of Los Angeles, (“Topanga”) (1974) 11 Cal.3d 506, 514-15.

CCP section 1094.5 does not in its face specify which cases are subject to independent review, leaving that issue to the courts. Fukuda v. City of Angels, (“Fukuda”) (1999) 20 Cal.4th 805, 811. In cases reviewing decisions which affect a vested, fundamental right the trial court exercises independent judgment on the evidence. Bixby v. Pierno, (1971) 4 Cal.3d 130, 143. See CCP §1094.5(c). In administrative mandamus actions to review decisions terminating welfare assistance, the trial court exercises independent judgment on the evidence. Frink v. Prod, (1982) 31 Cal.3d 166, 171.

Under the independent judgment test, “the trial court not only examines the administrative record for errors of law but also exercises its independent judgment upon the evidence disclosed in a limited trial de novo.” Id. at 143. The court must draw its own reasonable inferences from the evidence and make its own credibility determinations. Morrison v. Housing Authority of the City of Los Angeles Board of Commissioners, (2003) 107 Cal.App.4th 860, 868. In short, the court substitutes its judgment for the agency’s regarding the basic facts of what happened, when, why, and the credibility of witnesses. Guymon v. Board of Accountancy, (1976) 55 Cal.App.3d 1010, 1013-16.

“In exercising its independent judgment, a trial court must afford a strong presumption of correctness concerning the administrative findings, and the party challenging the administrative decision bears the burden of convincing the court that the administrative findings are contrary to the weight of the evidence.” Fukuda, supra, 20 Cal.4th at 817. Unless it can be demonstrated by petitioner that the agency’s actions are not grounded upon any reasonable basis in law or any substantial basis in fact, the courts should not interfere with the agency’s discretion or substitute their wisdom for that of the agency. Bixby, supra, 4 Cal.3d 130, 150-151; Bank of America v. State Water Resources Control Board, (1974) 42 Cal.App.3d 198, 208.

The agency’s decision must be based on a preponderance of the evidence presented at the hearing. Board of Medical Quality Assurance v. Superior Court, (1977) 73 Cal.App.3d 860, 862. The hearing officer is only required to issue findings that give enough explanation so that parties may determine whether, and upon what basis, to review the decision. Topanga, supra, 11 Cal.3d 506, 514-15. Implicit in CCP section 1094.5 is a requirement that the agency set forth findings to bridge the analytic gap between the raw evidence and ultimate decision or order. Id. at 115.

An agency is presumed to have regularly performed its official duties (Ev. Code §664), and the petitioner therefore has the burden of proof. Steele v. Los Angeles County Civil Service Commission, (1958) 166 Cal.App.2d 129, 137. “[T]he burden of proof falls upon the party attacking the administrative decision to demonstrate wherein the proceedings were unfair, in excess of jurisdiction or showed prejudicial abuse of discretion. Afford v. Pierno, (1972) 27 Cal.App.3d 682, 691.

The federal government provides rental assistance for low- and moderate-income families, the elderly, and the disabled through what is known as “the Section 8 program.” Congress added the Section 8 program to the United States Housing Act of 1937 in 1974 by enacting the Housing and Community Development Act of 1974, Pub.L. No. 93-333, §20 1(a), (codified as amended at 42 U.S.C. §14370). The express purpose of the Section 8 program is “aiding low-income families in obtaining a decent place to live and promoting economically mixed housing.” 42 U.S.C. §1437f(a). The program is managed federally by the United States Department of Housing and Urban Development (“HUD”) and administered locally by public housing authorities (“PHA”). 24 C.F.R. §982.1(a)(1).

HUD enters into annual contracts with its PHAs and provides the PHAs funds to subsidize rental payments to private landlords for eligible tenants. Administration of Respondents’ program is governed by 24 C.F.R. PHAs are required to adopt a written administrative plan that establishes local policies for administration of the program in accordance with HUD requirements. 24 C.F.R. § 982.54(a)-(b).

The PHA may admit only eligible families to the program. 24 C.F.R. §982.201(a). To be eligible, a family must be “income-eligible.” Id. Inter alia, to be income-eligible, the applicant family must be “low-income” and meet additional eligibility criteria specified in the PHA administrative plan. 24 C.F.R. §982.201(b)(iii); see also 42 U.S.C. §1437f(o)(4)(C). The annual income of an applicant family determines income eligibility. 24 C.F.R. §982.201(b)(3).

Section 8 tenants must sign a lease and pay a portion of their income toward rent. The remainder of the rent charge is paid by the PHA pursuant to a housing assistance payment (“HAP”) contract between the PHA and the owner, which mandates that a lease “shall be for a term of not less than [one] year” (42 U.S.C. § 1437f (o)(7XA)), shall “contain terms and conditions that are consistent with State and local law,” (42 U.S.C. §1437f(o)(7)(B)(ii)(I)), and “shall provide that during the term of the lease, the owner shall not terminate the tenancy except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause.” 42 U.S.C. §1437f(o)(7)(C).

The participant’s voucher is portable. The participant/tenant may choose to live in any property if the landlord agrees to accept the voucher and comply with the applicable regulations. The government subsidy is limited to the difference between the amount the family is required to contribute and the payment standard established by the PHA based on fair market rents for the area. 42 U.S.C. §1437f(o)(1)(B), (o)(2)(A)-(B).

HUD regulations identify the obligations of each Section 8 participant, referred to as “Family Obligations.” See 24 C.F.R. §982.551. Included in the list of Family Obligations is the requirement that the family (1) supply any information that the PHA or HUD determines is necessary in the administration of the program, (2) supply information requested by the PHA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition, (3) ensure all information is true and complete, and (4) not commit fraud in connection with the program. 24 C.F.R. §982.551(b); §982.551(k). Violation of any of the Family Obligations is grounds for termination of Section 8 benefits. 24 C.F.R. §982.552(c)(1)(i).

Participants are required to report a change of family composition immediately. 24 C.F.R. §§ 982.516(e), 982.551(h)(2). The amount of rental subsidy, which is paid by voucher, is based on the number of family members who will reside in the rental unit. Participants are required to report that a family member has left the household in writing within 30 days of the occurrence. The failure to do so is a basis to terminate Section 8 benefits.

The government’s rental assistance payment can be terminated for a variety of reasons. Among them are repeated violations of the lease (24 C.F.R. §§ 982.55 1(a), (e), 982.552(a)), failure to provide information to the PHA (24 C.F.R. §§ 982.551(b), 982.552(a)), and fraud. 24 C.F.R. §982.552(c)(1)(iv). “Fraud and abuse” means a single act or pattern of actions that (1) constitutes false statement, omission, or concealment of a substantive fact, made with intent to deceive or mislead; and (2) results in payment of Section 8 funds in violation of program requirements. 24 C.F.R. §792.103.

A PHA has the authority to deny or terminate admission of an applicant family if the family violates any Family Obligations pursuant to 24 C.F.R. section 982.551. 24 C.F.R. §982.552(c)(1)(i). This includes a failure to provide true and complete information to the PHA. 24 C.F.R. §§ 982.551(b), 982.552(a). A PHA also has authority to deny admission if a member of the family has committed fraud or any other corrupt act in connection with any federal housing program. 24 C.F.R. §982.552(c)(1)(iv).

In determining whether to deny assistance because of actions by members of the family, the PHA may consider all relevant circumstances such as the seriousness of the case, the extent of participation or culpability of individual family members, 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). A PHA has a duty to consider whether a reasonable accommodation is required with regard to a termination decision when the family includes a person with disabilities. 24 C.F.R. §982.552(c)(2)(iv).

Families in the Section 8 program are entitled to an administrative hearing before a PHA may terminate their assistance. 24 C.F.R. §982.555(a)(iv).

Under HA’s administrative plan, the HA shall comply fully with all federal, state, and local non-discrimination laws, and with rules and regulations governing fair housing and equal opportunity in housing and employment. RJN Ex. 1 (Admin. Plan §2-I.A).

The Fair Housing Act prohibits the refusal to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a program or dwelling under the program. Admin. Plan §2-II.A. A joint statement between HUD and the Department of Justice defines a reasonable accommodation as a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling. RJN Ex. 2. The HA must ensure that persons with disabilities have full access to its programs. Admin. Plan §2-II.A.

HA is required to terminate family assistance for certain actions or inactions of the family. Admin. Plan §12-II.A. For other actions or inactions of the family, regulations give HA the authority to terminate family assistance or take other actions. Id.

HA may require that any household member who participated in or was responsible for an offense no longer resides in the unit. Admin. Plan §12-II.C. The head of household must then certify that the culpable family member has vacated the unit and will not be permitted to visit or to stay as a guest in the assisted unit. Id. Upon HA request, the head of household must present evidence of the former member’s current address. Id.

If a family owes amounts to HA as a condition of continued assistance, HA will require the family to repay the full amount or to enter into a repayment agreement within 30 days of receiving notice from HA of the amount owed. Id.

In any decision to terminate Section 8 assistance, HA will consider the seriousness of the case, especially with respect to how it would affect other residents’ safety or property, the effects that termination of assistance may have on other members of the family who were not involved in the action or failure to act, and the extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities. Admin. Plan §12-II.D.

In the case of family-caused errors or program abuse, HA will take into consideration (1) the seriousness of the offense and the extent of participation or culpability of individual family members, (2) any special circumstances surrounding the case, (3) any mitigating circumstances related to the disability of a family member, (4) the effects of a particular remedy on family members who were not involved in the offense. Admin. Plan §14-I.C.

In the case of family-caused errors or program abuse, the family will be required to repay any excess subsidy received. Admin. Plan §14-II.B. HA may, but is not required to, offer the family a repayment agreement. Id. If the family fails to repay the excess subsidy, HA will terminate the family’s assistance. Id. HA generally will not enter a repayment agreement with a family if there is already a repayment agreement in place with the family or if the amount owed by the family exceeds $2,000. Admin. Plan §16.IV.B.

Program participants may not make false statements to HA or commit fraud, bribery, or any other corrupt or criminal act in connection with the program. Admin. Plan §14-II.B. HA will consider evidence of family program abuse, including intentional misreporting of family information or circumstances like income, and omission of facts that were obviously known by a family member. Id. HA may determine other actions to be program abuse based upon a preponderance of the evidence, as defined elsewhere in the administrative plans. Id.

Smith is 62 years old and has several disabilities. AR 785. She has received Section 8 rental assistance since 1995 and was first admitted to HA’s Section 8 program in 2001. AR 1, 785. She has reported all her income and previously complied with HA Family Obligations and Section 8 program requirements. AR 785.

Smith lives with her 37-year-old daughter Jessica and Jessica’s two sons, aged 14 and 15. AR 785. Smith has two IHSS workers, one of whom is Jessica. AR 785.

Smith’s sole income is $1,100 per month from SSDI and SSI. AR 785. Her rent is $2,035 per month, $448 of which she paid while her Section 8 voucher was active. AR 785. She cannot afford the full rent if HA terminates her assistance, and the landlord will evict her. AR 785. She does not have any family to move in with and believes that she would be homeless upon eviction. AR 785.

Because of her worsening condition, Smith has relied on Jessica since at least 2018 to fill out the annual Section 8 recertification paperwork as one of her IHSS workers. AR 785.

During a November 1, 2020 annual recertification appointment, the HA discovered Jessica was receiving income as Smith’s IHSS provider. AR 2, 65. Because her start date with IHSS was January 1, 2019, she should have reported this income by January 10, 2019. AR 2. Based on this income, HA calculated that its excess assistance payments to Smith totaled $2,830. AR 2.

On February 9, 2021, HA sent Smith a proposed termination letter based on the family’s failure to report Jessica’s income from IHSS. On March 30, 2021, HA and Smith entered into a repayment plan. AR 2, 65, 414. As part of this, Smith signed a Counseling Acknowledgment form reiterating her family’s responsibilities under the Section 8 program. AR 2, 416-17. Smith acknowledged that she underwent counseling because of noncompliance with family obligations, including the duty to (1) report income changes in writing within ten days of the occurrence and (2) not commit fraud in connection with the program. AR 416. Smith stated that she understood that further violations of family obligations would result in a recommendation for her termination. AR 417.

Smith completed the repayment plan, making the last payment on January 28, 2022. AR 766-68. On February 7, 2022, a City staff assistant emailed notice of Smith’s repayment to various HA employees, including Isabel Soto (“Soto”). AR 766.

On August 16, 2021, Smith and Jessica filed a personal declaration for HA rental assistance benefits. AR 443-50. Jessica’s listed income only included income from IHSS. AR 444. Smith and Jessica both signed the declaration under penalty of perjury. AR 450.

In June 2022, Smith’s landlord requested a Section 8 rent increase from HA, effective August 2022. AR 590-97. HA conducted an Electronic Income Verification (“EIV”) for Smith’s household. AR 2, 25-30. In the resulting EIV report, entries for the last two quarters of 2021 showed income of $4,174 and $9,693 from Molina Healthcare Inc. (“Molina”). AR 34. AR 27.

On June 16, 2022, HA sent Molina a Request for Verification to verify Jessica’s income. AR 34. In its June 29, 2022 response, Molina listed Jessica’s start date as August 2, 2021. AR 34. Jessica’s base pay for the last 12 months was $35,880 in 2021 and $36,777 in 2022. AR 34. Her overtime pay for the last 12 months was $40.63 in 2021 and $97.17 from the beginning of 2022 to date. AR 34.

On August 3, 2022, HA sent Smith a letter that proposed termination of her Section 8 voucher. AR 36. It explained that Family Obligations include duties to (1) report earned and unearned income from all sources; (2) report all income changes within ten days of the occurrence; and (3) not commit any fraud in connection with the Section 8 program. AR 36. Among other applicable provisions, HA stated that 24 C.F.R. section 982.552(a)(5) requires a PHA to terminate assistance because of the family’s action or failure to act. AR 37.

HA alleged that Smith failed to report Jessica’s income from Molina. AR 37. HA learned about this income only because (1) the EIV system detected it, and (2) Smith’s housing specialist discovered it while processing the landlord’s rent increase request. AR 37. HA sent a third-party verification form to Molina, which verified Jessica’s income. AR 37. HA calculated that it had made excess payments totaling $16,734 based on the unreported income. AR 3, 37.

HA’s letter stated that it was proposing to terminate Smith’s participation in the Section 8 program. AR 37-38. Smith was not eligible to enter into a repayment agreement because she previously entered into such an agreement for failure to report income. AR 37. HA stated that it would terminate Smith from Section 8 in 30 days unless she requested an informal hearing or appointment to address the allegations within ten days. AR 37-38. If HA terminated her participation, Smith would be liable for the full contract rent of her home. AR 38. In addition, HA has a policy of recuperating excess payments made due to fraudulent participant behavior. AR 38.

On August 6, 2022, Smith and Jessica filed a personal declaration for HA rental assistance benefits. AR 12, 19. Like the 2021 declaration, Jessica’s listed income only included income from IHSS, and did not include the income from Molina. AR 13. They admitted that a household member received a W-2 or 1099 income form in the last 12 months but did not file a tax return because the member “did not make enough to file” a tax return. AR 14. Smith and Jessica signed the declaration under penalty of perjury. AR 19.

On August 15, 2022, Smith requested in writing an appointment to discuss the termination. AR 40. This meeting occurred on August 17, 2022, where Smith and Jessica asserted that Jessica does not work for Molina. AR 43, 650. Jessica also provided a police report alleging identity theft. AR 43, 650. Smith stated that Jessica could not possibly work for Molina when she was home with Smith every day. 3, 42-43, 650.

On August 17, 2022, HA informed Molina via email of Jessica’s allegations of identity theft. AR 45-46. HA attached a copy of Jessica’s driver’s license and asked Molina to confirm that she was the woman hired. AR 45-46. On August 23, Molina confirmed that the driver’s license it had on file for Jessica had the same photo and information as HA’s copy. AR 48-49.

On August 24, 2022, HA gave Smith notice of her Section 8 voucher’s termination, effective September 30, 2022. AR 6. The stated reason for proposed termination was “Inaction by Family (Unreported Income and Repeat Offender).” AR 7. Among other applicable provisions, HA stated that 24 C.F.R. section 982.552(a)(5) requires a PHA to terminate assistance because of the family’s action or failure to act. AR 7.

The termination letter noted that Smith had signed acknowledgements that household members must report all income from all sources, report any changes in such income within ten days of its occurrence, and provide any information HA determines necessary in the administration of the program. AR 6-7. The acknowledgments also stated that household members must not commit fraud in connection with the program. AR 7.

The termination letter noted Smith’s previous failure to report Jessica’s IHSS employment income after it began on January 1, 2019. AR 7-8. HA and Smith entered into a repayment program for excess benefits paid as a result. AR 8.

In June 2022, Smith’s landlord requested a rent increase. AR 8. The subsequent EIV report revealed Jessica’s income from Molina, which Smith had again failed to timely report. AR 8. Molina provided verification of Jessica’s employment starting on August 8, 2021. AR 8. Jessica’s unreported earnings from Molina totaled $35,920.63 for 2021 and $36,874.17 through June 29, 2022. AR 8.

Smith and Jessica then submitted a false police report asserting that Jessica was a victim of identity theft. AR 8. Smith told HA it was impossible for Jessica to work for Molina because she was home with Smith every day. AR 8.

The termination letter stated that HA had made excess payments totaling $16,734. AR 8. It stated that Smith was not eligible to enter into a repayment agreement because she previously had entered into an overpayment agreement. AR 8-9. Smith had the right to request an informal hearing within ten days of the termination letter, or by September 3, 2022. AR 9.

Smith requested an informal hearing. AR 165. On August 30, 2022, HA acknowledged Smith’s request and sent her information about informal hearing procedures. AR 165, 167-74. The procedures informed Smith that she and her family would have the right to present oral and written evidence. AR 172. She could also submit a written request for a reasonable accommodation, with a deadline ten business days before the hearing. AR 174.

On October 27, 2022, HA’s Advisory Commission (“Commission”) held the informal hearing. AR 1, 69. Assistant Housing Manager Soto and HA Housing Specialist Tysharee Glover (“Glover”) appeared at the hearing and recommended termination. AR 79. Pertinent witness testimony^{^[2]} is as follows.

Glover stated that HA recommended Smith’s termination because she routinely failed to timely report all household income from all sources. AR 69. She also failed to supply information HA had determined necessary to administer the program, and to ensure such information was true and complete. AR 69. Household members also must not commit any fraud in connection with the Section 8 housing program. AR 69-70.

Smith’s previous failure to report Jessica’s income had resulted in a proposed termination on February 9, 2021. AR 71. Smith failed to report Jessica’s IHSS employment, which was discovered during the November 2020 annual recertification. AR 71. The result was excess HA payments of $2,830. AR 71. Smith was making the required payments under the repayment plan. AR 81.

In the present case, Jessica did not report her income from Molina during the household’s November 2021 annual recertification or the 2022 annual recertification. AR 70. HA learned about it through the EIV system during the processing of a rent increase request. AR 70. Molina’s third-party verification listed Jessica’s hire date as August 2, 2021 and her earnings as totaling $35,920.63 in 2021 and $36,874.17 in 2022 through June 29, 2022. AR 72. Upon inquiry from Commissioner Riley, Glover verified that both amounts were not reported. AR 72.

When Jessica and Smith met with Glover on August 17, 2022, Jessica denied ever working for Molina. AR 72. Smith added that it was impossible for Jessica to work for Molina because she was home with Smith every day. AR 72. Smith and Jessica provided a police report alleging identity theft. AR 72. Jessica had filed this false police report after receiving HA’s proposed termination without looking into the matter or contacting her employer to learn what was going on. AR 78. Jessica just filed the report to convince HA to rescind the termination or dismiss the overpayment. AR 78.

Glover sent Molina a copy of Jessica’s driver’s license and confirmed her employment. AR 72-73. HA decided to proceed with termination. AR 73. Because Smith had entered a repayment agreement in March 2021, the termination letter asserted that she was ineligible for a second repayment agreement for the $16,734 overpayment. AR 73, 79-80.

Participants are oriented to the Section 8 program upon admittance and read the Family Obligations. AR 73. Both Smith and Jessica had recently signed and submitted the form acknowledging that they had read and understood the rules. AR 74. The household had knowingly failed to report income for all household members on two separate occasions, had been counseled in entering into the repayment program for failure to report income, and filed a false police report after receiving the proposed termination. AR 74. HA cannot continue to assist Smith as she has failed to comply on two separate occasions. AR 74. She is not eligible for a repayment agreement and has a housing assistance overpayment of $16,734. AR 74. HA usually appears before the Commission to hear if anything can be done to rescind the termination, but this time termination was automatic. AR 80.^{^[3]}

Smith stated that, when she received the proposed termination, she did not know what was going on. AR 75. She called Soto and indicated that she had corrected the previous matter with Jessica. AR 75. Glover called Smith and she got an appointment. AR 76. Smith told Glover that she had no clue what this was all about because Jessica had been with Smith every day as her in-home caregiver. AR 76.

Jessica stated that, although she now knows that she works for Molina, she did not know that when she met with Glover. AR 77. A friend had given her a phone number to a recruiter, who then directed her to the open position. AR 77. The friend worked for LA Care, so Jessica thought she was placed with LA Care. AR 77. Jessica submitted the police report because she did not know that she was working for Molina. AR 77.

Although Jessica thought she was working for LA Care, she admitted that she never reported the income she earned. AR 77. She was mentally occupied with the COVID-19 pandemic, her uncle dying, her grandfather being hospitalized for COVID-19, the same grandfather learning that he has cancer, Jessica’s son fracturing his knee, and Smith going in and out of the hospital. AR 77. She became overwhelmed and forgot. AR 77.

Jessica had been a victim of identity theft before. AR 78. When Glover told her that records indicated she worked for Molina, Jessica reacted right away and filed a police report. AR 78. She later contacted Molina and discovered it was her employer. AR 78.

Jessica’s IHSS employment is separate from her Molina employment. AR 78. She has not filed taxes based solely on her IHSS income, but she did file a tax return based on her Molina income. AR 79.

Jessica accepts responsibility for her actions and does not want to see her mother lose her voucher because of what she did. AR 81.

During the hearing, Commissioner Riley opined that both the Commission and HA saw this as “a recent consistent negligence” of the rules and failure to report income. AR 80. The Commission understood that “things come up” but that does not explain the false police report. AR 80. HA gave Smith a repayment program the first time and when “you guys were making more income, you still didn’t pay the amount that was owed.” AR 81. When Commissioner Riley inquired whether the repayment program had not been paid, both Smith and Glover stated that payments were being made. AR 81. Glover added that “they’re just not eligible for a second – repayment.” AR 81.

Commission Childress inquired of Smith and Jessica if there was anything they could add because “the only option we have right now is to rescind if we have absolutely no grounds.” AR 81. Nothing has been said or shown to help you to get a retention [of Section 8 benefits]. AR 81.

The Commission concluded that based on the options currently in its purview, it had no choice but to revoke Smith’s Section 8 voucher. AR 82. When Smith pled for reconsideration, Commissioner Riley stated that HA had offered repayment once before and could not do so again because the first repayment agreement was still active. AR 82-83.

On October 31, 2022, the Commission issued a decision affirming the termination letter effective November 30, 2022. AR 64-66.

Jessica failed to report her IHSS income when she began work on January 1, 2019. AR 65. HA only discovered this through the EIV system during the November 1, 2020 annual reclassification appointment. AR 65. The excess HA payments totaled $2,830, and Smith entered a repayment plan for this amount on March 30, 2021. AR 65.

HA did not discover Jessica’s employment and income from Molina until it generated an EIV after the landlord requested a rent increase on June 13, 2022. AR 65. The EIV system did not show the hire date, but Molina’s third-party verification gave a hire date of August 2, 2021. AR 65. Jessica failed to report her new employment within ten days of its commencement. AR 65.

At the meeting after the proposed termination, Jessica denied that she worked for Molina and did not disclose that she worked for anyone else. AR 65. Molina subsequently confirmed that Jessica works for it. AR 65.

At the hearing, Jessica explained that she was hired via LA Healthcare and did not know she was working for Molina, a different company. AR 65. This second violation caused HA to overpay by $16,734. AR 65. Because Smith had entered into a repayment agreement before, she was not eligible for another. AR 66. The panel found Smith in violation of the family obligations and terminated her from the Section 8 program, effective November 30, 2022. AR 66.

On November 7, 2022, Smith and Jessica requested an appeal of the Commission’s decision. AR 67. Because of the severe impact of losing her Section 8 voucher, Smith asked for a chance to further discuss the extenuating circumstances that caused her failure to report her household’s income. AR 67.

On November 17, 2022, Smith’s counsel submitted another written request for HA to reinstate her Section 8 voucher. AR 84. One of the reasons was a request for reasonable accommodation based on Smith’s several disabilities and her inability to find additional housing without a voucher. AR 84. Because of her disabilities, her only source of income was $1100 of monthly SSI. AR 84. She could not afford a one-bedroom rental unit while having enough funds to pay for food and other necessities. AR 84. This would worsen her disabilities and physical health. AR 84. Restoring the voucher would not impose an undue burden on HA. AR 84.

Smith noted that she is not the person who violated family obligations. AR 85. Jessica did. AR 85. Civil Code section 3520 prohibits causing one person to suffer from the acts of another. AR 85.

Smith asserted that HA failed to consider mitigating circumstances, including her disabilities and that she did not violate any family obligations herself. AR 85. If permitted, Smith would agree to repay the overpaid rent subsidy on a reasonable installment plan or to remove her daughter from the voucher. AR 85.

Smith argued that HA also failed to subsidize Smith’s rent for September 2022 until the termination date of December 1, 2022. AR 85.

On December 2, 2022, HA notified Smith of its denial of her reasonable accommodation request. AR 86. HA explained that it can only grant an accommodation when the need is related to a person’s disability and the accommodation is reasonable. AR 86. An accommodation is not reasonable if it would (1) impose an undue financial or administrative burden or (2) fundamentally alter the nature of HA operations, including the obligation to comply with HUD requirements and regulations. AR 86-87.

Smith has a history of violating Family Obligations for failure to report income. AR 89. HA denied a reasonable accommodation to reinstate Smith’s Section 8 voucher because (a) Smith knew her reporting responsibility and yet signed multiple false certifications about income despite knowing her reporting responsibility, (b) her accommodation request failed to show that her failure to report income had any nexus with her disability, and (c) granting an accommodation to reinstate her Section 8 benefits on the grounds that she is disabled does not meet the definition of reasonable accommodation and would set a precedent that fundamentally alters the Section 8 program. AR 90. Anytime HA identified fraud in a household, the household could then just remove the culpable member and avoid termination. AR 90.

In case of family-caused errors or program abuses, the family will be required to repay the excess benefits, but HA is not required to offer a repayment agreement. AR 91.

The reasonable accommodation denial included notice of Smith’s right to request an informal hearing within ten business days. AR 91. Smith submitted that request on December 6, 2022. AR 92. On December 12, 2022, HA gave notice of the informal hearing scheduled for December 20, 2022. AR 93.

After the hearing, the hearing officer issued a decision on January 3, 2023 affirming the denial. AR 110-11. None of the “several ailments and health conditions” Smith’s counsel mentioned demonstrated a connection with the requested accommodation of a reversal of the Section 8 program termination. AR 110. HA’s representative illustrated both the standard for granting a reasonable accommodation and the grounds for the reasonable accommodation denial. AR 111.

The hearing officer found that Smith failed to establish a connection or causal nexus between her disability and her failure to report income in connection with the Section 8 program. AR 111. HA had followed policies and procedures when it issued the denial. AR 111. Granting a reasonable accommodation on the basis of disability without a connection to the behavior shown would fundamentally alter the nature of the reasonable accommodation process. AR 111.

On February 16, 2023, Smith requested that HA recalculate the excess Section 8 benefits paid in 2021 and 2022. AR 679. When HA had calculated the overpayment as $16,734, it assumed Jessica had earned $35,920.63 for 2021 and $36,874.17 for 2022 through June 29. AR 8, 679. However, those numbers are incorrect. AR 679. Documents show that Smith’s base salary was $35,880 in 2021 and $36,777 in 2022. AR 34, 679. Yet, HA did not prorate these base salaries to reflect Jessica’s 2021 start date of August 2, 2021 or the portion of the 2022 base salary paid as of June 29, 2022. AR 679.

On February 28, 2023, HA explained that Jessica previously asserted that she never worked for Molina and Smith never disputed the HA’s earnings calculations. AR 668. Now that Smith had done so, HA had asked Molina to provide Jessica’s W-2’s for 2021 and 2022. AR 668-69. These documents listed Jessica’s gross earnings from Molina as $31,043.93 in 2022 and $13,922.94 in 2021. AR 669. The total unreported income was therefore $44,966.87. AR 669. Based on this unreported income, the revised gross overpayment was $10,383. AR 669.

HA also acknowledged that it failed to pay the Housing Assistance Payment of $757 for September, October, and November 2022, a total of $2,301. AR 669. Smith therefore only needed to repay $10,383 - $2,301 = $8,082. AR 669.

On March 22, 2023, HA forwarded Smith a February 2022 email confirming that she had fully paid all amounts owed under the March 30, 2021 repayment plan. AR 765-66.

After filing the Petition in this action, Smith moved for a stay of her Section 8 program termination. In support of this motion, she filed declarations from herself, Jessica, and Steinback. RJN Exs. 3-6. Pertinent assertions are as follows.

Smith is 62 years old and has several disabilities. Smith Decl., ¶2. She has received Section 8 federal rental assistance since 1995 and was first admitted to the HA’s Section 8 program in 2001. Smith Decl., ¶2. Her disabilities include sciatica, back pain down her legs, arthritis, asthma, and hypertension. Smith Reply Decl., ¶2. She has reported all her income and has always complied with HA Family Obligations and program requirements. Smith Decl., ¶5.

Smith lives with her 37-year-old daughter Jessica and Jessica’s two sons, aged 14 and 15. Smith Decl., ¶2. Smith has two IHSS workers, one of whom is Jessica. Smith Decl., ¶2.

Smith’s sole income is $1100 per month from SSDI and SSI. AR 785; Smith Decl., ¶2. Her rent is $2,035 per month, $448 of which she paid while her Section 8 voucher was active. Smith Decl., ¶3. She cannot afford the full rent if HA terminates her assistance, and the landlord will evict her. Smith Decl., ¶3. She does not have any family to move in with and believes that she would be homeless upon eviction. Smith Decl., ¶3.

Because of her worsening condition, Smith has relied on Jessica since at least 2018 to fill out the annual Section 8 recertification paperwork as one of her IHSS workers. Smith Decl., ¶4; Smith Reply Decl., ¶¶ 3-4; Jessica Decl., ¶3.

When Jessica first started work as an IHSS provider, she did not know that she needed to report that income because she thought the money came from the government. Jessica Decl., ¶4. Once she learned otherwise, Smith and Jessica agreed to a repayment plan. Jessica Decl., ¶4.

In April and May 2021, Jessica submitted reports about changes to her IHSS work hours and her temporary disability status. Jessica Decl., ¶5. Later that year, a LA Healthcare employee recruited her to her new job. Jessica Decl., ¶6. Jessica therefore assumed that she was working for LA Healthcare, but she later learned that her employer was Molina. Jessica Decl., ¶6. This confusion meanwhile led her to file a police report because she thought her identity was stolen. Jessica Decl., ¶9.

Jessica works as a Molina Customer Service Agent from home 40 hours a week for $17.68 per hour. Jessica Decl., ¶6. Her pay stub shows that as of December 17, 2022, her year-to-date gross wages totaled $31,020.40, and net payment totaled $26,740.02. Jessica Decl., ¶7. She only failed to report this income because she was overwhelmed with family responsibilities. Jessica Decl., ¶8.

Jessica has space within the home to manage her own life. Smith Reply Decl., ¶6. Until the termination letter, Smith did not know that Jessica was employed and had unreported income, and she did not notice changes to Jessica’s routine or schedule. Smith Reply Decl., ¶5. When HA asked Smith if Jessica was employed other than as her IHSS, Smith answered “No” because she had no information to the contrary. Smith Reply Decl., ¶5. She never intended to misrepresent Jessica’s employment or withhold information from HA. Smith Reply Decl., ¶9.

Smith trusted Jessica to complete recertification forms correctly so that she could sign off on them afterwards. Smith Reply Decl., ¶4. Smith does not know why Jessica failed to report her own income on the forms. Smith Decl., ¶4. No one disputes that Smith fulfilled her duty to report her own income. Smith Decl., ¶5.

HUD sets income limits for the Section 8 voucher program based on geographic location. Steinback Decl., ¶4. For a four-person family in Los Angeles in 2022, HUD defined the “30% limits” income threshold as $35,750 and “Very Low Income” as $59,550. Steinback Decl., ¶4, Ex. C.

Petitioner Smith seeks to set aside HA’s decision to terminate her from the Section 8 program.

A court may grant a petition for a writ of mandate to set aside an administrative decision by a public agency that is “excessive and disproportionate to [the] alleged wrong.” Crooks v. Housing Auth. of City of Los Angeles, (“Crooks”) (2019) 40 Cal.App.5th 893, 910.

Smith argues that HA invoked the most severe punitive action it could take against her in response to a violation of family obligations by her daughter, and only her daughter. Smith, a then-61-year old woman with disabilities, did not engage in any misconduct, and did not know that her daughter had done anything improper. Even if HA did wish to punish Ms. Smith in some way for her daughter’s behavior, it had a panoply of options available. Termination of her housing assistance was excessive. Pet. Op. Br. at 15; Reply at 5.

Smith is wrong because the record fully supports the termination of her assistance. Smith had a previous failure to report Jessica’s IHSS income beginning January 1, 2019. AR 65. HA only discovered this through the EIV system during a November 1, 2020 annual reclassification appointment. AR 65. HA sent Smith a proposed termination letter on February 9, 2021 and, in lieu of termination, HA and Smith entered into a repayment plan on March 30, 2021. AR 2, 65, 414. As part of this plan, Smith signed a Counseling Acknowledgment form reiterating her family’s responsibilities under the Section 8 program. AR 2, 416-17. In her acknowledgement, Smith stated that she understood that further violations of family obligations would result in a recommendation for her termination. AR 417. Smith completed the repayment plan, making the last payment on January 28, 2022. AR 766-68.

Given this violation, Smith should have had a heightened awareness of her obligations. Yet, she failed to report Jessica’s income from Molina that began in August 2021. AR 34. Smith and Jessica submitted declarations dated August 16, 2021 and August 6, 2022 that failed to list Jessica’s income. This failure occurred while Smith was performing the repayment plan. HA did not discover Jessica’s Molina income until it generated an EIV after the landlord requested a rent increase on June 13, 2022. AR 65.

Not only did Smith fail to report Jessica’s income, she either lied or dissembled at the August 17, 2022 meeting. At the meeting, Jessica denied that she worked for Molina. Smith also asserted that Jessica did not work for Molina. AR 43, 650. Jessica also provided a police report alleging identity theft. AR 43, 650. Smith stated that Jessica could not possibly work for Molina when she was home with Smith every day. 3, 42-43, 650. Jessica did not disclose that she worked for any entity. AR 65.

Jessica subsequently admitted at the Commission hearing that her statements were false. She claimed that she was hired via LA Healthcare and did not know she was working for Molina, a different company (AR 65) but had no explanation why she did not report the income from her employer.^{^[4]}

In arguing that the penalty is excessive, Smith fails to address the false statements made by herself and her daughter about Jessica’s employment. It is almost inconceivable that Smith did not know that her live-in daughter and caregiver was working remotely from home at a new job. HA’s finding is fully supported that Smith violated her obligations to report true and complete information about family income from 2021-2022 and that termination of her Section 8 benefits is appropriate.

Smith argues that she is disabled, is guaranteed special protections under federal and state law to ensure that she is not improperly or discriminatorily denied equal access to public assistance, and HA failed to provide her with those protections.

The federal Fair Housing Amendments Act and the state Fair Employment and Housing Act and Unrue Act require housing providers to provide notice of reasonable accommodations to persons with disabilities where necessary to provide them with equal opportunity to use and enjoy housing. 42 U.S.C. §3604; Govt. Code §§ 12927, 12955; Civil Code §54.1(b)(1), (b)(3)(B). A “reasonable accommodation” is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling. Joint Statement of the Department of Housing and Urban Development and the Department of Justice, Reasonable Accommodations Under the Fair Housing Act (2004). Accommodations are required so long as they are reasonable, meaning that they do not create an undue financial or administrative burden on the housing provider and/or a fundamental alteration in the nature of the program. Giebeler v. M&B Associates, (9th Cir. 2003) 343 F.3d 1143, 1147 (citation omitted). Pet. Op. Br. at 13.

State and federal law require a PHA to provide written notification to Section 8 participants that they have the right to request a reasonable accommodation as a disabled person. See 24 C.F.R. §§ 8.20, 8.28. HA’s Administrative Plan states:

“The PHA will ask all applicants and participants if they require any type of accommodations, in writing, on the intake application, reexamination documents, and notices of adverse action by the PHA, by including the following language: ‘If you or anyone in your family is a person with disabilities, and you require a specific accommodation in order to fully utilize our programs and services, please contact the housing authority.’” (emphasis added). Admin. Plan, §2-II.A.

Smith argues that HA violated her a reasonable accommodation in different ways. First, HA violated the law and its own policy by failing to notify Smith that she had the right to a reasonable accommodation in its August 3, 2022 termination letter to Smith. As a result, Smith was not able to avail herself of this right during her termination process – when her disability could have been discussed, an accommodation could have been considered, and the termination could have been prevented. Instead, Smith discovered this right when she sought legal assistance after her Section 8 assistance was terminated. At that juncture, it was too late, practically speaking. Pet. Op. Br. at 13-14.

Second, federal law requires that a PHA decision to terminate assistance for a violation of a family obligation be subject to consideration of reasonable accommodation if the family includes a person with disabilities. 24 C.F.R. § 982.552(c)(2)(iv). HA did not consider Smith’s disability during the termination hearing. Pet. Op. Br. at 12.

Third, HA failed to engage in the interactive process and consider rule, policy, and practice changes that would have given Smith equal access as an individual with disabilities to keep her subsidy. This duty to accommodate is not limited to a single effort by the housing provider but is an interactive process wherein the PHA and participant engage in a dialogue regarding the needed accommodation. There were several accommodations that HA could have granted to achieve this aim, including (i) allowing Smith to enter into a repayment agreement, and (ii) allowing Jessica to leave the household. Federal law explicitly endorses both options as permissible accommodations. 24 C.F.R. §982.552(c)(2)(ii). HA did not discuss any accommodations that would have allowed Smith to keep her Section 8 voucher. Pet. Op. Br. at 14.

Fourth, HA’s written denial of Smith’s reasonable accommodation implies partly that the denial was due to fraud – a finding that was never made during the termination process or hearing. Fraud requires a finding that a person knowingly and willfully made false statements. 18 USC §1001. Smith did not have any knowledge of her daughter’s unreported income, and as such, she had no intent to conceal it. Smith Decl., ¶4; Suppl. Smith Decl., ¶5. She delegated the re-certification process to her daughter, her caregiver, which she had done for several years, and she signed the forms with the reasonable assumption that her daughter would appropriately report all income. Suppl. Smith Decl., ¶4. Pet. Op. Br. at 14.

Fifth and finally, HA’s failure to record the hearing on the denial of Smith’s reasonable accommodation request precludes the court from conducting an independent judicial review of the proceeding. Pet. Op. Br. at 14-15.

These issues are mostly moot. Smith is correct that HA violated the law and its own policy because its August 3, 2022 termination letter did not inform her of her right to reasonable accommodation. Nor did HA engage in the interactive process with Smith. These issues are mooted by the fact that HA addressed Smith’s subsequent reasonable accommodation request and she received a reasonable accommodation hearing on December 20, 2022. If she was entitled to reasonable accommodation, there is no reason it would not have been granted at the hearing. She was not.

On December 2, 2022, HA notified Smith that her request for reasonable accommodation was denied. AR 86. HA explained that it can only grant accommodation when the need is related to a person’s disability and the accommodation is reasonable. AR 86. Accommodation is not reasonable if it would (1) impose an undue financial or administrative burden or (2) fundamentally alter the nature of HA operations, including the obligation to comply with HUD requirements and regulations. AR 86-87.

HA denied Smith’s request for reasonable accommodation to reinstate her Section 8 voucher because (a) Smith knew her reporting responsibility and yet signed multiple false certifications about income despite knowing her reporting responsibility, (b) her accommodation request failed to show that her failure to report income had any nexus with her disability, and (c) granting an accommodation to reinstate her Section 8 benefits on the grounds that she is disabled does not meet the definition of reasonable accommodation and would set a precedent that fundamentally alters the Section 8 program. AR 90. Anytime HA identified fraud in a household, the household could then just remove the culpable member and avoid termination. AR 90. In case of family-caused errors or program abuses, the family will be required to repay the excess benefits, but HA is not required to offer a repayment agreement. AR 91.

After HA’s denial, Smith and her attorney attended the December 12, 2022 appeal hearing at which Smith had an opportunity to present evidence of her disabilities and how they related to her misconduct. See AR 110-11. She failed to provide documentary evidence as to the nature or specific details about her disabilities. Instead, she relied on unsubstantiated generalities that she has “several disabilities” and “several ailments and health conditions.” AR 84-85, 110-11.

The hearing officer’s January 3, 2023 decision affirmed HA’s denial of Smith’s reasonable accommodation request. AR 110-11. None of the “several ailments and health conditions” Smith’s counsel mentioned demonstrated a connection with the requested accommodation, which was a reversal of the Section 8 program termination. AR 110. Smith failed to establish a connection or causal nexus between her disability and her failure to report income in connection with the Section 8 program. AR 111. Granting reasonable accommodation on the basis of disability without a connection to the behavior shown would fundamentally alter the nature of the reasonable accommodation process. AR 111.

The hearing officer’s decision was correct. Smith never provided any nexus between her disabilities and her failure to report Jessica’s income as well as her false statements that Jessica could not possibly have had a job at Molina. Nor did she provide any medical documentation of her disabilities and how they affected her misconduct. Her statement that she delegated her daughter the task of filling out the application is not a valid excuse. Smith was the head of household and had an independent legal obligation to make sure all information provided was true and correct, an obligation of which she was fully aware. Smith also fails to address HA’s point that granting accommodation to reinstate her Section 8 benefits does not meet the definition of reasonable accommodation and would set a precedent that fundamentally alters the Section 8 program. AR 90.^{^[5]}

In reply, Smith argues that there is no standard that persons with disabilities must satisfy to get their reasonable accommodation request granted. Even when a reasonable accommodation request is not considered reasonable, the housing authority has a responsibility to engage in the interactive process. Joint Statement of the Department of Housing and Urban Development and the Department of Justice, Reasonable Accommodations under the Fair Housing Act. May 17, 2004 (p. 7). HA should have discussed other possibilities for Smith to retain her subsidy without a fundamental alteration to the IHA's operations and without imposing an undue financial and administrative burden. Reply at 6. These general propositions do not aid Smith. She fails to identify any nexus between her disabilities and her failure to report income that would warrant accommodation. No further interaction is required in this circumstance.

Federal law requires a PHA to affirmatively decide whether to exercise their discretion to consider relevant circumstances before determining if a Section 8 recipient’s housing subsidy should be terminated. Crooks, supra, 40 Cal.App.5th at 910-12. Those relevant circumstances include “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).

Similarly, HA’s Administrative Plan requires it to consider the following factors when making a decision to terminate Section 8 assistance: (i) “The seriousness of the case, especially with respect to how it would affect other residents’ safety or property”; (ii) “The effects that termination of assistance may have on other members of the family who were not involved in the action or failure to act”; and (iii) “The extent of participation or culpability of individual family members, including whether the culpable family member is a minor or a person with disabilities . . .” Admin. Plan, §12-II.D. HA’s Administrative Plan reiterates those requirements in its policy governing the remedies that can be imposed in response to family-caused errors. Admin. Plan, §14-I.C. These considerations are mandatory, not discretionary. Admin. Plan §12-II.D (“The PHA will consider the following facts and circumstances when making its decision to terminate assistance”) (emphasis added). Pet. Op. Br. at 9.

Smith argues that HA did not consider any of these factors when it made its decision to terminate her. HA’s several letters to Smith regarding termination, as well as the transcript of the Commission hearing, demonstrate that the entire focus of the decision to terminate Smith was the failure to report Jessica’s income. HA did not take into account Smith’s undisputed lack of culpability, any special circumstances surrounding the case (Smith had accurately reported her own income for nearly three decades), any mitigating circumstances related to Smith’s disability, or the effects that termination would have on her or Jessica’s minor children. HA failed to follow the dictates of its Administrative Plan. Pet. Op. Br. at 9-10; Reply at 4-5.

The court agrees. In Crooks, the appellate court affirmed the trial court’s determination that Crooks’ knowingly false statements about her marital status entitled the housing authority to terminate her from the Section 8 program. 40 Cal.App.5^th at 898. However, there was no indication in the administrative hearing officer’s decision that he considered the seriousness of the case and the effects of termination on other family members as required by 24 C.F.R. section 982.552(c)(2)(i). Id. While the regulation states that a PHA “may” consider these factors – meaning that it may consider all, some, or none of them – there was nothing in the hearing officer’s decision indicating that he either exercised his discretion to consider 24 C.F.R. section 982.552(c)(2)(i) or that “he was aware of his discretion to consider those factors and chose not to do so”. Id. at 911. The failure to recognize the authority to exercise discretion can itself be grounds for reversal. Id. (citation omitted).

This case is similar to Crooks. The Commission did not ever indicate that it knew it had discretion to consider the relevant circumstances in 24 C.F.R. section 982.552(c)(2)(i) and Admin. Plan, §12-II.D. Unlike in Crooks, this consideration is mandatory. Admin. Plan §12-II.D (“The PHA will consider the following facts and circumstances when making its decision to terminate assistance”) (emphasis added). This is a failure by the decision-maker to show that it was aware of the duty to evaluate mandatory factors.

Smith admits that HA correctly discovered that Jessica violated her obligation to timely report income she from a job that she started in August 2021. Smith argues that post-decision discoveries show that she did not receive due process and a fair trial. Pet. Op. Br. at 10.

Smith argues that HA grossly miscalculated Jessica’s earnings. HA determined, and argued to the Commission, that Jessica earned approximately $36,000 in the last four months of 2021 and approximately $37,000 in the first half of 2022. AR 000072. Jessica actually earned approximately $13,000 in 2021 and approximately $18,000 in 2022. AR 668-69. The amounts given to the Commission were materially incorrect. HA has acknowledged their inaccuracy and revised them since Smith’s hearing. AR 668-70. Pet. Op. Br. at 10-11.

Smith fails to acknowledge that the error in calculating Jessica’s earnings lay with Molina. On June 16, 2022, HA sent Molina a Request for Verification to verify Jessica’s income. AR 34. In its June 29, 2022 response, Molina listed Jessica’s base pay for the last 12 months as $35,880 in 2021 and as $36,777 in 2022. AR 34. HA used these numbers when it calculated the overpayment as $16,734. AR 8, 679. However, Molina failed to pro rate Jessica’s base salaries to reflect Jessica’s 2021 start date of August 2, 2021 or the portion of the 2022 base salary paid as of June 29, 2022. AR 679. This was Molina’s error.

At the August 17, 2022 meeting Jessica denied ever working for Molina. She also never disputed the HA’s earnings calculations before the Hearing Commission. See AR 77-78. Smith offers no explanation why this issue was not raised at her Commission hearing. Presumably, Jessica knew how much she had earned from her Molina paystubs or tax return. See AR 79. When Smith did raise the issue after the Commission’s decision, HA revised the total unreported income to $44,966.87 and the overpayment to $10,383. AR 669. None of these facts denied Smith a fair hearing.

Smith argues that HA’s Notice of Termination stated that HA is bound by “Title 24 Code of Federal Regulations (C.F.R.) 982.552: PHA Denial or Termination of assistance for family (a) Action or inaction by family. (5) The PHA must deny or terminate assistance because of the family's action or failure to act.” AR 7 (emphasis in original). Smith describes this as a wholesale fabrication. There is no 24 C.F.R. section 982.552(a)(5) and there is no mandatory PHA duty under 24 C.F.R. section 982.552 to terminate. Pet. Op. Br. at 11.

It is true that a PHA merely has discretion, not a mandatory duty, to terminate Section 8 assistance for a participant’s failure to provide true and complete information to the PHA under 24 C.F.R. §982.552(a), and that there is no subdivision (5) to this regulation. Yet, Smith fails to show any prejudice from the Notice of Termination. She did not assert any confusion or make any objection to this language at the August 17, 2022 meeting or at her Commission hearing. This objection is waived.

5. HA’s Erroneous Representations About Policy Denied Smith Due Process and a Fair Trial

The Commission’s failure to acknowledge its discretion is aggravated by the misrepresentations made by HA representatives to the Commission.

Smith argues that HA misrepresented that HA policy prohibited participants in an active repayment plan from entering into another repayment agreement. Smith’s counsel has obtained documentary proof that HA knew that Smith had satisfied her repayment plan obligations on February 7, 2022 and was not in an active repayment plan during the termination process (August-October 2022). AR 765. Soto possessed this evidence and yet argued vociferously at the hearing that Smith was in an active repayment plan. AR 79-80. Pet. Op. Br. at 12; Reply at 3-4.

At the Commission hearing, HA Housing Specialist Glover explained that Smith received a repayment agreement in March 2021. AR 79. Grover stated that, because Smith had entered a repayment agreement in March 2021, she was ineligible for a second repayment agreement for the $16,734 overpayment. AR 73-74, 79-80.

Assistant Housing Manager Soto added that HA’s policy is that when clients already have a repayment agreement, we can’t enter into a new one.” AR 80. “And we cannot allow them to pay us in full. This is an automatic termination and we just come to the commission to hear, you know, if there’s anything that we can do to rescind that, but in this situation, we can’t.” AR 80.

When Commissioner Riley inquired whether the repayment program had not been paid, both Smith and Glover stated that payments were being made. AR 81. Glover added that “they’re just not eligible for a second – repayment.” AR 81.

The Commissioners clearly felt they had no discretion. Commissioner Childress inquired of Smith and Jessica if there was anything they could add because “the only option we have right now is to rescind if we have absolutely no grounds.” AR 81. After deliberation, the Commission concluded that based on the options currently in its purview, it had no choice but to revoke Smith’s Section 8 voucher. AR 82. When Smith pled for reconsideration, Commissioner Riley stated that HA had offered repayment once before and could not do so again because the first repayment agreement was still active. AR 82-83.

There are two problems with HA’s representations to the Commission that its policy does not permit a second repayment agreement and termination is automatic.

First, HA points to no written policy to this effect. HA cannot have a policy without a formal document (the Administrative Plan) or some other written policy. The Admin. Plan states only HA’s policy that it may, but is not required to, offer a repayment plan (Admin. Plan §14-II.B) and that HA generally will not enter a repayment agreement with a family if there is already a repayment agreement in place with the family or if the amount owed by the family exceeds $2,000 (Admin. Plan §16-IV.B). Neither HA nor the Commission interpreted this policy to mean that no repayment plan is available if the participant ever had a repayment agreement, and it may be reasonably interpreted to mean that no repayment plan is available if the participant has an ongoing repayment agreement. The latter is clearly what the Commissioners understood. Yet, pursuant to this interpretation of the policy, Smith had completed her repayment agreement and was not automatically barred.

Second, the policy that HA generally will not enter a repayment agreement with a family if there is already a repayment agreement in place with the family or if the amount owed by the family exceeds $2,000, is not absolute. The word “generally” does not mean “always”. Even under the policy, the Commissioners had discretion and were not foreclosed from considering a new payment plan for Smith. Yet, they did not know they had this discretion.

The City argues that the corrected debt owed by Smith is $8,082, which still exceeds HA’s repayment threshold. Opp. at 8. This may be true, and the Commission would be within its discretion to conclude that a repayment program for the new debt is inappropriate. But the Commission never had the opportunity to make that determination. Additionally, Smith points out that her first repayment agreement was for $2830, which also exceeds the $2000 amount for which HA generally will not enter into a repayment agreement. Reply at 4. It is not beyond the realm of possible that the Commission would consider a repayment plan for the $8,082 amount.

The Petition is granted in part. There is sufficient evidence from which the Commission could terminate Smith from the Section 8 program. Smith was not denied a fair trial on some issues, and her reasonable accommodation request was properly denied. However, the Commissioners did not demonstrate that they had discretion to consider the requisite factors and erroneously believed that termination was automatic because of an ongoing repayment plan. A writ shall issue remanding the case to the Commission to exercise its appropriate discretion.

Petitioner Smith’s counsel is ordered to prepare a proposed judgment and writ, serve them on the City’s counsel for approval as to form, wait ten days after service for any objections, meet and confer if there are objections, and then submit the proposed judgment and writ along with a declaration stating the existence/non-existence of any unresolved objections. An OSC re: judgment is set for December 7, 2023 at 9:30 a.m.

^{^[1]}Smith requests judicial notice of (1) HA’s Administrative Plan (RJN Ex. 1); (2) “Reasonable Accommodations Under the Fair Housing Act,” a Joint Statement of the Department of Housing and Urban Development and the Department of Justice, dated May 7, 2004 (RJN Ex. 2); and (3) declarations in support of Smith’s motion for a stay, including Smith (RJN Exs. 3-4), (4) Jessica (RJN Ex. 5), and (5) Rachel Steinback (“Steinback”) (RJN Ex. 6). The requests for RJN Ex. 1 and 2 are granted. Evid. Code §452(c)

The court need not judicially notice the declarations (RJN Exs. 4-6) because it is always free to review prior filings in the current case, if relevant. Smith makes no showing of relevance. The determination of administrative mandamus is based solely on the Administrative Record unless the evidence meets the criteria of CCP section 1094.5(e). Smith makes no attempt to show that the declarations meet these criteria. Smith also failed to make a motion to augment the record with this evidence as required by LASC 3.231(g)(3). The court would exclude the declarations except that the City has no objection. As a result, they have been considered.

^{^[2]} It is not clear whether the witnesses were sworn under oath.

^{^[3]} Assistant Housing Manager Soto added that HA’s policy is that when clients already have a repayment agreement, we can’t enter into a new one.” AR 80. “And we cannot allow them to pay us in full. This is an automatic termination and we just come to the commission to hear, you know, if there’s anything that we can do to rescind that, but in this situation, we can’t.” AR 80.

^{^[4]} The August 8, 2022 declaration by Smith and Jessica contains a handwritten note stating that the family “did not make enough to file” a tax return. AR 14. This handwritten statement is contradicted by Jessica’s admission at the Commission hearing that she filed a tax return for her employment with Molina. AR 79.

^{^[5]} Smith does not show that the December 12, 2022 hearing was required to be recorded and the lack of a recording does not alter the fact that Smith failed to provide any evidence to substantiate her reasonable accommodation claim. Nor did HA’s denial of reasonable accommodation find that Smith committed fraud, although her conduct could be characterized as such. See AR 86-87.