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Khan v. Bland

February 18, 2009

LATIF KHAN, PLAINTIFF,
v.
EDWARD BLAND AND TOSHA LESHURE, THEIR INDIVIDUAL CAPACITIES, AND HOUSING AUTHORITY OF CHAMPAIGN COUNTY, AND ALPHONSO JACKSON, IN HIS OFFICIAL CAPACITY AS SECRETARY OF THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, DEFENDANTS.



OPINION

A jury trial in the above captioned case commenced in this court on February 2, 2009. At the close of Plaintiff's case on February 4, 2009, Defendants filed a Motion for Directed Verdict (#51) and moved for a directed verdict on all counts remaining in Plaintiff's Complaint (#1). Pursuant to Federal Rule of Civil Procedure 50(a), the court, for the following reasons, hereby GRANTS judgment as a matter of law for Defendants on all counts.

PROCEDURAL BACKGROUND

Plaintiff filed his Complaint (#1) in the matter on December 11, 2006. In his Complaint, Plaintiff alleged that he was entitled to damages from Defendants for their violation of his due process rights under the Fourteenth Amendment and for a state claim of intimidation. Plaintiff, a landlord, claimed that Defendants had improperly terminated existing Section 8*fn1 Housing Assistance Payment (HAP) contracts he had with the Housing Authority of Champaign County. Plaintiff also alleged that Defendants had debarred him from ever doing business with the Housing Authority's Section 8 program in the future. Plaintiff originally named as defendants (1) Edward Bland, Executive Director of the Housing Authority of Champaign County, (2) Tosha LeShure, manager of the Section 8 program at the Housing Authority of Champaign County, (3) the Housing Authority of Champaign County (hereinafter Housing Authority), and (4) Alphonso Jackson, in his capacity as Secretary of the United States Department of Housing and Urban Development (hereinafter HUD). Plaintiff listed seven counts in the Complaint, which were as follows:

Count I: 42 U.S.C. § 1983 Procedural Due Process Claim against Defendant Bland

Plaintiff claimed that Bland, acting pursuant to color of law, deprived Plaintiff of a valuable property right, i.e. his contracts with the Housing Authority and his expectancy to continue to contract in the future, without due process of law in violation of the Fourteenth Amendment to the United States Constitution. Plaintiff asked for compensatory and punitive damages.

Count II: Section 1983 Procedural Due Process Claim against Defendant LeShure

Plaintiff claimed that LeShure, acting pursuant to color of law, deprived Plaintiff of a valuable property right, i.e. his contracts with the Housing Authority and his expectancy to continue to contract in the future, without due process of law in violation of the Fourteenth Amendment to the United States Constitution. Plaintiff asked for compensatory and punitive damages.

Count III: Substantive Due Process Claim against Defendant Bland

Plaintiff claimed that Bland's debarment of Plaintiff from doing business with the Housing Authority and HUD was done arbitrarily and capriciously, with malice towards Plaintiff to retaliate against Plaintiff for evicting a tenant who had violated his lease with Plaintiff. Plaintiff claimed there was no adequate state law remedy against Bland for his actions in debarring Plaintiff and that Bland's actions constituted a denial of substantive due process in violation of the Fourteenth Amendment to the United States Constitution.

Count IV: Substantive Due Process Claim against Defendant LeShure

Plaintiff claimed that LeShure's refusal to allow tenants to remain in Plaintiff's houses, despite hardship, was done arbitrarily and capriciously, with malice towards Plaintiff, to retaliate against Plaintiff for evicting a tenant who had violated his lease with Plaintiff. Plaintiff claimed there was no adequate state law remedy against LeShure for her actions in refusing to allow tenants to remain in houses owned by Plaintiff and that her actions constituted a denial of substantive due process in violation of the Fourteenth Amendment to the United States Constitution.

Count V: Intimidation Claim against Defendant Bland

Plaintiff claimed that Bland's threat to see that Plaintiff was criminally prosecuted for fraud if he contested his debarment of Plaintiff constituted intimidation as defined in 720 ILCS 5/12-6 of the Illinois Criminal Code.

Count VI: Section 1983 Due Process Claim against Defendant Housing Authority

Plaintiff claimed that Bland was in a position of making and enforcing policies on behalf of the Housing Authority and that his actions in terminating Plaintiff's contracts with the Housing Authority without due process and intimidating Plaintiff were the actions of the Housing Authority by virtue of Bland's position with them. Plaintiff claims the Housing Authority implicitly or explicitly ratified Bland's actions in terminating Plaintiff's contracts with the Housing Authority without due process and intimidating Plaintiff. Further, the Housing Authority failed to adopt and enforce policies which would provide to persons who contracted with it, including Plaintiff, due process with respect to the administration and enforcement of its Section 8 housing program.

Count VII: Section 1983 Due Process Claim against HUD

Plaintiff alleged various procedural due process claims against HUD over the actions of the other Defendants.

On June 15, 2007, Defendant Alphonso Jackson, with the consent of Plaintiff and his attorney, moved the court to approve a stipulation dismissing Jackson from the litigation. Magistrate Judge David G. Bernthal granted the motion via text order on July 3, 2007. The three remaining Defendants filed their Answers (#18, 20, 22) to the Complaint on June 15, 2007. On July 17, 2007, a Discovery Order (#28) was entered by Judge Bernthal setting the final pretrial date for January 23, 2009, with a jury trial set to begin on February 2, 2009. No further action was taken by either party on the case until a status conference on December 15, 2008, where the jury trial dates remained in effect. On January 23, 2009, the final pretrial conference was held and the final pretrial order (#31) was entered. In the final pretrial order (#31), Plaintiff listed 16 different properties on which he claimed to have lost income for a total of $411,100 in lost income. Plaintiff also claimed $50,444 in other related losses. On February 2, 2009, a jury was selected and the case proceeded to trial the next day with opening statements.

As factual background, the dispute at issue has its origin in an eviction case between Plaintiff and a Section 8 tenant, Andrew Washington. Washington rented an apartment at 1211 N. Market Street, Champaign, Illinois, from Plaintiff under the Section 8 program. Some time after leasing the apartment, Washington inquired of Plaintiff about renting the unit's basement as a storage space outside the Section 8 program. Plaintiff claims he did check with the Housing Authority and was told he could rent the space to Washington. After Washington failed to pay his rent, Plaintiff took Washington to small claims court and eventually was successful in getting Washington evicted. Plaintiff claims this lead to the bad blood between himself and the Housing Authority, causing the confrontations with Executive Director Bland and the eventual termination of his Section 8 contracts.

THE TRIAL

Before trial began Plaintiff agreed to dismiss Count V of the Complaint, the intimidation claim. The case proceeded to trial on Counts I, II, III, IV, and VI only. The first witness called by Plaintiff was Mary Ann Midden. Midden worked in the law firm where Plaintiff was a client. Midden testified that Plaintiff had been having trouble with the Housing Authority since late 2005 because the HA did not like Plaintiff renting non-Section 8 property to a Section 8 tenant. Midden had been asked by Plaintiff to accompany him to a meeting with Defendant Bland in early 2006. Midden attended the meeting hoping to obtain a copy of the Section 8 rules to see what basis the HA had to be angry over the renting of the storage space to Washington. Attending the meeting were Bland, Plaintiff, and Midden. Bland explained Plaintiff could not have a side lease under his agreement with the HA or under HUD regulations. Midden did not recall Bland showing her any documents or rules barring the side lease.

Midden testified that Bland believed the storage space was going to be used for occupancy and Plaintiff was trying to get more rent than he was allowed. Midden described Bland as "firm, resolute, and not hearing" Plaintiff or her. Bland then had Plaintiff step out of the meeting and told Midden that he did not want people like Plaintiff in the program because of the way he did business. Midden asked what kind of process could Plaintiff use to appeal Bland's decision to terminate the HAP contracts but Bland ignored her and said the Housing Authority could use the Inspector General's office to have Plaintiff prosecuted for fraud.

On cross examination, Midden admitted that Bland allowed Midden and Plaintiff to speak. On redirect, however, she testified that she did not have the chance to explain to Bland why she thought the second lease was lawful. At the end of the meeting, it was her understanding that if Plaintiff pursued the matter, he would be investigated for fraud by the federal government.

Next to the stand was Tosha LeShure. LeShure has been employed by the HA since March 2000 and has been Section 8 manager since April 2004. She oversees the day to day processes of the Section 8 program and is in charge of quality control. She sent the March 28, 2006, letter to Plaintiff as part of her duties as Section 8 manager. The letter was admitted into evidence as Plaintiff's Exhibit 5. She was directed by Bland to send the letter. The letter informed Plaintiff that previous letters had been sent to Plaintiff's tenants, informing them of the termination of Plaintiff's HAP contracts and that they would need to seek other places to live and be out of their current properties by April 1, 2006. The letter did say that for tenants for whom moving would be a hardship, the HA would allow them to remain in their current units, as long as they were in habitable condition. LeShure testified that it was Bland who made the decision to terminate Plaintiff. In early 2006 Plaintiff maintained four properties in the Section 8 program.

LeShure also testified as to how the Section 8 program worked. The program allowed low income families to rent units in the private market that were subsidized by the federal government.

The prospective program member must come to the Housing Authority for an eligibility determination. The HA has the tenant fill out documentation on family size and income. The amount of the subsidy paid by the government depends on household composition and income. Also, a Section 8 tenant's portion of the rent cannot exceed 40% of his income. For example, if a tenant has a monthly income of $1,000, his portion of the rent cannot exceed $400. Once approved, the tenant can look for a home and present the voucher to the landlord of the property they wish to rent. The landlord can then approve the lease and enter into a contract with the HA which makes the property in question a Section 8 property. Properties are only Section 8 properties when a Section 8 tenant is living there. The paperwork is then returned to the HA, where the landlord's rent is viewed with the tenant's information to determine affordability. Once that is determined, a Housing Quality Standards (HQS) inspection is ordered for the unit.

HQS inspections involve safety issues, such as floors, walls, outlets, plumbing, and furnaces. Once a unit passes an HQS inspection, coordinators send out a HAP contract to the landlord. HAP contracts outline who should be in the unit, responsibilities, and what is considered a breach of the HAP contract. The HAP contract is between the landlord and the Housing Authority. A HAP contract will say how long it runs, usually from the start of the lease date (between the tenant and landlord) to the end of the lease date. The HAP contract can be terminated for many reasons. A HQS inspection is mandatory every year and the unit must pass the inspection for the HAP contract to be renewed. If the HQS inspection is a failure, the HA can terminate the HAP contract.

LeShure attended the meeting between Bland and Plaintiff, where the issue was the eviction of Andrew Washington. LeShure said the second lease between Plaintiff and Washington was a red flag under the HAP contract, since any addendums to leases had to be approved by the HA. In February 2006 a letters were sent out to notify tenants that HAP contracts with Plaintiff would be terminated as of April 1, 2006. Leshure testified that a meeting was had around this time between Plaintiff, Bland, and attorney Jason Barickman, a meeting for which she was present. LeShure described Bland as being "passionate" at the meeting. She said afterwards she explained to Plaintiff that the HA cannot debar him from doing business with the HA, and ...


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