CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS. CAAP-13-0000785; CIV. NO. 12-1-2339-09.
Philip W. Miyoshi, for petitioner.
Craig Iha, John C. Wong, Diane K. Taira and Jennifer R. Sugita. for respondent.
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON JJ.
[135 Hawai'i 268] Paula A. Nakayama,
This appeal concerns Fetu Kolio's (Kolio) eviction from Mayor Wright Homes (Mayor Wright), a federally-subsidized public housing project, which is owned and operated by Hawai'i Public Housing Authority (HPHA). While living at Mayor Wright, Kolio served as the president of the Mayor Wright Homes Tenant Association (Association) and misappropriated approximately $1,400 in Association funds. He later pled guilty to second degree theft. HPHA evicted Kolio from Mayor Wright, alleging that Kolio's theft of Association funds violated a term in his lease that stated: " Tenant . . . shall not engage in . . . any criminal activity . . . that threatens the health, safety or right to peaceful enjoyment of Management's public housing premises by other public housing residents or neighboring residents." On appeal, both the Circuit Court of the First Circuit (circuit court) and the Intermediate Court of Appeals (ICA) affirmed.
On review of the record, HPHA failed to carry its burden of showing that Kolio's theft threatened the health, safety, or peaceful enjoyment of the premises. Additionally, Kolio's theft did not meet the definition of criminal activity given in Hawai'i Administrative Rules (HAR) § 17-2020, which governs the practice and procedure for terminating the tenancy of a person occupying a unit in a project that is owned or operated by HPHA. Therefore, we hold that the ICA gravely
[135 Hawai'i 269] erred in affirming the Eviction Board, and we reverse the Eviction Board's Order.
In 2004, Kolio entered into a rental agreement with HPHA (Rental Agreement) under which he became a tenant of Mayor Wright, a federally-subsidized housing project. The project is under the jurisdiction of the U.S. Department of Housing and Urban Development (HUD) and under the ownership and operation of HPHA. From 2009 until 2011, Kolio served as the President of the Mayor Wright Tenant Association. On July 27, 2010, Kolio received a check for $1,400 from HPHA to be used for resident participation activities as required by HUD. In 2011, Kolio failed to comply with HPHA's requests for financial documentation of the Association checking account, and HPHA's Financial Management Office confirmed that the check had been cashed and deposited into Kolio's personal account. Kolio was charged with Theft in the Second Degree, a Class C felony in January 2012 and he pled guilty to the charge on May 29, 2012.
A. HPHA Proceedings
On February 27, 2012, HPHA sent Kolio a Notice of Violation of Rental Agreement and Proposed Termination of Rental Agreement (Non-Rent Violation) (Notice) stating that HPHA would proceed to terminate Kolio's tenancy because he violated, among other sections, Section 8(p)(1) of the Rental Agreement. Section 8(p)(1) stated that it was a tenant's obligation to
(p) Assure that Tenant, any member of the household, a guest or another person under Tenant control, shall not engage in:
(1) Any criminal activity or alcohol abuse that threatens the health, safety or right to peaceful enjoyment of Management's public housing premises by other public housing residents or neighboring residents or employees of Management[.]
The Notice further referred to Kolio's misappropriation of Association funds.
After the parties were unable to settle the dispute through the grievance process prescribed by Hawai'i Administrative Rules (HAR) § 17-2021, a hearing was scheduled before the Oahu Eviction Board A of HPHA on September 11, 2012 to determine whether the Rental Agreement should be canceled and terminated due to the alleged violations. In addition to providing evidence of Kolio's theft and his conviction, the Manager's Report to the Eviction Board stated that " Theft in the Second Degree is defined as a felony which constitutes criminal activity in violation of Section 8(p)(1) of the Rental Agreement." The Report also stated that the " Association funds which were to be used solely for the benefit of the individual residents that Mr. Kolio represented, caused mistrust within the community causing a [threat to] health, safety or right to peaceful enjoyment of Management's public housing premises by other public housing residents or neighboring residents."
Kolio argued that he did not violate Section 8(p)(1) of the lease because that Section referred only to activity that " (1) meets the definition of 'criminal activity' as understood in the context of public housing evictions and (2) 'threatens the health, safety, or right to peaceful enjoyment of the premises' by others." He asserted that the argument that tenant safety and health were threatened because the Association did not possess the stolen funds was purely speculative, and " '[a] legal conclusion should not rest on a foundation of entirely fictitious events.'"
At the hearing, HPHA Project Manager Joanna Renken (Renken) testified that:
[135 Hawai'i 270] A lot of times, we feel that peaceful enjoyment or, or any kind of threat of health and safety is a lot times physical, but what people don't know [is] that it can also mean emotional as well. So, I'm speaking on behalf of the residents of Mayor Wright Homes, and Mr. Kolio did violate the Rental Agreement.
When responding to a question about what the Association funds were to be used for, Renken stated:
Usually the resident participation fund is given by the HUD . . . and that specific fund is supposed to be used to generate programs for the residents within the community to gain either employment or anything to make them become self sufficient, or to provide ...