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  "name": "EASTERN CAROLINA REGIONAL HOUSING AUTHORITY v. SHERBREDA LOFTON",
  "name_abbreviation": "Eastern Carolina Regional Housing Authority v. Lofton",
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    "judges": [
      "Justice ERVIN did not participate in the consideration or decision of this case."
    ],
    "parties": [
      "EASTERN CAROLINA REGIONAL HOUSING AUTHORITY v. SHERBREDA LOFTON"
    ],
    "opinions": [
      {
        "text": "NEWBY, Justice.\nIn this case we consider whether public housing authorities must exercise discretion when pursuing evictions that are not otherwise mandated by federal law. Recognizing that public housing is the housing of last resort, Congress intended public housing authorities to exercise discretion in certain eviction proceedings, such as the lease violation at issue here arising from the actions of a third party. The trial court\u2019s findings establish that plaintiff failed to exercise its discretion before pursuing defendant\u2019s eviction. Accordingly, plaintiff has not established its right to summary ejectment. Nonetheless, because the Court of Appeals erred by imposing an unconscionability analysis, we modify and affirm the decision of that court.\nDefendant is a tenant in Brookside Manor, which is owned and operated by plaintiff, a federally subsidized housing authority. The tenancy is governed by a signed lease that contains various provisions required by federal law. Relevant here, the lease prohibits \u201c[a]ny drug-related criminal activity on or off the premises\u201d and provides that plaintiff \u201cmay terminate... the Lease and the tenancy\u201d for any such activity \u201cby Tenant, any of Tenant\u2019s household members, any guest of Tenant, or another person under Tenant\u2019s control.\u201d Plaintiff\u2019s \u201cResident Handbook\u201d and \u201cAdmission and Continued Occupancy Policy,\u201d both incorporated into the lease, restate the same, characterizing \u201c[djrug-related criminal activity engaged in on or off the premises by a tenant, member of the tenant\u2019s household or guest, and any such activity engaged in on the premises by any other person under the tenant\u2019s control, [a]s grounds to terminate tenancy.\u201d\nDefendant often asked Cory Smith to baby-sit her children while she worked at night. On 26 April 2013, Smith arrived at defendant\u2019s apartment to watch the children while defendant slept before work and later while she worked. While defendant slept, law enforcement entered the apartment and arrested Smith for outstanding child support warrants. Officers searched Smith incident to his arrest and found four small bags of marijuana in his pocket.\nDefendant consented to a search of her apartment, during which officers discovered a partially prepared \u201cmarijuana blunt\u201d in plain sight, marijuana in plain sight on the kitchen counter, plastic bags for packaging marijuana for sale, and fourteen more bags of marijuana behind a pan on the kitchen counter. Smith admitted that the marijuana belonged to him, and he was charged with felony possession with intent to sell and deliver a controlled substance. Defendant was not charged.\nOn 22 May 2013, plaintiff notified defendant in writing that she had breached the lease because of the drug-related activity that had occurred in her apartment by Smith, a person under her control. Plaintiff stated it had terminated defendant\u2019s lease and ordered her to vacate her apartment. When defendant failed to comply, plaintiff sought summary ejectment. Following a hearing, the magistrate entered judgment for plaintiff, entitling plaintiff to take possession.\nUpon appeal to the District Court, Wayne County, for a trial de novo, defendant admitted that Smith placed marijuana in various places in the apartment, that Smith was under her control, and that her lease made her \u201cresponsible for the conduct of her guests or persons under her control. \u201d Plaintiff\u2019s manager testified that she believed any drug-related criminal activity required eviction. In its order the trial court noted defendant\u2019s acknowledgement that \u201cdrug-related criminal activity\u201d occurred in her apartment and that such activity would \u201cauthorize Plaintiff to evict her from her apartment\u201d despite \u201cher lack of knowledge of\u2019 the criminal activity. Nonetheless, the trial court found in part:\n8. Plaintiff did not produce evidence that it considered any mitigating factors or used any discretion in making its decision to terminate Defendant\u2019s lease. The only decision Plaintiff considered was whether Defendant met the criteria for having a person under her control who engaged in drug-related criminal activity.\n9. It did not appear that Plaintiff, through its two witnesses, understood that it even had the authority or duty to consider other factors other than whether Defendant met the criteria for lease termination.\nThe trial court denied plaintiff\u2019s request to evict defendant, concluding that federal law required plaintiff to exercise discretion in making its decision. Plaintiff appealed the trial court\u2019s order to the Court of Appeals.\nThe Court of Appeals affirmed the decision of the trial court on a different basis, concluding that plaintiff must prove that evicting defendant was not unconscionable under North Carolina law. E. Carolina Reg\u2019l Hous. Auth. v. Lofton, _ N.C. App. _, 767 S.E.2d 63 (2014). We allowed plaintiff\u2019s petition for discretionary review.\nContrary to the Court of Appeals\u2019 decision, the equitable defense of unconscionability is not a consideration in summary ejectment proceedings. To prevail in a summary ejectment proceeding under North Carolina law, a landlord must establish by a preponderance of the evidence that a tenant breached the lease. See N.C.G.S. \u00a7\u00a7 42-26(a)(2), -30 (2015); see also Durham Hosiery Mill Ltd. P\u2019ship v. Morris, 217 N.C. App. 590, 593, 720 S.E.2d 426, 428 (2011) (\u201cA tenant may be removed in a summary ejectment action when the tenant has \u2018done or omitted any act by which, according to the stipulations of his lease, his estate has ceased.\u2019 \u201d (quoting N.C.G.S. \u00a7 42-26(a)(2) (2009)); id. at 595-96, 720 S.E.2d at 429 (rejecting as \u201cclearly dicta\u201d the language in Morris v. Austraw, 269 N.C. 218, 223, 152 S.E.2d 155, 159 (1967), perceived as requiring an unconscionability analysis).\nIf the lease at issue related to a private landlord-tenant relationship, our analysis would end here. When the government is the landlord, however, certain duties arise under applicable law. Federal statutes and regulations govern federally subsidized public housing and require public housing authorities to incorporate certain provisions into their leases. In its role as the final forum for review of government housing decisions, the Court is not to second-guess or replace plaintiff\u2019s discretionary decisions but to ensure procedural and substantive compliance with the federal statutory framework. See Charlotte Hous. Auth. v. Patterson, 120 N.C. App. 552, 555, 464 S.E.2d 68, 71 (1995) (\u201cIn federally subsidized housing cases, the court decides whether applicable rules and regulations have been followed, and whether termination of the lease is permissible.\u201d (citation omitted)). \u201cA trial court\u2019s findings of fact are binding on appeal if supported by competent evidence.\u201d Durham Hosiery, 217 N.C. App. at 592, 720 S.E.2d at 427 (citation omitted). The trial court found that plaintiff, believing Smith\u2019s drug-related activity mandated defendant\u2019s eviction, did not exercise discretion. Thus, the sole remaining question is whether under federal law plaintiff was required to exercise some degree of discretion in its eviction decision.\nFederally subsidized public housing is a safety net designed to provide homes to those least able to afford other housing options. Like everyone else, individuals who live in federally subsidized housing are entitled to be free from \u201cany criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises.\u201d 42 U.S.C.. \u00a7 1437d(Z)(6) (2012); see also N.C. Const, art. I, \u00a7 1 (\u201cWe hold it to be self-evident that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.\u201d); The Declaration of Independence para. 2 (U.S. 1776) (\u201cWe hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.\u201d). Recognizing the devastating effect of illegal drugs in public housing, Congress adopted the Public Housing Drug Elimination Act of 1988, Pub. L. No. 100-690, \u00a7 5122, 102 Stat. 4181, 4301 (codified as amended at 42 U.S.C. \u00a7 11901 (2012)). The Act requires leases to include language granting public housing authorities broad discretion to terminate leases to ensure that the housing is \u201cdecent, safe, and free from illegal drugs.\u201d 42 U.S.C. \u00a7 11901(1).\nUnder federal law, public housing leases must \u201callow the agency ... to terminate the tenancy,\u201d id. \u00a7 13662(a) (2012), for any household member \u201cwho... is illegally using a controlled substance,\u201d id. \u00a7 13662(a) (1), or whose drug abuse \u201cinterfere[s] with the health, safety, or right to peaceful enjoyment of the premises by other residents,\u201d id. \u00a7 13662(a) (2). The lease must prohibit not only household members from engaging in drug-related activity but also forbid any guest or person under a tenant\u2019s control from engaging in such activity. Id. \u00a7 1437d(Z)(6) (\u201cEach public housing agency shall utilize leases which . . . provide that . . . any drug-related criminal activity on or off such premises, engaged in by a public housing tenant, any member of the tenant\u2019s household, or any guest or other person under the tenant\u2019s control, shall be cause for termination of tenancy])]\u201d); 24 C.F.R. \u00a7 966.4(f)(12)(i), (ii) (2016); Public Housing Lease and Grievance Procedures, 56 Fed. Reg. 51,560, 51,567 (Oct. 11, 1991). Violation of these provisions \u201cshall be cause for termination of tenancy\u201d as determined by the local public housing authority in its discretion. 42 U.S.C. \u00a7 1437d\u00a9(6); see 24 C.F.R. \u00a7 966.4\u00a9(5)(vii)(B) (When terminating a tenancy for drug-related criminal activity, the housing authority \u201cmay consider all circumstances relevant to a particular case.\u201d).\nIn the seminal case interpreting public housing law, Department of Housing & Urban Development v. Rucker, 535 U.S. 125, 122 S. Ct. 1230, 152 L. Ed. 2d 258 (2002), some tenants questioned the extent of agency officials\u2019 authority to evict residents from public housing. The Supreme Court of the United States held that a housing authority could evict a tenant and her family as a result of a guest\u2019s illegal activity even when the tenant was unaware of the activity and had no reason to suspect it. Id. at 136, 122 S. Ct. at 1236, 152 L. Ed. 2d at 270; see also id. at 131, 122 S. Ct. at 1234, 152 L. Ed. 2d at 267 (\u201c[T]he plain language of \u00a7 1437d\u00a9 (6) requires leases that grant public housing authorities the discretion to terminate tenancy without regard to the tenant\u2019s knowledge of the drug-related criminal activity.\u201d).\nThe decision in Rucker, however, emphasizes the importance of housing officials exercising discretion before pursuing these \u201cno-fault\u201d evictions. Id. at 134-36, 122 S. Ct. at 1235-36, 152 L. Ed. 2d at 268-70. In particular,\n[t]he statute does not require the eviction of any tenant who violated the lease provision. Instead, it entrusts that decision to the local public housing authorities, who are in the best position to take account of, among other things, the degree to which the housing project suffers from \u201crampant drug-related or violent crime,\u201d \u201cthe seriousness of the offending action,\u201d and \u201cthe extent to which the leaseholder has . . . taken all reasonable steps to prevent or mitigate the offending action.\u201d [A] local housing authority may sometimes evict a tenant who had no knowledge of the drug-related activity.\nId. at 133-34, 122 S. Ct. at 1235, 152 L. Ed. 2d at 268 (first alteration in original) (quoting 42 U.S.C. \u00a7 11901(2) (1994 & Supp. V) and Screening and Eviction for Drug Abuse and Other Criminal Activity, 66 Fed. Reg. 28,776, 28,803 (May 24, 2001)). Congress thus \u201cafford[ed] local public housing authorities the discretion to conduct no-fault evictions for drug-related crime,\u201d id. at 135, 122 S. Ct. at 1236, 152 L. Ed. 2d at 269 (citation omitted), by \u201crequir[ing] lease terms that give local public housing authorities the discretion to terminate the lease,\u201d id. at 136, 122 S. Ct. at 1236, 152 L. Ed. 2d at 270. See also id. at 130, 122 S. Ct. at 1233, 152 L. Ed. 2d at 266 (holding that 42 U.S.C. \u00a7 1437d(\u00a3)(6) \u201cunambiguously requires lease terms that vest local public housing authorities with the discretion to evict tenants for the drug-related activity of... guests\u201d). In sum, while a public housing authority may conduct no-fault evictions, it must exercise discretion in doing so.\nShortly after the decision in Rucker, the federal Department of Housing and Urban Development (HUD) described the discretion given to public housing authorities to seek no-fault evictions based upon the actions of third parties. While characterizing the power as \u201ca strong tool,\u201d HUD emphasized that no-fault evictions \u201cshould be applied responsibly.\u201d Letter from Mel Martinez, Sec\u2019y, U.S. Dep\u2019t of Hous. & Urban Dev., to Pub. Hous. Dirs. (Apr. 16, 2002). Moreover, HUD directed that enforcement of the clause be \u201cleft to the discretion of each public housing agency ... to be guided by compassion and common sense,\u201d with eviction as \u201cthe last option explored.\u201d Id. Shortly thereafter, HUD reiterated that Rucker \u201cmade it clear both that the lease provision gives PHAs [Public Housing Authorities] such authority and that PHAs are not required to evict an entire household\u2014or, for that matter, anyone\u2014\u25a0 every time a violation of the lease clause occurs.\u201d Letter from Michael M. Liu, Assistant Sec\u2019y, U.S. Dep\u2019t of Hous. & Urban Dev., to Pub. Hous. Dirs. (June 6,2002). Instead, HUD explained, \u201cPHAs are in the best position to determine what lease enforcement policy will most appropriately serve the statutory interest of protecting the welfare of the entire tenant population.\u201d Id. Accordingly, HUD \u201curge[d]\u201d PHAs, when making an ultimate decision, \u201cto consider a wide range of factors\u201d and to \u201cbalance them against the competing policy interests that support the eviction of the entire household.\u201d Id.) see also 24 C.F.R. \u00a7 966.4(Z)(5)(vii)(B).\nDiscretion \u201cinvolve[s] an exercise of judgment and choice, not an implementation of a hard-and-fast rule exercisable at one\u2019s own will or judgment.\u201d Discretionary, Black\u2019s Law Dictionary (10th ed. 2014). Here the trial court concluded that plaintiff failed to exercise its discretion before seeking defendant\u2019s eviction. The trial court found that plaintiff was unaware of its responsibility to exercise discretion; therefore, plaintiff only considered whether the facts permitted eviction, thereby omitting the critical step of determining whether eviction should occur in this case. Neither the federal statutory framework nor plaintiff\u2019s lease or policies compel eviction; they only delineate the grounds or cause for eviction. Though the decision to evict lies in plaintiff\u2019s discretion, which courts will not second-guess, plaintiff does not exercise discretion when it is unaware it has a choice. See Hous. Auth. of Covington v. Turner, 295 S.W.3d 123, 129 (Ky. Ct. App. 2009) (Moore, J., concurring) (\u201c[Discretion must be exercised, rather than a blind application of the law because 42 U.S.C. \u00a7 1437d(\u00bf)(6) does not require evictions.\u201d).\nWhile we affirm the outcome of the Court of Appeals\u2019 decision, namely that summary ejectment was inappropriate in this case, we do so for a different reason. We hold that plaintiff failed to exercise its discretion as required by federal law before pursuing defendant\u2019s eviction. Accordingly, we modify and affirm the decision of that court.\nMODIFIED AND AFFIRMED.\nJustice ERVIN did not participate in the consideration or decision of this case.\n. The operation and management of public housing authorities, including lease terms and procedures, are governed by the United States Housing Act of 1937, Pub. L. No. 75-412, 50 Stat. 888 (codified as amended in scattered sections of 42 U.S.C.), and its regulations, see 24 C.F.R. \u00a7\u00a7 966.1 to 966.57 (2016).\n. The lease defines a \u201cguest\u201d as \u201ca person temporarily staying in the unit with the consent of Tenant or other member of the household with authority to consent on behalf of Tenant.\u201d The lease defines a \u201cperson under Tenant\u2019s control\u201d as \u201ca person not staying as a guest in the dwelling unit, but [one who] is or was present on the premises at the time of the activity in question because of an invitation from Tenant.\u201d\n. In the initial complaint, plaintiff appears to have elected to pursue defendant\u2019s eviction under N.C.G.S. \u00a7 42-63 (2015), which allows for eviction as a result of certain criminal activity. Nonetheless, the complaint also described the specific lease terms violated by defendant. On 8 July 2013, the parties stipulated to amend the complaint \u201cas though Plaintiff had selected the additional ground for eviction 'the defendant breached the condition of the lease described below for which re-entry is specified.\u2019 \u201d Thereafter, both parties proceeded solely under the lease violation theory. Thus, any argument pursuant to the statutory provision is not before this Court.",
        "type": "majority",
        "author": "NEWBY, Justice."
      }
    ],
    "attorneys": [
      "Ward and Smith, P.A., by Michael J. Parrish and E. Bradley Evans, for plaintiff-appellant.",
      "Robinson, Bradshaw & Hinson, P.A., by John R. Wester, Thomas Holdemess, and Erik Randall Zimmerman, pro hoc vice; and Legal Aid of North Carolina, Inc., by John Keller, Theodore O. Fillette, III, Peter Gilbert, and Andrew Cogdell, for defendant-appellee.",
      "Brownlee Law Firm, PLLC, by William K. Brownlee, for Apartment Association of North Carolina, amicus curiae.",
      "John R. Rittelmeyer and Yasmin Farahi for Disability Rights North Carolina, amicus curiae.",
      "Francis Law Firm, PLLC, by Charles T. Francis and Ruth Sheehan, for Housing Authority of the City of Raleigh, amicus curiae."
    ],
    "corrections": "",
    "head_matter": "EASTERN CAROLINA REGIONAL HOUSING AUTHORITY v. SHERBREDA LOFTON\nNo. 32PA15\nFiled 19 August 2016\nLandlord and Tenant\u2014public housing\u2014drug activity\u2014ejectment\u2014exercise of discretion by landlord\nSummary ejectment was inappropriate in a case involving drug activity in federally subsidized housing where plaintiff-Housing Authority did not exercise discretion before pursuing defendant\u2019s eviction, as required by federal law.\nJustice ERVIN did not participate in the consideration or decision of this case.\nOn discretionary review pursuant to N.C.G.S. \u00a7 7A-31 of a unanimous decision of the Court of Appeals,__N.C. App._, 767 S.E.2d 63 (2014), affirming an order and judgment entered on 29 August 2013 by Judge David B. Brantley in District Court, Wayne County. Heard in the Supreme Court on 16 November 2015.\nWard and Smith, P.A., by Michael J. Parrish and E. Bradley Evans, for plaintiff-appellant.\nRobinson, Bradshaw & Hinson, P.A., by John R. Wester, Thomas Holdemess, and Erik Randall Zimmerman, pro hoc vice; and Legal Aid of North Carolina, Inc., by John Keller, Theodore O. Fillette, III, Peter Gilbert, and Andrew Cogdell, for defendant-appellee.\nBrownlee Law Firm, PLLC, by William K. Brownlee, for Apartment Association of North Carolina, amicus curiae.\nJohn R. Rittelmeyer and Yasmin Farahi for Disability Rights North Carolina, amicus curiae.\nFrancis Law Firm, PLLC, by Charles T. Francis and Ruth Sheehan, for Housing Authority of the City of Raleigh, amicus curiae."
  },
  "file_name": "0008-01",
  "first_page_order": 84,
  "last_page_order": 91
}
