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Freeman v. Scott

Court of Common Pleas of Delaware, New Castle

June 19, 2017

DANIELLE FREEMAN, Plaintiff/Cross-Defendant & Appellant/Cross-Appellee,
v.
WALTER G. SCOTT, Defendant/Cross-Plaintiff & Appellee/Cross-Appellant.

          Danielle Freeman Donald L. Gouge, Jr., Esq. Pro se Appellant

          N. King Street, Ste. Attorney for Appellee

          MEMORANDUM OPINION AND ORDER

          Sheldon K. Rennie, Judge

          This is an appeal from the Justice of the Peace Court concerning a debt action. Trial was held on May 8, 2017, and the Court reserved its decision. This is the Court's Final Order after consideration of the pleadings, testimony, and documentary evidence introduced at trial.

         I. Facts

         On July 7, 2015, Patricia Dennis, then case management specialist for Wilmington Housing Authority ("WHA"), approved, Appellant/Cross-Appellee, Danielle Freeman ("Appellant") to rent 735 Warner Street, Wilmington, DE 19805 ("the Property") from, Appellee/Cross-Appellant, Walter G. Scott ("Appellee"), after the Property passed the initial inspection.[1] On August 1, 2015, WHA entered into a Housing Assistance Payments Contract ("HAP contract") with Appellee on behalf of Appellant and her two children.[2] The HAP contract ran from August 1, 2015 to August 1, 2016 and stated that WHA would pay $837.00 of the contractual $850.00 monthly rent on Appellant's behalf, unless circumstances required a readjustment of WHA's contribution. Donna Starkey Ford, Section 8 Chief at WHA, and Appellee both signed the HAP contract. On August 17, 2015, Appellant and Appellee entered into a rental agreement for the Property which stated that Appellant was responsible for $13.00 in monthly rent and an $850.00 security deposit.[3] The Porter Center, a non-profit agency, paid $450.00 of the $850.00 security deposit on Appellant's behalf, and Appellee allowed Appellant to move into the Property prior to receiving the remaining $400.00 portion of the security deposit.

          On November 16, 2015, Appellant wrote Appellee notifying him of problems with the Property.[4] Appellant's letter alleges there were mold spores in a bathroom's window, a rusting bathroom tub, faulty electrical sockets, and a water leak in the washroom that was causing mold. Appellant threatened to "take action to pursue [her] rights under the terms of [the] lease and any other applicable laws" if the alleged issues were not corrected.[5]

         On January 21, 2016, Kathryn H. McGinnes, Housing Choice Voucher Program Coordinator at WHA since 1993, was asked by Appellant to perform an annual inspection of the Property.[6] During her inspection, Ms. McGinnes found minor deficiencies in the Property's front porch windows, front stove burner, kitchen drawers, and refrigerator door.[7] On February 11, 2016, Ms. McGinnes advised Appellee that he had thirty days to correct these minor violations, and she would return to re-inspect the Property on March 10, 2016. Ms. McGinnes testified that she was unable to access the Property on March 10th because no one was present to let her into the Property; however, she noted that the glass had been replaced in the front porch windows. Because she was unable to access the unit, the unit failed re-inspection.

         In late January, snow had accumulated on the Property's roof and the roof began to leak into Appellant's kitchen. The leak created a hole in a section of the kitchen's ceiling. It is unclear how long Appellant lived with this hole in the ceiling, but in early February she presented pictures of the damage to Karen Spellman, Deputy Executive Director of WHA. Thereafter, Ms. Spellman made an administrative decision to immediately terminate the HAP contract with Appellee. While Ms. Spellman's directive was shared with WHA employees Patricia Dennis and Donna Starkey Ford via a conference call, no one at WHA informed Appellee of the HAP contract's termination.[8]

         On February 23, 2016, because of the purported termination of the HAP contract, Patricia Dennis issued Appellant a new voucher that would allow her to enter into a new rental agreement.[9] On February 29, 2016, Appellant sent WHA her sixty day notice letter, stating that she was "giving [her] sixty day notice as of [M]arch 1[], 2016 and would be vacating this property by May[] 1st [for] unfit property issues."[10] Nevertheless, in mid-February, Appellee testified that he wrote Ms. McGinnes a "lengthy" email detailing the steps taken to cure the various deficiencies, including the hole in the ceiling. Ms. McGinnes testified that she intended to visit the Property to verify that all the deficiencies were cured. However, in early March, during further communications between Ms. McGinnes and Appellee-but before Ms. McGinnes visited the Property-Appellee was verbally informed by Ms. McGinnes that the HAP contract had been terminated. Appellee expressed confusion upon hearing this news since Appellant's furniture was still at the Property when he arrived in late February to correct the deficiencies. Ms. McGinnes was surprised that Appellant had not vacated the Property when the HAP contract was terminated. According to WHA policy, a termination of a HAP contract divests a tenant of her right to remain in the dwelling."

         Notwithstanding the oral notification of termination, Ms. McGinnes informed Appellee that WHA would continue to make monthly payments as long as Appellant remained at the Property. She, however, noted that these payments were contingent on Appellee producing proof to WHA that he had repaired the hole in the Property's kitchen. After Appellee produced proof that he had repaired the Property's kitchen, WHA paid $837.00 towards Appellant's rent for February 2016 and continued to pay the readjusted rate of $608.00 for March, April, and May 2016.[11] On April 5, 2016, Appellee mailed Appellant a letter detailing Appellant's unpaid rent of $897.00 for February, March, and April, and her overdue $400.00 portion of the security deposit.[12] Appellant vacated the Property on May 1, 2016, informing Appellee that she had left the keys under the Property's welcome mat.[13] After cleaning and preparing the Property for a new tenant, Appellee was able to re-let the Property on July 1, 2016.

         II. Standard of Review

         As trier of fact, the Court is the sole judge of the credibility for each fact witness and any other documents submitted to the Court for consideration.[14] If the Court finds that the evidence presented at trial contains conflicts, it is the Court's duty to reconcile these conflicts-if reasonably possible-in order to find congruity.[15] If the Court is unable to harmonize the conflicting testimony, then the Court must determine which portions of the testimony deserve more weight in its final judgment.[16] In ruling, the Court may consider the witnesses' demeanor, the fairness and descriptiveness of their testimony, their ability to personally witness or know the facts about which they testify, and any biases or interests they may have concerning the nature of the case.[17]

          In civil actions, the burden of proof is by a preponderance of the evidence.[18] "The side on which the greater weight of the evidence is found is the side on which the preponderance of the evidence exists."[19]

         III. The Parties' Contentions

         Appellant alleges she paid her $400.00 portion of the security deposit to Appellee in cash and, thus, seeks the return of her security deposit. Appellee, as Cross-Appellant, claims that Appellant neither paid her portion of the security deposit, nor her rental portion for February through June. He was able to re-let the Property in July so he is not seeking rent for July. Appellee also claims that Appellant owes him for an unpaid water bill and damage to the Property beyond normal wear and tear. Appellee seeks $1, 589.00 in unpaid rent, which includes $13.00 for February's rent; $242.00 per month for March, April, and May 2016; $850.00 for June 2016; $85.20 for the unpaid water bill; and $700.00 for damage to the Property.

         IV. Discussion

         Preliminarily, the Court notes that Appellant's main assertion concerns the return of a portion of the security deposit. However, the contractual relationship between the parties will be addressed first, given the co-dependency of the two contracts at issue here.

         A. The Termination of the HAP Contract

         WHA failed to properly terminate the HAP contract. The HAP contract at issue is an agreement between a public housing agency ("PHA"), WHA, and a landlord, Appellee.[20] The contract is comprised of three sections: (A) Contract Information, (B) Body of the contract, and (C) the Tenancy addendum.[21] Section (A) describes the rental agreement reached by the parties, such as the lease term and rent owed by the PHA. This section of the contract is signed by Donna Starkey Ford of WHA and Appellee. Section (B) designates the legal rights and duties between the PHA and the landlord. Specifically, the section allows for the HAP contract to be terminated by the PHA if it "determines that the unit does not meet all requirements of [] [HUD's Housing Quality Standards], [22] or determines that the owner has otherwise breached the HAP contract."[23]

         The HAP contract further states: "[i]f the PHA determines that a breach [by the landlord] has occurred, the PHA may exercise any of its rights and remedies under the HAP contract, or any other available rights and remedies for such breach."[24] Thus, the PHA is given wide latitude to act, but the HAP contract is clear that the "PHA shall notify the owner of such determination, including a brief statement of the reasons for the determination."[25] The HAP contract clarifies that the "notice by the PHA to the owner may require the owner to take corrective action, as verified or determined by the PHA, by a deadline prescribed in the notice."[26] The contract allows the PHA to terminate the HAP contract if the landlord does not comply.[27] This section requires all notices from the PHA to the landlord regarding duties or obligations under the HAP contract to be in writing. Section (B) concludes by stating, "The HAP contract contains the entire agreement between the owner and the PHA."[28] Section (C), the tenancy addendum, governs the parameters of the rental agreement, and it states: "[i]f there is any conflict between the tenancy addendum and any other provisions of the lease, the language of the tenancy addendum shall control."[29] Notably, this section states, under "Lease: Relation to HAP Contract, " "[i]f the HAP contract terminates for any reason, the lease terminates automatically."[30]

         The rental agreement at issue here is a contract between Appellant and Appellee as tenant and landlord, respectively. The contract is comprised of three parts: (A) Lease information, (B) a second Tenancy addendum, and (C) Additional lease provisions.[31] The rental agreement contains the same lease information as the HAP contract, an identical Tenancy addendum, and a piecemeal of important Landlord and tenant obligations.[32]

         Based on the testimony and documentary evidence, there is no dispute that a valid contract existed between WHA and Appellee in the form of the HAP contract, and a valid contract existed between Appellant and Appellee in the form of the rental agreement. Ms. Spellman's directive to terminate the HAP contract mid-February 2016 would have terminated the rental agreement between Appellant and Appellee; however, WHA never formally notified Appellee that the HAP contract was terminated. Ms. McGinnes, in early March, verbally informed Appellee that the HAP contract had been terminated, but Appellee was not notified in writing, as required by the HAP contract. In addition, WHA continued making payments to Appellee towards Appellant's rent. Hence, because proper notice of termination was not given to Appellee, the HAP contract was not terminated. Consequently, the rental agreement remained valid.

          This Court bases its determination on the HAP contract's unambiguous language and consistent testimony during trial by multiple witnesses that no WHA employee formally informed Appellee in writing of the HAP contract's termination. The Court is certainly sympathetic to Appellant and the miscues that she received from WHA; however, WHA's failure to follow its procedures cannot be placed at the feet of Appellee. Therefore, the Court finds that the lease did not terminate in mid-February when Ms. Spellman informally directed that the HAP contract be terminated. Instead, the HAP contract continued to run. And concomitantly, the rental agreement remained in effect.

         B. Appellant's Obligations as Tenant

         Under Delaware law, a contract has been defined "as an agreement upon sufficient consideration to do or not to do a particular thing."[33] To prevail on a claim for breach of contract, the plaintiff must establish by a preponderance of the evidence that: (1) a contract existed between the parties; (2) the defendant breached his obligation imposed by the contract, and (3) plaintiff suffered damages as a result of the defendant's breach.[34] "A breach of contract occurs by a party's non-performance, repudiation, or both."[35] Additionally, for the injured party's remaining obligations under the contract to cease, the breach must be "material."[36] The breach will be deemed material if it concerns the "'root' or 'essence' of the agreement between the parties, or [is] 'one which touches the fundamental purpose of the contract and defeats the object of the parties in entering into the contract.'"[37]

          1. The Security Deposit

         Both the HAP contract and rental agreement expressly state that an $850.00 security deposit is due to Appellee. According to Title 25, the landlord and tenant are required to "agree to the consideration for rent, " and the landlord is allowed to require a security deposit payment equal to one month's rent where the rental agreement is for one year.[38] The security deposit is placed in an escrow account, and can be applied to any property damage by the tenant beyond normal wear and tear, to reimburse the landlord for unpaid rent, or to reimburse the landlord for "reasonable expenses" incurred in renovating and re-letting the premises because of the premature termination by the tenant.[39]

         The Court finds that Appellant has failed to satisfy her burden of proving that she handed Appellee $400.00 in cash to satisfy her portion of the $850.00 security deposit. The Court was not persuaded by her testimony. She failed to provide the Court with specifics regarding the circumstances of the payment. In addition, no other evidence or testimony was introduced at trial that supported her version of events. Simply put, her bare ...


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