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FOR PUBLICATION IN THE SUPENOW COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN VIRGIN ISLANDS COMMUNITY ) CIVIL NO. ST-07-CV-655 HOUSING LIMITED PARTNERSHIP, ) ) ACTION FOR FORCIBLE ENTRY Plaintiff, ) AND DETAlNER v. LORELIE RIVERA, Defendant. ) J. DARYL DODSON, ESQUIRE Moore, Dodson & Russell, P.C. 5035 Norre Gade P.O. Box 310 St. Thomas, Virgin Islands 00804 Attorney for Plaintiff KATHLEEN NAVIN, ESQUIRE Legal Services of the Virgin Islands No. 1 83 2 Kongens Gade St. Thomas, Virgin Islands 00802 Attorney for Defendant CARROLL, Judge MEMORANDUM OPPNION (Filed: D e c e m b e r ~ x , 2008) THIS MATTER is before the Court on Defendant's Motion to Dismiss for lack of subject matter jurisdiction. Plaintiff Virgin Islands Community Housing Limited Partnership was represented by J. Daryl Dodson, Esq. sf Moore, Dodson & Russell, P.C., and Defendant Lorelie Rivera was represented by Kathleen Navin, Esq. of the Legal Services of the Virgin [slands. Defendant argues that the Court lacks subject matter jurisdiction of this Forcible Entry Virgin Islands Community Housing Limited v. Lorelez Rivera Civd No. ST-0 7-CY-655 Memorandum Opinion and Detainer ("FED") proceeding and that it should be dismissed. The Court agrees with the Defendant's position and will dismiss this action. STATEMENT OF FACTS On or about December 22,2006, Defendant Lorelie Rivera ("Rivera") signed a lease for a two-bedroom apartment at the Patriot Manor residential apartment complex, owned by Plaintiff Virgin Islands Community Housing Limited Partnership ("VICH"). The lease was for a term of approximately one year, with a provision for automatic termination on November 30,2007. The lease states, "[tlhe Resident understands that this property is subject to the Low Income Housing Tax Credit (LIHTC) Regulation (Def.'s Ex. 1, p. 6)." The LIHTC provides federal tax credits for those who rent property to low-income tenants. Rivera also receives rental payment assistance under the Section 8 Project-Based Assistance Housing Choice Voucher ("Section 8") Program run by the U.S. Department of Housing and Urban Development r c ~ U ~ " ) . On December 27, 2006, VICH signed a Housing Assistance Payment contract ("HAP :ontracty') for existing housing with the Virgin Islands Housing Authority ("VIHA") for forty- :wo (42) rental units located in the Patriot Manor apartment complex. The HAP contract is part 3f the Section 8 Program run by HUD. Under the HAP contract between VIHA and VICH, the zffective date for all units was December 27, 2006. The HAP contract states that "the [Public Housing Authority] shall make housing assistance payments to the owner for the months during which a contract unit is leased to and occupied by an eligible family." On March 22, 2007, VIHA found Rivera eligible to occupy one of the project-based units in Patfiot Manor with her l The LlIITC under 26 U.S.C. 42, and the Section 8 Program under, 42 U.S.C., 8 1437-14372-8, work .ogether as a cohesive federal scheme to support housing for low-income families. Carter v, Maryland Management Co., 535 A.2d 158,162 (Md. 2003) Virgin Islands Conzmunity Housing Lzmrted v. Lorelei Rivera Civil No. ST-07-CV-655 Memorandum Opinion young daughter. Rivera remained in the same apartment, but she then started receiving rental payment assistance through VIHA. On October 3, 2007, Rivera received a notice to quit her apartment by December 1, 2007, due to the expiration of her lease the following month on November 30, 2007 (Pl.'s Ex. 2). From November 30, 2007 onward, the rental payments that Patriot Manor received have been accruing in an escrow account. On December 12, 2007, Rivera received another letter to quit, which stated that her lease was not being renewed because 3f alleged misconduct (Pl.'s Ex. 12). On December 28, 2007, VICH commenced a summary action for forcible entry and detainer, seeking restitution of Rivera's apartment. Defendant noved to dismiss this action for lack of subject matter jurisdiction on April 18, 2008. On May 27 and 30, 2008, the Court conducted a trial in this matter, having reserved decision on the Motion to Dismiss. This Court has found that it lacks subject matter jurisdiction over this ~roceeding as an FED action and will therefore dismiss the action. DISCUSSION Jurisdiction of the Superior Court in FED Proceedings This forcible entry and detainer action is governed by the legal principles enunciated in Wate of Thomas Mall, Inc. v. Territorial Court of the Virgin Islands, 923 F.2d 258 (3d Cir. FED complaints are summary actions to determine rights of peaceable possession of real property. . . . But speedy adjudication of the issue of peaceable possession comes at a price. The price is that the scope of an FED proceeding is very limited. Unless the statute is to the contrary, the jurisdiction of the Court in FED cases is confined to determining the issue of peaceable possession and does not extend to (a) an adjudication of title or (b) the right to possession; nor can the justice adjudicate a right of possession that depends on an equitable interest in the premises [I or inquire into equitable rights and give relief to which the party might be entitled in equity. Virgin Islands Community Housing Limited v. Lorelei Rivera Civil No. ST-07-CV-655 Memorandum Opinion . . . As soon as a defendant in possession in an FED action raises a colorable defense requiring construction of an agreement between the property owner and the party in possession, an FED action will not lie. Estate of Thomas Mall, 923 F.2d at 264 (internal citations omitted) (citing C.M.L., Inc. v. Dunagan, 904 F.2d 189, 190 (3d Cir. 1990); Inter Car Corp. v. Discount Car Rental, 21 V.I. 157,159 (Terr. Ct. 1984); and Iron Mountain &H.R. Co. v. Johnson, 119 U.S. 608, 612 (1887)). As the Estate of Thomas Mall Court noted, an FED action is not proper when "there is a lease between the parties, the meaning of which is in dispute." Id. at 265. The hearing in this matter was conducted consistent with the principles enunciated in Virgin blands Port Authority v. Joseph, 49 V.I. 424, 431, Case No. 20071046, 2008 WL 2329281, at *4 (V.I. May 17, 2008) ("The trial court should hear evidence until it is able to determine, based on the evidence, whether [defendant] has raised a facially bona fide and good faith defense to [plaintiffs] claim for possession."). Applying the legal principles expressed in Estate of Thomas Mall to the facts of this case, we are led to the conclusion that this Court does not have jurisdiction of this action as an FED :ase, since to resolve the issues in the case, the Court would have to construe the lease between he parties. There is no dispute that Rivera had a lease with Patriot Manor Apartment Complex. rhere is also no dispute that Rivera was approved as a participant under the Section 8 Program In March 22, 2007. VICH's own documents also state that they received tax credits under the LIHTC regulations. The ultimate issue that would have to be determined in this case is whether Ir not the lease originally signed by Rivera controls or whether the tenancy addendurn, other Jrogram requirements, and federal regulations override contradictory provisions in the initial ease. Thus, to resolve the questions in this FED proceeding, this Court would have to construe Virgin Islands Community Housing Limrted v. Lorelei Rivera Civil No. ST-07-CV-655 Memorandum Opinion Page 5 of9 the agreement between VICH and Rivera, in violation of the principles set forth in Estate of Thomas Mall. Recent cases from both the Appellate Division of the District Court of the Virgin Islands and the Supreme Court of the Virgin Islands have reaffirmed these principles enunciated in Estate of Thomas Mall. As the Supreme Court of the Virgin Islands recently stated, "[tlhe trial court should hear evidence until it is able to determine, based on the evidence, whether [defendant] has raised a facially bona fide and good faith defense to [plaintiff's] claim for possession." Virgin Islands Port Authority v. Joseph, 49 V.I. 424'43 1, Case No. 20071046, 2008 to proceed with the evidence until it appears that the question involved is in fact one of title or a WL 2329281, at *4 (V.I. May 17,2008); see also Inter Car, 21 V.I. at 159 (court is duty-bound complicated case of the right to possession). I I Assuming that the Court has conducted the proceedings in such a manner, "[wlhere a tenant is retaining possession by force, relief is available in a summary FED proceeding only if there 'is an undisputed oral or written lease agreement, and rent is due and owing thereon; . . ." Four Winds Plaza Corp. v. White, No. 2005-203,2008 WL 3539791, at "3 (D.V.I. filed August 5, 2008) (internal quotations and citations omitted). If the proceeding before the Court is in fact an FED proceeding, the Court's jurisdiction is limited to adjudicating issues that do "not raise a colorable claim of right under a lease agreement, or issues of damages, or for collection of unpaid rents." White, 2008 WE 353979 1, at *4. Virgin Islands Community Housing Limited v. Lorelei Rivera Civil No. ST-07-CV-655 Memorandum Op jnion 11. Section 8 Program Tenancy Addendum Although a new lease was not signed in March 2007 when Rivera was approved as part ~f the Section 8 program, Rivera argues that the tenancy addendum that is part of the Section 8 Tenant-Based Assistance Housing Choice Voucher Program then became part of her lease.2 This :onclusion is supported by testimony and other documents, and by federal regulations xomulgated by HUD. 24 CFS 5 983.256(d)(2) (2008) ('All provisions in the HUD-required .enancy addendum must be included in the lease. The terms of the tenancy addendum shall )revail over other provisions of the lease.") (emphasis added). Thus, Rivera has provided widence through federal regulations and direct testimony that the terms of the tenancy ddendum trump any contrary provisions of the lease. VICH argues that a provision in the original lease, which provides for automatic ermination without notice, at the end of the one-year lease period, controls in this case. lowever, Rivera has made a persuasive argument that the tenancy addendum, which allegedly Iecame a part of the lease and which was allegedly incorporated into the lease, does in fact :ontradict and supersede the original lease. The tenancy addendum provides: 8. Termination of Tenancy by Owner a. Requirements. The owner may only terminate the tenancy in accordance with the lease and HUD requirements. b. Grounds. During the term of the lease (the initial term of the lease or any extension term), the owner may only terminate the tenancy because of: (1) Serious or repeated violation of the lease; . . . (4) Other good cause (as provided in paragraph d). Under section 17 of the Tenancy Addendum, a "lease" is defmed as: "[tlhe written agreement between he owner and the tenant for the lease of the contract unit to the tenant. The lease includes the tenancy addendum )rescribed by HUD." Although the Tenancy Addendum offered in evidence says "Tenant-Based Assistance" it is dso the same Tenancy Addendum used for the Project-Based Program (Tr. Test. of Akala Anthony, pp. 24-8, May lo, 2005). Virgin Islands Community Housing Limited v. Lorelei Rivera Civil No. ST-07-CY-655 Memo?mdum Opinion . . . g. Owner notice of grounds (1) At or before the beginning of a court action to evict the tenant, the owner must give the tenant a notice that specifies the grounds for termination of the tenancy. The notice may be included in or combined with any owner eviction notice. (2) The owner must give the PHA a copy of any owner eviction notice at the same time the owner notifies the tenant. (Def.'s Ex. C, p. 2- 3.) Thus, in order to resolve the issues in this case, this Court must construe the provisions of the lease and tenancy addendum to make a determination as to whether the Lease expired by its own terms or if the tenancy addendum controlled, which provides for termination only upon a showing of good cause. The bulk of VICH's case at trial and its subsequent pleadings focus on whether or not they in fact did have good cause to evict Rivera from her apartment. VICH presented evidence 3f numerous alleged violations, but they failed to present evidence that proper notice of the {iolations and an opportunity to cure were provided to Rivera in accordance with HUD -egulations and the lease contract. In any event, finding that the good cause requirement for wiction had been met, would require this Court to construe the meaning of the agreement )etween the parties, which is not proper in FED proceedings. :IT. LIHTC Regulations VICH is the recipient of federal tax credits for low-income housing at Patriot Manor and is such, is bound to abide by the rules and regulations pertaining to those tax credits. Carter v. Maryland Management Co., 835 A.2d 158, 164 (Md. 2003) ("In order to qualify for the tax :redit under 5 42, a landlord must cornply with statutory requirements and requirements imposed Virgin Islands Community Housing Limited v. Lorelei Rivera Civil No. ST-07-CV-655 Memqrandum Opinion by authorized regulations of the Secretary of Housing and Urban Development during both the initial compliance period and the extended use period.").3 In its pleadings, VICH argues that the so-called "endless lease" provisions were removed from the regulations through Congressional amendments made in 1989. Although VICH concedes that good cause for an eviction should be given during the later "extended use" period identified in the code, it argues that these same protections do not apply to the initial "compliance period," under which Patriot Manor falls. This argument is directly contradicted by Congressional commentary on the amendments. The bill denies the credit to otherwise qualified property unless the owner of that building is subject to an enforceable agreement with the housing credit agency which prohibits (1) eviction of low-income tenants for other than good cause and (2) any increases in the gross rent for low-income units in excess of allowable rents under the rules applicable during the 15- year compliance credit period. H.R. Rep. No. 101-247, pt. 2 at 1195 (1989), reprinted in 1989 U.S.C.C.A.N. 1906, 2665 :emphasis added). VICI-I also attempts to summarily dispense with the holding of the Court in Carter by .abeling it "erroneous." However, Carter does not state that tenants are entitled to "endless eases," but that they are to be evicted only upon a showing of good cause. See Carter, 835 A.2d it 168-9 (tenants are not entitled to an endless lease if good cause exists to evict them; ". . . hat ever term may be stated in the lease, a voucher program tenant may not be evicted by a andlord who has qualified for a 8 42 tax credit and is continuing to receive rent subsidies, either bring the term of the lease or at the expiration of that term, except for conduct or circumstances VICH argues that in the FED proceeding, Rivera must prove the exact credits VICH receives under the Low Income Houslng Tax Credit (LIHTC). In a full clvd proceeding, however, such information would have been ~rovided to Rivera through discove~~, and this argument would not have been available to VICH. that qualify under the Federal law as good ca~se").~ Rivera has presented a colorable claim that under the LIHTC regulations, she is entitled to protection and should not be evicted at the expiration of her lease, absent good cause. See In re Turner, 326 B.R. 328,332 (Bkrtcy.W.D.Pa. Virgin Islands Community Housing Limited v. Lorelei Rivera Civil No. ST-07-CV-655 Memorandum Opinion 2005) ("Unfortunately, little case law is available on the narrow issue of "expiration" as opposed to "termination" of a lease entered into with a landlord who provides housing pursuant to the I Low Income Housing Tax Credit program ("LIHTC") offered by 26 I.R.C. 5 42."). Because Rivera's claim to a right to possession of the premises is a "colorable" one, this Court lacks jurisdiction under the FED statute, and this action must be dismissed. CONCLUSION This case presents numerous issues with respect to Defendant's claims and defenses, which should be dealt with in a regular civil action. For that reason, the Court finds that it does not have subject matter jurisdiction and will 2f 2008 DATED: December -, Even if VICH had good cause to evict Rivera from her apartment, it was not clear fiom the evidence presented that VICH followed the provisions in the lease andlor other regulations establishing the proper procedure to t e m a t e fivers's tenancy. In any event, as noted above, this type of evidence is not properly before the Court in an FED proceeding, since it would involve the Court in construing the terms of the lease between the parties. White, 2003 WL 3539791, at *3.