September 2008

In This Issue

• Supreme Court Reverses Housing Harassment Ruling
• Arbitrator Awards - Take Your Chances
• Deductions From Social Security Benefits- Do They Count As "Income?"
• PHAs Are Not Immune From Suit For Negligent Maintenance

Supreme Court Reverses Housing Harassment Ruling

By Lawrence F. Feheley

We reported previously about the troubling ruling of the Summit County Court of Appeals in the case of Ohio Civil Rights Commission v. Akron Metropolitan Housing Authority, 170 Ohio App. 3d 283 (Sum. Co. 2000).  The Court of Appeals ruled in December 2006 that a PHA can be held liable for failing to take corrective action against a tenant who creates a "hostile housing environment" by harassing another tenant on racial grounds.

The facts of the case were that one tenant family had a number of heated confrontations with an African-American family, including calling them racially derogatory names on a number of occasions and threatening them with physical harm. The targeted family complained to the Housing Authority management, but no corrective action was taken.  The appellate court recognized a legal claim against the landlord for allowing a racially hostile housing environment to exist.

On appeal, the Ohio Supreme Court reversed the ruling.  On July 8, 2008, the Supreme Court ruled that the Ohio housing discrimination law, Chapter 4112 of the Revised Code, does not create a cause of action against a landlord who fails to take corrective action against a tenant whose racial harassment of another tenant created a hostile environment.  Ohio Civil Rights Commission v. Akron Metropolitan Housing Authority, 119 Ohio St. 3d 77 (2008).  In reaching this result, the Supreme Court rejected the analogy to employment harassment because, unlike the employer-employee relationship, the relationship between a landlord and a tenant is not one of agency.  

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Arbitrator Awards - Take Your Chances

The Cuyahoga Metropolitan Housing Authority learned the hard way that arbitration decisions are often virtually unappealable, no matter how erroneous they may appear to be.  Cuyahoga Metropolitan Housing Authority v. SEIU Local 47 (Cuy. Co. 2007).

The Cuyahoga MHA fired a service worker who was a union member.  The employee had been given a credit card and PIN number for purchasing fuel.  The card tracked the employee, the vehicle, and the details of fuel purchases.  In this case, the employee purchased gas before work, purportedly for a CMHA vehicle.  However, the quantity of gas purchased exceeded the tank capacity for the vehicle and an incorrect odometer reading was recorded.  Upon discovery, the PHA discharged the employee for conversion of property.  However, the employee testified that employees shared PIN numbers and they used the credit cards to purchase gas for tools and equipment as well as the cars.  On this basis, the arbitrator concluded that there was no evidence that the employee was guilty of using the gas for personal purposes.  The arbitrator found there was no just cause for the discharge and reinstated the employee.

The PHA appealed the arbitrator's decision, arguing that it lacked rational support and contravened public policy.  The court rejected all the arguments, relying on the oft-quoted principle that an arbitrator's award will not be modified unless the arbitrator "exceeded his authority" or was guilty of "fraud, misconduct, partiality, or material mistake."  In other words, the court held that the parties bargained for the arbitrator's award, and they will be forced to accept that award unless it clearly contradicts the unambiguous terms of the union contract.  The appeals court noted that, even though the employee's purchases "appeared spurious," the arbitrator was within his authority to decide that just cause for termination did not exist.

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Deductions From Social Security Benefits - Do They Count As "Income?"

In a recent case, a PHA tenant was evicted for non-payment of rent.  The tenant argued that his rent was improperly calculated, even though it was calculated solely on the basis of his two sources of income - social security disability benefits and supplemental security income.  The tenant's argument – ingenious, but ultimately wrong - was that his full social security benefit should not be counted as income because the Social Security Administration withheld a portion of the payment for court-ordered child support payments.  The tenant argued that since he never received the withheld portion, it should not count as his income.  The Ohio court of appeals disagreed, holding that the tenant constructively "received" the withheld amount, which was garnished to pay his child support obligations.  Cincinnati Metropolitan Housing Authority v. Edwards, 174 Ohio App. 3d 174 (Ham. Co. 2007).

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PHAs Are Not Immune From Suit For Negligent Maintenance

In some instances, a public agency is immune from liability.  Generally, a public agency is not liable for damages where the injury arises from a "governmental" or "proprietary" function.  Section 2744.02, Ohio Revised Code.

In this case, children started a fire in a PHA-owned unit.  Two of the children died in the fire.  The mother filed suit and alleged that the PHA was negligent because it had removed the only working smoke detector from the apartment.

The PHA argued that it was immune from suit because providing low-income housing is a "proprietary or governmental function."  The appellate court agreed, holding that ownership and operation of a public housing facility is a "proprietary function."  However, the court then proceeded to analyze the exceptions to immunity afforded to public bodies, one of which is where liability is imposed on the agency by law.  The court ruled that a PHA is subject to the Ohio Landlord-Tenant law, which in turn requires a landlord to comply with all housing, building, health and safety codes.  Section 5321.04, Revised Code.  One such requirement is that smoke detectors be provided in private areas.   Since the PHA had a statutory duty to provide smoke detectors, no immunity from suit existed.  Moore v. Lorain Metropolitan Housing Authority, 2007-Ohio-5111 (Lor. Co. 2007).

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