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Federal duties require discretion before eviction

Heath Hamacher//September 1, 2016//

Federal duties require discretion before eviction

Heath Hamacher//September 1, 2016//

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As a landlord, the government can evict a tenant from federally subsidized housing for certain bad acts of a third party, but only after exercising discretion required by law, the North Carolina Supreme Court held Aug. 19.

In Eastern Carolina Regional Housing Authority v. Lofton, the top court considered on discretionary review the case of Sherbreda Lofton, a resident of Brookside Manor in Wayne County. Brookside Manor is owned and operated by the plaintiff.

Writing for the unanimous court, Justice Paul Newby said that the court would not second-guess a housing authority’s decision to evict, so long as all circumstances were considered first. Here, the court held, Eastern Carolina Regional couldn’t have used discretion because it wasn’t aware that it had discretion.

According to court documents, Lofton often had an individual named Cory Smith watch her children while she worked at night. On April 26, 2013, Smith was babysitting as Lofton slept when law enforcement officers entered the apartment and arrested Smith for outstanding child support warrants. While searching him, they found four bags of marijuana in his pocket. A consensual search of Lofton’s apartment yielded 14 more bags of marijuana, a “partially prepared marijuana blunt” and plastic bags for packing marijuana.

Smith was charged with felonies. Lofton was charged with nothing.

But weeks later, Lofton received a letter from the plaintiff stating that the drug-related activity was a breach of her lease and ordering her to vacate the apartment.

When Lofton failed to comply, the housing authority sought summary ejectment, which was granted by a magistrate.

On appeal to the district court, Lofton admitted that Smith had marijuana in the apartment, that he was under her control and that the lease made her responsible for guests under her control. A manager for the plaintiff testified that she believed any drug-related criminal activity required eviction.

The trial judge, David Brantley, noted that Lofton understood that despite her being unaware of the criminal activity, Smith’s actions would authorize the plaintiff to evict her from her apartment.

He also found, however, that the housing authority failed to consider any mitigating factors or use any discretion in deciding to terminate Lofton’s lease. It didn’t appear, the court added, that the plaintiff even understood that it had the duty or authority to consider factors other than whether Smith’s actions met the criteria to terminate Lofton’s lease.

Brantley denied the plaintiff’s request to evict, holding that federal law required the plaintiff to first exercise discretion.

Affirmed but modified

The Court of Appeals affirmed the trial court’s decision on a different basis, concluding that the housing authority must prove that evicting Lofton was not unconscionable under North Carolina law.

One of Lofton’s attorneys, John Wester of Robinson Bradshaw in Charlotte, said he was happy that two unanimous opinions refused to evict his client. He wasn’t as triumphant regarding the reasons why.

Because while the Supreme Court — which granted Lofton’s petition for discretionary review ― affirmed the appellate court’s decision, it ruled that 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,” Justice Newby wrote.

The court noted that its role in reviewing government housing decisions is not to “second-guess or replace plaintiff’s discretionary decisions,” but to ensure compliance with federal law and the additional duties that arise when the government is the landlord.

Newby cited the Public Housing Drug Elimination Act of 1988, granting housing authorities broad discretion to terminate leases when necessary to ensure safe, drug-free housing, and the U.S. Supreme Court’s decision in Department of Housing & Urban Development v. Rucker, holding that a housing authority can evict a tenant as the result of a guest’s illegal activity even if the tenant was unaware of the activity and had no reason to suspect it.

But as Newby wrote, the Rucker decision emphasizes the importance of discretion by officials pursuing “no-fault” evictions.

“The statute does not require the eviction of any tenant who violated the lease provision,” Rucker states. “Instead, it entrusts that decision to the local public housing authorities.”

The federal Department of Housing and Urban Development described no-fault evictions as “a strong tool” that “should be applied responsibly” using compassion and common-sense.

Newby wrote that while the courts will not second-guess a housing authority’s decision to evict based on discretion, it cannot exercise discretion if it “is unaware it has a choice.”

“While we affirm the outcome of the Court of Appeals’ decision … we do so for a different reason,” Newby wrote. “We hold that plaintiff failed to exercise its discretion as required by federal law before pursuing defendant’s eviction.”

Another of Lofton’s attorneys, John Keller of Legal Aid of North Carolina, said that eviction is a last resort and that public housing tenants across the state will benefit from having “the full context of their situations considered before facing the potential loss of their homes.”

“Tenants like Ms. Lofton, who are not at fault for the criminal activity of third parties and who cooperate with law enforcement, are assets to their communities and should not be evicted,” Keller said.

He added that the decision serves as a reminder to public housing counsel that eviction is not automatic and that mitigating factors should always be examined.

Loss of a defense

While Wester and Robinson Bradshaw co-counsel Thomas Holderness were pleased with the court’s decision, they see a “significant concern” regarding its finding that unconscionability is not part of the summary eviction process. Wester said he hopes that the legislature will fix it.

“We were really hoping that the case would have a sweep of greater significance because of the unconscionability feature of the Morris decision,” Wester said. “We had a unanimous Court of Appeals that embraced that view. If there were ever a worthy tenant, this is a worthy tenant.”

In 1967’s Morris v. Austraw, the court rejected as “clearly dicta” language perceived as requiring an unconscionability analysis.

Holderness called the loss of the unconscionability defense a big one for tenants of both public and private housing, describing Lofton as a woman working late-night shifts to provide for her children. The appeals court recognized, he said, that she was involved in no wrongdoing and had nowhere else to go.

“In the big picture, they said that’s unconscionable and some trial courts have been using that standard since the 60s,” he said.

Former Legal Aid attorney J. Hamilton McCoy, now with Merritt, Webb, Wilson & Caruso in Durham, was not involved in this case but reviewed the court’s decision. He said that removing this defense eliminates the ability of innocent tenants, many of whom have “backstories that others could not begin to imagine,” to remind the housing authority of its primary purpose: to provide safe and habitable housing for those who qualify, not to “contribute to additional homelessness on a whim.”

“This becomes increasingly important as you see cities across North Carolina suffer from a severe deficiency in the production of affordable housing communities,” McCoy said. “Even for private landlord/tenant cases this can be detrimental to the tenant, though the gravity of this decision will be insulated as most tenants in the private sector have the financial means to relocate to another community and avoid further issue with their landlord. Public Housing tenants are not provided the luxury of that option.”

“An attorney for the plaintiff, Michael Parrish of Ward and Smith in New Bern, said that the decision regarding unconscionability does not give landlords a “carte blanche to evict,” but does confirm that landlords are in the best position to decide whether eviction is appropriate.

“[A]s long as a violation has occurred, the courts will not second-guess that decision through a fairness analysis,” Parrish wrote in an email.

The 11-page decision is Eastern Carolina Regional Housing Authority v. Lofton (Lawyers Weekly No. 010-034-16). A digest of the opinion is available online at

Follow Heath Hamacher on Twitter @NCLWHamacher

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