Cahill v. Senecal

VERMONT SUPERIOR COURT CIVIL DIVISION
Orange Unit Case No. 24-CV-03284
5 Court Street
Chelsea VT 05038
802-685-4610
www.vermontjudiciary.org

Mary Cahill v. Kimberly Senecal

ENTRY REGARDING MOTION
Title: Motion to Dismiss Complaint (Motion: 2)
Filer: Everett M. Secor
Filed Date: September 25, 2024

The motion is DENIED.
Defendant Tenant Kimberly Senecal seeks to dismiss the present ejectment action based on
Plaintiff Landlord Mary Cahill’s alleged non-compliance with the Federal Coronavirus Aid, Relief,
and Economic Security Act (CARES Act). Tenant alleges that the property where she resides is a
“covered property” as that term is defined under 15 U.S.C. § 9058(a)(2) and as a result Landlord was
required to give her a 30-day notice for termination based on non-payment of rent. 15 U.S.C. §
9058(c). Since it is undisputed that Landlord did not give such notice, Tenant looks to have the
entire complaint dismissed for lack of subject matter jurisdiction.

The Court finds that the property is not covered by Section 9058 for purposes of extending
the time required for notice of termination under Section 9058(c), and that along with unresolved
factual issues will allow the present matter to continue and proceed to trial or further motion
practice.

Undisputed Facts

Based on the complaint and supplemental information provided by Landlord, the Court
adopts the following facts solely for the purposes of the present motion to dismiss. V.R.C.P. 12(b);
Colby v. Umbrella Inc., 2008 VT 20, ¶ 5.

Defendant Senecal is a tenant of Plaintiff Cahill and rents a dwelling unit from her at 25
Vermont Route 14 in East Randolph, Vermont at a rate of $850 per month. Tenant stopped paying
her monthly rent at some prior to August 5, 2024. On that date, Landlord sent a notice of 14-day
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termination notice consistent with 9 V.S.A. § 4467(a). This notice gave Tenant until August 19,
2024, to vacate the dwelling unit. At the time of the letter, Tenant owed Landlord $1,700 in unpaid
rent.

Tenant did not pay any rent due and owning on her lease and did not vacate the premises
during the notice period. Since August 19th, Tenant has not vacated the dwelling unit but has
continued to reside in the unit and has not paid any further rent. Landlord filed the present action
seeking ejectment based on non-payment of rent and payment of the unpaid rental amounts at the
end of August 2024. Landlord initially omitted her CARES certification with her initial filing, but
she has since filed this information and has also provided supplemental information to show that the
property and dwelling unit are not subject to any federally backed mortgages or loans. It is also
undisputed that Tenant does not receive any vouchers or assistance from the Vermont State
Housing Authority or similar entity that is authorized to distribute federal assistance commonly
known as Section 8. It is not alleged that Tenant receives any other vouchers or support from any
other government assistance program. It is also not alleged that Landlord receives any government
assistance or subsidy for either Tenant’s lease or Tenant’s dwelling unit.

Plaintiff Cahill admitted at the September 30, 2024 rent escrow hearing in this matter that
she does have at least one other tenant who receives “section 8 assistance,” although it is unknown
if such assistance is a tenant-based voucher or a project-based voucher, or even if the tenant resides
at the Route 14 property or at another rental property owned by Plaintiff.

Legal Analysis

The Court will only grant a motion to dismiss if there are no facts or circumstances that
would grant plaintiff relief. Colby, 2008 VT 20, at ¶ 5. This is because the purpose of a motion to
dismiss for failure to state a claim is “to test the law of the claim, not the facts which support it.”
Brigham v. State of Vermont, 2005 VT 105, ¶ 11 (quoting Powers v. Office of Child Support, 173 Vt. 390,
395 (2002)). Courts rarely grant motions to dismiss for failure to state a claim. Colby, 2008 VT 20, at
¶ 5; see also Kaplan v. Morgan Stanley & Co., Inc., 2009 VT 78, ¶ 7.

In this case, Tenant’s motion is focused on whether 15 U.S.C. § 9058(c) applies to the
present tenancy and requires a longer notice of termination than Landlord provided. Section 9058 is
part of what is known as the CARES Act, which was enacted on March 27, 2020 to provide, in part,
economic stabilization and assistance to certain sectors of the United States economy during the
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coronavirus pandemic and the subsequent recovery. See 15 U.S.C., Ch. 116, part III (Economic
Stabilization and Assistance to Severely Distressed Sectors of the United States Economy). One
sector of the economy that the CARES Act sought to stabilize in the wake of the Coronavirus was
the residential rental sector. To that end, Congress passed a temporary moratorium on certain
evictions that lasted from March 27, 2020 through July of 2020. 15 U.S.C. § 9058(b). Congress also
passed a law requiring that certain landlords, after the moratorium, had to give tenants a minimum
30-day notice to vacate when the basis of the eviction was non-payment of rent. 15 U.S.C. §
9058(c); see Housing Authority of County of King v. Knight, 543 P.3d 891, 902 (Wash. App. 2024)
(concluding that Section 9058(c) only applies to non-payment of rent eviction notices).

The limitation on both the temporary moratorium and the 30-day notice requirement is that
each only applies to “covered dwellings.” This term is defined in Section 9058(a)(1) to include any
dwelling that is occupied by a tenant pursuant to a residential lease (or without a lease but terminable
under state law) and is on or in a “covered property.” 15 U.S.C. § 9058(a)(1). A covered property is
defined in Section 9058(a)(2) to include any property that (A) participates in a covered housing
program or rural housing voucher program or (B) has a federally backed mortgage loan or federally
back multifamily mortgage loan. 15 U.S.C. § 9058(a)(2). The covered housing programs cited in
Section 9058(a)(2)(A) reference the list of programs found at 34 U.S.C. § 12491(a), and they include
42 U.S.C. § 1437f, which is the housing voucher program known as Section 8 that is administered by
the Vermont State Housing Authority.

When interpreting a statute, “[t]he bedrock rule of statutory construction is to determine and
give effect to the intent of the legislature.” In re C.S., 158 Vt. 339, 343 (1992). The Court begins this
process by looking at the plain language within the context of the statutory scheme. Delta Psi
Fraternity v. City of Burlington, 2008 VT 129, ¶ 7. If the plain language resolves consistent with the
legislation, then the analysis ends. Id. If the plain language produces results that are “manifestly
unjust, absurd, unreasonable or unintended, or conflicts with expressions of legislative intent,” then
the Court must look further. Town School Dist. of St. Johnsbury v. Town School Dist. of Topsham, 122 Vt.
268, 271 (1961).

In this case, there is a threshold legal question of federalism that must be resolved before the
Court can parse the language of the statute further. Landlord-tenant law is primarily a creature of
state law. Alabama Assoc. of Realtors v. Department of Health and Human Servs., 594 U.S. 758, 764 (2021).
Thus, any action by the federal government into this area must be done with “exceedingly clear
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language” as such provisions “alter the balance between federal and state power.” Id. In Vermont,
landlords and tenants are governed by the Vermont Residential Rental Act, which has specific
provisions for how to terminate a tenancy for non-payment of rent. The provision found at 9
V.S.A. § 4467(a) requires a landlord to give a tenant 14 days of notice before terminating the
tenancy. If applicable, 15 U.S.C. § 9058(c) would alter this requirement and would effectively double
the amount of time a landlord is required to give. To make such an alteration to state law and
practices, there must be a clear authority and Congressional mandate. Alabama Assoc. of Realtors, 594
U.S. at763–65 (striking down a federal eviction moratorium where the purpose and authorization
were too disparate to support the broad sweep of authority).

In this case, there is some ambiguity as to what Congress meant when it stated that a
“covered property” was one that “participates in a covered housing program” like the Section 8
program under 42 U.S.C. § 1437f. This is because Section 8 assistance comes in different forms that
involve the property in different manners.

Two of the major Section 8 programs are known as the Section 8 Existing Housing Choice
Voucher and the Section 8 Project-Based Voucher. See Vermont Housing Authority, Section 8 Housing
Assistance Program at https://www.vsha.org/vsha-programs/rental-assistance-program/ (last visited
Oct. 9, 2024) (explaining the different Section 8 programs that the State administers). Under the
Housing Voucher program, it is not clear if the property itself participates in the program. The
program is a subsidy that while delivered to the landlord is only a benefit to the tenant as it helps the
tenant meet their market-rate rental obligations. Id. In such cases, landlord puts an apartment on
the open market for rent at a particular rate. Under the Housing Voucher program, tenant agrees to
pay the market-rate rent that was advertised, but the Vermont State Housing Authority agrees to pay
a portion of this rental obligation. Id. Landlord receives the same amount of rent that they would
have received from a non-subsidized tenant. When the lease ends and the tenant moves to another
rental property, they take the voucher and subsidy with them for their benefit. Nothing about this
program attaches to the property.

In contrast, the Project-based voucher sets a specific dwelling unit aside as an affordable
housing unit. Such units are not listed on the open market. Id. Tenants are selected from a waiting
list by Landlord and payment comes from the Housing Authority as negotiated with landlord. The
subsidy is attached to the unit—that is the property—and does not go with the tenant. Id.

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This issue is a matter of first impression for Vermont courts. Given the differences and
distinctions as well as the federalism issue, the Court has looked to other jurisdictions to see if and
how they have addressed this analysis. After a survey of available cases, the Court found several
decisions where other jurisdictions have sought to interpret the provisions of Section 9058 and its
applicability to various landlord/tenant situations. See, e.g., D.H. v. Common Wealth Apartments, 231
N.E.3d 284, 287–88 (Ind. App. 2024); MIMG LXXIV Colonial, LLC v. Ellis, 6 N.W.3d 799, 804,
805–07 (Neb. 2024) (Papik, J., concurring); Olentangy Commons Owner LLC v. Fawley, 228 N.E.3d 621,
632–33 (Ohio App. 2023); Sherwood Auburn, LLC v. Pinzon, 521 P.3d 21, 220–21 (Wash. App. 2022).
Each of these cases and the near dozen others applying the provisions of 15 U.S.C. § 9058(c) to a
termination of tenancy proceeding involve either a landlord receiving a substantial benefit from a
federally subsidized mortgage/federal subsidy program, or a tenant who has received a direct
subsidy tied to the tenancy at issue in the case. None of the cases involve the type of indirect
relationship—applying the provisions of Section 9058 to a tenant residing at the property who is not
receiving Section 8 assistance on the sole basis that another tenant is—that is at issue in the present
matter and motion. Thus, while the Court can find several cases interpreting and applying the 30-
day notice provision of Section 9058(c), it cannot find a single case where a court has extended the
provision in the manner that Tenant seeks.

Looking to the federal agency that is charged with implementing Section 9058 and the other
provisions of the CARES Act, the Court sees that this distinction is necessarily chance but is a
reflect of federal policy and interpretation. In its sole guidance on the issue, the Department of
Housing and Urban Development provides the following interpretation of Section 9058 and its
applicability to non-subsidized tenants who seek to apply the CARES Act to their eviction:

If the market rate property has a federally backed mortgage, then Section 4024 of the
CARES Act applies to the entire property. If the market rate property does not have
a federally backed mortgage, then Section 4024 of the CARES Act only applies to
the voucher holder. HUD does not have the authority to extend jurisdiction
over unassisted tenants or the property that does not have a federal backed
mortgage. However, owners should review their state and local laws, as many are
also enacting their own moratorium on evictions.

Dep’t of Housing and Urban Dev., HUD COVID-19 FAQs for Public Housing Agencies at 9 at
https://www.hud.gov/sites/dfiles/PIH/documents/COVID19_Round3-FAQs_04-22-20.pdf (Apr.
22, 2020) (emphasis added).

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The Court finds this interpretation to be persuasive and worthy of adoption for the
following reasons. First, it comes from the Agency charged with implementing and interpreting the
provisions of Section 9058 and with administrating the public funding programs. Second, the
opinion recognizes that while Section 9058 has broad language, the federal mandate is limited and
constrained by the authority of the federal government to intercede into areas of state law. This
reasoning is given the fullest available expression by Nebraska Supreme Court Justice Papik in his
concurrence in the MIMG LXXIV Colonial, LLC where he notes that:

If the federalism canon were applied, the relevant question would not be whether the
text of 15 U.S.C. § 9058 is best read to create a permanent federal 30-day notice
requirement for evictions from covered properties. Rather, the question would be
whether an interpretation that avoids or minimizes federal regulation of a subject
traditionally left to the states is at least tenable, such that the more expansive
interpretation cannot be described as clear. As Justice Barrett observed in a recent
concurring opinion, the federalism canon is a “strong-form canon,” and such canons
ask courts to “strain statutory text to advance a particular value.” Biden v. Nebraska,
600 U.S. 477, 508, 143 S. Ct. 2355, 216 L. Ed. 2d 1063 (2023) (Barrett, J., concurring)
(emphasis in original). As a result, Justice Barrett explained that when a clear-
statement interpretive rule applies, “the better interpretation of a statute will not
necessarily prevail,” id., and if the “better reading leads to a disfavored result ... the
court will adopt an inferior-but-tenable reading to avoid it,” id., 600 U.S. at 509, 143
S.Ct. 2355. See, also, Rudisill v. McDonough, 601 U.S. 294, 315, 144 S. Ct. 945, –––
L.Ed.2d –––– (2024) (Kavanaugh, J., concurring) (“[a]pplying a substantive canon, a
court may depart from what the court, absent the canon, would have concluded is
the best reading of the statutory text. Otherwise, of course, the substantive canon
would not be necessary or relevant”).

MIMG LXXIV Colonial, LLC v. Ellis, 6 N.W.3d at 806.

While the Court does not adopt the federalism cannon in this case, the discussion,
nevertheless, embodies the Court’s concerns about Tenant’s broader interpretation of Section 9058.
Given the weak connection between any federal money and the activity sought to be regulated, any
interpretation that sits at the outer edges of Section 9058—such as Tenant’s interpretation, which
would allow a tenant to claim the benefit of a federal statute despite no nexus between the federal
funds and the tenant, the unit they were renting, the lease agreement, or even the property— would
likely exceed the federal government’s authority to alter existing state landlord-tenant laws. The
HUD interpretation of Section 9058’s mandate, which excludes situations where the only federal
nexus is a separate and unrelated tenant receiving a housing voucher, is the only sensible reading of

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the statute that would avoid this constitutional issue. State v. Berard, 2019 VT 65, ¶ 16 (noting that
Vermont courts “generally construe statutes to avoid constitutional difficulties if possible.”).

Third, the HUD interpretation also accounts for the issues of jurisdiction and notice. If the
Court was to extend the provisions of the CARES Act to parties not directly involved with the
receipt of federal funds, there would be a substantial question what notice parties would have as to
when the federal jurisdiction applied. By way of example, if the Section 8 tenant leaves before the
landlord gives notice to the non-Section 8 tenant, would 15 U.S.C. § 9058(c) still apply? What about
the opposite circumstance where the Section 8 tenant moves in after the non-Section 8 tenant forms
their rental agreement and relationship under Vermont law? Do the rights accrue to the non-Section
8 tenant despite the parties’ prior agreement and relationship? What if the move-in of the Section 8
tenant occurs after the notice of termination but before the ejectment action? Beyond the practical
jurisdictional dilemmas in these scenarios, each carries a question of notice. How does a tenant
learn that these rights accrue? How does the Landlord? In all other cases with the CARES Act,
there is a moment where either landlord or landlord and tenant sign an agreement with HUD or its
state proxy and accrue a benefit that puts them on notice.1

According to the HUD such guidance and notifications will not be given to landlords for
their non-Section 8 tenants. See Dep’t of Housing and Urban Dev., 30-Day Notification Requirement
Prior to Termination of Lease for Nonpayment of Rent, 88 Fed. Reg. 83877-02 (Dec. 1, 2023)
(detailing the HUD’s proposed rules for applicability of the CARES Act to only project-based rental
assistance tenants for evictions based on non-payment of rent). To the extent that this Court
allowed Tenant’s interpretation to prevail, it would create a situation that would run counter to any
intent to notify and require the parties and would effectively impose a requirement that was not
covered by the agency implementing notice and general enforcement. Id. at 83882. Given that
there is no clear line of notice either naturally occurring within the landlord/tenant relationship or
planned by the HUD’s current rulemaking, Tenant’s proposed interpretation creates a problem of
notice and jurisdiction. The HUD interpretation does not.

For these reasons, the Court finds the HUD interpretation of the scope and reach of 15
U.S.C. § 9058 to be the more persuasive and compelling interpretation for purposes of

1 Such subsidy or mortgage agreements also reference contain language invoking the various statutes such as 15

U.S.C. § 9058 that serve as another, likely form of notice.

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implementing the purpose of the CARES Act and applying the federal modifications to state
landlord/tenant law in a clear and delineated manner that is consistent with the federal intent and
supported by federal agencies. The Court adopts this interpretation, which effectively resolves
Tenant’s Motion to Dismiss as a matter of law. Based on this interpretation, Landlord in the present
case was not obligated to provide additional notice to Tenant under 15 U.S.C. § 9058(c), and the
notice provided is consistent with state law under 9 V.S.A. § 4467(a).

Returning to the factual issues that the Court set aside earlier, the facts of this case have not
been fully developed. While Landlord mentioned another tenant receiving Section 8 housing, there
has been no pleading or sufficient record to understand the nature of this tenant’s subsidy or what
Landlord has or has not agreed to receive. Therefore, in addition to the legal considerations
analyzed above, the record is not sufficient for the Court to rule as a matter of law on the factual
bases that Tenant relies upon in her responsive filing.

ORDER

Based on these considerations, Tenant’s Motion to Dismiss is Denied. This denial is based
on the legal limitations that render 15 U.S.C. § 9058(c) inapplicable to the current Landlord and
Tenant and their lease relationship as presently understood by the Court under V.R.C.P. 12(b). This
denial is also based on the lack of facts sufficient to demonstrate the precise nature of the
relationship between Landlord and the other tenant, including the tenant’s location, subsidy status,
and relevant dates when their lease relationship began.

In light of this dismissal and Landlord’s compliance with the CARES Act notification, the
Rent Escrow Order and all deadlines associated with that Order remain in place. Tenant has 14 days
from the date of this Order to file her answer as required under V.R.C.P. 12.

Electronically signed on 10/9/2024 11:38 PM pursuant to V.R.E.F. 9(d)

__________________________________
Daniel Richardson
Superior Court Judge

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