In re the Rental Dwelling License held by Khan

804 N.W.2d 132, 2011 Minn. App. LEXIS 116, 2011 WL 3903243
CourtCourt of Appeals of Minnesota
DecidedSeptember 6, 2011
DocketNo. A10-2211
StatusPublished
Cited by7 cases

This text of 804 N.W.2d 132 (In re the Rental Dwelling License held by Khan) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Rental Dwelling License held by Khan, 804 N.W.2d 132, 2011 Minn. App. LEXIS 116, 2011 WL 3903243 (Mich. Ct. App. 2011).

Opinion

OPINION

SHUMAKER, Judge.

Relator Mahmood Khan challenges respondent City of Minneapolis’s procedure for hiring and selecting administrative hearing officers to conduct hearings on alleged violations of city ordinances respecting residential rentals, contending that the hearing officers have a direct, personal, substantial pecuniary interest in rendering decisions favorable to the city and that this procedure violates his due-process rights. Relator also challenges [135]*135the revocation of his residential rental license, contending that there is a lack of substantial evidence to support the revocation. Because there is no evidence showing that the city’s procedure for hiring and selecting hearing officers provides the hearing officers with a direct, personal, substantial pecuniary interest to decide cases in favor of the city, and because the city’s decision to revoke relator’s rental license is supported by substantial evidence, we affirm.

FACTS

Mahmood Khan holds licenses to rent approximately 40 properties that he owns in Minneapolis. One of these properties is a house located at 3223 Bryant Avenue North. There is no dispute that the house contains a legally uninhabitable basement unit.

On March 12, 2009, City of Minneapolis Blousing Inspector Valerie Asante conducted a conversion inspection of this property. A conversion inspection is a routine inspection of property that is rented for the first time or that is rented after having been vacant for more than a year. During her inspection, Asante observed violations of the Minneapolis Code of Ordinances, including the illegal occupancy of the basement unit. The tenants told Asante they were using the basement unit as a bedroom, and Asante observed a bed and bedding there. She concluded that the legally uninhabitable basement unit was being used as a bedroom in violation of the code of ordinances, and she entered the violation in the city’s database.

Asante also issued an order to Khan to discontinue the unlawful occupancy of the basement unit. The order notified Khan that he was not in compliance with the code and that any additional violations of the code or a failure to comply could result in revocation of his license to rent this particular property. The notice informed Khan that the order was appealable. Khan did not appeal the order. Another housing inspector inspected the property on April 27, 2009, and the basement was no longer occupied.

A little more than a year later, on May 25, 2010, a subsequent group of tenants contacted the City of Minneapolis to report that the property had electrical problems and an unfinished ceiling and kitchen. Housing Inspector Sheila Rawski investigated the complaint. During her inspection, Rawski observed violations of the code, including that the basement unit contained a bed, a mattress, bedding, a dresser, a couch, a chair, a space heater, lighting, and clothes. Rawski concluded that the unit was being illegally occupied as a bedroom. Rawski later learned that this was the second violation on the property for using the legally uninhabitable basement as a bedroom, so she notified Janine Atchison, district manager of the city’s Department of Housing Inspections.

Atchison reviewed the evidence and confirmed that this was the property’s second citation for illegal occupancy of the basement unit and that Khan had been notified the first time of the illegal occupancy. At-chison began proceedings to revoke Khan’s license to rent this particular property, in accordance with the city’s policy. Atchison mailed a letter to Khan notifying him of the license-revocation proceedings, and Khan was given 15 days to appeal the determination. Khan timely appealed. A hearing was held before an administrative hearing officer, who heard testimony from and reviewed evidence submitted by both Khan and the city regarding the allegations of illegal occupancy.

Khan testified at the hearing that he did not know the tenants were using the basement as a bedroom on either occasion until he received notice of such from the city. [136]*136After receiving notice on both occasions, Khan testified that he evicted the tenants who were living in the basement. Melvin Snoddy, who helps Khan manage his rental properties, corroborated that Khan evicted both groups of tenants after learning they were using the basement illegally. However, Snoddy asserted that Khan was aware of the second instance of illegal use of the basement and that he had already begun eviction proceedings against the tenants prior to Rawski’s inspection.

The administrative hearing officer concluded that Khan had twice violated the city’s code of ordinances by allowing tenants to use the basement unit as a bedroom. The hearing officer specifically found Khan in violation of Minneapolis, Minn., Code of Ordinances (MCO) § 244.1910(3) (2010), which states that “[n]o rental dwelling or rental dwelling unit shall be over occupied or illegally occupied in violation of [the code].” The hearing officer recommended that the Minneapolis City Council revoke Khan’s license to rent this particular property.

The Minneapolis City Council’s Regulatory, Energy, and Environment Committee (REEC) considered the recommendation on October 14, 2010, and Khan and the city argued their respective positions. The REEC recommended that the city council adopt the hearing officer’s recommendation and revoke Khan’s rental license. The city council voted to revoke Khan’s rental license on October 22, 2010, and notified him of the decision on November 4, 2010. Khan appealed to this court by petition for a writ of certiorari.

ISSUES

1. Does the city’s administrative-hearing procedure violate Khan’s due-process rights because hearing officers are hired and compensated by the city?

2. Was the evidence sufficient to support the city’s decision to revoke Khan’s rental license?

ANALYSIS

Procedural History

The City of Minneapolis’s Director of Inspections has authority to initiate an action to revoke a rental license. MCO § 244.1940 (2010). An appeal of the director’s recommendation of revocation shall be heard by an administrative hearing officer. MCO § 244.1960(a) (2010). The hearing officer makes a recommendation to the city council, which shall have the final authority to revoke the license. Id. (e) (2010). Janine Atchison was acting as the city’s director of inspections and initiated revocation proceedings. Khan had a hearing before an administrative hearing officer, who recommended revocation to the city council. The city council heard the matter and voted to revoke Khan’s rental license for this particular property.

Standard of Review

A quasi-judicial decision made by a municipality is reviewable through a writ of certiorari. See City of Minneapolis v. Meldahl, 607 N.W.2d 168, 171 (Minn.App.2000). “A city council’s decision may be modified or reversed if the city ... made its decision based on unlawful procedure, acted arbitrarily or capriciously, made an error of law, or lacked substantial evidence in view of the entire record submitted.” Montella v. City of Ottertail, 633 N.W.2d 86, 88 (Minn.App.2001) (quotation omitted). “The party seeking reversal has the burden of demonstrating error.” Id.

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804 N.W.2d 132, 2011 Minn. App. LEXIS 116, 2011 WL 3903243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-rental-dwelling-license-held-by-khan-minnctapp-2011.