Housing authority suit ends

Published 12:00 am Sunday, August 28, 2005

The Selma Times-Journal

Charges against the Selma Housing Authority alleging misconduct in the

disbursement of Section 8 funds were dismissed with prejudice by a federal court judge earlier this month.

Ending a year of litigation, the summary judgment filed in the United States District Court of Judge William Steele found in favor of the SHA.

In July 2004, the Selma Housing Development Corporation, owner of MBA Homes, filed a suit against the SHA alleging fraud, breach of contract and violation of due process.

Steve Smitherman, owner of SHDC, filed the suit after SHA reduced Section 8 payments to residents at the Woodrow East Subdivision. Provided by the federal Housing and Urban Development department, the funds paid for partial rent to the Section 8 residents of Woodrow East. The end of payments meant that tenants either had to move or pay full price for rent.

Smitherman lowered rent in the subdivision. SHA stopped payments, claiming that SHDC didn’t follow proper procedures to notify SHA.

John Kelly III, the attorney for SHA, said that it was the first of several administrative violations.

The Times-Journal was unable to contact Smitherman or SHA head John [Jesse

Johnny Moss as of press time for contact.

Smitherman filed suit, saying that the SHA violated a contract with SHDC, violated the corporation’s due process rights and committed fraud.

In the judgment filed, the SHDC claims that the SHA &8220;wrongfully cancelled so-called HAP (housing assistance payment) contracts…without following legally adequate procedures,&8221; and &8220;that SHA wrongfully increased utility allowances without following legally adequate procedures.&8221; SHDC cited these issues as a violation of due process.

The SHDC also claimed that the SHA &8220;breached the management agreement relating to MBA Homes b allowing the property to fall in disrepair, failing to provide adequate security and prematurely terminating the contract.&8221;

In the third claim against the SHA, fraud, SHDC alleged that &8220;SHA fraudulently represented that if SHDC constructed new units of Section 8 housing, SHA would grant those units so-called project Section 8 status…meaning that the Section 8 voucher would travel with the property rather than with the tenant.&8221;

Steele answered each of the complaints point-by-point in his judgment.

Steele found for SHA in the end. In the conclusion of his judgment, Steel

put the issue to rest in no uncertain terms.

As for the due process violations, Steele found none.

Counts regarding the breach of contract issues were dismissed along with the fraud counts.