United States District Court, D. Nevada
UNITED STATES OF AMERICA ex rel. CHRISTINA ELLIS and JONATHAN ELLIS, Relators, Plaintiffs,
JING SHU ZHENG and SJ 5318 INVESTMENT CORP., Defendants.
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT (ECF NO.
P. GORDON UNITED STATES DISTRICT JUDGE.
Christina and Jonathan Ellis bring a qui tam action on behalf
of the United States pursuant to the False Claims Act, 31
U.S.C. § 3729, et seq. The Ellises assert that
defendants Jing Shu Zheng and SJ 5318 Investment Corp. (SJ
5318) misrepresented the amount of rent Zheng was charging
the Ellises, whose rent was being subsidized by the United
States Department of Housing and Urban Development (HUD). A
clerk's entry of default has been entered as to SJ 5318
Investment Corp. ECF No. 17. The Ellises now seek summary
judgment against Zheng on their FCA claim.
March 2013, the Ellises leased from Zheng a house at 4411
Melrose Abbey Place, Las Vegas, Nevada (the
“Property”). ECF No. 24 at 6. SJ 5318 acted as
Zheng's agent and property manager. ECF Nos. 27 at 4;
27-1. The Ellises signed a lease agreement on March 22, 2013
indicating a total monthly rent of $2, 300. ECF No.
March 18, 2013, Zheng submitted a Request for Tenancy
Approval to the Southern Nevada Regional Housing Authority
(SNRHA) asking that the Property be considered for approval
under the Section 8 Tenant-Based Housing Choice Voucher
Program. ECF No. 24-5. Under Section 8, HUD enters into
annual contribution contracts with regional public housing
agencies across the United States, including the SNRHA. 24
C.F.R. § 982.151. Pursuant to the contribution contract,
the SNRHA makes monthly housing assistance payments to
landlords on behalf of eligible tenants. See Id.
§ 982.451. The contract between the SNRHA and a landlord
is known as a Housing Assistance Payments (HAP) Contract.
Request for Tenancy Approval submitted by Zheng proposed a
monthly rent of $2, 000. ECF No. 24-5. On April 10, 2013, SJ
5318 entered into a HAP Contract with the SNRHA on
Zheng's behalf. ECF No. 24-1. The HAP Contract contained
the terms of the SNRHA's payment assistance to Zheng on
behalf of the Ellises. Part A of the HAP Contract lists the
“rent to owner” as $2, 000, of which $456 would
be paid by the SNRHA every month as a housing assistance
payment pursuant to Section 8. Id. at 3. Parts B and
C of the HAP Contract provide, in relevant part, that: (1)
the lease shall be consistent with the HAP Contract; (2) the
rent payment may at no time exceed the reasonable rent as
determined by the SNRHA; (3) except for the “rent to
owner” payment, the owner may not accept any additional
payment for rent of the unit; and (4) unless the owner has
complied with all provisions of the HAP Contract, the owner
does not have a right to receive housing assistance payments
under that contract. Id. at 6, 7, 10.
received a Notice of Rent Payment and Program Abuse Warning
Information, which notifies the owner that the HAP Contract
will begin. ECF No. 24-2. The notice states that
“[r]equiring extra (‘side') payments in
excess of the family's share of rent as listed . . . is
considered program fraud” and will lead to the
termination of the owner and family from the Housing Choice
Voucher Program. Id. Throughout the Ellises'
tenancy, Zheng received seven SNRHA Notice of Change forms
notifying her of increases in the monthly HAP payment but
indicating the total rent to owner remained $2, 000. ECF No.
the HAP Contract stated the rent was $2, 000, from April 2013
to January 2015, the Ellises deposited $2, 300-their monthly
rental share and the extra $300 under the March 22
lease-directly into Zheng's bank account. ECF Nos. 24 at
9-10; 24-8; 24-9; 24-10. Zheng received twenty-two payments
from the SNRHA under the HAP Contract for a total of $18,
722. ECF No. 24-11. The Ellises moved out in January 2015,
two months before the expiration of their lease agreement.
ECF No. 12 at 2.
judgment is appropriate if the pleadings, discovery
responses, and affidavits demonstrate “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a), (c). A fact is material if it “might affect the
outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). An issue is genuine if “the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” Id.
party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion and
identifying those portions of the record that demonstrate the
absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden
then shifts to the non-moving party to set forth specific
facts demonstrating there is a genuine issue of material fact
for trial. Fairbank v. Wunderman Cato Johnson, 212
F.3d 528, 531 (9th Cir. 2000). I view the evidence and draw
reasonable inferences in the light most favorable to the
non-moving party. James River Ins. Co. v. Hebert Schenck,
P.C., 523 F.3d 915, 920 (9th Cir. 2008).
Agency Relationship Between Zheng and SJ 5318
primary argument in opposition is that SJ 5318, not her,
signed the HAP Contract. She contends that SJ 5318 managed
the Property and “t[ook] care of everything” for
her. ECF No. 26 at 1. The Ellises respond that Zheng is
liable for SJ 5318's violations of the FCA because it had
actual authority to act on her behalf.
general principles of the federal common law of agency have
been formulated largely based on the Restatement of
Agency.” Doe I v. Unocal Corp., 395 F.3d 932,
972 (9th Cir. ...