Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-07106/USCOURTS-caDC-96-07106-0/pdf.json

Parties Involved:
Hampton Cross
Appellant
District of Columbia
Appellant
Patricia A. Montgomery
Appellant
Samaritan Inns, Inc.
Appellee

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 31, 1997 Decided June 6, 1997 

No. 96-7105

SAMARITAN INNS, INC.,

APPELLEE/CROSS-APPELLANT

v.

DISTRICT OF COLUMBIA, ET AL.,

APPELLANTS/CROSS-APPELLEES

Consolidated with 

Nos. 96-7106 and 96-7109

Appeals from the United States District Court 

for the District of Columbia 

(No. 93cv02600)

Lutz Alexander Prager, Assistant Deputy Corporation 

Counsel, argued the cause for appellants/cross-appellees, with 

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whom Charles F.C. Ruff, Corporation Counsel, and Charles L. 

Reischel, Deputy Corporation Counsel, were on the briefs.

John R. Risher Jr., argued the cause for appellee/crossappellant, with whom James P. Mercurio was on the briefs.

Before: WALD, ROGERS and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The District of Columbia and two 

of its employees, Hampton Cross and Patricia A. Montgomery 

(collectively "the District") appeal a judgment awarding approximately $2.4 million in compensatory damages, $1,000 in 

punitive damages, and $684,624 in attorney's fees and costs to 

Samaritan Inns, Inc., for violations of the Fair Housing Act, 

42 U.S.C. §§ 3601-3631. The District does not contest the 

district court's finding that it violated the Act by issuing an 

illegal stop-work order that temporarily prevented Samaritan 

Inns from completing renovations to a residential housing 

facility for former drug and alcohol abusers, and by initiating 

proceedings to revoke the facility's construction permits. 

Rather, the District contends that the record does not support the district court's award of compensatory damages for 

"lost" and "delayed" charitable contributions to Samaritan 

Inns, approximately $2.3 million, or the award of punitive 

damages against Cross and Montgomery. Samaritan Inns 

cross-appeals the district court's denial of relief on its claim 

that the District violated the Fair Housing Act by failing to 

make reasonable accommodations in its zoning laws.

We hold that because Samaritan Inns did not establish with 

reasonable certainty that the District's actions caused any 

potential contributors to refrain from making donations to its 

capital campaign, it is not entitled to recover damages for 

"lost" contributions. We further hold that Samaritan Inns 

may recover damages for "delayed" capital contributions, but 

that the district court's findings as to the duration of the 

delay are clearly erroneous. We affirm the award of punitive 

damages against Cross and Montgomery. Accordingly, we 

reverse the awards of compensatory damages for "lost" and 

"delayed" capital contributions, and we remand the case for 

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1 Under the zoning regulations, a "boarding house" is "a building or part of a building that provides, for compensation, meals or 

lodging and meals to three (3) or more guests on a monthly or 

longer basis." D.C. Mun. Regs. tit. 11, § 199.1 (1995). 

recalculation of the award for "delayed" contributions and for 

reconsideration of the attorney's fees award.

I.

Samaritan Inns is a tax-exempt charitable corporation that 

provides below-market rental housing to former drug and 

alcohol abusers in the District of Columbia. It operates three 

"Inns" that provide short-term transitional housing, and two 

"Houses"Lazarus House and Tabitha's Housethat provide longer-term housing. As a condition of living in either 

the Inns or the Houses, all tenants must have completed an 

approved substance abuse program, must obtain and maintain 

gainful employment, and must refrain from using drugs and 

alcohol.

A.

Background to the litigation. Lazarus House opened in 

1991. Within two years, it received nearly 800 applications 

from men and women who met the criteria for living there. 

Because it was unable to meet this demand, Samaritan Inns 

decided to open a second House modeled after Lazarus House 

and, in 1992, purchased the building now known as Tabitha's 

House. In 1993, the District issued the demolition and 

building permits necessary to allow Samaritan Inns to renovate Tabitha's House and operate it as a boarding house.1

Shortly after work on the project began, however, residents 

of the surrounding community began to express opposition to 

the housing facility. On September 22, 1993, David Erickson, 

the president of Samaritan Inns, met with community residents to discuss the Tabitha's House project. Also attending 

the meeting were appellant Cross, then the Acting Director of 

the D.C. Department of Consumer and Regulatory Affairs; 

Joseph Bottner, the D.C. Zoning Administrator; and the 

Honorable Charlene Drew Jarvis, D.C. Council Member for 

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2 Under the zoning regulations, a "community-based residential 

facility" is "a residential facility for persons who have a common 

need for treatment, rehabilitation, assistance, or supervision in their 

daily living." D.C. Mun. Regs. tit. 11, § 199.1 (1995). If a facility is 

Ward 4, in which Tabitha's House is located. At the meeting, 

community residents argued that Tabitha's House could not 

be considered a boarding house under the zoning laws because it would not serve meals, and demanded that Cross 

issue an order stopping all work on the project.

Erickson subsequently met with the Zoning Administrator 

and community residents in an effort to resolve issues relating to the Tabitha's House meal plan. Opponents of the 

project, including the Ward 4 Council Member, continued to 

press for a stop-work order. On October 7, 1993, the Zoning 

Administrator issued an order requiring Samaritan Inns to 

stop all construction work on Tabitha's House. The order 

contained no discernible explanation of why it had been 

issued. Although the Zoning Administrator shortly thereafter recommended to Cross that the order be vacated, Cross 

refused to rescind it, claiming that the Mayor had decided to 

support the protesters. On October 18, 1993, appellant Montgomery, the Acting Director of the D.C. Building and Land 

Regulation Administration in the Department of Consumer 

and Regulatory Affairs, sent Erickson a letter purporting to 

revoke the building and demolition permits for Tabitha's 

House on the ground that Samaritan Inns had misrepresented to the District that the building would be used as a 

boarding house.

The District later acknowledged that the October 18 revocation order was invalid because Samaritan Inns had not 

received a hearing. On November 19, 1993, Montgomery 

issued a Notice of Intent to Revoke Permit, reiterating the 

charge that Samaritan Inns had falsely represented in its 

permit applications that it intended to operate the Tabitha's 

House property as a "boarding house." The notice also 

charged that Lazarus House, the model for Tabitha's House, 

was being operated as a "community-based residential facility," rather than a boarding house.2 At Cross's direction, a 

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a community based residential facility, it cannot be deemed to 

constitute any other use permitted by the zoning regulations. Id.

3 Under the zoning regulations, a "rooming house" is "a building or a part of a building that provides sleeping accommodations 

for three (3) or more persons who are not members of the immediate family of the resident operator or manager, and in which 

accommodations are not under the exclusive control of the occupants." D.C. Mun. Regs. tit. 11, § 199.1 (1995). 

4

See D.C. Mun. Regs. tit. 11, §§ 357-360 (1995) (defining 

permissible uses of various types of community-based residential 

facilities in R-5 zones). 

citation charging that Lazarus House had violated its certificate of occupancy was also issued, but not served. Samaritan Inns requested an expedited hearing, and on December 

28, 1993, an administrative law judge found that the District 

had not proven any false statements in the permit applications for Tabitha's House. The judge also found that there 

was no evidence that Lazarus House was being operated as a 

community-based residential facility or that Samaritan Inns 

intended to provide counseling or residential services at Tabitha's House that would make it a community-based residential facility under the zoning laws. The judge further 

found that even if Samaritan Inns did not intend to provide 

meals, Tabitha's House would still qualify as a "rooming 

house," rather than a "boarding house."3 Under the zoning 

regulations, both boarding houses and rooming houses are 

uses that are permitted as of right in the area where Tabitha's House is located, an R-5 residential zone. D.C. Mun. 

Regs. tit. 11, §§ 330.6, 350.4(a) (1995). If Tabitha's House 

had been classified as a community-based residential facility, 

the number of occupants permitted in the facility would have 

been limited, and Samaritan Inns would have been required 

to obtain permission from the Board of Zoning Adjustment 

("BZA") to operate the facility.4

During the course of this controversy, the stop-work order 

remained in effect. On December 20, 1993, Samaritan Inns 

filed the instant lawsuit alleging violations of District of 

Columbia law, the Civil Rights Act of 1871, the Fair Housing 

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5

42 U.S.C. § 3602(h) provides:

"Handicap" means, with respect to a person

(1) a physical or mental impairment which substantially 

limits one or more of such person's major life activities;

(2) a record of having such an impairment, or

(3) being regarded as having such an impairment,

Act, and the Due Process Clause of the Fifth Amendment. 

On January 12, 1994, the District rescinded the stop-work 

order, and on March 15, 1994, the parties entered into a 

consent order, pursuant to which the District agreed not to:

revoke or seek to revoke plaintiff's building permits 

relating to Tabitha's House, nor issue a stop-work order 

pertaining to work being done on Tabitha's House pursuant to those permits, except as may be necessary either 

to protect the public from a dangerous physical condition 

arising at Tabitha's House or on the basis of information 

not of record which would warrant revocation or a stopwork order under the law....

Despite this agreement, Cross subsequently caused the citation against Lazarus House to be served on March 21, 1994. 

The District canceled that citation on April 6, 1994.

The construction and renovation of Tabitha's House was 

completed in June 1994. In July, the Zoning Administrator 

issued a certificate of occupancy for its use as a rooming and 

boarding house. Opposition from the surrounding community 

continued, and residents appealed the issuance of the certificate of occupancy to the BZA. In September 1996, the BZA 

denied the appeal.

After a bench trial in February 1995, the district court 

entered judgment for Samaritan Inns on most of its Fair 

Housing Act claims. The district court found that the tenants of Tabitha's House and Lazarus House were persons 

with a "handicap" under § 802(h) of the Act, 42 U.S.C. 

§ 3602(h),5and that the District's actions were motivated by 

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but such term does not include current, illegal use of or 

addiction to a controlled substance (as defined in section 802 of 

Title 21).

Recovering alcoholics or drug abusers who do not currently use

illegal drugs may be persons with a "handicap" under the Fair 

Housing Act. H.R. REP. NO. 100-711, at 22 (1988), reprinted in

1988 U.S.C.C.A.N. 2173, 2183; see also United States v. Southern 

Management Corp., 955 F.2d 914 (4th Cir. 1992). 

6

42 U.S.C. § 3604(f)(1) makes it unlawful to:

discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a 

handicap of

(A) that buyer or renter,

(B) a person residing in or intending to reside in that 

dwelling after it is so sold, rented, or made available; or

(C) any person associated with that buyer or renter.

42 U.S.C. § 3617 makes it unlawful to:

coerce, intimidate, threaten, or interfere with any person in the 

exercise or enjoyment of, or on account of his having aided or 

encouraged any other person in the exercise or enjoyment of, 

any right granted or protected by section ... 3604 ... of this 

title.

7

42 U.S.C. § 4604(f)(3)(B) provides that "[f]or the purposes of 

this subsection, discrimination includes ... a refusal to make reasonable accommodations in rules, policies, practices, or services, 

when such accommodations may be necessary to afford such person 

equal opportunity to use and enjoy a dwelling...." 

discriminatory intent, had a discriminatory effect, and 

"coerced or intimidated" Samaritan Inns from continuing its 

efforts to complete and open Tabitha's House, in violation of 

§§ 804 and 818 of the Act, 42 U.S.C. §§ 3604, 3617.6 The 

district court found, however, that Samaritan Inns had failed 

to present persuasive evidence that the District had violated 

the "reasonable accommodations" provision of the Fair Housing Act.7

In light of its disposition, the court declined to 

address Samaritan's Due Process claim. The court also 

concluded that neither Cross nor Montgomery was entitled to 

qualified immunity. The court awarded Samaritan Inns 

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$2,404,903 in compensatory damages, and assessed punitive 

damages of $500 each against Cross and Montgomery. It 

also awarded Samaritan Inns attorney's fees and costs of 

$684,624.83, and ordered the District to cease and desist its 

discriminatory practices.

B.

The damages award. More than $2.3 million of the compensatory damages award was intended to compensate Samaritan Inns for harm to a planned capital fundraising campaign, the "Next Steps Initiative." When the Tabitha's 

House controversy began, Samaritan Inns was planning to 

solicit $8 million in donations to finance the cost of constructing five new Inns providing short-term housing, two new 

Houses similar to Lazarus House and Tabitha's House, and a 

support center, and to create a $2 million endowment fund to 

help support the operating costs of the residences. Once the 

controversy began, however, Samaritan Inns decided not to 

commence this campaign in 1994, as originally planned. The 

district court found that "the devastating impact of the [District's] actions, commencing with the issuance of the stopwork order on October 7, 1993," effectively prevented Samaritan Inns from achieving its fundraising goals because it 

"chilled the interest in potential donors and previously active 

Samaritan Inns board members in donating to and working 

with [Samaritan Inns] until the cloud of controversy and 

delay lifted."

The evidence to support the district court's conclusion came 

primarily from Erickson and John Derrick, the president of 

Potomac Electric Power Company ("PEPCO"), who was 

chairman of the Tabitha's House fundraising board. Erickson testified that once the stop-work order was issued, the 

conflict concerning Tabitha's House became "almost the sole 

focus" of his meetings with the fundraising board, and the 

board members began to evidence a lack of interest in 

continuing to work with Samaritan Inns. Derrick testified 

that the stop-work order "basically just knocked the pins 

right out from underneath of us." In Derrick's view, the 

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8 The district court found that the amount of this shortfall was 

$255,000. Erickson testified, however, that although the Tabitha's 

House campaign was $258,000 short of its goals at the time the 

stop-work order was issued, about $61,000 of that sum was already 

"in process," and thus, the total shortfall was approximately 

$196,000. 

District's actions, including those of the Ward 4 Council 

Member, raised serious doubts as to whether Samaritan Inns 

would be able to continue to operate in the District of 

Columbia, and made it impossible to go forward with the 

Next Steps Initiative. In the wake of the stop-work order, 

the board was unable to raise approximately $196,000 needed 

to complete the Tabitha's House campaign.8 However, Erickson and his staff were nonetheless able to raise most of the 

funds necessary to close this shortfall.

To calculate the dollar impact of the District's actions on 

the Next Steps Initiative, Erickson assumed that some portion of the potential contributions that he would have solicited 

had been irretrievably "lost" and that the remainder had 

merely been "delayed." He calculated the total amount lost 

during 1994 and 1995 at $1,958,501. The district court accepted these figures, and found them to be consistent with 

the analysis of Samaritan Inns' economic expert, Dr. Richard 

Edelman. Edelman used the past pattern of contributions to 

Tabitha's House and three indexes of business and economic 

activity to estimate the amount that Samaritan could have 

expected to receive from October 1993 to October 1994. He 

then calculated the amount of "lost" contributions as the 

difference between this expected level of contributions and 

the amount of contributions that Tabitha's House actually 

received during the same period. Using this methodology, 

Edelman estimated the total loss as between $2.05 million and 

$2.88 million.

Edelman further calculated that a delay of two years would 

reduce the value to Samaritan Inns of the funds Erickson had 

classified as "delayed" by $385,723. Edelman also calculated 

the loss in value of the funds that Erickson testified he had 

expected to receive for the completion of the Tabitha's House 

campaign from November 1993 to January 1994, concluding 

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that a delay in receipt until June 1994 reduced their value to 

Samaritan Inns by $3,442.

The remaining testimony on the issue of damages to Samaritan Inns' fundraising prospects came from Dr. James 

Gelatt, a fundraising expert retained by the District. Gelatt 

and two other experts, one of whom was retained by Samaritan Inns and the other by the District, formed a panel that 

interviewed twenty-one past or potential donors to Samaritan 

Inns, selecting the interviewees from a list that Samaritan 

Inns had provided. The expert panel concluded that Samaritan Inns "continues to enjoy a positive reputation among 

those individuals, corporations, foundations, church groups, 

and other organizations from whom it has and would be 

anticipated in the future to solicit capital contributions." 

Gelatt testified that prior to the Tabitha's House controversy, 

Samaritan Inns had the capacity to meet the goals of the 

Next Steps Initiative, and that the expert panel had concluded that it would still be able to meet those goals "if it receives 

support in its efforts from the D.C. government and if the 

volunteer leadership is still 'on board.' " Gelatt also testified 

that while the members of the panel "felt that we could 

comfortably say that there was some impact" on Samaritan 

Inns' fundraising capability as a result of the controversy, 

"none of us ... felt that we could quantify it." The expert 

panel was unable to conclude "whether the impact [was] an 

outright loss of contributions, or merely a delay in their 

receipt (based at least in part on Samaritan Inns' election not 

to proceed with the Next Steps Initiative)."

The district court found that the earliest prudent date for 

Samaritan Inns to begin the Next Steps Initiative was January 1996, and it accepted Erickson's estimates of "lost" and 

"delayed" contributions and Edelman's calculations of the 

diminution in value caused by the delay. The court therefore 

awarded Samaritan Inns $1,958,500 for "lost" contributions, 

$385,723 for the reduction in value of "delayed" donations to 

the Next Steps Initiative, and $3,440 for the reduction in 

value of the delayed donations to the Tabitha's House campaign. The district court also awarded $57,240 to compensate 

Samaritan Inns for construction delay and staff overhead, 

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9 The legislative history of the Fair Housing Act is "not too 

helpful." Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 

210 (1972); but see Gladstone Realtors v. Village of Bellwood, 441 

U.S. 91, 105-107 (1979). Although § 813 was added in 1988, its 

relief provisions are virtually identical to those in former § 812 of 

the original Fair Housing Act, Pub. L. No. 90-284, § 812, 82 Stat. 

88 (1968). The only significant differences between current 

§ 813(c) and former § 812(c) are that the new provision eliminates a 

$1000 limit on punitive damages and broadens the court's discretion 

to award attorney's fees. See H.R. REP. NO. 100-711, at 39-40 

(1988), reprinted in 1988 U.S.C.C.A.N. 2173, 2200-01. Former 

§ 812, like the remainder of the Fair Housing Act, derives primarily 

from an amendment offered on the Senate floor by the minority 

leader, Senator Dirksen. 114 Cong. Rec. 4570-73 (1968). The 

House ultimately agreed to the Senate amendments. Id. at 9621. 

Neither the House nor the Senate debates shed additional light on 

the meaning of the term "actual damages." 

bringing the total award of compensatory damages to 

$2,404,903.

II. 

Section 813(c) of the Fair Housing Act, 42 U.S.C. § 3613(c), 

provides that "if the court finds that a discriminatory housing 

practice has occurred or is about to occur, the court may 

award to the plaintiff actual and punitive damages...." On 

its face, nothing in this language suggests any limit on the 

type of "actual damages" that a plaintiff may recover. Nor 

does the legislative history of the Act suggest any such 

limitation.9 However, the parties have not cited a case, nor 

are we aware of one, in which a plaintiff has sought to recover 

damages under the Fair Housing Act for a defendant's interference with a fundraising campaign. Nonetheless, although 

the District contends that Samaritan Inns' claims of injury 

are unduly speculative and remote, it does not contend that 

such damages are not recoverable under § 813(c), upon a 

proper showing of causation.

Furthermore, we recognize that the language of the Act is 

"broad and inclusive" and must be given a "generous construction." Trafficante, 409 U.S. 205, 209, 212 (1972); see 

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10 Of course, knowledgeable donors might well be aware that 

the path of construction and renovation of facilities like Tabitha's 

House is rarely smooth, and that various obstacles are likely to 

arise during such endeavors. See, e.g., Linda Wheeler, Capitol Hill 

Residents Protest Opening of New Homeless Shelter, WASH. POST., 

Jan. 30, 1996, at B3; Steve Bates, Alexandrians Fail to Stop Group 

Home, WASH. POST., July 18, 1996, at V1; Laurie Goodstein, A 

Mission Not All Will Embrace, WASH. POST. Oct. 21, 1993, at A1. 

also City of Edmond v. Oxford House, Inc., 115 S. Ct. 1776, 

1780 (1995). The Supreme Court has recognized that an 

action for damages under § 813 may be analogous to several 

different tort actions recognized at common law, including 

actions for defamation or intentional infliction of emotional 

distress. Curtis v. Loether, 415 U.S. 189, 195 & n.10 (1974). 

Whatever the appropriate analogy, "[a] damages action under 

the statute sounds basically in tortthe statute merely defines a new legal duty, and authorizes the courts to compensate a plaintiff for the injury caused by the defendant's 

wrongful breach." Id. at 195.

It cannot be gainsaid that just as the success of a for-profit 

business may depend on the good will of its customers, see, 

e.g., Newark Morning Ledger Co, v. United States, 507 U.S. 

546, 555-56 (1993), many charitable enterprises such as Samaritan Inns depend largely on donations from the public for 

their continued success. See, e.g., Henry B. Hansmann, The 

Role of Nonprofit Enterprise, 89 YALE L.J. 835, 840-41 (1980). 

Furthermore, because such enterprises cannot sell equity 

shares, they often depend heavily on outside contributions for 

capital financing. Id. at 877. By issuing a stop-work order 

because Samaritan Inns had purportedly misrepresented its 

intentions in its permit applications, and by otherwise obstructing the completion of Tabitha's House, the District 

could reasonably have foreseen that its actions might, at least 

temporarily, adversely affect Samaritan Inns' image as an 

efficient and reputable provider of charitable services, and 

thereby impair its ability to raise funds.10 Cf. RESTATEMENT 

(SECOND) OF TORTS § 561(b) (1977); 2 FOWLER V. HARPER ET AL.,

THE LAW OF TORTS § 5.3 (2d ed. 1986). In related contexts, 

the court has recognized that for-profit corporations may 

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recover lost or delayed profits. For example, in ALPO 

Petfoods, Inc. v. Ralston Purina, Inc., 997 F.2d 949 (D.C. Cir. 

1993), a competitor's false advertising campaign forced a dog 

food manufacturer to delay introduction of a new product into 

the national market, and the court upheld an award of 

damages under § 43(a) of the Lanham Act, 15 U.S.C. 

§ 1125(a) for the delay in receipt of profits. See also Art 

Metal-U.S.A., Inc. v. United States, 753 F.2d 1151, 1156 

(D.C. Cir. 1985). We see no principled basis on which to 

conclude that a nonprofit corporation, such as Samaritan 

Inns, may not recover contributions lost or delayed as a 

result of the District's unlawful interference with its activities 

if such interference was the proximate cause of the loss. See

HARPER ET AL., supra, § 5.3.

To determine whether Samaritan Inns has met this burden 

of proof to show loss and causation, we apply settled principles governing the recovery of damages for lost profits. Both 

parties agree that the relevant standards are stated in Story 

Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 

555, 563 (1931):

Where the tort itself is of such a nature as to preclude 

the ascertainment of the amount of damages with certainty, it would be a perversion of fundamental principles 

of justice to deny all relief to the injured person, and 

thereby relieve the wrongdoer from making any amend 

for his acts. In such case, while the damages may not be 

determined by mere speculation or guess, it will be 

enough if the evidence show the extent of the damages as 

a matter of just and reasonable inference, although the 

result be only approximate.

Id. at 563. Thus, while a plaintiff seeking to recover lost 

profits must ordinarily prove the fact of injury with reasonable certainty, proof of the amount of damages may be based 

on a reasonable estimate. Office & Professional Employees 

Intern. Union, Local 2 v. FDIC, 27 F.3d 598, 602 (D.C. Cir. 

1994); Eureka Investment Corp., N.V. v. Chicago Title Ins. 

Co., 743 F.2d 932, 938 (D.C. Cir. 1984); RESTATEMENT, supra,

§ 912 & cmt. d; 1 ROBERT L. DUNN, RECOVERY OF DAMAGES FOR 

LOST PROFITS § 1.3, at 11 (4th ed. 1992). Although a court will 

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not permit a plaintiff to recover damages based on "mere 

speculation or guess," see Wood v. Day, 859 F.2d 1490, 1493 

(D.C. Cir. 1988), the fact that an estimate is uncertain or 

inexact will not defeat recovery, once the fact of injury is 

shown. DUNN, supra, at 11.

Applying this framework to the District's contention that 

the record does not support the district court's award of more 

than $2.3 million to compensate Samaritan Inns for "lost" and 

"delayed" contributions to the Next Steps Initiative, we conclude that Samaritan Inns is not entitled to recover damages 

for "lost" contributions because it has not shown with reasonable certainty that any contributions were lost. The primary 

evidence concerning lost contributions came from Erickson, 

whose testimony did not provide any clear explanation as to 

why some of the funds Samaritan Inns expected to receive in 

1994 and 1995 were irretrievably "lost," while the remaining 

amounts were merely "delayed." Erickson testified that he 

and his staff expected to solicit $4 million from ten potential 

donors in the first phase of the Next Steps campaign in 1994. 

Based on past giving patterns, he anticipated that 85% of that 

sum would be paid over a three-year period, and that the 

remaining 15%, or $600,000, would be paid in a lump sum 

during 1994. In his damages estimate, Erickson assumed 

that this $600,000 in lump-sum contributions had been "lost," 

but that the contributions expected to be paid over the threeyear period had merely been delayed. Similarly, Erickson 

testified that in the second phase of the campaign, he planned 

to raise $650,000 from individual and corporate contributors, 

and that a fundraising board similar to those used in the 

Lazarus House and Tabitha's House campaigns was expected 

to raise $650,000. Again, he assumed that 85% of this sum 

would be paid over three years, and that the remaining 15%, 

or a total of $195,000, would be paid in a lump sum in 1994. 

Erickson also classified this $195,000 lump sum payment as 

"lost." In 1995, in the third phase of the campaign, Erickson 

planned to raise $300,000 from individual and corporate contributors, and expected the fundraising board to raise 

$850,000. Relying on historical patterns, Erickson assumed 

that 51% of the later donations would be paid on a multi-year 

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basis. He classified the remaining 49%, or $563,000, as "lost" 

lump sum contributions.

Although he offered no testimony on this point, a four-page 

analysis prepared by Erickson indicated that he also planned 

to solicit $700,000 from foundations in 1994 and $850,000 in 

1995. The analysis indicates that he expected approximately 

one-third of the foundation grants to have been "lost" rather 

than delayed. Erickson classified $250,000 of the foundation 

grants from 1994 and $200,000 of the grants from 1995 as 

"lost." Thus, Erickson concluded that $1,045,000 of the 

$2,996,667 Samaritan Inns expected to receive in 1994 and 

$913,500 of the $3,110,667 it had expected to receive in 1995 

had been "lost."

Erickson's calculations regarding the "lost" contributions 

depended upon the premise, accepted by the district court, 

that fundraising is cyclical, and that in any given year contributors have a finite amount of money to donate to worthy 

causes. Thus, if circumstances prevented Samaritan Inns 

from soliciting money in a particular year, it would have 

irretrievably lost the opportunity to compete for the funds 

that were distributed in that year. Although it could conceivably raise the same amount of money in a different year, 

those contributions would come out of a different pool of 

funds. As Erickson explained, "[t]he people that have the 

capacity to give this kind of money give this generously ... 

on a regular basis. That money that wasn't given in 1994 was 

given for something else. And so that money is not available 

to Samaritan Inns." This type of analysis is, in some respects, analogous to the manner in which contract law treats 

"lost-volume" sellers. If, for example, a buyer breaches a 

contract to purchase a car from an automobile dealer, the fact 

that the dealer is subsequently able to resell the car to a 

second buyer at the same price does not mean that the dealer 

has suffered no damage. Had it not been for the first buyer's 

breach, the dealer would have sold two cars, and earned 

profit on both. Hence, the dealer is entitled to recover the 

lost profit on the sale of one car. See U.C.C. § 2-708(2); 

Neri v. Retail Marine Corp., 30 N.Y.2d 393 (1972). Similarly, 

if a charity solicits money on an annual basis, a donation in 

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one year will not compensate the charity for a donation "lost" 

in a prior year as a result of a defendant's misconduct. Had 

it not been for the misconduct, the charity would have received contributions in both years.

The problem with the "lost" contributions analysis is that 

the Next Steps Initiative, as Erickson explained it to the 

district court, was not an annual giving program. Rather, it 

was a capital fundraising drive of limited duration intended to 

raise a specified sum of money for the construction of new 

Houses and Inns and the creation of an endowment. Erickson acknowledged that "[c]apital projects are, by definition, 

special projects," and distinguished between the sums that 

Samaritan Inns raised for capital projects and the funds it 

raised to defray its operating costs. There is nothing in the 

record to suggest that Samaritan Inns would have continued 

to solicit capital contributions indefinitely once it received the 

$8 million it hoped to raise in 1994 and 1995. To the 

contrary, Erickson described the campaign as a three-year 

endeavor. Thus, there was no basis for the district court to 

conclude that Samaritan Inns had irretrievably lost any funds 

merely because it lost the opportunity to compete for the 

funds available in 1994 and 1995. Given the limited duration 

of the capital campaign, Samaritan Inns could mitigate that 

loss by raising the amount that it planned to raise in 1996 and 

subsequent years. Assuming that it could raise the same 

amount at a later time, its damages would be limited to any 

injury caused by the delay.

Had the Next Steps Initiative been an annual giving campaign, rather than a capital campaign of limited duration, 

Edelman's analysis might well have provided a relevant measure of damages. As noted, Edelman estimated the amount 

of contributions that the Next Steps Initiative could have 

expected to receive between October 1993 and October 1994, 

relying on historical patterns of contributions to the Tabitha's 

House campaign and various indexes of business activity. 

His analysis indicated that Tabitha's House could have expected to receive between $2.05 and $2.8 million during that 

one-year period. If the Next Steps Initiative were an annual 

event expected to continue for the indefinite future, Edelman 

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might have reasonably concluded that Samaritan Inns had 

irretrievably lost this sum of money. But neither Edelman's 

analysis nor any other evidence offered by Samaritan Inns 

explained why, under the circumstances, Samaritan Inns 

could not simply make up the "lost" contributions in later 

years and still achieve the goals of the campaign.

Furthermore, contrary to the district court's finding, Edelman's analysis did not "fully support" Erickson's damages 

estimates. Although both concluded that Samaritan Inns had 

suffered damages in the $2 million range, their calculations 

measured different things. Erickson assumed that the 

"lump-sum" contributions and a portion of the foundation 

grants that Samaritan Inns had expected to receive in 1994 

and 1995 had been "lost," but that the remaining funds that 

Samaritan Inns had expected to receive had merely been 

delayed. If, as Erickson contended, the delay meant that 

Samaritan Inns had forever lost the opportunity to compete 

for those funds available in 1994 and 1995, it is unclear why 

the remaining contributions were not also "lost," rather than 

delayed. Edelman, by contrast, conducted an analysis appropriate for an annual campaign, assuming that Samaritan Inns 

had "lost" the entire difference between the contributions it 

could have received in the wake of the Tabitha's House 

controversy and the contributions it actually received. Not 

only did he employ a different methodology, but he examined 

a different period of time. Erickson's calculations covered 

the two-year period from 1994 to 1995, while Edelman's 

covered the one-year period from October 1993 to October 

1994. Given these significant differences in methodology, the 

fact that Edelman and Erickson reached similar estimates of 

Samaritan Inns' damages was mere coincidence.

This is not to suggest that a charitable organization could 

never recover damages for lost contributions to a limitedduration capital fundraising campaign. Samaritan Inns could 

have demonstrated permanent losses by presenting evidence 

that particular contributors who might otherwise have made 

contributions in 1994 and 1995 were unwilling to do so in the 

wake of the Tabitha's House controversy, and that Samaritan 

Inns was unable to secure contributions from alternative 

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11 Even if Erickson could not ascertain the intentions of all of 

its hoped-for donors to the capital campaign, the record demonstrates he had ongoing relationships with some of Samaritan Inns' 

key donors and could at least have determined their views. 

sources. It did not present any evidence to this effect, 

although Erickson did testify that he felt the members of the 

Tabitha's House fundraising board would be reluctant to be 

involved in the Next Steps Initiative.11 The best evidence of 

the reactions of potential contributors to the Tabitha's House 

controversy came from the interviews conducted by the panel 

of fundraising experts. The comments that Gelatt, a member 

of the expert panel, cited in his written declaration did reflect 

some hesitation on the part of contributors to give money to 

Samaritan Inns until it resolved its problems with the District, but none of the cited comments suggest that any 

contributor viewed these problems as an absolute barrier to 

future contributions. Furthermore, Gelatt testified that although the expert panel members thought that the District's 

actions had some impact on Samaritan Inn's fundraising 

capability, they were unable to quantify it or to state with any 

certainty whether the impact would be manifested as an 

outright loss or merely as a delay. Given the dearth of 

evidence and the conflicting methodologies used by Erickson 

and Edelman, we conclude that Samaritan Inns did not prove 

with reasonable certainty that it had lost any capital contributions. Consequently, the district court's finding that Samaritan Inns lost $1,958,501 in 1994 and 1995 was clearly erroneous.

The district court's award of damages for the delayed 

receipt of the Next Steps Initiative funds is a different 

matter. Through the testimony of Erickson and Derrick, 

Samaritan Inns presented substantial evidence to support the 

district court's finding that the District's actions forced a 

delay in the commencement of the Next Steps Initiative. 

Having demonstrated the fact of a delay with reasonable 

certainty, Samaritan Inns was only required to prove the 

extent of its damages "as a matter of just and reasonable 

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inference, although the result be only approximate." Story 

Parchment, 282 U.S. at 563. While neither Erickson nor the 

district court could know with certainty whether Samaritan 

Inns ultimately would meet the goals of the Next Steps 

Initiative, Gelatt testified that those goals were reasonable 

and attainable. Given this expert testimony, the district 

court could reasonably rely on Erickson's estimates of the 

amount Samaritan expected to raise through the Next Steps 

Initiative as more than "mere speculation and conjecture." 

Id.; cf. Wood, 859 F.2d at 1493.

Samaritan Inns is, however, only entitled to recover damages for delays caused by the District, not for delays caused 

by factors over which the District had no control, such as 

community opposition to Tabitha's House. The district court 

concluded that as a result of the District's actions, Samaritan 

Inns was unable to raise any capital contributions from 

October 1993, when the stop-work order was issued, to the 

time of trial in February 1995, and that the "earliest prudent 

commencement date for the Next Steps Initiative [was] 1996." 

Therefore, it awarded Samaritan Inns damages for a delay of 

two years. The district court's finding that the District's 

actions forced a two-year delay in the receipt of funds by 

Samaritan Inns is clearly erroneous. At the very latest, the 

District had ceased to oppose Samaritan Inns' activities by 

July 12, 1994, when it issued a certificate of occupancy for 

Tabitha's House. As early as March 15, 1994, the District 

had entered into a consent agreement not to revoke the 

Tabitha's House permits or attempt to stop work on the 

project without a legitimate reason. Although Cross caused a 

citation to be issued against Lazarus House after the consent 

order was issued, that matter was quickly resolved. After 

the issuance of the certificate of occupancy for Tabitha's 

House, Samaritan Inns' fundraising efforts were still presumably hindered by significant obstacles unrelated to the District, including most notably, the appeal to the BZA in August 

1994 by community residents seeking to revoke Tabitha 

House's certificate of occupancy. But the District cannot be 

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12 Erickson also testified that the Ward 4 Council Member had 

introduced legislation in the Council of the District of Columbia in 

1994 that would have made Tabitha's House a community-based 

residential facility. The measure was never enacted, and the 

District cannot be held responsible for the delay caused by the 

actions of an individual legislator. 

13 Because a remand is required, we note that Edelman appears to have relied on the Consumer Price Index, a measure of 

inflation, rather than any measurement of interest rates, in making 

his damages calculations. While we do not now decide whether any 

particular method of calculating the income lost as a result of the 

delay is preferable to another, the district court should consider on 

remand whether Edelman's methodology is a reliable and appropriate way to measure Samaritan Inns' damages, and regardless of 

what methodology is used, the court should explain the basis for its 

choice. See generally St. Louis Southwestern Ry. Co. v. Dickerson,

470 U.S. 409, 412 (1985); Jones & Laughlin Steel Corp. v. Pfeifer,

462 U.S. 523, 536-42 (1983). 

14 Erickson's analysis indicated that he anticipated that Samaritan Inns would receive $2,996,667 in 1994, $3,110,667 in 1995, 

$1,697,167 in 1996, and $195,500 in 1997. 

held responsible for that delay.12 Furthermore, Samaritan 

Inns is entitled to recover only for the delay that could not 

reasonably have been minimized had Samaritan Inns begun 

its capital campaign once the consent decree was entered.

Under these circumstances, the maximum period of delay 

reasonably attributable to the District's actions is nine 

months, from the time the stop-work order was issued in 

October 1993 to the time the certificate of occupancy was 

issued in July 1994. The minimum period of delay is three 

months, from the issuance until the revocation of the stopwork order. Therefore, we remand the case to the district 

court for redetermination of the period of delay reasonably 

attributable to the District, and recalculation of the amount of 

Samaritan Inns' damages.13 On remand, because Samaritan 

Inns did not demonstrate any "lost" contributions, the entire 

sum of $8 million that it expected to receive from 1994 to 1997 

must be classified as "delayed."14

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III.

The remaining issues do not require extensive discussion. 

First, the District contends that Cross and Montgomery were 

entitled to qualified immunity because they could reasonably 

have believed that their actions were lawful. Additionally, it 

contends that the district court abused its discretion in 

awarding punitive damages against Cross and Montgomery 

for their "reckless and callous indifference" to Samaritan 

Inns' rights under the Fair Housing Act. The District focuses on a 1992 decision by the BZA ruling that a building that 

provided former prison inmates with housing, as well as 

religious guidance and assistance with financial matters, had 

to be classified under the zoning laws as a community-based 

residential facility, rather than as a rooming or boarding 

house. The District maintains that, based on this precedent, 

Cross and Montgomery could reasonably have believed that 

Tabitha's House was a community-based residential facility.

Government officials who violate a plaintiff's civil rights are 

entitled to qualified immunity if the officials reasonably could 

have believed that their actions were lawful in light of clearly 

established federal law and the information available to them 

at the time the actions took place. Anderson v. Creighton,

483 U.S. 635, 641 (1987). Punitive damages for violations of 

federal law are available where a defendant's conduct is 

"motivated by evil motive or intent, or when it involves 

reckless or callous indifference to the federally protected 

rights of others." Smith v. Wade, 461 U.S. 30, 56 (1982). 

The district court found that Cross and Montgomery were not 

entitled to qualified immunity, and that punitive damages 

were appropriate, based on their entire course of conduct 

during the Tabitha's House controversy. For example, the 

district court found that the October 1993 stop-work order 

was facially invalid because it contained no explanation of why 

it had been issued. Although the Zoning Administrator 

recommended that the order be vacated, Cross refused to do 

so, claiming that the Mayor had decided to support the 

protesters. As a result, the stop-work order remained in 

effect until mid-January 1994. Cross also directed Montgomery to revoke the building and demolition permits for TabiUSCA Case #96-7106 Document #276909 Filed: 06/06/1997 Page 21 of 23
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tha's House. Montgomery then wrote a letter purporting to 

revoke the permits without the hearing required under District law. Even if Cross and Montgomery could reasonably 

have believed that Tabitha's House was a community-based 

residential facility by reason of the BZA's 1992 decision, there 

is nothing in the record to suggest that they could have 

reasonably believed that these actions were lawful. To the 

contrary, the district court found that these actions were 

motivated by intentional discrimination against the prospective residents of Tabitha's House on the basis of their handicaps. Given the course-of-conduct evidence, the district 

court's findings that Cross and Montgomery were not entitled 

to qualified immunity and that they acted with reckless and 

callous disregard for Samaritan Inns' rights are not clearly 

erroneous. Hence, the district court did not abuse its discretion in awarding punitive damages.

Second, the District contends that if it prevails in this court 

as to the compensatory damages award for "lost" and "delayed" contributions to the Next Steps Initiative, the case 

should also be remanded for reconsideration of the award of 

attorney's fees and costs. We agree. Samaritan Inns confined its response to this contention by asserting, in a footnote to its brief, that there was nothing in the record to 

indicate that the fee award was related to the lost contributions award. As a prevailing plaintiff, Samaritan Inns is 

entitled to recover reasonable attorney's fees and costs because the District has not demonstrated any circumstances 

that would make such an award unjust. 42 U.S.C. 

§ 3613(c)(2); Hensley v. Eckerhart, 461 U.S. 424, 429 (1983). 

The reasonableness of the award, however, may turn on the 

degree of success that a plaintiff achieves. Id. at 434-36. On 

remand, therefore, the district court shall reconsider the 

award, determining whether to reduce it in light of the 

revised level of success that Samaritan Inns ultimately 

achieves.

Finally, Samaritan Inns cross-appeals the district court's 

denial of its "reasonable accommodation" claim under 42 

U.S.C. § 3604(f)(3)(B). This claim stems from a letter of 

December 1, 1993, that counsel for Samaritan Inns wrote to 

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Cross. The letter requested that the District agree that the 

social services that Samaritan Inns planned to provide at 

Tabitha's House were permitted as a matter of right, and 

agree to issue a certificate of occupancy for Tabitha's House 

as a boarding, rooming, or apartment house once construction 

was completed. In the complaint, Samaritan Inns alleged 

that the District violated § 3604(f)(3)(B) by failing to agree to 

these proposals. The district court addressed this issue in 

cursory fashion, noting only that "Samaritan Inns has failed 

to present persuasive evidence in support of this claim."

The District properly points out that we need not address 

Samaritan Inns' "reasonable accommodation" contentions because they are moot. The District has issued a certificate of 

occupancy for Tabitha's House as a rooming and boarding 

house. Thus, the District has made it clear that the services 

Samaritan Inns intends to provide at Tabitha's House are 

permitted as of right, and that they do not, in the District's 

view, make it a community-based residential facility. That 

conclusion is supported by the administrative law judge's 

decision of December 28, 1993, finding that Tabitha's House 

was properly classified as a rooming or boarding house rather 

than as a community facility, and by the BZA's decision not to 

revoke Tabitha's House's certificate of occupancy. Hence, 

there is no formal District policy or rule preventing Samaritan Inns from making its planned use of Tabitha's House, and 

it is unclear what "accommodation" Samaritan Inns requests. 

The district court thus properly denied the request for relief.

Accordingly, we reverse the judgment in part and remand 

the case for recalculation of Samaritan Inns' damages for 

delayed capital contributions arising from the District's interference with the Next Steps Initiative, and for reconsideration of the award for attorney's fees and costs; otherwise we 

affirm.

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