Opinion ID: 765199
Heading Depth: 3
Heading Rank: 2

Heading: Ms. Harris' Claims

Text: 33 Ms. Harris raises three independent claims under the FHA: (1) for eviction notices contrary to established policy; (2) for disparate treatment of rental testers; and (3) for the discriminatory statement by Ms. Waldman. Central to this analysis is the characterization of evidence by the parties. Appellees seek to consider and justify each piece of evidence separately. In contrast, Ms. Harris asks this court to look at the evidence as components of a larger whole. 34
35 The FHA makes it unlawful to: (1) deny a dwelling to any person because of race (42 U.S.C. S 3604(a); 24 C.F.R. S 100.50(b)(1)); (2) discriminate against any person in the terms, conditions or privileges of rental of a dwelling because of race (42 U.S.C. S 3604(b); 24 C.F.R. S 100.50(b)(2)); and (3) coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of any right granted or protected by SS 3603-06 of this title (42 U.S.C. S 3617). Additionally, HUD regulations state that it is unlawful to use different provisions in leases or contracts of sale, such as those relating to rental charges because of race. (24 C.F.R. S 100.65(b)(1)). 36 Ms. Harris confronted Ms. Waldman regarding her discriminatory statement in December 1995. Four months later, the Itzhakis contend they did find her check under Ms. Harris' doormat, the previously agreed method of payment. The accepted practice was for Mrs. Itzhaki to call the tenant before sending a three-day notice. The following month, the same incident occurred, causing Ms. Harris to send all subsequent payments by certified mail. Ms. Harris presented evidence that she suffered emotional distress as a result of the notices and feared a racially motivated eviction in the future. Under these facts, we conclude that Ms. Harris has established a prima facie disparate treatment claim under the FHA -- that Harris, as a protected class member under the FHA, was subject to eviction proceedings that were contrary to the established policy and practice. Consequently, Ms. Harris contends she suffered emotional distress and disruption in the quiet enjoyment of her apartment. 37 The Itzhakis contend that the check wasn't there. They assert that the check could have been stolen or lost within the unsecured building. Furthermore, while the Itzhakis don't remember calling Ms. Harris, they contend that this is merely a courtesy and consequently should not implicate FHA liability. Here the Itzhakis have provided a nondiscriminatory reason for their action -- that they simply didn't get the check and that the phone call is merely a courtesy to the tenant. 38 Ms. Harris contends that the Itzhakis' explanation is merely pretext, citing circumstantial and direct evidence from her other claims, including the discriminatory statement by Ms. Waldman and the treatment of the rental testers. Under these facts, applying the shifting burden analysis of McDonnell Douglas and Burdine, we conclude that there is genuine factual question as to whether the Itzhakis' nondiscriminatory reason is pretextual, thereby making summary judgment inappropriate. See also Lowe, 775 F.2d at 1009; Smith v. Town of Clarkton, 682 F.2d 1055, 1066 (4th Cir. 1982) (holding that deviations from a procedural norm are suspect when they lead to results impacting more harshly on one race than on another). We reverse the district court's dismissal of Harris' eviction notice claim to the extent that retrospective relief is available.
39 The FHA makes it unlawful to represent to any person because of race that any dwelling is not available for inspection or rental when such dwelling is in fact so available. 42 U.S.C. S 3604(d). Additionally, HUD regulations state that it is unlawful to: (1) provide false or inaccurate information regarding the availability of a dwelling for rental to any person, including testers, regardless of whether such person is actually seeking housing, because of race (24 C.F.R. S 100.80(b)(5)); (2) discourage any person from inspecting or renting a dwelling because of race (24 C.F.R. S 100.70(c)(1)); (3) discourage the rental of a dwelling because of race by exaggerating drawbacks or failing to inform any person of desirable features of a dwelling or of a community, neighborhood or development (24 C.F.R. S 100.70(c)(2)); and (4) deny or delay the processing of an application made by a renter because of race (24 C.F.R. S 100.70(d)(3)). 40 The rental testers were treated differently by Mr. Itzhaki with regard to: (1) the owner's rental preferences (no preference told to white tester; black tester told that owner prefers singles); (2) the rent charged ($700 for white tester; black tester told that owner may charge an additional $50 for two peo ple); (3) description of the unit (a one bedroom for the white tester; black tester told unit is really small); and (4) safety of the neighborhood (safety not discussed with white tester; black tester told area unsafe). 41 The testers were also treated differently by Ms. Waldman with regard to: (1) the terms of the rental (white tester told rent, deposit & total move-in cost; black tester told to contact owner); (2) encouragement to pursue the property (white tester invited into Ms. Waldman's home to call owner; black tester told to get owner's telephone number from sign outside); (3) endorsement to the owner (white tester introduced as a beautiful girl who I'd love to have as my neighbor; black tester was not endorsed to the owner). Under these facts, we conclude that Ms. Harris has established a prima facie disparate treatment claim under the FHA -- that the black tester as a protected class member was discouraged from renting the apartment, while the white tester was given preferential treatment, and as a result of these actions, Ms. Harris was deprived of the opportunity to live in an apartment free of housing discrimination. 42 Again, the Itzhakis provide a nondiscriminatory reason -that the distinctions between these conversations are the consequence of bad timing and differing personality types, rather than discriminatory intent. 4 43 Ms. Harris again contends that the Itzhakis' explanation is merely pretext. A reasonable inference can be drawn from these facts that Mr. Itzhaki sought to discourage the black tester, citing safety and size. Ms. Harris argues that these actions are inconsistent with an interest to fill a rental vacancy. Furthermore, Ms. Harris contends that Ms. Waldman serves as a filter, where Blacks are screened out for the owner. Under these facts, applying the shifting burden analysis of McDonnell Douglas and Burdine, we conclude that there is a genuine factual question as to whether the Itzhakis' nondiscriminatory reason is pretextual, thereby making summary judgment inappropriate. See also Lowe, 775 F.2d at 1009; Gresham v. Windrush Partners, Ltd., 730 F.2d 1417, 1422 (11th Cir. 1984) (upholding an injunction against landlords who offered prospective white tenants encouragement that had not been given to blacks. . .); McDonald v. Verble, 622 F.2d 1227, 1234 (6th Cir. 1980) ([D]isparity of treatment between whites and blacks, burdensome application procedures, and tactics of delay, hindrance, and special treatment must receive short shrift from the courts.). We reverse the district court's dismissal of Ms. Harris' rental tester claim to the extent that retrospective relief is available.
44 The FHA makes it unlawful for owners or their agents to make any statement with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on color or an intention to make any such preference, limitation or discrimination. 42 U.S.C. S 3604(c); 24 C.F.R. 100.50(b)(4). Furthermore, HUD states that 42 U.S.C. S 3604(c) applies to all oral notices or statements by a person engaged in the rental of a dwelling. 24 C.F.R. 100.75(b). See also Soules v. HUD, 967 F.2d 817, 824 (2d Cir. 1992) (Openly discriminatory oral statements merit ...straightforward treatment.). Ms. Harris has asserted a prima facie case of discrimination under the FHA -- that Ms. Waldman's dis criminatory statement caused Ms. Harris emotional distress and disruption in the quiet enjoyment of her apartment. 45 The Itzhakis do not contest that Ms. Waldman made the statement; rather they contend that Ms. Waldman is not an agent or employee, thereby making any statements inadmissible. We disagree. 46 The question whether an agency relationship exists for purposes of the Fair Housing Act is determined under federal law, not state law. Cabrera v. Jakabovitz, 24 F.3d 372, 386 n.13 (2d Cir. 1994). The policy reason underlying the application of federal law is to avoid predicating liability for Fair Housing Act violations on the vagaries of state law. Id. Furthermore, the question of agency should be submitted to the jury unless the facts are clearly insufficient to establish agency or there is no dispute as to the underlying facts. Id. at 386. 47 Ms. Waldman has assisted the Itzhakis by collecting rent checks and showing vacant units to prospective tenants. Ms. Harris points to these facts supporting her contention that Ms. Waldman is an agent or employee of the Itzhakis. The Itzhakis, however, point to the fact that they don't pay Ms. Waldman or offer her any discount on rent, supporting their contention that Ms. Waldman is not their agent or employee. 48 HUD regulations define an agent under the FHA as any person authorized to perform an action on behalf of another person regarding any matter related to the . . . rental of dwellings, including offers, solicitations or contracts and the administration of matters regarding such offers, solicitations or contracts or any residential real estate-related transactions. 24 C.F.R. S 100.20 (emphasis added). Under HUD's definition, which is afforded deference, there are facts from which a jury could reasonably find that Ms. Waldman is an agent of the Itzhakis. 49 Federal Rule of Evidence (FRE) 801(d)(2)(D) requires the proffering party to lay a foundation to show that an otherwise excludable statement relates to a matter within the scope of the agent's employment. Breneman v. Kennecott Corp., 799 F.2d 470, 473 (9th Cir. 1986); Hoptowit v. Ray, 682 F.2d 1237, 1262 (9th Cir. 1982). If the jury finds that Ms. Waldman was the Itzhakis' agent, her statement --The owners don't want to rent to Blacks -- would be admissible, since it relates to a matter within the scope of the agency, i.e. showing empty apartments. 5 50 The Itzhakis contend that Ms. Waldman's statement should be treated as a stray remark, insufficient to establish discrimination. If the remark is unrelated to the decisional process, then it is insufficient to show discrimination. Merrick v. Farmers Ins. Group, 892 F.2d 1434, 1438 (9th Cir. 1990); Smith v. Firestone Tire and Rubber Co., 875 F.2d 1325, 1330 (7th Cir. 1989). Ms. Harris contends that Ms. Waldman acts as a filter for the Itzhakis, thereby making her comments related to her decision to recommend tenants. Viewing the evidence in the light most favorable to Harris, we cannot hold that Ms. Waldman's statement is a stray remark as a matter of law. Consequently, we reverse the district court's dismissal of Harris' discriminatory statement claim to the extent that retrospective relief is available.