Opinion
1:00CV1143
April 4, 2002
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This matter is currently before the Court for consideration of Magistrate Judge Sharp's Order and Recommendation [Document #47] [hereinafter "Magistrate Judge Sharp's Recommendation"] with respect to Defendants Hobbs Realty, James Hobbs, and Jimmy Hobbs, Jr.'s (collectively "Defendants") Motion for Summary Judgment, or Alternatively, for Partial Summary Judgment [Document #29] [hereinafter "Defendants' Motion for Summary Judgment"] as to Plaintiffs Harvey L. Bynum, Frances P. Solari, and Loren N. Bynum's (collectively "Plaintiffs") claims for race discrimination in the making and enforcement of a contract pursuant to 42 U.S.C. § 1981, race discrimination in the rental of real property in violation of 42 U.S.C. § 1982, conspiracy to interfere with rights of equal protection in violation of 42 U.S.C. § 1985 (3) and N.C. Gen. Stat. § 99D-1, and unfair or deceptive trade practices pursuant to N.C. Gen. Stat. § 75-1.1. Also before the Court for consideration is Magistrate Judge Sharp's Recommendation as to Plaintiffs' Rule 56(f) Motion to Refuse Summary Judgment [Document #35]. For the reasons explained below, the Court accepts Magistrate Judge Sharp's Recommendation. As such, in accordance therewith, Plaintiffs' Rule 56(f) Motion to Refuse Summary Judgment is DENIED and Defendants' Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.
II. FACTUAL AND PROCEDURAL BACKGROUND
The Court has reviewed the factual allegations contained in the record and hereby adopts the facts and procedural history as set forth in Magistrate Judge Sharp's Recommendation.
III. DISCUSSION
A. Plaintiffs' Rule 56(f) Motion to Refuse Summary Judgment
On October 2, 2001, Plaintiffs filed a Motion to Refuse Summary Judgment [Document #35] pursuant to Rule 56(f) of the Federal Rules of Civil Procedure. As noted in Magistrate Judge Sharp's Recommendation, Plaintiffs' Motion to Refuse Summary Judgment was based on the fact that Defendants asserted their Motion for Summary Judgment while there was a pending Motion to Compel Discovery. The Court has since resolved the Motion to Compel Discovery. For that reason, Magistrate Judge Sharp recommended that Plaintiffs' Motion to Refuse Summary Judgment be denied. Notably, Plaintiffs offered no objection to that portion of Magistrate Judge Sharp's Recommendation. Therefore, for the reasons set forth in Magistrate Judge Sharp's Recommendation, this Court also finds that there is no merit in Plaintiffs' Motion to Refuse Summary Judgment. Accordingly, Plaintiffs' Motion to Refuse Summary Judgement is DENIED.
B. Defendants' Motion for Summary Judgment
On August 30, 2001, Defendants' Motion for Summary Judgment [Document #29] was filed. Pursuant to that Motion, Defendants argue that summary judgment should be granted as to each of Plaintiffs' claims. The Court will therefore consider each of Plaintiffs' claims in turn.
1. Plaintiffs' Race Discrimination Claims
As noted in Magistrate Judge Sharp's Recommendation, Plaintiffs have asserted claims for intentional race discrimination under 42 U.S.C. § 1981, which prohibits race discrimination in the formation and enforcement of contracts, and under 42 U.S.C. § 1982, which specifically prohibits race discrimination in the rental of real property. In support of these claims Plaintiffs have offered evidence that after wrongfully denying Plaintiff Loren N. Bynum ("Ms. Bynum") possession of the rental property on September 25, 1998, Defendant James Hobbs uttered a derogatory racial epithet as he walked away from her. Magistrate Judge Sharp determined that this alleged statement was sufficient direct evidence of intentional race discrimination to allow Plaintiffs' discrimination claims, to the extent they arose out of Mr. James Hobbs' alleged statement, to survive Defendants' Motion for Summary Judgment. Magistrate Judge Sharp, therefore, recommended that Defendants' Motion for Summary Judgment be denied in part with respect to Plaintiffs' discrimination claims arising out of the alleged September 25, 1998 incident.
Plaintiffs, however, have also alleged separate discrimination claims arising from allegedly discriminatory settlement negotiations that occurred between the parties during 1999 and 2000. Magistrate Judge Sharp determined that Plaintiffs had failed to produce sufficient evidence of discrimination to create an issue of fact with respect to whether Defendants discriminated against Plaintiffs during these settlement discussions. Magistrate Judge Sharp therefore recommended that Defendants' Motion for Summary Judgment be granted in part with respect to Plaintiffs' discrimination claims arising out of the 1999 and 2000 settlement discussions. After reviewing the record, this Court wholly agrees with Magistrate Judge Sharp's reasoning and therefore adopts Magistrate Judge Sharp's Recommendation with respect to Plaintiffs' race discrimination claims under 42 U.S.C. § 1981 and 1982 as they relate to the 1998, 1999, and 2000 incidents.
Notwithstanding Magistrate Sharps' Recommendation, Defendants, in their objections to the Recommendation, maintain that Plaintiff Harvey L. Bynum ("Mr. Bynum") and Plaintiff Frances P. Solari ("Ms. Solari") are without standing to assert claims under §§ 1981 and 1982 with respect to the September 25, 1998 incident. Specifically, Defendants argue that because Mr. Bynum and Ms. Solari were not present on September 25, 1998, when Mr. Hobbs denied Ms. Bynum access to the property and allegedly uttered a racially derogatory statement, they cannot articulate any particularized injury that affected them, a necessary element to acquire standing. In support of their position, Defendants rely on Mackey v. Nationwide Ins. Co., 724 F.2d 419 (4th Cir. 1984) and Benjamin v. Aroostook Med. Ctr., Inc., 57 F.3d 101 (1st Cir. 1995). Defendants' reliance on these two cases, however, is not persuasive.
In Mackey, the Fourth Circuit denied standing to a former insurance agent who brought claims under §§ 1981 and 1982 against the insurance company due to its practice of refusing to insure people that reside in predominantly African-American neighborhoods. In Benjamin, the First Circuit held that the patients of a doctor whose staff privileges were revoked allegedly because of his race lacked standing to challenge the medical center's actions. In both Mackey and Benjamin, the decision to deny standing turned on the fact that the plaintiffs were asserting the rights of a third party — the rights of the residents of the predominantly African-American neighborhoods in Mackey and those of the doctor in Benjamin — and not asserting their own rights. In the instant case, though, unlike in Mackey and Benjamin, Mr. Bynum and Ms. Solari had a pre-paid contract with Defendants for the use of a vacation home for the weekend of September 25, 1998. They were denied the benefit, use, and enjoyment of their contract allegedly because of Ms. Bynum's race. Therefore, despite Defendants' reliance on Mackey and Benjamin, this Court finds, as did Magistrate Judge Sharp, that Plaintiffs have properly alleged that they suffered a particularized injury as result of the September 25, 1998 incident sufficient to gain standing to assert their claims under §§ 1981 and 1982.
As an additional matter, the Court notes that in support of their claim that summary judgment is proper, especially as to Ms. Bynum's claims under §§ 1981 and 1982, Defendants argue that Ms. Bynum has failed to show that Defendants' articulated basis for denying her access to the property was a pretext for discrimination. Defendants' argument regarding pretext, however, has no bearing on the Court's decision to the extent that Ms. Bynum does not seek to establish her prima facie case of discrimination based upon the burden shifting scheme of the McDonnell Douglas test. The Court notes, instead, that Plaintiffs' claim is based upon what has been deemed to constitute a sufficient showing of direct evidence of discrimination, that is, the alleged racially derogatory statement of Mr. James Hobbs, so as to create an issue of fact without resort to the McDonnell Douglas test. The pertinent issues, then, are whether Mr. James Hobbs actually made the alleged statement and whether, if he made the alleged statement, it proves that he denied Ms. Bynum access to the property on the basis of race, and not because the individuals with her were not a family, as claimed by Defendants. As noted by Magistrate Judge Sharp, such issues involve witness credibility, and should be resolved by a jury and not at the summary judgment phase.
Therefore, for the reasons outlined in Magistrate Judge Sharp's Recommendation, as well as those discussed above, this Court finds that there is a genuine issue of material fact with respect to whether Mr. James Hobbs made a racially derogatory statement on September 25, 1998. Accordingly, Defendants' Motion for Summary Judgment is DENIED IN PART to the extent that it relates to Plaintiffs' §§ 1981 and 1982 claims arising out of the events of September 25, 1998.
Furthermore, as to Plaintiffs' claim of racial discrimination with respect to the settlement discussions of 1999 and 2000, the Court adopts the finding of Magistrate Judge Sharp that there is insufficient evidence of discrimination to create an issue of fact with respect to Plaintiffs' discrimination claims arising out of the settlement attempts in 1999 and 2000. In this regard, the Court notes that Defendants' Motion for Summary Judgment also addresses the claims filed by Plaintiffs against both Jimmy Hobbs, Jr. and James Hobbs individually as to the 1999 and 2000 settlement discussions. However, given the Court's adoption of Magistrate Judge Sharp's Recommendation that there is insufficient evidence to support the claim itself, it is not necessary for the Court to fully address Defendants' Motion for Summary Judgment with respect to Plaintiffs' claims against the individual Defendants for the 1999 and 2000 incidents. Defendants are therefore entitled to judgment as a matter of law with respect to Plaintiffs' §§ 1981 and 1982 claims as they relate to the events of 1999 and 2000. As such, Defendants' Motion for Summary Judgment is GRANTED IN PART to the extent that it relates to any aspect of Plaintiffs' §§ 1981 and 1982 claims arising out of the settlement discussions of 1999 and 2000.
2. Plaintiffs' Conspiracy Claims
As noted in Magistrate Judge Sharp's Recommendation, Plaintiffs have alleged that Defendants conspired to violate their civil rights in violation of 42 U.S.C. § 1985 (3) and N.C. Gen. Stat. § 99D-1. Magistrate Judge Sharp determined that Plaintiffs have failed to create a genuine issue of material fact with respect to their federal and state law civil conspiracy claims. Notably, Plaintiffs did not object to that portion of Magistrate Judge Sharp's Recommendation. After reviewing the record, including the parties' objections, this Court agrees with and hereby adopts Magistrate Judge Sharp's Recommendation as it relates to Plaintiffs' civil conspiracy claims. Defendants are therefore entitled to judgment as a matter of law with respect to those claims. As such, Defendants' Motion for Summary Judgement is GRANTED to the extent that it relates to Plaintiffs' civil conspiracy claims under 42 U.S.C. § 1985 (3) and N.C. Gen. Stat. § 99D-1.
3. Plaintiffs' Unfair or Deceptive Trade Practices Claim
As noted in Magistrate Judge Sharp's Recommendation, Plaintiffs have also alleged that Defendants engaged in unfair or deceptive trade practices in the events of September 25, 1998 as well as in the settlement negotiations of 1999 and 2000. Magistrate Judge Sharp determined that Plaintiffs had demonstrated a genuine issue of material fact with respect to whether Mr. James Hobbs made a racially derogatory statement on the night of September 25, 1998. Magistrate Judge Sharp further determined that because such a statement may be sufficient to support a finding of unfairness in violation of N.C. Gen. Stat. § 75-1.1, summary judgment was not proper to the extent that Plaintiffs' unfair or deceptive trade practices claim related to Mr. Hobbs' alleged statement.
As to Plaintiffs' claim of unfair or deceptive trade practices related to the events surrounding the failed settlement negotiations of 1999 and 2000, Magistrate Judge Sharp found that the events amounted to, at most, a misunderstanding as to the terms of the proposed settlement agreement and/or a simple breach of any agreement that may have existed. Magistrate Judge Sharp therefore recommended that summary judgment be granted in part to dismiss Plaintiffs' unfair or deceptive trade practices claim as it relates to the settlement discussions of 1999 and 2000.
After reviewing the record, including the objections filed by the parties, this Court agrees with and adopts Magistrate Judge Sharp's Recommendation and the reasoning in support thereof as it relates to Plaintiffs' claim under N.C. Gen. Stat. § 75-1.1. Therefore, Defendants' Motion for Summary Judgment is DENIED IN PART as to Plaintiffs' unfair or deceptive trade practices claim that arises out of the events of September 25, 1998. Defendants, however, are entitled to judgment as a matter of law with respect to Plaintiffs' unfair or deceptive trade practices claim as it relates to the settlement discussions of 1999 and 2000. Accordingly, Defendants' Motion for Summary Judgment is GRANTED IN PART as to Plaintiffs' unfair or deceptive trade practices claim that arises out of the settlement discussions of 1999 and 2000.
4. Plaintiffs' Claims against Jimmy Hobbs, Jr.
Separate and apart from the Court's previous ruling regarding Plaintiffs' claim of individual liability of Defendant Jimmy Hobbs, Jr. and James Hobbs as to the claim of discrimination related to the 1999 and 2000 settlement discussions, Defendants' Motion for Summary Judgment also claims that the individual claims against Jimmy Hobbs, Jr. relating to the September 25, 1998 incident should be dismissed. Although Magistrate Judge Sharp's Recommendation does not directly consider this portion of Defendants' Motion for Summary Judgment, the Court will examine Defendants' position. Defendants argue that because Jimmy Hobbs, Jr. was not present when Mr. James Hobbs allegedly made a racially derogatory statement on September 25, 1998, all claims against him relating to that incident should be dismissed. The Court notes, though, as did Magistrate Judge Sharp, that at the time of the alleged September 25, 1998 incident, Hobbs Realty operated as a general partnership. As such, according to N.C. Gen. Stat. §§ 59-39(a), 59-43 and 59-45, both partners, James Hobbs and Jimmy Hobbs, Jr., are subject to joint and several liability for the conduct of James Hobbs as it relates to the September 25, 1998 incident. Therefore, all of Plaintiffs' claims that remain as result of this Court ruling are properly asserted against Mr. Jimmy Hobbs, Jr., along with Mr. James Hobbs and Hobbs Realty. Defendants' Motion for Summary Judgment with respect to the individual claims asserted against Jimmy Hobbs, Jr. in connection to the September 25, 1998 incident is therefore DENIED.
IV. CONCLUSION
IT IS THEREFORE ORDERED, for the reasons set forth above, that Plaintiffs' Rule 56(f) Motion to Refuse Summary Judgment [Document #35] is DENIED. IT IS FURTHER ORDERED that Defendants' Motion for Summary Judgment [Document #21 is GRANTED IN PART to the extent that Plaintiffs' civil conspiracy claims under 42 U.S.C. § 1985 (3) and N.C. Gen. Stat. § 99D-1, as well as Plaintiffs' race discrimination claims under 42 U.S.C. § 1981 and 1982 as they relate to the settlement discussions of 1999 and 2000 and Plaintiffs' unfair or deceptive trade practices claim under N.C. Gen. Stat. § 75-1.1 as it relates to the settlement discussions of 1999 ad 2000 are DISMISSED. IT IS FURTHER ORDERED THAT Defendants' Motion for Summary Judgment is DENIED IN PART as to Plaintiffs' race discrimination claims under 42 U.S.C. § 1981 and 1982 to the extent they relate to the alleged events of September 25, 1998, and as to Plaintiffs' unfair or deceptive trade practices claim under N.C. Gen. Stat. § 75-1.1 to the extent that it relates to the alleged events of September 25, 1998.