Opinion
96-CV-6234 (ILG)
December 4, 2001
AMENDED MEMORANDUM ORDER
SUMMARY
Plaintiffs brought this action under the Fair Housing Act, 42 U.S.C. § 3601 et seq., 42 U.S.C. § 1982, 42 U.S.C. § 1981, the New York Executive Law § 296(5)(a) (the "New York Human Rights Law"), and the Administrative Code of the City of New York § 8-101 et seq. (the "New York City Human Rights Law"), alleging that defendants unlawfully discriminated against Miguel Mora and Cristel Mora (collectively "the Moras") and testers employed by the Open Housing Center ("OHC") when defendants denied assistance in renting apartments to the Moras and black OHC testers based on their race and color. Cristel Mora and OHC (collectively the "plaintiffs") seek summary judgment against Arthur Kessler, Pat Kessler, and Kessler Realty, Inc. ("KRI") (collectively the "defendants"). KRI cross moves for summary judgment asserting that it was misjoined in this action, and defendants additionally move for an order to amend the Answer to add a statute of limitations defense. Plaintiffs request leave to amend the Complaint to substitute Arthur Kessler Realty Inc. and Brighton Neighborhood Development Corp. d/b/a Kessler Realty in place of KRI.
According to plaintiffs' counsel, Miguel Mora has filed for chapter 7 bankruptcy and thus will not move for summary judgment until the bankruptcy court approves counsel to continue representation of Mr. Mora in this matter. (Mem. of Law in Supp. of Summ. J. by Pls. n. 1)
Plaintiffs have settled with the four other defendants.
For the reasons set forth below, the court makes the following rulings. Plaintiffs' motion for summary judgment is granted against Arthur Kessler and Pat Kessler. Kessler Realty, Inc.'s, cross motion for summary judgment is granted. Plaintiffs' request for leave to amend the Complaint is granted; and the court extends plaintiffs' summary judgment to include defendants Arthur Kessler Realty, Inc. and the Brighton Neighborhood Development Corp. Defendants' motion for leave to amend their Answer is denied.
BACKGROUND
Husband and wife Arthur and Pat Kessler ("the Kesslers") are employed by the Brighton Neighborhood Development Corp. d/b/a Kessler Realty ("Kessler Realty"). (P. Kessler Dep. at 15-16) Kessler Realty is engaged in the business of selling, and until the commencement of this suit in 1996, renting residential real estate. (A. Kessler Dep. at 14-15) Arthur Kessler is the president and sole shareholder of Kessler Realty. (A. Kessler Aff. ¶ 3) At all relevant times, Pat Kessler managed the rental aspects of the business. (P. Kessler Aff ¶ 5) Kessler Realty does not provide formal training to its employees on the fair housing laws nor does it have a written policy or procedure manual describing how salespersons are to interact with clients. (See P. Kessler Dep. at 45; A. Kessler Dep. at 37, 49) KRI, not Kessler Realty, is a named defendant in this action. Although there is some confusion as to which corporate entity is the proper defendant, either Kessler Realty or KRI provided brokerage services and employed the Kesslers in 1996. For purposes of deciding these motions, the court shall refer to the corporate defendant as "Kessler Realty."
The issue of the proper corporate defendant will be addressed below.
The following facts are undisputed unless otherwise noted. In 1996, Miguel Mora, a white Latino, and Cristel Mora, a black Latina, were looking to rent an apartment in Brooklyn for themselves and their baby. (Mora Aff. ¶¶ 2-3) Mr. Mora had previously rented an apartment through Arthur Kessler in 1990. On March 12, 1996, Mr. Mora again enlisted Arthur Kessler's assistance in renting a two bedroom apartment. Mr. Mora completed a registration card which requested basic information such as name, address, size of the desired apartment and a rental price range. Arthur Kessler then brought Mr. Mora to see four apartments in the Brighton Beach and Sheepshead Bay areas of Brooklyn. The apartments rented for approximately $700 to $800 per month. Mr. Mora expressed an interest in a particular apartment on Ocean Avenue. Upon returning to the office, Arthur Kessler gave Mr. Mora a list of documents and information required to complete a rental application for the landlord.
On March 14, 1996, Arthur Kessler called the Mora home and spoke with Mrs. Mora to confirm their appointment for later that day. When the Moras and their baby arrived at the office, they spoke with Pat Kessler and began filling out the rental application. Soon thereafter, Arthur Kessler met with the Moras in his office. Apparently, this was the first time either of the Kesslers had met Mrs. Mora and the baby. After a short discussion with the Moras, Arthur Kessler asked them to leave his office so he could call the landlord to see if the apartments were still available. A few minutes later, Arthur Kessler emerged from his office to tell the Moras that the apartments were already rented, but that he would continue to search on their behalf. The Moras left the Kessler Realty office surprised and confused.
For the following three days, Mr. Mora called Arthur Kessler to ask if there were any two bedroom apartments available, and each time Mr. Mora was told that none were available. Mr. Mora contacted OHC during the first week of April 1996, and suspecting violations of federal and state housing laws, OHC initiated an investigation of the defendants' apartment rental brokerage services.
OHC is a New York not-for-profit corporation that provides fair housing advocacy services. OHC's mission includes promoting equal opportunity in housing in New York City and eliminating unlawful racially discriminatory housing practices. (See Lee Aff. ¶ 2)
OHC's investigation of Kessler Realty's practices utilized seven sets of "testers" who posed as prospective clients and reported back on each of their interactions with the defendants. (See generally, Lee Aff. ¶¶ 4, 14, 16) For each test, one white tester and one black tester visited Kessler Realty within the same day and inquired about similar apartment locations and prices. The paired testers were similar in age, income and family profile; however, the black testers presented a slightly higher income than their paired white tester. For example, in "Test C," Julie Berman, the white tester, presented a $40,000 annual income, and Aishah Hasan had a $42,000 annual income. (See Berman Profile, annexed as Ex. A to Berman Aff.; Hasan Profile, annexed as Ex. 7 to Lee Aff.) As part of OHC's investigation, Mr. Mora, whose wife is black, returned to Kessler Realty on April 16, 1996 to again inquire about available rentals. Mr. Mora was paired with a white tester named Elizabeth Paukstis.
The crux of the parties' disagreement revolves around the following facts. Plaintiffs argue that the Moras' experience together with the seven OHC tests reveal that defendants engaged in discriminatory practices in the renting of apartments by misrepresenting the availability of apartments to blacks, imposing different terms and conditions for rental apartments on blacks, and discouraging blacks from renting by steering them to buy instead of rent. Specifically, plaintiffs complain that all of the white testers were shown apartments whereas only one black tester was shown an apartment. (Lee Aff. ¶ 18) Four of the black testers reported being told by defendants that a rental application, separate from the registration card, had to be completed prior to seeing any apartments. (See Summ. of OHC Investigation, annexed as Ex. 13 to Lee Aff.) None of the white testers were required to complete a rental application prior to viewing, although defendants showed each of the white testers apartments. (Id.) Finally, defendants steered four of the black testers towards buying an apartment or other housing despite the testers' expressed desire to rent an apartment. These four testers were either told no apartments were available or were not shown apartments. Defendants did not encourage any of the white testers to buy instead of rent. (Id.) Defendants contend that they did not engage in any discriminatory or otherwise unlawful practice.
Defendants lost many of their real estate records when there was a water leak in the Kessler Realty storage room in 1995 or 1996. (See A. Kessler Dep. at 101-103)
The testers' experiences are chronicled in extensive detail, and the facts relevant to the motions are discussed below. In Test A, Mr. Mora returned to Kessler Realty on the morning of April 16, 1996 to see Arthur Kessler who was not in the office, so Mr. Mora left a message asking Arthur Kessler to phone him. (See Mora Aff. ¶ 4) Mr. Mora called Kessler Realty again later than morning and left another message. Approximately thirty minutes later, Elizabeth Paukstis, a white tester visited Kessler Realty and Scott Feratovic, a real estate agent, showed Paukstis three apartments. (See Paukstis Report, annexed as Ex. B to Paukstis Aff.) During their encounter, Feratovic asked Paukstis if her husband was black or white and she answered white. (See id.) Paukstis then inquired whether that would make a difference, to which Feratovic answered in the negative, but stated that "people just needed to know." (See id.) The next day, Mr. Mora spoke to Arthur Kessler who informed him that no apartment meeting his specifications was available, but that he would continue to search on his behalf (See Mora Aff. ¶ 6) Arthur Kessler explains that he never returned Mr. Mora's call because one month had elapsed since Mr. Mora's initial inquiry and he did not believe the Moras were still serious about renting an apartment. (See A. Kessler Aff. ¶ 12) Pat Kessler further avers that Feratovic's inquiry about the race of Paukstis' husband was "outside the scope of any employment" but does not explain her reasoning. (See P. Kessler Aff. ¶ 9)
All of the salespersons at Kessler Realty had the same level of access to information about which apartments were available for rent. (See P. Kessler Dep. at 27-28)
Test B paired Laura Blum, a white tester, and Suzette Knight, a black tester, both of whom inquired about studio and one bedroom apartments. Pat Kessler did not show Knight any apartments on her visit, despite the fact that another agent showed Blum an apartment ninety minutes earlier. (See Blum Report, annexed as Ex. 5 to Lee Aff.; P. Kessler Aff. ¶ 13) Pat Kessler also indicated to Knight that a completed rental application would be necessary for prospective landlords prior to her viewing apartments. (See Knight Report, annexed as Ex. 6 to Lee Aff.) Knight did have difficulty answering questions Pat Kessler posed about Knight's "work" at Coney Island Hospital. (See id.) Pat Kessler states that she later called the hospital several times to tell Knight she had an apartment for her, but was told that the hospital did not have an employee by that name. (P. Kessler Aff. ¶ 14)
During Test C, Feratovic showed Julie Berman, a white tester, two apartments. ( See Berman Report annexed as Ex. B. to Berman Aff.) Aishah Hasan, a black tester, met with Pat Kessler two hours later who told her that viewing apartments first required a completed rental application form. (See Hasan Report, annexed as Ex. 7 to Lee Aff.) Instead of showing Hasan apartments, Pat Kessler tried to convince Hasan that she and her husband should buy instead of rent. Hasan returned to Kessler Realty later that day to tell Pat Kessler that she and her husband were not interested in buying. Pat Kessler insisted that Hasan reconsider buying an apartment, and if after reconsideration they still wanted to rent, Pat Kessler indicated that she would show Hasan apartments with a completed rental application. ( See id.)
Pat Kessler similarly encouraged Lothrop Richards, the black tester in Test D to buy rather than rent and told that him that she would not show him an apartment until he had completed a rental application. ( See Richards Report dated May 30, 1996, annexed as Ex. 8 to Lee Aff.) Approximately one hour earlier, Christopher Milenkevich. a white tester, viewed a one bedroom apartment with Feratovic. ( See Milenkevich Report, annexed as Ex. 9 to Lee Aff.) Feratovic showed Milenkevich the apartment absent a completed rental application. Pat Kessler called Richards some time later to tell him about an available apartment, but she was told that he was not at the phone number he provided. (P. Kessler Aff. ¶ 21)
Two weeks later, Vanessa Thompson Summers, a black tester, went to Kessler Realty to inquire about studio and one bedroom apartments. The salesperson who initially met her told her that no such apartments were available, but that she should complete a registration card and that someone would contact her if any apartments became available. (See Summers Report, annexed as Ex. B to Summers Aff.) While Summers completed the registration card, Arthur Kessler told her that a completed rental application would also be necessary to view an apartment. Arthur Kessler then called a management company regarding the availability of an apartment but found that it had already been rented. Thereafter, he gave Summers addresses of two apartment buildings that she could drive by to view from the exterior. Arthur Kessler finally suggested that Summers consider buying an apartment and recommended that she call to set up an appointment to see some apartments. About two hours later, Nanci Fields, the white tester for Test E, arrived at Kessler Realty and Pat Kessler showed her two studio apartments. (See Field Report dated June 14, 1996, annexed as Ex. 10 to Lee Aff.) Upon their return to Kessler Realty, Pat Kessler asked Fields to complete a rental application, but Fields would only give her the information orally, not in writing. Thereafter, Pat Kessler gave Fields her business card and informed her that she would call if any one bedroom apartments became available.
In Test F, OHC sent Lothrop Richards back to Kessler Realty where he asked for Pat Kessler. She reiterated that she had no apartments meeting his needs, but that some might be available soon. (See Richards Report dated June 26, 1996, annexed as Ex. 8 to Lee Aff.) Pat Kessler indicated that she would call Richards when something became available. Pat Kessler states in opposition to the motion for summary judgment that she was suspicious of Richards because she could not verify his employment at Country Wide Insurance or find him at the phone number he provided. (See P. Kessler Aff. ¶ 20-21) Two and one half hours after Richards' visit, Fields, the white tester from Test E, also returned to Kessler Realty inquiring about apartments of the same type, location, and cost as those Richards requested. Pat Kessler showed her two apartments. (See Fields Report dated June 26, 1996, annexed as Ex. 10 to Lee Aff.)
OHC completed its testing on August 20, 1996 when it sent Richard Platek, a white tester, to inquire about studio and one bedroom apartments. A salesperson took Platek to view a one bedroom apartment on Brighton 11th Street. ( See Platek Report, annexed as Ex. B. to Platek Aff.) Arthur Kessler later informed Platek that he could fax a completed rental application if he wanted the apartment. Later that day, Ramon Parkins, a black tester, arrived at Kessler Realty and inquired about one bedroom apartments. Pat Kessler showed Parkins an apartment on Shore Parkway. ( See Parkins Report, annexed as Ex. 12 to Lee Aff.) Parkins returned to Kessler Realty later that day on instruction from OHC, and asked Pat Kessler about availabilities in an apartment he had seen on the way to the train station, that is, the same building on Brighton 11th Street where Platek saw an apartment. Pat Kessler told Parkins that no studio or one bedroom apartments were available in the building. Pat Kessler denies that Parkins ever returned to inquire about that building. ( See P. Kessler Aff. ¶ 29)
DISCUSSION
I. Summary Judgment Standard
Summary judgment under Fed.R.Civ.P. 56 is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (internal quotation omitted). The moving party bears the burden of proof on such motion. See United States v. All Funds, 832 F. Supp. 542, 550-51 (E.D.N.Y. 1993).
If the summary judgment movant satisfies its initial burden of production, the burden of proof shifts to the nonmovant who must demonstrate that a genuine issue of fact exists for trial. Anderson v. Liberty Lobby. Inc, 477 U.S. 242, 250 (1986). A genuine factual issue exists if there is sufficient evidence favoring the nonmovant such that a jury could return a verdict in its favor. Id. The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd., v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Coletex, 477 U.S. at 324. Once the nonmovant has adduced evidence of a genuine issue of material fact, its "allegations [will be] taken as true, and [it] will receive the benefit of the doubt when [its] assertions conflict with those of the movant." Samuels v. Mockry, 77 F.3d 34, 36 (2d Cir. 1996).
II. Fair Housing Act Claims
Plaintiffs allege that defendants violated 42 U.S.C. § 3604 (b) and (d) of the Fair Housing Act ("FHA"). Section 3604(b) prohibits "discriminat[ion] against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, [and] color. . . ." Section 3604(d) further makes unlawful the "represent[ation] to any person because of race, color . . . that any dwelling is not available for inspection, sale or rental when such dwelling is in fact so available."
In an action brought under the FHA, the court applies the same burden shifting analysis used in Title VII cases to allocate burdens of proofSee Cabrera v. Jakabovitz, 24 F.3d 372, 382 (2d Cir.), cert. denied, 513 U.S. 87 (1994). Thus, the court observes the following analysis:
First, the plaintiff has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant 'to articulate some legitimate, nondiscriminatory reason for the [adverse decision].' Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination.Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 252-253 (1981) (citing McDonnell Dougas Corp. v. Green, 411 U.S. 792, 802-804 (1973)).
A. Prima Facie Case
The court first considers whether plaintiffs have established a prima facie case of discrimination by showing that: (1) plaintiffs are members of a protected class; (2) plaintiffs requested information on the availability of a particular type of apartment; (3) defendants failed or refused to provide truthful information as to the availability of such apartments; and (4) white applicants were provided with truthful information. See Darby v. Heather Ridge, 806 F. Supp. 170. 176 (E.D. Mich. 1992); See also Robinson v. 12 Lofts Realty. Inc., 610 F.2d 1032, 1038 (2d Cir. 1979) (utilizing a parallel test in a housing purchase case). These same four elements have been used in both section 3604(b) and 3604(d) cases. See Darby, 806 F. Supp. at 175-76.
Plaintiffs have set forth facts establishing a prima facie case of discrimination under the FHA. First, Cristel Mora, as a black Latina, is a member of a protected class. Likewise, five of OHC's testers are black. Second, the Moras sought to rent an apartment through Kessler Realty and OHC's testers made similar inquires of Kessler Realty. Third, Mr. Kessler informed the Moras on March 16, 1996 that none of the apartments he had showed Mr. Mora on March 14, 1996 were available. (A. Kessler Aff. ¶ 10) Defendants told all but one black tester (including Mr. Mora whose wife is a black Latina) that no apartments were available or did not show apartments to them. (See Summ. of OHC Investigation, annexed as Ex. 13 to Lee Aff.) In contrast, defendants showed apartments to all the white testers during the same time period, indicating that apartments were in fact available. (Id.) Furthermore, defendants told four of the black testers that they had to complete rental applications prior to seeing any apartments. (Id.) Fourth, defendants showed Mr. Mora apartments prior to the Kesslers meeting Mr. Mora's black Latina wife. (M. Mora Aff. ¶ 3) Defendants also viewed apartments with all of the white testers without requiring them to complete a rental application in advance. (See Summ. of OHC Investigation, annexed as Ex. 13 to Lee Aff.)
B. No Legitimate, Nondiscriminatory Reason for Adverse Acts
Defendants initially oppose plaintiffs' motion for summary judgment arguing that plaintiffs have offered "no competent evidence from all the black testers in admissible form . . . in order to make the comparison of disparate treatment." (Defs.' Mem. at 4) Specifically, defendants note that of the twelve testers involved, only four have submitted their reports in affidavit form and the rest, defendants argue, are not admissible. The Supreme Court instructed in Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986), that "regardless of whether the moving party accompanies its summary judgment motion with affidavits, the motion may, and should, be granted so long as whatever is before the district court demonstrates that the standard for the entry of summary judgment . . . is satisfied." Moreover, the testers' reports appended to OHC Investigation Coordinator Michelle Lee's affidavit are admissible as business records under Fed.R.Evid. 803(6). See Laudon v. Loos, 694 F. Supp. 253, 254 n. 2 (E.D. Mich. 1988) (admitting tester reports of a fair housing advocacy center as business records pursuant to Rule 803(6)). Therefore, defendants' arguments opposing summary judgment will be viewed in light of the affidavits, tester reports, depositions, and interrogatories submitted by plaintiffs.
Defendants counter plaintiffs' allegations of misrepresentation, steering away from renting, and disparate treatment with conclusory assertions in an effort to rationalize their behavior. Defendants' response to plaintiffs' allegation that they misrepresented the availability of housing for rental to black persons is that "[a]partments are not always available from day to day, and the availability changes from hour to hour." (P. Kessler Aff. ¶ 30) Such a general, conclusory statement regarding the availability of apartments in insufficient to create a triable issue of fact because Fed.R.Civ.P. 56(e) requires the non-moving party to set forth "specific facts" showing that there is a genuine issue of material fact. See also, Gottlieb v. County of Orange, 84 F.3d 511, 518 (2d Cir. 1996).
With regard to the evidence that defendants steered some of the black testers away from renting apartments, defendants argue that when they encouraged the testers to buy, such an "option was a legitimate business service." (Defs.' Mem. at 12) It may have been economically preferable for Hasan, Richards, and Summers to ultimately purchase a home instead of rent one and defendants stood to profit from selling them a home. But more importantly, these testers requested assistance renting and defendants did not show them any apartments despite showing the corresponding white testers apartments. There can be no doubt that defendants steered these black testers away from renting apartments because they were not given an actual choice to rent or buy. The court is thus compelled to conclude that defendants have not proffered a nondiscriminatory reason for their steering of black testers toward buying a home.
Defendants further argue that it did not subject black persons to treatment different from that afforded white persons even though they required four black testers to complete rental applications prior to viewing apartments. During discovery, defendants conceded that there is no requirement that a rental application must be completed before a customer is shown an apartment. (See Answers to Defs.' [sic] First Set of Interrog. No. 8 at 7-8; A. Kessler Dep. at 47; P. Kessler Dep. at 40) Defendants also gave testimony that only if a potential tenant was unemployed or for some other reason did not stand a fair chance of being approved for an apartment would they then not require a completed rental application. (See P. Kessler Dep., at 35; A. Kessler Aff. ¶ 18) The sense of this procedure is belied by the fact that each of the black testers presented a higher income than their white counterpart, who were each shown apartments without completed applications.
In opposition to plaintiffs' motion for summary judgment, defendants now assert that the white and black testers were treated similarly because the testers completed "cards" or "applications" prior to viewing apartments. (See Defs.' Rule 56.1 Statement ¶¶ 5, 8-14) In support of their argument, defendants assert that: (1) Julie Berman, a white tester, filled out an "application" prior to viewing two apartments (Id. at ¶ 9); (2) Christopher Milenkevich, a white tester, completed an "information card" prior to being shown an apartment (Id. at ¶ 10); (3) defendants gave Nanci Fields, a white tester, an "information card" prior to being shown an apartment; (Id. at ¶ 12); and (4) Richard Platek, a white tester, completed an "information card" prior to viewing an apartment. (Id. at ¶ 14) Defendants attempt to create an issue of material fact by interchanging the words "information card" for "application" and vice versa. Arthur Kessler asserts that "[a]ll customers had to fill out an information card, which indicated how many rooms they wanted, and an agreement to pay our commissions." (A. Kessler Aff. ¶ 18). Plaintiffs argue that defendants required applications from the black testers prior to viewing apartments; plaintiffs do not argue that defendants differentially treated the testers in requiring information cards of prospective renters. Defendants have attempted to create a genuine issue of material fact where there is none by using creative language. The Supreme Court, however, has required the nonmoving party to "do more than simply show that there is some metaphysical doubt as to the material fact." Matsushita Elec. Indus. Co., Ltd., v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). None of defendants' proffered explanations are sufficient to shift the burden of proof back on plaintiffs, and the uncontroverted fact remains that defendants required four black testers, and no white testers, to complete rental applications prior to viewing apartments.
Defendants further attempt to explain away plaintiffs' proffer of evidence of discrimination by attacking the tests. In defense of his interaction with Mr. Mora in Test A, Arthur Kessler states that he did not believe that the Moras were serious about renting an apartment because one month had elapsed since their last contact. With regard to Test B, defendants draw the court's attention away from the fact that Laura Blum was shown an apartment and Suzette Knight was not, by arguing that Knight was unable to answer questions Pat Kessler posed about her job and that Pat Kessler could not verify Knight's employment at Coney Island Hospital after Knight's visit. Likewise, in Test D, Pat Kessler explains that Lothrop Richards appeared extremely nervous, and that her later attempts to call Richards were unsuccessful. Defendants also attack Nanci Fields' report in Test E by controverting statements made in her report that are in fact irrelevant to Fields' interest in renting an apartment.
C. Individual Liability
Having determined that there is no genuine issue of material fact as to the discriminatory treatment suffered by plaintiffs, the court finds Arthur and Pat Kessler individually liable under the FHA for their own acts of discriminatory conduct. Thus, plaintiffs' motion for summary judgment on their FHA claims is granted with respect to defendants Arthur and Pat Kessler. Corporate liability will be discussed below.
III. Claims Under 42 U.S.C. § 1981, 1982: The New York Human Rights Law: and The New York City Human Rights Law.
42 U.S.C. § 1981 forbids discrimination in the making and enforcing of private contracts. 42 U.S.C. § 1982 further prohibits private racial discrimination in the sale and rental or real and personal property. Together, these statutes "prohibit all racial discrimination, whether or not under color of law, with respect to the rights enumerated therein — including the right to purchase or lease property." Jones v. Alfred H. Mayer. Co., 392 U.S. 409, 436 (1968). The New York Human Rights Law and the New York City Human Rights Law likewise proscribe discrimination in the provision of housing accommodations or in the terms or conditions of the rental of apartments and in the provision of related services.
42 U.S.C. § 1981 provides in relevant part:
All persons within the jurisdiction of the United States shall have the same right in every State and territory to make and enforce contracts . . . and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens. . . .
842 U.S.C. § 1982 provides in relevant part: "All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit. purchase, lease, sell, hold, and convey real and personal property."
The New York Human Rights Law provides:
It shall be an unlawful discriminatory practice for the owner, lessee, sub-lessee, assignee, or managing agent of, or other person having the right to sell, rent or lease a housing accommodation . . . or any agent or employee thereof:
(1) To refuse to sell, rent, lease or otherwise to deny to or withhold from any person or group of persons such a housing accommodation because of race, creed, color, . . . of such person or persons.
(2) To discriminate against any person because of race, creed, color . . . in the terms, conditions or privileges of the sale, rental or lease of any such housing accommodation or in the furnishing of facilities or services in connection therewith.
N Y Exec. Law §§ 296(5)(a)(1), (2).
The New York City Human Rights Law provides:
It shall be an unlawful discriminatory practice for the owner, . . . or other person having the right to sell, rent or lease or approve the sale, rental or lease of a housing accommodation . . . or any agency or employee thereof
(1) To refuse to sell, rent, lease . . . to otherwise deny to or withhold from any person or group of persons such a housing accommodation . . . because of the actual or perceived race, creed, color., of such person or persons. . . .
(2) To discriminate against any person because of such person's actual or perceived race, creed, color . . . in the terms, conditions or privileges of the sale, rental or lease of any such accommodation . . . or in the furnishing of facilities or services in connection therewith.
N Y City Administrative Code §§ 8-107(5)(a)(1), (2).
Courts have applied the three-part burden shifting test used in FHA claims to claims arising under 42 U.S.C. § 1981, 1982, the New York Human Rights Law, and the New York City Human Rights Law. See Reed v. A.W. Lawrence Co., Inc., 95 F.3d 1170, 1177 (2d Cir. 1996) (considering New York Human Rights Law claims "in tandem with Title VII claims because New York courts rely on federal law when determining claims under the New York Human Rights Law.") (citations omitted); Abdullah v. Skandinaviska Enskilda Banken Corp., No. 98 CV 7398, 1999 WL 945238, at *4 (S.D.N.Y. Oct 19, 1999) (subjecting New York City Human Rights Law claim to three-part burden shifting test); Broome v. Biondi, 17 F. Supp.2d 211, 216 (S.D.N.Y. 1997) (stating that three-part burden shifting test applicable to § 1981, § 1982, and the New York Human Rights Law claims); Huertas v. East River Housing Corp., 674 F. Supp. 440, 454 (S.D.N.Y. 1987) (applying the elements of a prima facie FHA claim to claims under § 1981 and § 1982). For the same reasons articulated for granting plaintiffs' motion for summary judgment under the FHA, the court also grants plaintiffs' motion for summary judgment against Arthur and Pat Kessler with respect to the New York Human Rights Law and New York City Human Rights Law claims.
Unlike a FHA claim, claims brought under §§ 1981 and 1982 require a showing of discriminatory intent. See General Bldg. Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 388-89 (1982); Mian v. Donaldson. Lufkin Jenrette Sec. Corp., 7 F.3d 1085, 1097 (2d Cir. 1993) (requiring a finding of intent to discriminate in § 1981 case); Garg v. Albany Indus. Dev. Agency, (N.D.N.Y 1995), aff'd 104 F.3d 351 (2d Cir. 1996) (same in § 1982 cases). The "totality of the relevant facts" must be examined to determine whether a discriminatory purpose may properly be inferred. Rogers v. Lodge, 458 U.S. 613, 618, reh'g denied, 459 U.S. 899 (1982). "The inquiry is a practical one designed to ascertain whether the action could not 'reasonably be explained without reference to racial concerns.'" Huertas v. East River Hous. Corp., 674 F. Supp. 440, 455 (S.D.N.Y. 1987) (citing Columbus Board of Education v. Penick, 443 U.S. 449, 465 (1979)).
Plaintiffs argue that the totality of events discussed in the FHA claims also show that defendants purposefully and intentionally discriminated on the basis of race and color. Plaintiffs have set forth a compelling portrait of racial and color-based discrimination and defendants have not opposed the §§ 1981 or 1982 claims in their papers. Therefore, plaintiffs' motion for summary judgment as against Arthur and Patricia Kessler on the §§ 1981 and 1982 claims is granted.
IV. Defendant Kessler Realty. Inc.'s Cross Motion for Summary Judgment: Defendants' Motion to Amend Answer: Plaintiffs' Application to Amend Complaint
Defendant KM cross moves for summary judgment pursuant to Rules 12 (b)(7) and 56 of the Fed.R.Civ.P. arguing that "Kessler Realty, Inc." ceased doing business in 1993 and as a non-existent entity it cannot be joined in the Complaint. Defendants assert that Brighton Neighborhood Development Corp. d/b/a Kessler Realty is the proper corporate entity involved in the Complaint. (See A. Kessler Aff. ¶ 3) Plaintiffs do not dispute these facts, but rather seek leave to amend the Complaint to substitute Arthur Kessler Realty Inc. and Brighton Neighborhood Development Corp. d/b/a Kessler Realty for KRI. Consequently, KRI's motion for summary judgment is granted.
Plaintiffs have requested this relief pursuant to Fed.R.Civ.P. 15 (a) but have not done so by way of a notice of motion. This court has the discretion to grant plaintiffs' application to amend its pleading made contemporaneously with its motion for summary judgment. See Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993); Chartier v. Matthews Assocs., No. 93 Civ. 1212, 1994 WL 582938, at *2 (S.D.N.Y. Oct. 20, 1994). Fed.R.Civ.P. 15(a) permits a party to amend its pleading by leave of the court and "leave shall be freely given when justice so requires." Where a moving party mistakes the proper identity of a party, the court may grant leave to amend a pleading if there is no prejudice to the non-moving party. See Soto v. Brooklyn Correctional Facility, 80 F.3d 34, 35-37 (2d Cir. 1996). Plaintiffs' attorneys state that they erroneously named KM due to a misnomer, but plaintiffs have had notice that KM was the incorrect corporate entity since March 21, 1997 when defendants asserted the affirmative defense that "Kessler Realty, Inc. is a non-existent entity which cannot be joined as a defendant to this action." (Answer ¶ 67) Despite plaintiffs' last minute request, justice would require the court to grant it. Here, Arthur Kessler was the president of Arthur Kessler Realty, Inc. and the president and sole shareholder of the Brighton Neighborhood Development Corp. (See A. Kessler Aff. ¶ 3; Dun Bradstreet, Inc. Report, annexed as Ex. 4 to Hong Aff.) Both entities existed in 1996 and both employed Arthur and Pat Kessler. (See New York Corporation Limited Partnership Records for Arthur Kessler Realty, Inc. and Brighton Neighborhood Development Corp., annexed as Ex. 4 and 5 to Hong Aff.; Answers to Defs.' [sic] First Set of Interrog. No. 3 at 4) As named parties, both Arthur and Pat Kessler have had notice of this suit and have actively participated in their own defense. Therefore, there is no doubt that the corporation that employed the Kesslers should be a party to this suit. The court thus grants plaintiffs' request for leave to amend their complaint to substitute KM with Arthur Kessler Realty, Inc. and Brighton Neighborhood Development Corp. d/b/a Kessler Realty.
Plaintiffs additionally suggest that an Amended Complaint substituting the two new defendants for KRI relates back to the Complaint under Fed.R.Civ.P. 15(c)(3). Relation back applies when:
the amendment changes the party or the naming of the party against whom a claim is asserted if [ Fed.R.Civ.P. 15(c)(2)] is satisfied, and within the period provided by Rule 4(m) for service of the summons and complaint, the party to be brought in by amendment (A) has received notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.
Fed.R.Civ.P. 15(c)(3). As previously discussed, Arthur Kessler Realty, Inc. and Brighton Neighborhood Development Corp. both had constructive notice of the suit when owner Arthur Kessler was served. The two new defendants would not suffer any prejudice here since plaintiffs have maintained the identical facts and asserted the identical claims as set forth in the Complaint. The concept of relation back is also particularly applicable here since the proper corporate entities should have known that plaintiffs would have brought suit against them since the Kesslers have actively defended this suit. Plaintiffs argue that they mistakenly named "Kessler Realty, Inc." in the Complaint based in part on the business cards using the name "Kessler Realty." In the interest of judicial efficiency and upon the principle of relation back, the court reads plaintiffs' motion for summary judgment to include the proper defendants Arthur Kessler Realty, Inc. and Brighton Neighborhood Development Corp. Therefore, for the reasons articulated previously, the court grants plaintiffs' motion for summary judgment against Arthur Kessler Realty, Inc. and Brighton Neighborhood Development Corp. for violations of 42 U.S.C. § 3604 (b) and (d) of the Fair Housing Act, the New York Human Rights Law, the New York City Human Rights Law, and 42 U.S.C. § 1981 and 1982.
At the time this motion was filed, both Arthur Kessler Realty, Inc. and Brighton Neighborhood Corp. d/b/a Kessler Realty were corporations in dissolution by proclamation, the former as of June 26, 1996 and the latter as of September 23, 1998. (See New York Corporation Limited Partnership Records for Arthur Kessler Realty, Inc. and Brighton Neighborhood Development Corp., annexed as Ex. 4 and 5 to Hong Aff.) Both corporations are nontheless capable of being sued under the New York Business Corporation Law § 1006(a)(4).
V. Motion to Amend Answer
Defendants also move the court to allow them to serve an Amended Answer pursuant to Rule 15(a) of the Fed.R.Civ.P. to include a statute of limitations defense. Defendants wish to apply a 180 day statute of limitations period, running from the date on which the discriminatory practice occurred, under 42 U.S.C. § 3612. Section 3612, however, applies to FHA actions brought by the Secretary of the Department of Housing and Urban Development. 42 U.S.C. § 3613 governs this case because it is brought by private plaintiffs. Plaintiffs here have brought their FHA suit within the applicable two year statute of limitations; thus, there is no statute of limitations defense. While leave to amend is generally granted freely, leave may be denied where permitting the amendment would be futile. See Foman v. Davis, 371 U.S. 178, 182 (1962);Advanced Magnetics, Inc. v. Bayfront Partners. Inc., 106 F.3d 11, 18 (2d Cir. 1997). Defendants' proposed amendment serves no purpose, and the court therefore denies defendants' motion for leave to amend their Answer.
CONCLUSION
The Open Housing Center and Cristel Mora's motion for summary judgment is granted against Arthur Kessler, Patricia Kessler, Arthur Kessler Realty, Inc., and Brighton Neighborhood Development Corp. d/b/a Kessler Realty for violations of 42 U.S.C. § 3604 (b) and (d) of the Fair Housing Act, the New York Human Rights Law, the New York City Human Rights Law, and 42 U.S.C. § 1981 and 1982. Defendant Kessler Realty, Inc.'s, cross motion for summary judgment is granted. Plaintiffs' application for leave to amend their Complaint is granted; but the court extends plaintiffs' summary judgment to include defendants Arthur Kessler Realty, Inc. and the Brighton Neighborhood Development Corp. based on the principle of relation back. Finally, defendants' motion for leave to amend their Answer is denied.
SO ORDERED.