Opinion
CIVIL ACTION No. 01-2574-CM
May 20, 2003.
MEMORANDUM AND ORDER
This matter is before the court on the defendants' Motion for Summary Judgment (Doc. 44). Plaintiffs, who appear pro se, filed their complaint under 42 U.S.C. § 1982 and the Fair Housing Act, 42 U.S.C. § 3601 et seq. (FHA), on December 4, 2001, alleging that defendants violated their civil rights by failing to renew plaintiffs' apartment lease at the previous monthly rental rate. Defendants filed their Motion for Summary Judgment on November 1, 2002. For the reasons stated below, defendants' Motion for Summary Judgment is granted.
The complaint form plaintiffs filed is a "fill in the blank" form. Plaintiffs checked boxes indicating that this case involved claims under Title VII and the ADEA, and they checked the box indicating that retaliation was the reason for the violation. The court concludes that the allegations set forth within the complaint show that this was a mistake on plaintiffs' part. Plaintiffs do not allege that either of them were ever employed by any of the defendants. Instead, plaintiffs allege that defendants raised the rental rate for plaintiffs' apartment in a discriminatory manner. The court will, therefore, treat the complaint as one for discriminatory housing practices.
The court construes the facts in the light most favorable to plaintiff as the non-moving party pursuant to Fed.R.Civ.P. 56. Plaintiffs have submitted no affidavits to support their allegations. Plaintiffs' complaint and their Response to Defendants' Motion for Summary Judgment set forth numerous assertions of fact without disclosing the means of plaintiffs' personal knowledge of those facts. Cf. Fed.R.Civ.P. 56(e) ("Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein . . . When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits . . . must set forth specific facts showing that there is a genuine issue for trial."). The court will therefore exclude from consideration those factual contentions which contain no support in the record. See H.B. Zachry Co. v. O'Brien, 378 F.2d 423, 425 (10th Cir. 1967) (conclusory statements, general denials, and factual allegations not based on personal knowledge are insufficient to avoid summary judgment).
Plaintiffs are tenants at the College Station apartment complex in Lawrence, Kansas. Plaintiffs, who are African-American, claim that, because of plaintiffs' race, defendants did not renew the lease on plaintiffs' apartment at the same rate given to other tenants. Defendant First Management, Inc. ("FMI") manages the College Station complex. Defendant Dobie Bartlett is a former employee of FMI. Defendant William Newsome's only connection with this case is that he is an investor in the limited liability company that owns College Station.
Plaintiffs first began leasing an apartment at the College Station complex in April 1999. The original rental rate was $420.00 per month. Plaintiffs renewed their lease in March 2000 at the same rate. However, in September 2000, the rental rate for two-bedroom apartments at College Station increased to $495.00 per month for 12-month leases. On April 2, 2001, plaintiffs signed a new lease stating a monthly rental rate of $495.00.
Defendants have provided, through the affidavit of defendant FMI's regional manager, Sheryl Krzanowsky, examples of other tenants who signed lease agreements similar to that which plaintiffs signed:
• On October 26, 2000, Tammy Waters, a Caucasian, signed a 12-month lease for a two-bedroom apartment at College Station for $495 per month.
• On December 12, 2000, Dustin Hadl, a Caucasian, signed a 12-month lease for a two-bedroom apartment at College Station for $495 per month.
• On February 28, 2001, Natasha Iron Wing, a Native American, signed a 12-month lease for a two-bedroom apartment at College Station for $495 per month.
• On March 2, 2001, Joseph Guthrie and Judith Mortensen, both Caucasian, renewed their 12-month lease for a two-bedroom apartment at College Station for $495 per month.
(Krzanowsky Aff. at ¶¶ 8-9, 11-12.)
When plaintiffs renewed their lease on April 2, 2001, the rental rate for two-bedroom apartments at College Station was $495.00 per month. Due to an increasing vacancy rate in two-bedroom units and the impending end of the school year, the two-bedroom rental rate decreased to $450.00 per month on April 18, 2001. Both the $495.00 rate and the $450.00 rate were advertised in Lawrence area newspapers during the times the rates were in effect.
Plaintiffs assert that they were treated in a discriminatory manner because other tenants were allowed to renew their leases at their previous rates and, in some cases, at lower rates. Plaintiffs have not produced affidavits or set forth any evidence of their personal knowledge regarding these assertions. Plaintiffs only specify one lease that they claim was renewed at the previous rate. Jim McDaniel Jim and Cornelia Rose Lee, both Native American, leased a one-bedroom apartment on September 27, 1999. Mr. Jim and Ms. Lee renewed their lease on October 1, 2000 and October 1, 2001. At both of these times, the University of Kansas's fall semester was underway, and the demand for one-bedroom apartments did not justify increasing rental rates.
Plaintiffs assert that defendants have misstated the rental rate Mr. Jim and Ms. Lee are currently paying. Plaintiffs claim to have evidence to prove that Mr. Jim and Ms. Lee pay $375.00 per month, as opposed to the $395.00 per month defendants have claimed. Plaintiffs have not provided the court with any such evidence, nor have plaintiffs addressed the fact that Mr. Jim and Mrs. Lee lease a one-bedroom, rather than a two-bedroom, apartment.
II. Analysis
A. Standards
Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact" and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). An issue of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Id. (citing Anderson, 477 U.S. at 248).
The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Id. at 670-71. In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party's claim. Id. at 671 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
Once the movant has met this initial burden, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256; see Adler, 144 F.3d at 671 n. 1 (concerning shifting burdens on summary judgment). The nonmoving party may not simply rest upon its pleadings to satisfy its burden. Anderson, 477 U.S. at 256. Rather, the nonmoving party must "set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Adler, 144 F.3d at 671. "To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein." Id.
The court acknowledges that plaintiffs appear pro se and their response is entitled to a somewhat less stringent standard than a response filed by a licensed attorney. Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). However, this does not excuse plaintiffs from the burden of coming forward with evidence to support their claims as required by the Federal Rules of Civil Procedure and the local rules of this court. Pueblo Neighborhood Health Ctrs., Inc. v. Losavio, 847 F.2d 642, 649 (10th Cir. 1988). Even pro se plaintiffs must present some "specific factual support" for their allegations. Id.
Finally, the court notes that summary judgment is not a "disfavored procedural shortcut," rather, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action." Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).
B. McDonnell Douglas Burden-Shifting Analysis
In evaluating whether summary judgment is appropriate in housing discrimination cases, the court applies the burden-shifting framework set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 793 (1973). See Asbury v. Brougham, 866 F.2d 1276, 1279 (10th Cir. 1989) (applying McDonnell Douglas test to housing discrimination case).
Under the McDonnell Douglas test, plaintiffs bear the initial burden of establishing a prima facie case of race discrimination. 411 U.S at 802. The burden then shifts to defendants to articulate some legitimate, nondiscriminatory reason for the increase in plaintiffs' rent. Id. The burden then reverts to the plaintiffs "to show that there is a genuine dispute of material fact as to whether [defendants'] proffered reason for the challenged action is pretextual — i.e., unworthy of belief." Marx v. Schnuck Mkts., Inc., 76 F.3d 324, 327 (10th Cir. 1996). "Pretext can be shown by such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffered legitimate reasons for its action that a reasonable factfinder could rationally find them unworthy of credence and hence infer that the employer did not act for the asserted non-discriminatory reasons." Morgan v. Hilti, Inc., 108 F.3d 1319, 1323 (10th Cir. 1997) (internal citations omitted). However, "[m]ere conjecture that [defendants'] explanation is a pretext for intentional discrimination is an insufficient basis for denial of summary judgment." Id. (citing Branson v. Price River Coal Co., 853 F.2d 768, 772 (10th Cir. 1988)).
1. Plaintiffs' Prima Facie Discrimination Case
Plaintiffs bring their case under 42 U.S.C. § 1982 and the FHA, claiming that defendants raised the rent on their apartment in violation of the terms of the lease agreement. Plaintiffs assert that defendants raised the rent solely because plaintiffs are African-American. It is undisputed that plaintiffs are members of a protected class under 42 U.S.C. § 1982 and the FHA, which prohibit discrimination on the basis of race. In order to prevail on a claim made under these statutes, plaintiffs must prove discriminatory conduct and a discriminatory intent. Asbury, 866 F.2d at 1279 (citing Denny v. Hutchinson Sales Corp., 649 F.2d 816, 822 (10th Cir. 1981)).
"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, convey real and personal property." 42 U.S.C. § 1982.
[I]t shall be unlawful . . . (b) To discriminate 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, color, religion, sex, or national origin.42 U.S.C. § 3604, 3604(b).
Discrimination claims under the FHA may be based on disparate treatment or disparate impact. Bangerter v. Orem City Corp., 46 F.3d 1491, 1501 (10th Cir. 1995). In this case, the parties' arguments contemplate a disparate treatment violation. Plaintiffs do not argue that a facially neutral policy impacted them in a discriminatory way, but that defendants disregarded the terms of the lease agreement and, in so doing, treated plaintiffs differently from other similarly-situated tenants.
The parties disagree, however, as to whether plaintiffs have to prove that the alleged discrimination was intentional. "A claim of disparate impact, unlike a claim of disparate treatment, does not require a finding of intentional discrimination. Indeed, 'the necessary premise of the disparate impact approach is that some [housing] practices, adopted without a deliberately discriminatory motive, may in operation be functionally equivalent to intentional discrimination.'" Mountain Side Mobile Estates P'ship v. Sec'y of Hous. Urban Dev., 56 F.3d 1243, 1250-51 (10th Cir. 1995) (citations omitted). Conversely, "[t]he ultimate question in a disparate treatment case is whether the defendant intentionally discriminated against the plaintiff." Id. at 1251, n. 6. Since the parties agree that the alleged violations support a disparate treatment claim, plaintiffs are required to establish intent as an element of their prima facie case. This is not to say that plaintiffs must prove a malicious motive on defendants' part:
Specifically with regard to housing discrimination, a plaintiff need not prove the malice or discriminatory animus of a defendant to make out a case of intentional discrimination where the defendant expressly treats someone protected by the [FHA] in a different manner than others . . . [A] plaintiff makes out a prima facie case of intentional discrimination under the [FHA] merely by showing that a protected group has been subjected to explicitly differential — i.e. discriminatory — treatment.
Bangerter, 46 F.3d at 1501. Simply put, the inquiry under a disparate treatment analysis is whether similarly-situated persons or groups are subject to differential treatment. Mountain Side Mobile Estates P'ship, 56 F.3d 1251, n. 6.
The court concludes that plaintiffs have not submitted sufficient evidence to establish their prima facie case. The only similarly-situated tenants plaintiffs attempt to identify are Mr. Jim and Ms. Lee. Plaintiffs have submitted no evidence that Mr. Jim and Ms. Lee are similarly-situated. The uncontroverted evidence shows that Mr. Jim and Ms. Lee lease a one-bedroom apartment, while plaintiffs lease a two-bedroom apartment. Where the allegedly discriminatory conduct comes in the form of a rent increase, a tenant in a two-bedroom apartment is not similarly-situated to a tenant in a one-bedroom apartment. Moreover, courts generally require plaintiffs to prove that they have been treated differently from similarly-situated non-minorities in order to avoid summary judgment. See Munoz v. W. Res., Inc., 225 F. Supp.2d 1265, 1271 (D.Kan. 2002). Mr. Jim and Ms. Lee are both Native American and, therefore, are not similarly-situated non-minorities. For these reasons, the court determines that Mr. Jim and Ms. Lee are not similarly-situated tenants.
Even if the court were to conclude that Mr. Jim and Ms. Lee were similarly-situated, defendants have the right to raise the rent on two-bedroom apartments while maintaining current rates for one-bedroom apartments; defendants' act of raising two-bedroom apartment rates, and not doing the same for one-bedroom rates, does not amount to discriminatory conduct without a showing that the increase had a disparate impact on members of a protected class. Plaintiffs have made no such showing.
On the contrary, the defendants have presented sufficient evidence to show that plaintiffs were treated in exactly the same manner as other minority and non-minority tenants signing 12-month leases on two-bedroom apartments. On April 2, 2001, when plaintiffs renewed their lease, the market price for a 12-month lease on a two-bedroom apartment at College Station was $495.00 per month, regardless of the race of the potential tenant.
Plaintiffs' claim centers around one paragraph of their lease agreement. Plaintiffs argue that Paragraph 5 of the lease agreement requires defendants to renew plaintiffs lease every year at the original rate. The language of the paragraph is as follows:
5. LEASE TERMINATION: Unless the Lessee, the Landlord, or the Landlord's agent indicates his or its intention to terminate this rental contract in writing no less than 60 days (2 full months) prior to the end of the original term, the agreement will automatically renew, subject to the same terms and conditions, for twelve (12) months following the expiration date, and will so renew on every anniversary date thereafter. This notice shall serve to excuse rental obligations after departure, if executed in the manner prescribed above and if all other conditions of the contract have been satisfied.
Def. Ex. A at 2. This clause might be read to require defendants to give plaintiffs 60-day notice that their rent would increase on the next year's lease. However, the court finds as a matter of law that it cannot be construed as binding defendants to allow plaintiffs to continue renting indefinitely at the $420.00 per month rate.
For plaintiffs to prove that defendants breached Paragraph 5 of the lease agreement in violation of plaintiffs' civil rights, plaintiffs must show that 1) they did not receive notice that their rent would increase as required by Paragraph 5, and 2) other similarly-situated tenants did receive such notice of the rent increase. Plaintiffs have submitted no evidence that this was the case. The court concludes that plaintiffs have presented no evidence sufficient to establish a prima facie case of discrimination and that there exists no genuine issue of material fact as to any of the elements of their prima facie case of discrimination.
In fact, plaintiffs have provided a letter which purports to be from defendant First Management, Inc., by its property manager, dated November 5, 2001. The letter is addressed "Dear Resident," and appears to be a reminder that the lease will automatically renew, in the absence of a 60-day written notice to the contrary. Further, the letter sets forth the current market rates for one-bedroom and two-bedroom apartments and states, "These will be the rates you will re-new at." Pl. Compl. Ex. at 1. This letter is not relevant to this case, as it was written after the lease at issue was renewed. Further, this letter has not been authenticated and is, thus, inadmissible hearsay. The court does not rely on this letter in reaching its opinion, but wishes to point out — for plaintiffs' information — that defendants may use this type of letter to notify defendants of rent increases and that this type of letter seems to comply with the requirements of Paragraph 5.
2. Defendants' Legitimate, Non-discriminatory Reason and Plaintiffs' Proof of Pretext
Even if plaintiffs had submitted adequate evidence, based on personal knowledge, to establish their prima facie case, the court would still grant defendants' Motion for Summary Judgment. Defendants' purported reason for the discrepancy in rental increases — that market conditions and the law of supply and demand dictated these business decisions — is a legitimate, non-discriminatory reason for its actions, as required by McDonnell Douglas. McDonnell Douglas's burden-shifting framework requires plaintiff "to show that there is a genuine dispute of material fact as to whether [defendants'] proffered reason for the challenged action is pretextual — i.e., unworthy of belief." Edwards Assocs., Inc., v. Black Veatch, L.L.P., 84 F. Supp.2d 1182, 1192 (D.Kan. 2000) (citations omitted).
Plaintiffs have not met their burden on this point. In fact, plaintiffs have not submitted a single piece of evidence regarding this issue. Therefore, the court concludes that there exists no genuine issue of material fact as to whether defendants' proffered reason is pretextual.
C. Defendant Newsome's Association to the Case
Finally, defendants argue that defendant William Newsome is not a proper party to this case. The court agrees. The uncontroverted evidence before the court indicates that defendant Newsome never had dealings with plaintiffs. Plaintiffs named defendant Newsome in the complaint solely because he holds an ownership interest in the limited liability company that owns College Station. Based on these facts, defendant Newsome is not a proper party to the case.
Earlier this year, the United States Supreme Court addressed this precise issue. In Meyer v. Holley, ___ U.S. ___, 123 S.Ct. 824 (2003), the Court considered whether FHA "imposes personal liability without fault upon an officer or owner of a residential real estate corporation for the unlawful activity of the corporation's employee or agent." Id. at 827. The Court concluded that FHA "imposes liability without fault upon the employer in accordance with traditional agency principles, i.e., it normally imposes vicarious liability upon the corporation but not upon its officers or owners." Id. (emphasis added). Therefore, the court concludes that defendant Newsome is not a proper party to this case and that summary judgment would be appropriate as to defendant Newsome even if it were not appropriate as to the other defendants.
IT IS THEREFORE ORDERED that defendants' Motion for Summary Judgment (Doc. 44) is granted.