Here is another example of a recent Fair Housing Act lawsuit brought by the United States Department of Justice (“DOJ”). I try to post case summaries in order to provide timely updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.
Last Friday (October 16, 2009), the DOJ filed a lawsuit against TK Properties L.L.C., its owner, and two employees (property managers), for violating the Fair Housing Act by discriminating on the basis of race. The lawsuit alleged that the defendants violated the Fair Housing Act by harassing and making discriminatory statements to an African-American family residing at Lakeport Village Apartments (located in Sioux Falls, South Dakota). In addition, the lawsuit alleged that the defendants intimidated white tenants who came to the family's defense.
Lakeport Village Apartments is a 48-unit apartment complex that is comprised of three buildings, each with 16 units. The complex is home to many families with children. On December 1, 2008, TK Properties hired Ann Wagner (hereinafter “Manager Wagner”) and Corey Anderson (hereinafter “Manager Anderson”) as on-site property managers.
On January 5, 2009, Michelle Chevalier, a white tenant at Lakeport Village, complained to Manager Wagner about noise coming from an apartment being rented by Charlotte and Untoma Gadsden (who lived there with their three minor children and one adult child). The Gadsdens are African-American. Tenant Chevalier and Manager Wagner went upstairs to speak to the Gadsdens. Charlotte Gadsden explained to Manager Wagner that her husband Untoma had just returned from the hospital and that the noise had been the result of his dialysis machine falling to the floor. Manager Wagner nevertheless yelled, "That's it, you're done, you're out of here, I've had enough," or words to that effect.
Following that confrontation, Manager Wagner urged Tenant Chevalier to file a false police report stating that the Gadsden's 17-year old son had attacked Tenant Chevalier. Tenant Chevalier refused to do so. Manager Wagner nevertheless stated she would file such a report, and told Ms. Chevalier that she needed her help in evicting the Gadsdens, whom she referred to as "nigger" tenants. When the police arrived, Tenant Chevalier denied that she had been threatened by the Gadsdens’ son and therefore no charges were filed.
Manager Anderson told Tenant Chevalier that, with regard to the maintenance requests of African-Americans, "them fucking niggers can wait, I'll get to them when I get to them," or words to that effect. Manager Anderson made the comment in the presence of Tenant Chevalier's children.
On February 11, 2009, Manager Anderson called the Sioux Falls Police Department and falsely reported that the Gadsdens' 15-year old son was attempting to steal change from the apartment complex's laundry machine. Scott Terveen (an owner of TK Properties) insisted that charges be filed. The charges were later dismissed.
On numerous occasions, white tenant Jenny Johnson heard Manager Anderson and Manager Wagner use the word "nigger" to describe black tenants, including the Gadsdens. On February 19, 2009, Tenant Johnson told another white tenant that she believed that Manager Anderson and Manager Wagner were racist. Manager Anderson, who learned of Tenant Johnson's allegations, responded by sending Tenant Johnson a text message that said, "Who in the hell do u think u r if u want 2 bitch about me and b nosy u know where I live." Manager Anderson also told another tenant that he would "punch [Tenant Johnson] in the mouth to shut her up," or words to that effect. The tenant told Tenant Johnson about Manager Anderson's threat.
Following Manager Anderson's text message and threat of assault, Manager Wagner and Tenant Johnson saw each other on the balconies of their respective units. Manager Wagner yelled, "Do you know the difference between a black person and a nigger? . . . They're niggers. They're niggers upstairs in 306," or words to that effect, referring to the Gadsden's unit.
On February 20, 2009, Tenant Chevalier, Tenants Gadsdens and Tenant Johnson went to the Sioux Falls Housing and Redevelopment Commission ("Housing Authority") to complain about the discriminatory conduct of Manager Anderson and Manager Wagner. Manager Anderson and Manager Wagner saw them leave the property. Later that day, Tenants Gadsdens and Tenant Johnson returned to their apartments to find that they and other tenants on their floor did not have heat.
The following day (February 21, 2009), Manager Wagner sent Tenant Chevalier a text message asking, "is it true you were with Jen [Tenant Johnson] yesterday at housing [Sioux Falls Housing and Redevelopment Commission]. we have never done anything 2 u or your family -- y r u against us?”
On February 22, 2009, Tenant Johnson received a voice mail message from Manager Wagner in which she yelled vulgarities and stated that she would use "every ounce in my body" to "take you out of here." Tenant Johnson felt threatened by the message and called the police the following day.
Defendants TK Properties and Scott Terveen (an owner of TK Properties) knew about Manager Anderson’s and Manager Wagner's discriminatory conduct, but failed to take corrective action. In February 2009, Tenant Johnson met with Michael Terveen (another owner of TK Properties) to complain about Manager Anderson’s and Manager Wagner's discriminatory conduct. Michael Terveen relayed Tenant Johnson's complaints to Scott Terveen.
Despite these complaints, Defendants TK Properties and Scott Terveen failed to curtail Manager Wagner’s and Manager Anderson's authority over the management of the complex and allowed them to continue on as managers. Both managers continued to live at the property rent-free and continued to serve as managers of the property until at least May 2009.
On February 26, 2009, Charlotte Gadsden, Untoma Gadsden, Chevalier, and Johnson, on behalf of themselves and their minor children, filed three discrimination complaints with the U.S. Department of Housing and Urban Development ("HUD"). Following an investigation, HUD determined that that reasonable cause existed to believe that the defendants had engaged in illegal discriminatory housing practices in violation of the Fair Housing Act. Accordingly, HUD issued a Determination of Reasonable Cause and Charge of Discrimination against Defendants.
On September 15, 2009, Tenants Gadsden, Tenant Chevalier, and Tenant Johnson timely elected to have these charges resolved in a federal civil action. As a result, the DOJ filed this lawsuit, on October 16, 2009 ,which is pending in the United State District Court of South Dakota.
The lawsuit seeks a court order declaring that defendants' actions violate the Fair Housing Act, prohibiting future discrimination by the defendants, awarding monetary damages to all persons harmed by the defendants' discriminatory practices and assessing a civil penalty to vindicate the public interest. The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Source: U.S. Department of Justice press release and legal complaint (portions of press release used with permission)
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