Asbury v. Brougham 866 F.2d 1276 (10th Cir. 1989)
James A. Parker, District Judge.
Plaintiff Rosalyn Asbury brought suit under 42 U.S.C. §1982* and the Fair Housing Act, 42 U.S.C. §3601 et seq. (FHA), claiming that the defendants refused to rent or to allow her to inspect or negotiate for the rental of an apartment or townhouse at Brougham Estates in Kansas City. Defendants Leo Brougham, individually and doing business as Brougham Estates and Brougham Management Company, and Wanda Chauvin, his employee, appeal a jury verdict awarding Asbury compensatory damages of $7,500 against them upon a finding that the defendants discriminated against her on the basis of race and/or sex. Leo Brougham appeals from the jury verdict awarding punitive damages in the amount of $50,000 solely against him. . .988
I. Sufficiency of Evidence Supporting a Finding of Racial Discrimination in Violation of §1982 and FHA
42 U.S.C. §1982 and the FHA both prohibit discrimination on the basis of race. In order to prevail on a claim made under these statutes, plaintiff must prove a discriminatory intent. A violation occurs when race is a factor in a decision to deny a minority applicant the opportunity to rent or negotiate for a rental, but race need not be the only factor in the decision. In addition, §3604(d) of the FHA specifically prohibits dissemination of false information about the availability of housing because of a person's race. Accordingly, failure to provide a minority applicant with the same information about availability of a rental unit or the terms and conditions for rental as is provided to white ``testers,'' results in false information being provided and is cognizable as an injury under the FHA.
A. Asbury's Prima Facie Case Under §1982 and FHA
The three-part burden of proof analysis established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), a Title VII employment discrimination case, has been widely applied to FHA and §1982 claims. Under the McDonnell Douglas analysis, plaintiff first must come forward with proof of a prima facie case of discrimination. Second, if plaintiff proves a prima facie case, the burden shifts to defendants to produce evidence that the refusal to rent or negotiate for a rental was motivated by legitimate, non-racial considerations. Third, once defendants by evidence articulate non-discriminatory reasons, the burden shifts back to plaintiff to show that the proffered reasons were pretextual.
The proof necessary to establish a prima facie case under the FHA also establishes a prima facie case of racial discrimination under §1982. In order to establish her prima facie case, plaintiff had to prove that:
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(1) she is a member of a racial minority;
(2) she applied for and was qualified to rent an apartment or townhouse in Brougham Estates;
(3) she was denied the opportunity to rent or to inspect or negotiate for the rental of a townhouse or apartment; and
(4) the housing opportunity remained available.
A review of the evidence in this case shows that plaintiff established her prima facie case. Defendants stipulated that Asbury is black. Plaintiff testified that on February 23, 1984, she went to Brougham Estates with her daughter to obtain rental housing. At the rental office at Brougham Estates, Asbury encountered Wanda Chauvin, the manager, and explained to Chauvin that she was being transferred to Kansas City and needed to rent housing. Asbury told Chauvin that she needed to secure housing by the middle of March or the beginning of April. In response, Chauvin said there were no vacancies, but told Asbury she could call back at a later time to check on availability. Chauvin provided no information concerning availability of rental units that would assist Asbury in her efforts to rent an apartment or townhouse at Brougham Estates. Asbury asked for the opportunity to fill out an application, but Chauvin did not give her an application, again stating that there were no vacancies and that she kept no waiting list. Asbury also requested floor plans or the opportunity to view a model unit, and Chauvin refused. Instead, Chauvin suggested Asbury inquire at the Westminister Apartments, an apartment complex housing mostly black families. Although Chauvin did not ask Asbury about her qualifications, plaintiff was employed with the Federal Aviation Authority at a salary of $37,599. Based on her salary, defendants concede that Asbury would likely be qualified to rent an apartment or townhouse at Brougham Estates. . . .
Although there was a conflict in the evidence as to the availability of housing at the time Asbury attempted to inspect and negotiate for rental, there was abundant evidence from which the jury could find that housing was available. Defendants testified that families with a child are housed exclusively in the townhouses at Brougham Estates, and that there were no townhouses available on the date Asbury inquired. Asbury introduced evidence suggesting that both apartments and townhouses were available and, in addition, that exceptions previously had been created to allow children to reside in the apartments.
On February 24, 1984, the day after Asbury inquired about renting, Asbury's sister-in-law, Linda Robinson, who is white, called to inquire about the availability of two-bedroom apartments. The woman who answered the telephone identified herself as ``Wanda'' and invited Robinson to come to Brougham Estates to view the apartments. The following day, February 25, 1984, Robinson went to the rental office at Brougham Estates and met with Wanda Chauvin. Chauvin provided Robinson with floor plans of available one- and two-bedroom apartments at Brougham Estates. Robinson specifi cally asked Chauvin about rental to families with children, and Chauvin did not tell Robinson that children were restricted to the townhouse units. Robinson accompanied Chauvin to inspect a model unit and several available two-bedroom apartments. Upon inquiry by Robinson, Chauvin indicated that the apartments were available immediately and offered to hold an apartment for her until the next week. 990
Asbury also provided evidence indicating that townhouses were available for rent. On February 1, 1984, Daniel McMenay, a white male, notified Brougham Estates that he intended to vacate his townhouse. On April 4, 1984, Brougham Estates rented the townhouse vacated by McMenay to John Shuminski, a white male. On March 10, 1984, Randall Hockett, a white male, also rented a townhouse at Brougham Estates. In addition, Asbury provided computer data sheets generated by Brougham Estates which indicated that a third townhouse was unoccupied at the time of her inquiry on February 23, 1984 and remained vacant as of April 10, 1984. There was also evidence that a building which included townhouse units had been closed for the winter but would be available for rent beginning in the spring. On February 22, 1984, one day prior to Asbury's inquiry into vacancies, James Vance, a white male, paid a deposit for a townhouse which he occupied when the building opened on April 10, 1984. Since Asbury testified that she told Chauvin she did not need to occupy a rental unit until the beginning of April, the jury could have concluded that at least one of the townhouses which was subsequently rented to the white males was available at the time Asbury inquired. Although defendants took the position at trial that the townhouses were closed or out of order for repair and therefore not available to rent, the jury was free to accept the evidence of availability presented by the plaintiff.
Since Asbury met her burden of proving a prima facie case of racial discrimination, the burden shifted to defendants to prove a legitimate, non-discriminatory reason for denial of housing.
B. Failure of Proof of Legitimate, Non-discriminatory Reason for Rejection
Defendants claimed their legitimate, nondiscriminatory reasons for rejecting Asbury arose out of the policies at Brougham Estates that families with one child could rent townhouses but not apartments, and that families with more than one child were not permitted to move into Brougham Estates. Defendants further argued that they made no exceptions to these rules. Defendants contended that in accordance with these rental policies, no appropriate housing was available for Asbury when she inquired. However, plaintiff introduced evidence indicating that exceptions to these rules had been made on several occasions; families with children had rented apartments, and families with more than one child had been permitted to move into Brougham Estates. Asbury was not provided information about the terms and conditions that gave rise to an exception to the policy concerning children being restricted to the townhouses. The jury could therefore find that defendants' reasons for denying Asbury the opportunity to negotiate
for rental were not legitimate and nondiscriminatory. 991
Defendants also argue that evidence of a high percentage of minority occupancy in Brougham Estates conclusively rebuts the claim of intentional racial discrimination. Although such statistical data is relevant to rebutting a claim of discrimination, statistical data is not dispositive of a claim of intentional discrimination. Moreover, there was other evidence from which the jury could have determined that race was a motivating factor in defendants' decision to refuse to negotiate with Asbury for a rental unit.
II. Sufficiency of Evidence Supporting Punitive Damages Award
Defendant Brougham contends that there was insufficient evidence supporting the jury's award of punitive damages against him because he never met or dealt with the plaintiff, the actions of Chauvin should not be attributed to him, and he did not promulgate any discriminatory policies or procedures.
Punitive damages may be awarded against a defendant ``when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others.'' Smith v. Wade, 461 U.S. 30, 56 (1983). The jury has discretion to award punitive damages to punish outrageous conduct on the part of a defendant and to deter similar conduct in the future.
Plaintiff advanced two theories supporting Brougham's liability for punitive damages: (1) Brougham's own discriminatory conduct in establishing rental policies, procedures and rules; and (2) his authorization or ratification of discriminatory conduct by Chauvin, his employee. We find sufficient evidence to establish liability under either theory.
In this case, Asbury presented evidence that Leo Brougham was the managing partner of Brougham Estates and Brougham Management Company. Brougham established all policies, rules and rental procedures for Brougham Estates. Chauvin worked for Brougham who instructed her about the rental policies and procedures. Among the policies and procedures implemented by Brougham were the requirements that Chauvin routinely and untruthfully tell people over the phone that there were no vacancies, whether or not vacancies existed, but that Chauvin then encourage the individuals to come in, inspect the premises and discuss upcoming vacancies. Brougham established the requirement of visual observation of a prospective tenant. Although a policy that prospective tenants must be visually scrutinized is not necessarily improper, under the circumstances of this case, the jury could have inferred that the policy operated to screen prospective tenants on the basis of race and that, at a minimum, Brougham was callously indifferent to
this result of his policy. Indeed, this policy had given rise to several administrative complaints by single black females prior to Asbury's inquiry about a vacancy. Brougham was aware of previous claims of discriminatory practices in the rental of units at Brougham Estates. 992
Another policy established by Brougham was that a family with a child could occupy only a townhouse. Chauvin was advised of this policy. Brougham testified that he made no exceptions to the policy, and he testified specifically that no tenant or prospective tenant with a child could obtain permission to be excepted from the rule. Plaintiff, however, produced evidence that exceptions had been created on occasion. Those exceptions had been authorized by Brougham and had been made on an individual basis. . . . From the evidence presented, the jury could have determined that the policies established and implemented by defendant Brougham directly fostered the discrimination which Asbury experienced, that Brougham should have been aware that this might occur, and that Brougham was recklessly or callously indifferent to it happening.
Plaintiff also offered evidence tending to prove that Brougham ratified Chauvin's actions. [After investigating, Brougham] determined [that] Asbury had only one child and therefore fit within the residential policies of Brougham Estates. . . . Furthermore, the jury could have drawn the inference that Brougham's failure to apologize or otherwise remedy the situation, after personally investigating Asbury's claim of discrimination at Brougham Estates, was an acceptance and ratification of Chauvin's treatment of Asbury.
Having reviewed the record in this case, we find that there was substantial evidence supporting and a reasonable basis for the jury's verdict awarding both compensatory and punitive damages, and we affirm the district court's decision to deny defendants' motion for a new trial. . . .
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Property Law - Rules, Policies and Practices (Second Edition) Aspen Law & Business (1997)
Joseph William Singer