MICHELLE M. HARNER, U.S. BANKRUPTCY JUDGE.
This dispute involves two matters that most individuals hold very dear — their families and their homes. As such, emotions have run high throughout the various underlying administrative and judicial proceedings, which began in January 2010. The Court understands that both parties adamantly believe in their respective positions. By its analysis below, the Court means neither to diminish nor disparage how any of the parties feel they may have been treated over the past several years. The Court's evaluation of this dispute, however, must focus on the evidence in the record and the applicable legal standards.
The above-captioned Debtor's pending second Motion for Partial Summary Judgment (the "Debtor's Second Motion") [ECF 545] relates to the proofs of claim filed in this chapter 11 case by Dr. Paul C. Clark, Ms. Rebecca Delorme, and Paul Clark, Jr. (the "Creditors").
The Debtor is an unincorporated condominium association, comprising "any person, firm, corporation, trust, or other legal entity ... holding legal title to a condominium unit" in the building located at 100 Harborview Drive (the "Building"). Memorandum of Law in Support of Creditors' Motion for Partial Summary Judgment [ECF 596] Ex. 2, Art. I (q) (collectively with Creditors' Motion for Partial Summary Judgment [ECF 595] and Line attaching Affidavits [ECF 597], the "Creditors' Motion"). The Building "is a 29-story luxury residential high rise that stands on the shore of Baltimore's Inner Harbor." In re Council of Unit Owners of the 100 Harborview Drive Condominium, 572 B.R. 131, 135 (Bankr. D. Md. 2017) (J. Schneider). It "was established in 1993 as a condominium regime and contains 249 units and a health club." Id.
On March 9, 2016, the Debtor filed this chapter 11 case. The Debtor seeks to, among other things, reorganize its financial affairs and resolve years of litigation with the owners of two different units in the Building through a chapter 11 plan. Dr. Clark owns one of the units involved in this litigation — penthouse 4A ("Unit PH4A"). The Creditors' proofs of claim, at claim nos. 46, 47, and 48 (the "Claims"), collectively assert in excess of $25 million in damages against the Debtor. The Claims are based on the FHA Claims, alleged property damage to Unit PH4A, and consequential and other damages allegedly arising from those claims. On January 24, 2017, the Debtor filed objections to the Claims [ECF 264-266]. On February 23, 2017, the Creditors each filed an opposition to the Debtor's objections [ECF 316-318].
On May 18, 2017, Judge Schneider entered a Scheduling Order [ECF 393] with respect to the contested matter involving the Claims (the "Contested Matter"). The Court and the parties have subsequently amended that Scheduling Order several times. [ECF 474, 514, 618, 640]. The parties have conducted discovery and filed a total of four dispositive motions in the Contested Matter. The Court held a hearing for purposes of oral argument on three of these dispositive motions, including the Debtor's Second Motion, on January 5, 2018 (the "Hearing").
The Creditors and the Debtor have been litigating various issues relating to Unit PH4A for several years. The Maryland Court of Special Appeals summarized "the
In early 2010, the Creditors filed a complaint with the U.S. Department of Housing and Urban Development ("HUD") alleging familial status discrimination stemming from a cease and desist letter, dated January 19, 2010. "In February, the complaint was referred to the Maryland Commission on Human Relations [("MCHR")], which, after investigation, also made a finding of no probable cause on August 17, 2010." 100 Harborview Drive, 119 A.3d at 95. See also Debtor's Second Motion Ex. F. Creditors filed a motion for reconsideration, which MCHR denied. See id. at Ex. G.
On October 20, 2010, Dr. Clark filed a lawsuit against the Debtor and its professional property management company, Zalco Reality, Inc. ("Zalco"), in the Circuit Court for Baltimore City. Clark v. Zalco Realty, Inc., et al., 24-C-10-007236 (Circ. Ct. Balt. City) (the "First State Court Action"). In the First State Court Action, Dr. Clark asserted a fraudulent misrepresentation claim and violations of the Maryland Consumer Protection Act against the Debtor and Zalco. These claims involved Dr. Clark's purchase of Unit PH4A in October 2009 and the resale disclosure certificate issued by the Debtor and Zalco in connection with that transaction. The Circuit Court granted summary judgment in favor of the Debtor and Zalco in the First State Court Action, which decision was subsequently affirmed by the Maryland Court of Special Appeals. See 100 Harborview Drive, 119 A.3d at 95 (describing result of this particular action).
On September 15, 2011, the Creditors filed another HUD complaint, naming as respondents the Debtor, Zalco, and Dr. John H. Cochran (the former President of the Debtor's Board of Directors (the "Board")). The Creditors alleged discrimination and retaliation against the respondents. HUD dismissed the complaint, finding "that no reasonable cause exists to believe that a discriminatory housing practice has occurred." See Debtor's Second Motion Ex. H.
On January 14, 2013, Dr. Clark filed a lawsuit in the Circuit Court for Baltimore City under the Maryland Condominium Act, seeking the production of certain documents from the Debtor and monetary damages. Clark v. 100 Harborview Drive Council of Unit Owners, et al., 24-C-13-000322 (Circ. Ct. Balt. City) (the "Second State Court Action"). In the Second State Court Action, the Circuit Court held that the Debtor was not required to produce written legal advice provided to the Debtor or those documents already produced concerning the Debtor's financial affairs, but that it was required to produce certain legal invoices. See 100 Harborview Drive Council of Unit Owners v. Clark, 224 Md.App. 13, 119 A.3d 87 (2015) (describing the Circuit Court's decision and affirming in part, and vacating in part, that decision).
On March 24, 2014, Dr. Clark filed a lawsuit against the Debtor in the Circuit Court for Baltimore City, seeking a temporary restraining order and preliminary and permanent injunctive relief that would allow Dr. Clark to send his lawyers to the Debtor's Board and committee meetings. Clark v. 100 Harborview Drive Council of Unit Owners, 24-C-14-001537 (Circ. Ct. Balt. City) (the "Fourth State Court Action"). On October 31, 2014, the Circuit Court awarded summary judgment to the Debtor, ruling that the Debtor's policy resolution barring Dr. Clark's lawyers from the Debtor's meetings "is lawful and proper." See Debtor's Second Motion Ex. I. Additionally, in the Fourth State Court Action, the Debtor counterclaimed for injunctive relief, seeking access to Unit PH4A to perform necessary maintenance and repairs on common elements affecting water infiltration into the condominium building and its units. See Debtor's Second Motion Exs. K, L.
On October 3, 2014, the Creditors filed a lawsuit against the Debtor, Mr. Cochran, and Zalco, captioned Paul C. Clark, et al. v. Council of Unit Owners of the 100 Harborview Drive Condominium, et al., No. 14-3122 JFM (the "District Court Case"). The District Court Case involved allegations by the Creditors that the Debtor, Zalco, and Mr. Cochran violated various provisions of the FHA. On March 23, 2016, the District Court entered an order granting summary judgment in favor of Mr. Cochran (the "March 2016 Order"),
Dr. Clark is the owner of Unit PH4A. Creditors' Motion Ex. 1. He purchased the unit on or about October 27, 2009, as a new home for his family. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶ 2. He moved into Unit PH4A with his wife, Ms. Delorme, and their young son in early November 2009. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶ 3. In 2009, and at all times subsequent thereto, the only noise and nuisance policy in place for the Debtor and the Building was contained in the Debtor's bylaws. Debtor's Second Motion Ex. O Art. XIII. Section 20 of those bylaws provides:
Id. at § 20, Art. XIII. See also Debtor's Second Motion Ex. O § 13, Art. XIII.
Prior to moving into the unit, Giselle Rivera, the general manager for the Debtor at that time, informed the Creditors that their downstairs neighbor, Guy Flynn, had expressed concern about the amount of noise a five year old child would make. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶ 4. As a result of Mr. Flynn's concerns, Ms. Rivera asked the Creditors where their son would sleep, as well as where he would play. Id. at ¶ 6. After the Creditors moved into their home, Mr. Flynn emailed the Board and management staff frequently regarding the noise levels in Unit PH4A. Id. at Mezrich Depo. Ex. 4,
Between November 2009 and January 2010, the Board had many discussions concerning Mr. Flynn's noise complaints and potential responses to address the situation. Mollietta Mezrich (the Board's President at the time) and one staff member also visited Mr. Flynn's unit to experience the noise levels. Id. at Mezrich Depo. Ex. 4, at 27-28. During this time, the Debtor's staff contacted the Creditors by telephone and by visiting the Creditors' unit to inform them of Mr. Flynn's complaints and to ask them to mitigate the noise. Id. at Delorme Aff. Ex. 1, at ¶ 8. Ms. Mezrich received emails indicating that Mr. Flynn expected "the Board to strictly enforce existing rules regarding noise and nuisance" and that he would take action if the Board did not act. Id. at Mezrich Depo. Ex. 4, at 54-55.
Shortly thereafter, Ms. Rivera informed Ms. Delorme that the Board was going to hold a hearing on the noise complaints on January 12, 2010. Id. at Delorme Aff. Ex. 1, at ¶ 9. Ms. Delorme told Ms. Rivera that she could not attend on that date and asked Ms. Rivera to reschedule the hearing. Id. at Ex. 13. Ms. Delorme also pointed out that the Board had not followed appropriate procedures for scheduling a formal hearing. Id. The Board decided to move forward with an informal hearing on January 12, 2010, at which only Mr. Flynn and his lawyers appeared and presented evidence, including a noise study. Id. at Mezrich Depo. Ex. 4, at 41, 60; Ex. 31. The Board then issued a cease and desist letter to Dr. Clark and Ms. Delorme on January 19, 2010 (the "2010 Cease and Desist Letter"). Id. at Ex. 16. The 2010 Cease and Desist Letter explained what transpired at the January 12, 2010 hearing, asked Dr. Clark and Ms. Delorme to mitigate the noise, provided mitigation suggestions (including, for example, finding alternative play places for their young child), and indicated that they could request a hearing to challenge the letter.
The Creditors did not request a hearing on the 2010 Cease and Desist Letter. Rather, on January 28, 2010, the Creditors filed a complaint with HUD. Id. at Delorme Aff. Ex. 1, at ¶ 13. HUD referred the matter to MCHR, which found no probable cause to find discrimination and denied reconsideration of the matter. Id. at Ex. 49. Also around the time of the 2010 Cease and Desist Letter, the Debtor designated a children's playroom in the Building. This room, known as the Marina Room, had very few amenities and no bathroom. Id. at DeLorenzo Dep. Ex. 15, at 60. See also id. at Mezrich Dep. Ex. 4, at 66. It was used as a playroom for only a short time and was subsequently "renovated into a conference room." Id. at Mezrich Dep. Ex. 4, at 65. See also id. at DeLorenzo Dep. Ex. 15, at 60-61.
In addition to the noise complaints, the Creditors also were dealing with water leaks in Unit PH4A. As a result of water leaks and the detection of mold, the Creditors moved out of Unit PH4A on March 30, 2010, and moved back into Unit 433 at Pierside, which is where they resided prior to November 2009. See Creditors' Motion, at 4-5.
In March 2010, Mr. Cochran was appointed President of the Council. Approximately one month after Mr. Cochran became President, and just a few months after the Creditors filed their discrimination complaint, the Board, for the first time ever, included a "litigation update" section in the Board's monthly newsletter, Tower Topics. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶ 16. The first "litigation update," which appeared in the April 2010 edition of the Tower Topics, included information about the Creditors' discrimination complaint, as well as two other matters, one of which involved another family with children. Id. at Ex. 17. Subsequent publications by, and meeting discussions of, the Debtor included reports on the status of litigation between the Debtor and the Creditors, as well as others. Id. at Delorme Aff. Ex. 1, at ¶ 17-21.
Following these events, in September 2011, the Creditors filed a second discrimination complaint with HUD, as well as the litigation described above in Part II. HUD did not find any probable cause to support the alleged claims of discrimination. Debtor's Second Motion Ex. 8.
In addition, as discussed below, the Creditors had additional interactions with the Debtor and the Debtor's agents after moving out of Unit PH4A in March 2010. For example, on one occasion when Ms. Delorme was taking a construction contractor to Unit PH4A, she was asked to wait for a police escort to accompany her to the unit. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶ 33. The Debtor also issued a second Cease & Desist Letter to Ms. Delorme in May 2011 (the "2011 Cease and Desist Letter"). Creditors' Second Opposition Ex. 37. The 2011 Cease and Desist Letter stated that Ms. Delorme had violated the Debtor's pool rules, which prohibit use of the pool unless a lifeguard is on duty. Id.
These facts, with additional details, and further facts in the record are discussed below in Part V, which sets forth the Court's analysis of the FHA Claims and the Debtor's request for summary judgment on those claims.
Rule 56 of the Federal Rules of Civil Procedure, made applicable to this Contested Matter by Bankruptcy Rule 7056, governs the Debtor's motion for partial summary judgment. A moving party may be entitled to judgment as a matter of law under Civil Rule 56 in the absence of any genuine issue of material fact. Fed. R. Civ. P. 56. See Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). See also Guessous v. Fairview Prop. Inv., LLC, 828 F.3d 208, 216 (4th Cir. 2016) (discussing standards for summary judgment). "When a party has submitted sufficient evidence to support its request for summary judgment, the burden shifts to the nonmoving party to show that there are genuine issues of material fact." Emmett, 532 F.3d at 297. Courts generally will grant summary judgment "unless a reasonable jury could return a verdict for the nonmoving party on the evidence presented." Stanley Martin Cos. v. Universal Forest Prods. Shoffner LLC, 396 F.Supp.2d 606, 614 (D. Md. 2005) (citations omitted).
The court must view the evidence on summary judgment in the light most favorable to the nonmoving party and "draw all justifiable inferences" in its favor, "including questions of credibility and of the weight to be accorded to particular evidence."
A court has some flexibility in the kinds of evidence that it can consider in resolving a motion for summary judgment. See, e.g., Humphreys & Partners Architects, 790 F.3d 532, 538-539 (4th Cir. 2015). As explained by the U.S. Court of Appeals for the Fourth Circuit, "[a] court may consider materials that would themselves be admissible at trial, and the content or substance of otherwise inadmissible materials where the `the party submitting the evidence show[s] that it will be possible to put the information ... into an admissible form.'" Id. (quoting 11 James Wm. Moore et al., Moore's Federal Practice § 56.91[2] (3d ed. 2015)). On summary judgment, a party "`need only make out a prima facie case showing that [the exhibit] is what he or she claims it to be'" for purposes of authentication under Federal Rule of Evidence 901. Williams v. Kettler Management, Inc., 2014 WL 509474, at *4 (D. Md. Feb. 5, 2014) (citations omitted); Stanley Martin Cos., 396 F.Supp.2d at 612-613 (denying request to strike deposition transcripts that were not accompanied by executed court reporter certificates).
The Mezrich Affidavit purports to authenticate the exhibits attached to the Debtor's Second Motion. Dr. Mezrich is the President of the Debtor's Board. In the affidavit, Dr. Mezrich affirms, "under the penalties of perjury," that he has personal knowledge of the facts, has reviewed the memorandum in support of the Debtor's Second Motion, and that "[e]ach of the Exhibits referred to in [that memorandum] are true and authentic copies of what they
As noted above, the central question underlying authentication is whether the evidence is what it purports to be. Evidence Rule 901(b) provides parties with a non-exclusive list for establishing the authenticity of an exhibit. Fed. R. Evid. 901. The proponent may, as here, provide an affidavit. The affiant does not need to be the author of the document, but does need to have personal knowledge on which to base her identification of the exhibit. Moreover, "authentication may be accomplished entirely through circumstantial evidence, and `any and all manner of circumstantial evidence may be used to establish that the document is genuine.'" Milbourne v. JRK Residential Am., LLC, 2016 WL 1070818, at *3 (E.D. Va. Mar. 15, 2016) (quoting ABN Amro Mortg. Grp., Inc. v. Maximum Mortg., Inc., 2006 WL 2598034, at *5 (N.D. Ind. Sept. 8, 2006)).
The Court has reviewed the Mezrich Affidavit and the exhibits attached to the Debtor's Second Motion and the Debtor's Second Reply. The Court observes that the Mezrich Affidavit does not speak to the merits of any of the claims or allegations in the Contested Matter or any other litigation between the parties. See Breyan v. U.S. Cotton, LLC Long Term Disability Plan, 2013 WL 5536795, at *5 (W.D.N.C. Oct. 7, 2013) (noting the limited and proper nature of affidavit purporting solely to authenticate a document). Rather, the focus is on authenticating and identifying each exhibit. Dr. Mezrich also was President of the Board of Directors or a resident in the Building during the relevant period. The former would allow him to review materials maintained in the ordinary course of the Debtor's business, and the latter would have allowed him to observe materials circulated to residents, such as the Building publications.
The Creditors' objection to the Cochran Affidavit presents a more difficult question.
The last minute filing of the Cochran Affidavit is problematic for several reasons. The parties' respective arguments concerning the FHA Claims are not new or even recent, and the Debtor has known for some time that it would be seeking summary judgment on these issues. The original Scheduling Order in the Contested Matter was entered in May 2017, and the Debtor raised the FHA Claims in the Debtor's First Motion in July 2017 and then again in November 2017 in its Second Motion. The Court also notes for the record that it struck the Debtor's Notice of Service of Subpoena De Bene Esse of John H. Cochran [ECF 612] for the reasons set forth in the Court's order dated December 29, 2017 [ECF 615].
The FHA is the primary federal law addressing fairness in, and equal access to, housing opportunities for individuals within certain identified protected classes. 42 U.S.C. §§ 3601-3619, 3631. Congress enacted the FHA in 1968, and that first
Congress amended the FHA in 1974 to include sex discrimination within its protected classes, and then again in 1988 to extend that same protection to familial status and persons with disabilities. See, e.g., Deer Hill Arms II Ltd. Partnership, 686 A.2d at 977. The objectives of these amendments were similar to those articulated in the original legislative history — e.g., to expand housing opportunities for individuals whom landlords, brokers, sellers, neighbors, and others might want to exclude from particular communities. See, e.g., Ohana v. 180 Prospect Place Realty Corp., 996 F.Supp. 238, 240 (E.D.N.Y. 1998). With respect to "familial status," the legislative history explains: "`[F]amilies with children, like the other classes protected by title VIII, have been the victims of unfair and discriminatory housing practices.'"
The Creditors generally allege that the Debtor discriminated against them because of their familial status and, as a result, violated sections 3604(a), 3604(b), and 3617 of the FHA. They also assert a claim of racial discrimination under the FHA. Section 3604 of the FHA states, in relevant part, that it shall be unlawful,
42 U.S.C. §§ 3604(a), (b). Section 3617 of the FHA provides,
42 U.S.C. § 3617. The Creditors fall within the definition of "familial status," which the FHA defines to mean "one or more
The Debtor contends that it is entitled to judgment as a matter of law because the record shows that it did not discriminate or retaliate against the Creditors based on their familial status or on account of race in violation of the FHA. The Creditors believe that many, if not most, of the Debtor's acts with respect to the Creditors since 2009 were based on the Creditors' familial status. They also argue that the Debtor's handling of their situation was based on the race of the neighbor submitting the noise complaints.
Section 3604 of the FHA generally protects families with children from discrimination in accessing housing, as well as in the condition of, or privileges, services, and facilities associated with, housing. See, e.g., Fair Hous. Cong. v. Weber, 993 F.Supp. 1286, 1292 (C.D. Cal. 1997). The Creditors allege that the Debtor violated this section of the FHA in several ways. For example, the Creditors point to the language in various emails from Mr. Flynn and the Debtor's Board members, the issuance of the 2010 Cease and Desist Letter and the 2011 Cease and Desist Letter, the Board's treatment of other noise complaints in the Building, the Debtor's general treatment of the Creditors, and the Debtor's alleged delays in the repair and maintenance of Unit PH4A.
A plaintiff "may establish discrimination in violation of the FHAA under a theory of disparate treatment or disparate impact." Budnick v. Town of Carefree, 518 F.3d 1109, 1114 (9th Cir. 2008); Fair Hous. In Huntington Comm. Inc. v. Town of Huntington, 316 F.3d 357, 366 (2d Cir. 2003); De Reyes v. Waples Mobile Home Park LP, 205 F.Supp.3d 782, 787 (E.D. Va. 2016). The Creditors base their claim only on disparate treatment, and they do not allege a disparate impact theory.
A plaintiff alleging disparate treatment must show that the defendant's discriminatory intent was a "motivating factor" in the discriminatory treatment.
The disparate treatment theory focuses on a defendant's intent to discriminate against a protected class in the challenged decision or conduct. A plaintiff may establish the requisite discriminatory intent through direct or indirect evidence. See, e.g., Foster v. Univ. of Maryland-Eastern Shore, 787 F.3d 243, 249 (4th Cir. 2015) (Title VII claim). Although the Creditors suggest they are relying on both direct and indirect evidence of discriminatory intent in their papers, the Creditors stated at the Hearing that they were relying primarily on indirect evidence of discriminatory intent.
Courts generally describe the McDonnell Douglas shifting burden analysis as follows:
Khalil, 452 F.Supp.2d at 207 (citations omitted); Foster, 787 F.3d at 250. Under this analysis, as well as the direct/indirect evidence method, the plaintiff bears the ultimate burden of persuasion. Texas Dep't of Comm. Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) (discussing burden under McDonnell Douglas method); Foster, 787 F.3d at 252; Budnick, 518 F.3d at 1114 (discussing burden under both methods).
Based on the evidence in the record, which is detailed further below, the Creditors have made a prima facie case under the McDonnell Douglas analysis. See, e.g., Coleman v. Quaker Oats Co., 232 F.3d 1271, 1282 (9th Cir. 2000) (plaintiff may rely on the same evidence for prima facie case and pretext).
Because the defendant's burden to establish a legitimate reason and the plaintiff's ultimate burden of persuasion are the same under both the McDonnell Douglas and the alternative direct/indirect evidence methods, the remainder of this Part considers the evidence as a whole for purposes of both methods, in light of the applicable standards for summary judgment. The Creditors and the Debtor have presented emails, documents, and deposition testimony explaining the facts giving rise to the current dispute. Notably, both parties often rely on the same evidence, but emphasize different parts or aspects of that evidence. The Court has read all of the admissible evidence submitted by the parties, drawing all inferences in the light most favorable to the nonmoving party, i.e., the Creditors.
The tension between the Creditors and their neighbor, Mr. Flynn, arose even prior to the Creditors moving into
The record shows that the Creditor's neighbor, Mr. Flynn, who owned the unit beneath Unit PH4A, was concerned about the noise coming from Unit PH4A, and he complained about these noise levels to the Debtor's Board. Id. at Mezrich Depo. Ex. 4, at 13-14; DeLorenzo Depo. Ex. 15, at 33. Mr. Flynn's complaints consistently identified Dr. Clark's and Ms. Delorme's young child as the source of the noise. Most of the Board's email exchanges, in turn, repeat Mr. Flynn's complaints and attribute the noise to the child.
Id. at Cochran Email Ex. 8.
The record does not contain evidence suggesting that the Board was discussing the issue or considering potential alternatives because the source of the noise was a child.
Id. Likewise, when Ms. Mezrich was asked whether the Board thought "it would be appropriate to have rules specifically relating to the conduct and — of children," she responded that the Board only "pondered whether we should — we, in fact, decided it would not be appropriate."
A review of the record in its entirety shows that the Creditors and their neighbor, Mr. Flynn, were both upset, and that the Board was struggling to navigate the increasingly tense dispute between these neighbors. The child-specific references and the terminology in some of the Board's correspondence (e.g., statement that the Board should require the child to wear "padded sole shoes such as Nike makes;" statement that Unit PH4A had turned into "a romper room") does satisfy the Creditors' prima facie case. But the Court cannot consider these statements in isolation. Rather, the Court must, as urged by the Creditors' counsel at the Hearing, consider the totality of the circumstances. These, and similar, statements when read in context and in light of the action of the Board, establish that the references to the child were of a descriptive nature, as a means of identifying the alleged source of the noise, and not a motivating factor.
Accordingly, with respect to the general conversation surrounding the noise complaints, the Debtor articulated a legitimate reason for its conversations and actions in that the Board was required to consider and respond to the complaint of a unit owner in light of the noise policy in Article XIII, Sections 13 and 20 of the bylaws.
The Creditors presented evidence that the Board rarely issued cease and desist letters. In fact, the evidence suggests that the Board preferred to have neighbors work out their disputes informally, through dialogue and perhaps mediation. The record also shows that the situation between Mr. Flynn and the Creditors escalated to the 2010 Cease and Desist Letter in less than two months. The Creditors contrast this treatment with that afforded to another unit owner, Nicholas Moore, when he made noise complaints to the Board.
The Debtor posits that the Board followed its normal course of procedure with respect to the Creditors and Mr. Flynn, including by calling the Creditors, notifying them of the complaints, and asking them to try to mitigate the noise in those conversations.
Ms. Mezrich testified that the following took place around the time of the January 12, 2010, hearing and prior to the issuance of the 2010 Cease and Desist Letter:
Id. at Mezrich Depo. Ex. 4, at 60. See also id. at Ex. 33. In addition, the 2010 Cease and Desist Letter explains what transpired at the January 12, 2010, hearing and demands that the Creditors "cease and desist making the noise in your unit which violates the Council's governing documents and that are causing a nuisance and interfering with the Flynn's right to quiet and peaceful enjoyment of their home." Id. at Ex. 16. The letter goes on to suggest ways to mitigate the noise — e.g., finding a new place for the child to play — but does not mandate that result.
The Creditors posit that the 2010 Cease and Desist Letter was an act evidencing discriminatory intent. They argue that the Board did not follow its own policy in issuing the 2010 Cease and Desist Letter, that the Creditors filed the HUD complaint (rather than pursuing other remedies) because they believed they were being discriminated against, and that the Board's actions in the Creditors' situation differed from how the Board handled other similar situations. The Court will take each of these arguments in turn.
As noted above, the record contains evidence showing that the Debtor contacted the Creditors and tried to remedy the situation prior to scheduling a hearing on the noise complaints. See supra note 37. It also indicates that the Board did some investigation of the complaints. Although
With respect to the filing of the HUD complaint, the Creditors had no obligation to request a hearing or arbitration under the 2010 Cease and Desist Letter. The Court does not question the Creditors' decision to file the HUD complaint. The Creditors' pleadings in this Contested Matter demonstrate that they felt as though the Board discriminated against them because of their familial status. A plaintiff's subjective beliefs, however, do not determine the legal sufficiency of a claim for discrimination under section 3604 of the FHA. See, e.g., Elliott v. Grp. Med. & Surgical Serv., 714 F.2d 556, 567 (5th Cir. 1983) ("We are not prepared to hold that a subjective belief of discrimination, however genuine, can be the basis of judicial relief."); Gavin v. Spring Ridge Conservancy, Inc., 934 F.Supp. 685, 687 (D. Md. 1995).
The Creditors' argument concerning the Board's treatment of Mr. Moore's noise complaint comes closer to the kind of evidence sufficient to create a genuine issue of material fact on a section 3604 claim. The Creditors have not, however, established that the two situations were factually similar but garnered different treatment. See Na'im v. Sophie's Arms Fine Residences, 2015 WL 401257, at *7 (S.D. Cal. Jan. 8, 2015) (in context of plaintiff's motion for summary judgment, discussing similarity between parties required to infer discriminatory intent). See also Bryant v. Bell Atlantic Maryland, Inc., 288 F.3d 124, 134 (4th Cir. 2002) (reviewing differences in employees posited as similarly situated in context of Title VII claim). The record shows that Mr. Moore was Caucasian and a unit owner in the Building. The individual living in the unit above Mr. Moore's unit was African American, had a child living with her, and did not own the unit. Creditors' Second Opposition Ex. 27; Mezrich Depo. Ex. 4, at 80-81. Rather, she was renting the unit. Id. at Mezrich Depo. Ex. 4, at 80-81. Mr. Moore submitted several noise complaints concerning the tenant, and the record suggests that the source of the noise was not the child. Mr. Cochran and the Board encouraged Mr. Moore to be patient and to give the Board time to resolve the situation. Id. at Ex. 29.
The Debtor posits that the Moore situation was very different from the Flynn situation. The Debtor suggests that neither Mr. Moore nor the tenant were litigious and neither was threatening legal action.
The record also confirms the tension and litigious mindset of the parties involved in the Flynn situation.
The evidence establishes significant, objective differences between the Moore and the Flynn situations, and the Debtor's reason for handling the situations differently is legitimate. The Creditors' focus on the informal approach in the Moore situation and the formal approach in the Flynn situation is factually correct. The Creditors' have not, however, presented evidence to create a genuine issue of material fact that the difference was because of, motivated by, or a pretext for the Creditors' familial status. Rather, Mr. Moore's willingness to talk and the landlord/tenant nature of the situation emerge as the factors guiding the Debtor's decisions in the Moore situation.
The Creditors received a second cease and desist letter in 2011, after they had moved out of Unit PH4A. This letter involved the Debtor's policy that residents could not use the pool if a lifeguard was not on duty. The 2011 Cease and Desist letter was issued to the Creditors and another family, and states that "[t]he Board of Directors and management received a Complaint that each of you and your respective children were in the Harborview swimming pool at a time that the pool was closed and no life guard was on duty." Id. at Ex. 37. The Creditors argue that they were not in the pool at the time. They also assert that partygoers were in the pool area at the same time violating the Debtor's policies, but that the partygoers did not receive a cease and desist letter.
The Debtor relies on the lifeguard policy, the relevant incident report, and the 2011 Cease and Desist Letter to support the issuance of the letter as a proper response to a potential safety issue. The Creditors rely on an email from a resident in the Building named Joann Clay and, at the Hearing, pointed to the deposition testimony of Sasha Russo, an interim general manager at the Building. Transcript at 71.
With respect to the partygoers, Mr. Russo did not recall many details, but he observed that "an outdoor party" is "different than a pool party." Id. at 26. The Creditors also did not provide any evidence of the age of the partygoers or other details that would support their claim that, if the partygoers were violating policies, the Creditors were treated differently from them based on familial status. Again, the Creditors' bear the burden to establish that the Debtor's legitimate reason offered for the decision to issue the 2011 Cease and Desist Letter was not the real reason or otherwise that the Creditors' familial status motivated the decision. See, e.g., Burdine, 450 U.S. at 253-254, 259, 101 S.Ct. 1089. The evidence does not raise a genuine issue of material fact on this aspect of the claim.
The Creditors allege that the Debtor failed to timely repair the water leaks, conduct mold remediation, and perform other tasks necessary to maintain Unit PH4A, as required by the Debtor's bylaws. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶¶ 29-30. The Debtor, on the other hand, attributes the timing of repairs and maintenance to Unit PH4A to the complicated roof and façade on the Building, the fact that many of the issues with the unit were new issues and not just one ongoing problem, and the difficulty with obtaining access to the unit to conduct repairs and maintenance. Debtor's Second Motion at 23-25; Ex. Z, at 4-6. The Debtor alleges that access issues were created by the Creditors, in that the Creditors changed the lock on the door, pad-locked the door, and required the Debtor to coordinate access through their lawyers.
The evidence shows that the Creditors have had continuous issues, in one form or another, with the condition of Unit PH4A since 2009. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶¶ 29-30; Debtor's Second Motion Ex. T, at ¶¶ 27-28.
Viewed in its entirety, the record demonstrates that the repairs and other issues with the unit (and the Building generally) were complicated and that the Debtor encountered, among other things, access and financial issues in beginning and completing that work. Although the Debtor's efforts to repair the unit have been ongoing for a number of years, the evidence does not suggest or create an inference that the Creditors' familial status (or, as explained below, protected activity) was a factor in the Debtor's decisions regarding when or how it would perform the repairs and maintenance work. The Creditors have not offered evidence to show a genuine issue of material fact regarding the Debtor's motive or real reason for the timing of the repairs and maintenance work to Unit PH4A.
In addition to the foregoing analyses, the Court also considered the record as a whole to determine whether the entirety of the Debtor's conduct evidenced a discriminatory intent towards the Creditors based on their familial status. It does not. What the record shows is tension among two neighbors and frustration by both regarding the Board's handling of the situation. Unfortunately, a child was caught in the crossfire. But the Creditors have not presented evidence to show that the child's presence in this dispute was a motivating reason for the Debtor's and the Board's decisions and conduct. Rather, the evidence supports the Debtor's legitimate reasons; the Board was trying to resolve a dispute among neighbors and, again unfortunately, the identification of the child as the alleged or assumed source of the noise was a fact they had to discuss in evaluating the dispute. That fact did not, however, emerge in the evidence as a motivating factor or the real reason for the Debtor's decisions and conduct. The Creditors did not establish a genuine issue of material fact on their claims under section 3604(a) or 3604(b) of the FHA.
In addition to discrimination based on familial status, the Creditors also base their FHA claims on racial discrimination under section 3604.
The Debtor responds that the Board was concerned with litigation, but that the kind of potential litigation was irrelevant.
The record does contain references by Mr. Cochran to Mr. Flynn potentially filing a "race discrimination" lawsuit, as well as an acknowledgment that the parties involved in the Flynn matter were of different races. Creditors' Second Opposition Mezrich Depo. Ex. 4, at 56; Ex. 32 (describing the race of the various individuals involved in the dispute). The focus of the Board's discussions, however, is on protecting the Debtor and the Board from litigation and evaluating the Board's potential responses. The Debtor does not deny that race was used as a descriptive term in these discussions, but argues that race was not a motivating factor in the Board's decisions. Debtor's Second Reply at 4, 7-8. Rather, the Board was focused on enforcing the Debtor's bylaws and anticipating potential litigation. The Creditors did not produce evidence to refute the Debtor's claim or suggest that race was a motivating factor in, or the real reason for, the Debtor's decisions or conduct. See supra Part V.A.2 (discussing additional evidence in the record regarding the Moore and the Flynn situations). As with the familial status claims, the Debtor may have discussed race (or the fact that a child was involved), but the record does not show that the Debtor was motivated to act because of race or familial status. The evidence does not raise a genuine issue of material fact on this aspect of the FHA Claim.
The Creditors also bring claims against the Debtor under section 3617 of the FHA. 42 U.S.C. § 3617. Specifically the Creditors assert that, because of their protected activity under the FHA, the Debtor delayed repairs and maintenance of Unit PH4A, prohibited their lawyers from attending Board meetings, treated them differently and in a harassing way, and publicized certain information about the Creditors. The Creditors characterize these actions as threats, interference, and retaliation in violation of section 3617 of the FHA.
To prevail on a claim under section 3617 of the FHA, the Creditors generally must show that "(1) [they were] engaged in protected activity; (2) [the Debtor] was aware of that activity; (3) [the Debtor] took adverse action against [them]; and (4) a causal connection existed between the protected activity and the asserted adverse action." Hall v. Greystar Mnmt. Servs., 637 Fed.Appx. 93, 98 (4th Cir. 2016); Foster, 787 F.3d at 250. The Fourth Circuit in Foster applied this general standard in the context of the McDonnell Douglas burden shifting analysis described above.
The Creditors have established by the evidence, specifically the filing of the January 2010 HUD complaint, that they asserted their rights under the FHA. Creditors' Second Opposition Delorme Affidavit Ex. 1, at ¶ 13. All of the actions identified by the Creditors occurred after the filing of the January 2010 HUD complaint. Although the Court does not find a violation of section 3604 in this Contested Matter, some of the facts asserted by the Creditors to support the retaliation claim under section 3617 are different than those asserted in the context of discrimination under section 3604. In addition, as noted above, the Creditors are members of a protected class under the FHA, and the retaliation provisions of the FHA are designed in part, to prevent actions that might chill or deter actions by members of protected classes to assert and protect their rights. See, e.g., Marks v. BLDG Management Co., 2002 WL 764473, at *12 (S.D.N.Y. Apr. 26, 2002). Accordingly, the Court will analyze the Creditors' retaliation claims under the framework established by the Fourth Circuit in Hall, Foster, and similar cases.
Similar to the discrimination claim addressed above, the Creditors argue that the alleged delays in repairs and maintenance work to Unit PH4A was in retaliation for the HUD complaint and other protected activity pursued by the Creditors. See supra Part V.A.4. The Fourth Circuit has held that, in the context of a retaliation claim, a plaintiff must establish "`traditional principles of but-for causation' and must be able to prove that `the unlawful retaliation would not have occurred in the absence of the alleged wrongful action or actions of the [defendant].'"
The totality of the evidence does not support a finding that, but for the Creditors' protected activity, the Debtor would have responded more quickly to the repair and maintenance needs of Unit PH4A. See supra Part V.A.4. See also Doran, 2009 WL 10687839, at *8 (explaining that plaintiff could not establish retaliation claim based on same facts supporting her unsuccessful discrimination claim). In addition, the evidence does not demonstrate a close temporal proximity to the protected activity and the alleged adverse action. For example, the water leaks in Unit PH4A existed prior to the Creditors moving into the unit, the Creditors were aware of at least pinhole leaks prior to moving in, and the timing of the repairs and maintenance were discussed between the Creditors and the Debtor at that time. Debtor's Second Motion Ex. R; Ex. T, at ¶¶ 27-28; Debtor's Second Reply Ex. FF, at ¶¶ 4-5. Those issues continued on and off, and irrespective of the Creditors' filing the HUD complaints and other litigation. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶¶ 29-30; DeLorenzo Depo. Ex. 15, at 100, 105, 114. The Creditors thus have not shown but for causation or that their protected activity was the real reason for the Debtor's alleged delay in repairs and maintenance to the unit. The evidence does not create a genuine issue of material fact on these allegations.
The Creditors assert that certain resolutions passed by the Board constitute adverse action and retaliatory conduct under the FHA. Specifically, the Board passed two different resolutions in 2013 that prohibited members, employees, and agents of the law firms representing the Creditors and Penthouse 4C, LLC, the owner of penthouse unit 4C ("Unit PH4C"), in their respective litigation against the Debtor from attending the Debtor's meetings. Debtor's Second Motion Ex. A, at 15-16; Creditors' Second Opposition Ex. 48. The Debtor posits that these resolutions were valid and legal actions by the Board, and they point to the decision of the Baltimore City Circuit Court, dated October 3, 2013, in the Fourth State Court Action, in support of its position. Debtor's Second Motion Ex. I.
The Board adopted the resolutions at issue in May and November of 2013. By that time, the Creditors had filed at least two lawsuits and two separate HUD complaints against the Debtor, and the owner of Unit PH 4C was in active litigation with the Debtor. See, e.g., Creditors' Second Opposition Exs. 17-20 (disclosing actions);
The Debtor's bylaws and the Maryland Condominium Act give the Council and, in turn, the Board the authority to adopt reasonable rules and regulations.
In arguing the totality of the circumstances, the Creditors identify various incidents between the Debtor and the Creditors as conduct that was threatening, intimidating, humiliating, and retaliation under the FHA. For example, the Creditors describe an incident in which Ms. Delorme was asked to wait for a police escort before taking a construction contractor to Unit PH4A. Creditors' Second Opposition Delorme Aff. Ex. 1, at ¶ 33. The Creditors also identify the 2011 Cease and Desist Letter and the general treatment of the Creditors in the Building.
The Court considers these allegations on an independent and totality basis. Having reviewed the record, the evidence suggests that the police escort was done to protect the Creditors, and that, in the particular
The Court acknowledges the facts recited by the Creditors and that at least the police escort situation appears out of the ordinary. That said, the legal question is whether the Creditors' protected activity was the cause for any of the challenged conduct. The Court does not find evidence in the record to create a genuine issue of material fact on causation. Although the Creditors had filed at least the January 2010 HUD complaint prior to these incidents, the evidence does not show that those complaints were the real reason or the causation for the conduct.
The Creditors also point to a series of publications and public discussions about the Creditors' HUD complaints and other litigation in support of their retaliation claims. The first of these publications in the Building's newsletter, titled Tower Topics, identified the filing of the January 29, 2010, HUD complaint by the Creditors and was published in April 2010, a little over two months after the filing of the complaint. Creditors' Second Opposition Ex. 17. This April 2010 issue of Tower Topics discussed the Creditors' complaint in a new section of the newsletter dedicated to litigation matters involving the Building. Prior to that time, the newsletter did not routinely report on litigation matters. In addition, the Creditors allege that this information was also included in email bulletins, was circulated beyond the Building's
The Debtor responds that the creation of the litigation section in the newsletter and the other discussions of litigation matters were necessary to keep unit owners informed of the status of significant litigation. Id. at DeLorenzo Depo. Ex. 15, at 74-75.
The Court has reviewed the evidence pertaining to this particular allegation carefully and extensively because of the proximity between the January 29, 2010, HUD complaint and the April 2010 newsletter. A close temporal connection between the protected activity and the alleged adverse action may establish a prima facie case of discrimination.
Considering the record as a whole, the Court does not find a genuine issue of material fact with respect to the publications and public discussions of the litigation between the Debtor and the Creditors. The evidence shows that the disclosures were made in a consistent and fact-based manner that provided unit owners with information relevant to their economic interests in the Debtor and the Building. These disclosures likewise were removed temporally from the Creditors' protected activity, disclosed litigation in addition to the Creditors' HUD complaints, and disclosed litigants other than the Creditors.
A plaintiff who prevails on a claim under the FHA is entitled to seek punitive damages and attorney's fees. 42 U.S.C.A. § 3613(c). For the reasons set forth above in Parts V.A, V.B, and V.C, the Court is granting the Debtor's motion for summary judgment on the Creditors' claims under sections 3604 and 3617 of the FHA. Accordingly, the Creditors are not entitled to recover punitive damages or attorney's fees under applicable law.
For all of the forgoing reasons, the Court grants the Debtor's Second Motion for Partial Summary Judgment. The Court will enter a separate Order consistent with this Memorandum Opinion.
