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United States v. Garden Homes Management

August 10, 2001

UNITED STATES OF AMERICA, PLAINTIFF,
v.
GARDEN HOMES MANAGEMENT, CORP.; JOSEPH WILF; WESTBOUND HOMES, INC.; REDSTONE GARDEN APARTMENTS, INC; AND CATHY ROSENSTEIN, DEFENDANTS.



The opinion of the court was delivered by: John C. Lifland, U.S.D.J.

OPINION & ORDER

Defendants Garden Homes Management Corp., Westbound Homes, Inc., Redstone Garden Apartments, Inc., Joseph Wilf and Cathy Rosenstein move for summary judgment dismissing this housing discrimination action. They argue that summary judgment is appropriate because plaintiff, the United States of America ("the Government"), has not presented sufficient proof to establish that they engaged in a "pattern or practice" of discriminatory conduct. The Government disagrees and submits that the results of its fair housing tests, coupled with substantial independent evidence, show that defendants discriminated against prospective tenants on the basis of race and familial status. Defendant Wilf also seeks summary judgment. He contends that he cannot be held liable for the alleged misconduct of his rental agent. Once again, the Government disagrees. For the following reasons, Defendants' motion is denied in its entirety.

I. BACKGROUND

B. The Parties

This housing discrimination action involves three apartment complexes located in Parsippany, New Jersey: Lakeview Garden Apartments, Redstone Garden Apartments and Westgate Garden Apartments (collectively "the Subject Properties"). (Final Pretrial Order at § 3, p. 5.) *fn1 The first complex, Lakeview Garden Apartments, is a 214-unit property that contains two bedroom apartments. (Id.) JHW Associates, a partnership, owns the Lakeview complex. Defendant Wilf is a partner at JHW Associates. (Id. at p. 6.) The second, Redstone Garden Apartments, comprises 92 units, some of which are two bedrooms. (Id. at p. 5.) Defendant Redstone Garden Apartments, Inc. owns the Redstone complex. (Id.) The final complex, Westgate Garden Apartments, has 152 units. Like the others, it offers two bedroom apartments. (Id.) Defendant Westbound Homes, Inc. owns the Westgate property. Defendant Wilf is an officer of Westbound Homes.

Defendant Garden Homes Management Corp. manages the Lakeview, Redstone, and Westgate complexes. (Id. at p. 6.) It is responsible for establishing rental policies, supervising staff, maintaining vacancy information, evaluating rental applications, and keeping tenant files for each property. (Id.) During 1998, Defendant Wilf served as an officer of Garden Homes. (Id.)

Defendant Rosenstein, an employee of JHW Associates, serves as the rental agent for the Subject Properties. (Id. at p. 5.) In this capacity, she disseminates vacancy information and shows apartments to interested parties; provides rental applications and information about how to complete them; and verifies answers that applicants furnish. (Id.) The Subject Properties have one rental office, which is located at the Lakeview complex. (Id.)

C. The Fair Housing Tests

In April 1998, the United States Department of Justice, in tandem with the Northern New Jersey Fair Housing Council, began investigating the Subject Properties. The inquiry spanned one month and consisted of three fair housing tests. (Id. at p. 6.) These tests, along with subsequent investigation, allegedly revealed racial discrimination as well as discrimination against applicants with small children. *fn2

All of the tests occurred in roughly the same way. (Defendants' Statement of Material Facts at ¶ 24.) On each occasion, an African-American tester inquired about the availability of a two bedroom apartment at the Subject Properties, only to be informed that such units were not available. Within twenty-four hours, a white tester arrived and made the same inquiry. The white tester was told that a two bedroom apartment was available - or would likely become available - and was encouraged to apply. The specific details of each test are as follows. *fn3

1. The April 1998 Test

On April 8, 1998, an African-American female tester went to the rental office and asked whether any two bedroom units were available. Defendant Rosenstein replied that "I hate to tell you. The two bedrooms are at a premium. At a premium. I must have 20 people ahead of the line." (Decl. of Eric I. Halperin at Ex. A, p. 2, ln. 13-15.) *fn4 She further explained that "two bedrooms are very hard in Parsippany. That's my only problem. I have none at this time." (Id. p. 4, ln. 7-9.) She agreed to place the tester on a waiting list, but cautioned that "if you had little children, we would have to only consider you for the first floor." (Id. at p. 3, ln. 8-10.)

A white tester visited the rental office the next morning. She also met with Defendant Rosenstein, who informed her that "the only thing I have, to be very honest with you, is a 2-bedroom here and they're very hard to come by." (Id. at Ex. B., p. 3, ln. 4-6.) Defendant Rosenstein then engaged in sales talk to persuade the tester to take the apartment. (See, e.g., id. at p. 4, ln. 8-11.)

2. The May 6, 1998 Test

On May 6, 1998, an African-American female tester visited the rental office. She inquired about two-bedroom units for June 1, 1998. Defendant Rosenstein announced that "right now two bedrooms are at a premium . . . I don't think there's one complex here in Parsippany that has a two bedroom. That's how bad it is." (Id. at Ex. C. p. 2, ln.11-16.) Defendant Rosenstein promised to put the tester on a waiting list, but warned her that the list had at least twenty names on it already. (Id. at p 2, ln. 18-24.) The tester then asked for a rental application, but Defendant Rosenstein refused to provide one, declaring that it was not her policy to distribute applications. (Id. at. p. 11, ln. 1-7.)

Several hours later, a white tester went to the rental office and asked about a two bedroom for June 1, 1998. Defendant Rosenstein said that she would probably have a unit available for that date and, if not, that one would be vacant for June 15. (Id. at Ex. D., p. 3, ln. 1-7; p. 9, ln. 12-22; p. 10, ln. 5-7.) She then showed the tester the apartment - which was the same unit offered to the white tester involved in the April 1998 test - and gave the tester a rental application. (Id. at. p. 18, ln. 5-9.) In addition, Defendant Rosenstein questioned the tester closely about her family composition to verify that the tester did not have children. (Id. at p. 1, ln. 15-19.) *fn5

3. The May 8, 1998 Test

The Government's final test occurred on May 8, 1998. On that date, an African-American male tester went to the rental office and asked for a two bedroom apartment. Defendant Rosenstein immediately retorted that "you are going to have one heck of a time . . . It's impossible for a two bedroom. Impossible. They're very, very, very hard to come by. I hate to tell you. I can take your name, but I have to tell you there's a long list." (Id. at Ex. E, p. 2, ln. 12-18.) She then directed him to other apartment complexes in the area.

A white tester arrived at the rental office less than two hours later. He asked for a two bedroom apartment in mid-June, but was told that it would be difficult to find a vacancy. (Id. at Ex. F, p. 2, ln. 14-22.) Defendant Rosenstein then showed the tester an apartment that might be available for that date - the same apartment that she showed to each of the prior white testers - but informed him that two other individuals were interested and that they had priority. (See, e.g., id. at p. 12, ln. 18-20.) She suggested that the tester could have the apartment if the other individuals did not take it and told him what he needed to do to obtain a lease. (Id. at p. 6, ln. 9-13.) Defendant Rosenstein also gave the tester a rental application. (Id. at ln. 19-21.) On May 13, 1998, Defendant Rosenstein called the tester to find out if he was still interested in the apartment. (Id. at Ex. G, p. 2, ln. 17-24.)

C. The Government's Subsequent Investigation

The Government developed evidence in addition to the results of its fair housing tests. *fn6 The investigation identified Steven Jackson as a racial discrimination victim. Mr. Jackson, an African-American, avers that he went to the rental office in early January 1999 seeking a two-bedroom. (Id. at Ex. H, ¶ 3.) Defendant Rosenstein allegedly told him that she did not have anything available. (Id. at ¶ 4.) However, after receiving notice of the Government's intention to file this suit, (Id. at Ex. K), Defendant Rosenstein contacted Mr. Jackson and offered him an apartment, (Id. at Ex. H, ¶ 6).

In addition to Mr. Jackson, the Government located Patricia Dacres, an African American mother of one. (Id. at Ex. I, ¶¶ 2-4.) Ms. Dacres declares that she went to the rental office in April 1999 looking for a two bedroom for herself, her husband, and her infant son. (Id.) She walked through an available second floor apartment and subsequently obtained an application. After she disclosed that she had a young child, Defendant Rosenstein tried to dissuade her from taking the unit. (Id. at ¶¶ 8-9.) Ms. Dacres then left the rental office and completed the application. She returned several days later, at which time Defendant Rosenstein "attempted to discourage [her] from renting the second floor apartment that [she] was applying for. [Defendant Rosenstein] stated, that children should be on the first floor. [Defendant Rosenstein] said, ...


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