Scott E. Mollen

Discriminating Conduct—Landlord May Be Liable for Violations of Fair Housing Act and NYS Human Rights Law by Not Addressing Racial Harassment by One Tenant Against Another Tenant—Tort Claims Dismissed

This decision involves the issue of "whether a landlord may be liable under §§3604 and 3617 of the Fair Housing Act of 1968 (FHA), 42 U.S.C. §§3604, 3617, and analogous provisions of the New York State Human Rights Law (NYSHRL), NY Exec. Law §296, for intentionally discriminating against a tenant who complains about a racially hostile housing environment that is created by and leads to the arrest and conviction of another tenant." A U.S. District Court [E.D.N.Y.] dismissed the plaintiff's claims under the FHA, 42 U.S.C. §§1981 and 1982, and the NYSHRL, in addition to the plaintiff's other claims under New York State law. The U.S. Court of Appeals for the Second Circuit (Second Circuit or court) vacated the District Court's dismissal of the federal and NYSHRL and remanded the matter of further proceedings. The court otherwise affirmed the District Court's judgment. A dissenting opinion would have affirmed the District Court opinion.

The landlord had "allegedly refused to take any action to address what it knew to be a racially hostile housing environment created by one tenant targeting another, even though the landlord had acted against other tenants to redress prior, non-race related issues." The court asserted that its decision adhered to the "FHA's broad language and remedial scope."

The plaintiff alleged that the African American plaintiff heard the subject neighbor (neighbor) cursing out "Jews" while standing in front of their apartments calling the plaintiff the "n-word." The neighbor allegedly also approached the plaintiff's open front door and again cursed out Jews and the plaintiff. The plaintiff cited many additional similar incidents involving racial and religious verbal attacks.

From the beginning of the neighbor's "several-month campaign of harassment," the plaintiff, "fearing for his personal safety, contacted the police" and the landlord to complain. A police hate crime unit officer visited the apartment complex, interviewed witnesses, and warned the neighbor to stop threatening the plaintiff. The plaintiff also filed a police report. Although a police officer told the landlord about the neighbor's conduct, the landlord "did nothing."

After, the neighbor's conduct continued, the plaintiff notified the landlord in writing about the neighbor's racist conduct. The plaintiff provided the landlord with contact information for the police officer who had investigated the neighbor. Again, the landlord "failed to do anything at all, even as little as respond to (plaintiff's) letter." The neighbor's conduct continued.

The plaintiff further alleged that the landlord not only "failed to investigate or attempt to resolve (plaintiff's) complaints of racial abuse, but to the contrary, allowed (neighbor) to live in the complex" until the neighbor's lease expired, "without reprisal." Upon expiration of the neighbor's lease, the neighbor vacated his apartment. A few months later, the neighbor pled guilty to harassment and in violation of NY Penal Law §240.26(1). A state court entered an order of protection prohibiting the neighbor from contacting the plaintiff.

The plaintiff thereafter sued the landlord and the neighbor, alleging violations of §§3604 and 3617 of the FHA, the Civil Rights Act of 1866, 42 U.S.C. §§1981, 1982 and that the landlord violated NYS Human Rights Law §296(5) (NYSHRL), N.Y. Exec. Law §296(5), which bar housing discrimination in New York. The plaintiff also sued the landlord and the neighbor for "negligent infliction of emotion distress" and for violating NYSHRL §296(6) by aiding and abetting a violation of NYSHRL §296(5), (the landlord) for breach of contract and breach of the implied warranty of habitability and (the neighbor) for intentional infliction of emotional distress."

The District Court entered a default judgment against the neighbor who had never appeared. The landlord moved to dismiss for failure to state a claim, pursuant to FRCP 12(b)(6). The District Court granted that motion, except as to the plaintiff's implied warranty of habitability claim. The plaintiff voluntarily withdrew that claim. The District Court then granted a partial final judgment in favor of the landlord. The plaintiff appealed.

Following oral argument, the Second Circuit sought HUD's "views relating to a landlord's potential liability for a tenant's racial harassment of another tenant under its regulations." HUD urged the court to "recognize certain limited claims against landlords arising out of tenant-on-tenant racial harassment."

The court explained that FHA §3604(b) provides that it is unlawful 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, familial status, or national origin" and FHA §3617 provides that it is unlawful to "coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed any right protected by the Act."

The court held that "so-called 'post-acquisition' claims that arise from intentional discrimination are cognizable under §3604." It proceeded to describe the "degree of application necessary to resolve (plaintiff's) FHA claims…."

The court reviewed the statutory language and applicable judicial precedent, and noted that "every other circuit faced with the issue has acknowledged that §3604(b) at least prohibits 'discrimination relating to…actual or constructive eviction, which is necessarily post-acquisition.'" Thus the court found that §3604 could apply to post-acquisition conduct.

The court held that the statute would apply to "discrimination in the enjoyment of residence in a dwelling or in the provision of services associated with that dwelling after acquisition." It further stated that §3617 prohibits discriminatory conduct and "creates an independent cause of action." The court opined that "coercion, intimidation, threats, or interference with or on account of a person's exercise of his or her (§3604(b)) rights can be distinct from outright violations of (§3604(b))."

The court also noted that if a landlord rented to a "white tenant, but then threatens to evict him upon learning that he's married to a black woman, the landlord has plainly violated §3617, whether he actually evicts the tenant or not." It observed that HUD's regulations "have for thirty years clearly contemplated claims based on post-acquisition conduct." Additionally, the court cited Congress's "intent to root out discrimination in housing and to 'replace the ghettos with truly integrated and balanced living patterns.'"

The court acknowledged that the FHA did not "explicitly" endorse "landlord liability arising from such tenant-on-tenant harassment." However, it explained that it had never "required every last detail of a legislative scheme to be spelled out in the statute itself – especially a civil rights statute." For example, the FHA did not explicitly refer to liability for "actual or constructive eviction, even though that form of liability is widely recognized."

The landlord argued inter alia, that the plaintiff had not alleged that the landlord had "intentionally discriminated against him."

The court found that the complaint sufficiently alleged that the landlord had "engaged in intentional racial discrimination." The complaint alleged that the landlord had committed discriminatory acts "by tolerating and/or facilitating a hostile environment" even though the landlord had the authority to "counsel, discipline, or evict (neighbor) due to his continued harassment of (plaintiff)." Moreover, the landlord had "intervened against other tenants…regarding non-race-related violations of their leases or other law."

The court held that the complaint sufficiently alleged that the defendants "intentionally refused to address the harassment because it was based on race, even though they had addressed non-race-related issues in the past, including, it is reasonable to infer, tenant-on-tenant harassment." Thus, the court further held that the plaintiff is entitled to pursue discovery with respect to such issues. It vacated the District Court's dismissal of the plaintiff's FHA claims and remanded the matter for further proceedings relating to those claims.

The court also vacated the District Court's dismissal of the plaintiff's §§1981 and 1982 claims and vacated the District Court's dismissal of the plaintiff's claims under NYSHRL §296(5). However, it affirmed the District Court's dismissal of the negligent infliction of emotional distress claims since such claims are only "compensable…when it is a direct, rather than a consequential, result of the breach of a duty that a defendant owes to a plaintiff." Here, the complaint alleged that the landlord had intentionally breached a duty they owed to the plaintiff, but such breach did not "directly result in (plaintiff's) emotional distress," which the neighbor "directly caused with his continued campaign of racial harassment."

A dissenting opinion argued that the majority's opinion would force "landlord's to monitor and (expeditiously) correct such behavior." The dissent believed that the majority's opinion lacked "support in the FHA's text, our precedent, or the background tort principles that informed Congress at the time the FHA was enacted." The dissent reasoned that the majority opinion "steers our FHA jurisprudence into 'uncharted territory'…where courts improbably discover new causes of action in half-century-old provisions, heedless of the deleterious consequences for parties, courts, and the housing market."

The dissent observed, inter alia, that when the neighbor's lease expired, the landlord had "declined to renew" his lease and the refusal to renew the lease was "within a year of the original incident and only a few months after (landlord) received notice from (plaintiff) about the harassment." The dissent also noted that the plaintiff continues to live at the same apartment complex.

The dissent stated that HUD had cited a "brand-new legislative rule (enacted after this litigation began) which provides that a landlord may be liable under the FHA for 'failing to take prompt action to correct and end a discriminatory housing practice by a third-party." The dissent asserted that the majority have relied heavily on the HUD Rule and an analogy to Title VII case law. It stated that the plaintiff himself had not argued that the landlord was "liable because they acted with racial amanous" and that several of the plaintiff's allegations were vague and general.

The dissent expressed concern as to the majority's "continued misinterpretation of the FHA" and a "new and ill-defined liability theory" and stated that "one might expect some supporting precedent in the fifty-plus years since the FHA was enacted."

With respect to the statutory text, the dissent asserted that a plaintiff must prove discrimination or related conduct by a defendant. Here, the text did not "appear to impose an ongoing duty to prevent discrimination by third-parties." The dissent cited the majority's concession that "neither provision facially contemplates liability for failing to redress tenant-on-tenant harassment."

The dissent opined that the tenant "privileges of rental" does "not have the vague and expansive scope that the majority's (and the Ninth Circuit's) interpretation affords it." The dissent stated that the FHA's prohibition against discrimination in the "terms, conditions, or privileges of sale or rental…requires a connection with the sale or rental, so that not all alleged impairments of a person's post-acquisition enjoyment of residence are sufficiently connected to the sale or rental to trigger §3604(b)."

The dissent stated that the majority opinion, like the view of the U.S. Court of Appeals for the Ninth Circuit, eliminates "any required connection between the 'privileges of sale or rental of a dwelling' and the sale or rental itself. And by unmooring §3604(b) from this limiting principle (or any other) majority is able to discern a new FHA duty on the part of landlords (despite the lack of supporting language in the statute) to intervene in tenant-on-tenant disputes."

With respect to the tort claims, the dissent stated that the majority interpreted the text of the FHA, which it acknowledged to be silent on this issue, "to alter rather than respect this traditional tort liability rule," that "in order to abrogate a common-law principle, the statute must 'speak directly' to the question addressed by the common law." The dissent reasoned that a damage claim under the FHA, "is akin to a 'tort action.'" The dissent emphasized that New York courts "in particular have been remarkably clear: a landlord has no duty to protect a tenant from even the criminal act of another 'since it cannot be said that a landlord has the ability or a reasonable opportunity to control the offending tenant.'" The dissent reasoned that the "mere power to evict does not afford such control" and cited case law in support of such principle.

The dissent further reasoned that "without some basis for control, fairness does not permit holding a landlord responsible for the misconduct of others."

The dissent disagreed with the majority's analogy to Title VII case law. A plaintiff asserting a hostile work environment claim need not demonstrate that the employer "himself engaged in the alleged harassment; rather, the employer can be liable 'when a co-worker harasses the Plaintiff.'" The dissent cited significant distinctions between the employer-employee relationship and the landlord-tenant relationship. An employee is "considered an agent of the employer while the tenant is not considered an agent of the landlord."

The dissent reasoned that employers "simply exert far more control over not only their employees, but also the entire workplace environment, than do landlords over their tenants and the residences both tenants quite literally call their own." The dissent stated that the Title VII cases note the "proximity and regular contact" among "employers, supervisors and employees." In contrast, landlords "generally do not monitor their tenants to the substantial degree that employers monitor employees…, nor have landlords historically solicited and maintained information about tenants' comings and goings, or their interactions with other tenants and with guests invited into their homes." Furthermore, landlords "ordinarily lack the tools to investigate and remediate tenant misconduct when it is reported."

For instance, employers can order employees to "undergo sexual harassment training." The dissent noted that landlords "cannot temporarily evict a tenant or force all tenants to undergo harassment training and provide information about each other's behavior. And while an employer can transfer a problematic employee, a landlord cannot generally move tenants around different building units in response to complaints."

Additionally, the dissent wrote that "even if landlords could develop a roster of such intermediate steps and penalties, leading up to eviction itself, we might question whether Congress sought to import such a system into the housing context, without a word as to the due process principles that this system would implicate, and that would need to be addressed." The dissent also questioned whether the landlord should have taken action before the conclusion of the police investigation. The dissent noted that "if the majority cannot even suggest what the (landlord) might have done differently when (plaintiff) contacted them, how can the majority conclude that the FHA provides a cause of action pursuant to which these Defendants are fairly held liable for doing what they did?"

The dissent also criticized majority's "heavy reliance" on HUD's Rule, because it gave "retroactive effect to a legislative rule" and that is "impermissible…." The dissent stated that even if the rule is "interpretive," the rule did not deserve deference since it misinterpreted the FHA's text, found no support in precedent and relied on a "flawed analogy to Title VII." The dissent opined that the majority's "analysis is not rooted in the plaintiff's complaint, statutory text, precedent or common law, but instead floats on the FHA's 'broad and inclusive compass,'…."

Additionally, the dissent stated that "from now on, any landlord who fails to intervene following a tenant's complaint of another tenant's harassment on the basis of a protected ground is vulnerable to an FHA claim." The dissent believed that the "parameters of the necessary intervention,…go entirely unaddressed, even now, over three years since this case was argued before this Court."

The dissent further stated that the majority's decision "may benefit law firms and insurance companies, which sometimes profit from legal anomalies." Rather than a "step forward" to "root out discrimination in housing," the dissent believed that the majority's decision is "another stumble along the path to evermore litigation that increases housing costs for those who rent, renders affordable housing more scarce, and risks, the loss of housing for some of the most vulnerable among us." Accordingly, the dissent would have affirmed the District Court's judgment.

Francis v. Kings Park Manor Inc., U.S. Court of Appeals, 2d Cir., Case No. 15-1823-cv, decided Nov. 6, 2019, opinion by Pooler, Lohier, JJ., Concur. Livingston, J., Dissents in part and affirms in part.

Landlord-Tenant—Landlord Failed To Strictly Comply With Real Property Actions and Proceedings Law Requirements—Holdover Proceeding Dismissed

A landlord commenced a licensee holdover proceeding against two respondents. The respondents moved to dismiss the proceeding pursuant to CPLR §3211(a)(7) and CPLR §3212. They argued that the landlord failed to "file the notice of petition and accompanying affidavits of service as required by the RPAPL §731 and RPAPL §735." The landlord cross moved, seeking an order "deeming the notice of petition and affidavits or service as originals, of in the alternative, amending the petition to include the aforementioned pleadings."

The landlord cross moved to "deem a copy of the notice of petition and the accompanying affidavits as originals, nunc pro tunc." Alternatively, the landlord sought to amend the petition to include the aforementioned pleadings. The landlord disputed whether it had "properly complied with the requirements of the RPAPL" and attached a copy of its "purported filing" to its cross motion.

The court stated that although the landlord's motion "may have merit in the Appellate Division, Second Department…, this Court is bound by the holdings of this Department, which requires strict compliance with the statutory requirements so as to give the court jurisdiction…"

The court found that there was "no indication that the (landlord) timely complied with the filing requirements of the RPAPL as they pertain to the notice of petition and affidavits of service." The copy of the Notice of Petition and affidavits of service did not "bear a time stamp from the court clerk concerning the date and time of filing." Further, "upon filing of the notice of petition, it is time stamped separate and apart from the time stamp that is provided for on the petition. The time stamp on the notice of petition is made upon filing of the original with the affidavits of service."

Additionally, the landlord "failed to include an affidavit of an individual with personal knowledge of the filing which would indicate or lead the court to believe that the clerk of the court misplaced the documents in question." Finally, the court found that the copies presented did not "appear to be copies of those actually filed." "The clerk of the court stamped the petition with the time stamp indicating the date and time of filing; stamped the initial return date of the petition, the time, and the part." The landlord's copy does not bear the same leading the court to believe that is a later and inaccurate reproduction." Accordingly, the court granted the respondents motion to dismiss the proceeding and denied the landlord's cross motion.

2198 Cruger Assocs. v. Xhurreta, Civil Court, Bronx Co., Case No. 005187/2019, decided Nov. 15, 2019, Lach, J.

Scott E. Mollen is a partner at Herrick, Feinstein.