In the Matter of Commission on Human Rights ex rel. Zanique Morgan, Petitioner v. NY Pyramid Group, David Michael, & “Jane Doe”1, Respondents In default proceeding, petitioner established that respondent refused to accept a city-issued housing voucher from the complainant. Mental anguish damages of $10,000 recommended, along with civil penalty of $20,000, and participation in anti-discrimination training. Petitioner, the Commission on Human Rights (the “Commission”), brought this discrimination proceeding against respondents NY Pyramid Group, and David Michael and “Jane Doe,” real estate brokers, under section 8-109 of the Administrative Code and section 1-61 of title 47 of the Rules of the City of New York. The amended verified complaint alleges that respondents violated the New York City Human Rights Law (“HRL”) by denying Zanique Morgan, the complainant, an opportunity to rent a housing accommodation because of her lawful source of income, a Human Resources Administration (“HRA”) voucher, in violation of section 8-107(5)(a)(1) of the Administrative Code, and that respondents engaged in a pattern and practice of housing discrimination (ALJ Ex. 3). Respondent Michael submitted a verified answer to the original complaint, but did not answer the amended complaint (ALJ Ex. 2). Upon respondents’ failure to appear for trial on April 26, 2024, petitioner submitted proof of service of the complaint, amended complaint, notice of probable cause, notice of referral to OATH, notice of conference, and notice of trial (ALJ Exs. 1, 3; Pet. Exs. 1, 2, 3, 7). As proof of service, petitioner submitted a report of database searches performed on January 9, 2024, and an affidavit from Ms. Streisfeld, the Commission employee who performed the searches, which established that the notices were mailed to respondents’ last known address (Pet. Ex. 17). The report generated an address associated with NY Pyramid Group, identifying Mr. Michael as the registered agent at that address (Id. at Exs. A, B). The database searches also revealed that one of the telephone numbers listed on the advertisement for the apartment that Ms. Morgan inquired about is associated with Mr. Michael (Id. at Ex. C). Following the inquest, I held the record open for petitioner to provide a supplemental affidavit from Ms. Streisfeld, dated May 1, 2024, which stated that she performed a search of the New York State Department of State’s website on April 29, 2024 (Pet. Ex. 19). The search indicated that respondents’ last known address has not changed since January 9, 2024 (Id.).2 This satisfied the jurisdictional prerequisites for finding respondents in default and the trial proceeded in the form of an inquest via videoconference. Petitioner presented the testimony of the complainant as well as documentary evidence in support of its case. As set forth below, I find that petitioner has established that respondents NY Pyramid Group and David Michael refused a housing accommodation to Ms. Morgan on the basis of a lawful source of income, an HRA housing voucher, in violation of the HRL. Petitioner, however, failed to demonstrate that respondents engaged in a pattern and practice of discrimination. I recommend that respondents be ordered to pay $10,000 in mental anguish damages to the complainant, as well as a civil penalty of $20,000, and that respondents be required to participate in anti-discrimination training. ANALYSIS The Human Rights Law prohibits discrimination based on a lawful source of income, stating that it is “an unlawful discriminatory practice” for any “person having the right to sell, rent or lease or approve the sale, rental or lease of a housing accommodation…, or any agent or employee thereof” to “refuse to sell, rent, lease, approve the sale, rental or lease or otherwise deny…any person…such a housing accommodation…because of any lawful source of income of such person.” Admin. Code §8-107(5)(a)(1) (Lexis 2024); see also Admin. Code §8-107(5)(c)(1) (any “real estate broker, real estate salesperson or employee or agent thereof” may not “refuse to sell, rent or lease any housing accommodation…to any person…or to refuse to negotiate for the sale, rental or lease, of any housing accommodation…to any person…because of any lawful source of income of such person.”). “Lawful source of income” is defined as “income derived from…any form of federal, state, or local public assistance or housing assistance including, but not limited to, section 8 vouchers.” Admin. Code §8-102. In support of the charges, petitioner primarily relied on the testimony of the complainant, Zanique Morgan. In June 2020, Ms. Morgan lived in public housing with her five-year-old son and her spouse (Tr. 35). She felt unsafe there due to violence and gambling nearby, and did not allow her son to play outside (Tr. 36). Following an incident where an individual threatened to steal her property, which made her fear for her life, Ms. Morgan decided to move (Tr. 35-36). She began searching for a two-bedroom apartment to provide enough room for her family (Tr. 36-37). Ms. Morgan testified she had obtained rental assistance from HRA and planned to use it to pay a portion of the rent for her new apartment (Tr. 37-40; Pet. Ex. 13). She found an advertisement online through “Craigslist” for an apartment located at 32-43 86th Street, that included contact information for “Mr. D. Michael,” stating that HRA vouchers were accepted (Tr. 40-41; Pet. Ex. 14).3 The listed apartment appealed to Ms. Morgan because of the neighborhood, quality of the schools, and spaciousness (Tr. 53). Ms. Morgan called the number she saw in the advertisement, 718-820-3058,4 and spoke with a person who confirmed he was David Michael (Tr. 49-50, 53).5 When Ms. Morgan asked about the apartment listing, respondent Michael wanted to know how she would pay for the apartment (Tr. 53). Ms. Morgan told him she had an HRA voucher (Id.). Respondent Michael replied “Oh, I don’t take that” (Id.). Ms. Morgan reminded him that the advertisement stated vouchers were accepted and said that it is illegal to discriminate based on voucher status (Tr. 53-54). Respondent Michael’s tone turned from “pleasant” to “harsh” and he stated, “Well what are you going to do about it? Do something about it then,” and ended the call (Tr. 54). Ms. Morgan felt slighted, defeated, and spoken to as though she were a child (Id.). Following the rejection by respondent Michael, Ms. Morgan tried to apply for another apartment later that same day, but did not receive a response, making her feel that no one would accept her housing voucher (Tr. 55). Ms. Morgan felt discouraged by respondent’s lack of compassion for her situation, “shut down,” and set back to “step one” (Id.). She was stressed about getting her son into a different living environment (Id.). Ms. Morgan experienced depression, anxiety, and began therapy in part due to respondents having deterred her from leaving public housing to provide a better life for her son (Tr. 56). In August 2020, Ms. Morgan and her family moved to a two-bedroom apartment in another public housing development (Tr. 57). Ms. Morgan described poor conditions in the apartment that were corroborated with photographs, including holes and cracks in the doors, peeling paint, brown water coming from the faucet, damage from flooding, lack of heat, and mold in her son’s bedroom (Tr. 58-69; Pet. Ex. 15). Ms. Morgan testified that the poor apartment conditions affected the health of her two children because they are “constantly” in the hospital for respiratory issues and often do not feel well (Tr. 69-70, 74; Pet. Ex. 16). Ms. Morgan was “let go” from work because she spent so much time caring for her children’s health (Tr. 70). She also went to the hospital several times herself, which made it difficult for her to feel rested and care for her children (Tr. 70, 74). Ms. Morgan began another search to leave public housing in April 2023 (Tr. 80-81). She did not resume her search earlier because she was afraid to have another discouraging interaction similar to what she experienced with respondents (Id.). She decided to take her time to thoroughly review apartment listings and “all the [required] guidelines” before submitting another application (Tr. 82). She also wanted to take more time to look for an apartment after giving birth to a second child and did not want to deal with the stress of moving while pregnant or with a young child (Tr. 81). During her recent housing search, Ms. Morgan used the service “Housing Connect” because it is the “safest” option in contrast to websites that are not “certified” (Tr. 80). The housing development where she now lives maintains substandard conditions that she described as “inhumane,” including loud noise, garbage, pest issues, fighting and shootings, and an inability for her children to play in a nearby park due to people throwing glass or barbecuing in the children’s area (Tr. 75-77). Ms. Morgan’s son feels upset because she will not allow him to play outside for his own safety, which makes her feel “horrible” that he does not get to experience a “normal” childhood and worried that the “streets would take [her] children” (Tr. 76-78). Petitioner also presented the testimony of Awais Ahmad, a discrimination tester for the Commission. Mr. Ahmad was provided with a “test report form” containing a phone number for respondents (Tr. 27-29; Pet. Ex. 11). On April 5, 2021, Mr. Ahmad testified he called the number on the test report form and a woman answered the phone (Tr. 28-29). When he asked with whom he was speaking, the woman answered, “It’s the Pyramid Group” (Tr. 29). The amended complaint identifies the woman that Mr. Ahmad called as “Jane Doe” (ALJ Ex. 3). Mr. Ahmad asked to speak with David Michael but respondent Doe did not give him a “clear response” (Tr. 29-30). Mr. Ahmad told respondent Doe he wanted to rent an apartment (Tr. 29). She asked Mr. Ahmad if he had income or a government voucher (Tr. 29-30). When Mr. Ahmad told her he had “Section 8,” she said that they “do not accept Section 8″ and tried to “get off the phone very quickly” (Tr. 29). Mr. Ahmad asked for respondent Doe’s name but she replied that it “doesn’t really matter” and hung up the phone (Tr. 29-30). Mr. Ahmad memorialized his conversation in a narrative that he submitted to his testing coordinator, which was consistent with his testimony (Tr. 30; Pet. Ex. 12). The test report form that Mr. Ahmad described contains two phone numbers, the number Ms. Morgan testified she called from the Craigslist advertisement, and a second number (Pet. Ex. 11). Mr. Ahmad did not testify how the second number was connected with respondents, or which phone number he called on April 5, 2021. Nevertheless, I found that Mr. Ahmad spoke with a person affiliated with respondent NY Pyramid Group based on his testimony about the conversation. Although respondents did not appear at the trial, respondent Michael filed a verified answer to the complaint notarized on May 15, 2021 (ALJ Ex. 2). In his sworn, verified answer to the complaint, respondent Michael acknowledged he is associated with the Pyramid Group, but stated he has never rented an apartment in the building located at 35-16 85th Street, the building that the Commission alleged respondents refused to rent to Ms. Morgan in its complaint (ALJ Ex. 2).6 On June 4, 2020, the date petitioner alleged Ms. Morgan called respondent Michael about the apartment, respondent Michael stated that his office at the Pyramid Group was closed due to COVID-19 and he was not working at that time (Id.). He asserted that the allegations against him are “false and fabricated” and that he has “never been discriminatory towards any client” (Id.). The credible evidence established that respondents NY Pyramid Group and David Michael, a real estate broker with NY Pyramid Group, denied Ms. Morgan the opportunity to rent a housing accommodation because she advised respondents that she had an HRA housing voucher. Ms. Morgan’s clear, credible, and consistent testimony at trial was more persuasive than respondent Michael’s hearsay denials in his verified answer. See Taxi & Limousine Comm’n v. Oyebamiji, OATH Index No. 352/24 (Aug. 18, 2023), adopted, Comm’r Dec. (Aug. 24, 2023) (finding sworn testimony more credible than hearsay document). Additionally, Ms. Morgan’s testimony was corroborated by the Commission’s tester, Mr. Ahmad, who confirmed that a representative of NY Pyramid Group refused to rent him an apartment in April 2021 when he told the representative he had a housing voucher. Section 8-107(5)(o) of the HRL, which was repealed on February 15, 2021, but in effect at the time of the alleged discrimination in 2020, provided that the prohibition against discrimination on the basis of lawful source of income “shall not apply to housing accommodations that contain a total of five or fewer housing units.” Admin. Code §8-107(5)(o) (Lexis 2020). Section 8-107(5)(o) provided an exception, however, where discrimination protections would apply “to all housing accommodations, regardless of the number of units contained in each, of any person who has the right to sell, rent or lease or approve the sale, rental or lease of at least one housing accommodation within New York City that contains six or more housing units.” Admin. Code §8-107(5)(o)(ii). Petitioner did not offer any evidence of the number of housing units respondents had the right to sell, rent, or lease. However, under the Commission’s rules, “[a]ny allegation in the complaint not specifically denied or explained shall be deemed admitted unless good cause to the contrary is shown.” 47 RCNY §1-14(c) (Lexis 2024). Thus, the undenied allegation of the complaint, stating that respondents NY Pyramid Group and David Michael are real estate brokers with the “right to sell, rent or lease or approve the sale, rental or lease of at least one (1) housing accommodation within New York City that contains six (6) or more housing units” (ALJ Ex. 1 at
