Long et al v. Aronov Realty Management, Inc. et al

Filing 88

MEMORANDUM OPINION AND ORDER that: (1) Knudsen's 37 motion for summary judgment is denied with respect to the allegations surrounding the lease but granted with respect to the allegations surrounding the purchase offer; (2) Aronov Brokerage� 39;s 50 motion for summary judgment is denied in part and granted in part on the same grounds as Knudsen's; (3) Aronov Management's 52 second motion for summary judgment is granted and the claims against Aronov Management are dismissed with prejudice; (4) Forney's 35 motion for summary judgment is denied with respect to the allegations surrounding Knudsen's conduct with the lease, and granted with respect to the allegations surrounding the purchase offer. Forney is dir ected to file supplemental briefing on her liability with respect to the allegations surrounding Little's conduct with the lease, in conformity with this opinion. Forney's brief is due 2/18/09. A response brief is due 2/25/09. Signed by Honorable William Keith Watkins on 2/4/09. (sl, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION T E R R E N C E LONG, et al., P l a i n t if f s , v. A R O N O V REALTY MANAGEMENT, INC., et al., D e f e n d a n ts . ) ) ) ) ) ) ) ) ) )

C A S E NO. 2:07-CV-881-WKW [WO]

M E M O R A N D U M OPINION AND ORDER S e v e ra l motions for summary judgment in this case are ripe for resolution. Prior to P la in tif f s' Amended Complaint (Doc. # 43), Defendant Meiying Forney ("Forney") filed a m o tio n for summary judgment (Doc. # 35), with a supporting brief (Doc. # 36), as did D e f en d a n ts Aronov Realty Management ("Aronov Management") and Amy Clark Knudsen (" K n u d s e n " ) (Docs. # 37 & 38). Plaintiffs subsequently amended their complaint to add A ro n o v Realty Brokerage, Inc. ("Aronov Brokerage") as a defendant. (Doc. # 43.) Aronov B ro k e ra g e filed a motion for summary judgment (Doc. # 50), with a supporting brief (Doc. # 51), and Aronov Management filed a second motion for summary judgment (Doc. # 52), w ith a supporting brief (Doc. # 53). Plaintiffs responded to Forney's motion (Doc. # 56), and resp o n d ed to all other Defendants in one response (Doc. # 57), and filed an evidentiary su b m iss io n for all claims (Doc. # 58). Forney replied (Doc. # 63), and Aronov Management, A ron o v Brokerage, and Knudsen filed a combined reply (Doc. # 64), with evidentiary s u b m is s io n (Doc. # 65). Based upon careful consideration of the arguments of counsel, the

re le v a n t law and the record as a whole, the motions are due to be denied in part and granted in part. I . JURISDICTION AND VENUE S u b ject matter jurisdiction is exercised pursuant to 28 U.S.C. § 1331, 1343(a)(4), 2 2 0 1 , and 2202. The parties do not contest personal jurisdiction or venue, and there are a lle g a tio n s sufficient to support both. II. FACTUAL AND PROCEDURAL BACKGROUND P la in tif f s Terrence Long ("Long") and Barry Barr ("Barr") are suing Defendants for d i sc r im in a t in g against them on the basis of race when they attempted to lease and purchase re a l estate in Montgomery, Alabama. (Am. Compl.) Plaintiffs allege violations of 42 U.S.C. § 1981 and 42 U.S.C. § 1982, and request declaratory and injunctive relief, compensatory an d punitive damages, retention of jurisdiction for enforcement, costs, reasonable attorney's f e e s, prejudgment interest, and any additional relief deemed just and equitable. (Am. Compl. ¶ ¶ 31-40 & p.7.) Long and Barr filed suit October 2, 2007 (Doc. # 1), and Defendants a n sw e re d (Docs. # 7, 8, 10). In June 2008, Plaintiffs filed a motion to amend their complaint to add Aronov Brokerage. (Doc. # 33.) The first summary judgment motions were filed after th a t, but before the Amended Complaint. The second set of summary judgment motions, in a d d itio n to Aronov Brokerage's answer (Doc. # 48), followed the Amended Complaint. P e n d in g are three additional motions that will be resolved by separate order, the Motion for L e a v e to File Defendants' Amended Witness List (Doc. # 68), the Motion for Leave to Use

2

B e n Kushner's Video Deposition as Trial Testimony (Doc. # 74), and the Motion for Leave to Use Sam McGhar's Video Deposition as Trial Testimony (Doc. # 75), all filed by both A ro n o v entities and Knudsen. The following facts are undisputed.1 Long is a former major league baseball player w h o is African-American, and Barr is a Caucasian male. At the time of the alleged conduct, K n u d s e n was a commercial real estate broker for Aronov Brokerage, which is a whollyo w n e d subsidiary of Aronov Management.2 In the spring of 2007, Long and Barr discussed o p e n in g a sports bar that would cater to African-Americans.3 That May, Knudsen showed B arr a commercial space for lease in the LeCroy Village Shopping Center ("LeCroy"). L e C r o y is owned by Forney. Knudsen assisted Forney in leasing the space even though K n u d s e n and Forney no longer had a written agency agreement for that space.4 Not long a f te r meeting with Knudsen, Barr offered to buy the entire LeCroy shopping center for one

Aronov Management and Knudsen include a section in their brief for describing "material undisputed facts." (Mot. Summ. J. Br. Aronov Management & Knudsen 3.) Those facts that are verified as undisputed are included in this section, as are any additional undisputed facts. Material disputed facts will be discussed as they arise, and the facts will be viewed in the light most favorable to Plaintiffs. Occasionally, record citations are given for important or controversial facts.
2

1

Knudsen worked for Aronov Management prior to working for Aronov Brokerage.

The nature of this discussion and the business relationship between Barr and Long, however, is not undisputed. Knudsen had a written agreement with Forney to lease the space at one point, and Knudsen actively rented spaces in LeCroy for Forney until the agreement expired, at which time Knudsen continued to rent LeCroy spaces for Forney without a written agreement. (Knudsen Dep. 50-51, June 23, 2008 (Pls.' Evidentiary Submission Ex. C).)
4

3

3

m illio n dollars, with a ten-percent sales commission, to be paid by Forney. Forney rejected th e offer without presenting a counteroffer. Also shortly after Barr's meeting with Knudsen, Mark Cranage ("Cranage") contacted K n u d s e n , who arranged for him to view the space. Don Little ("Little"), an attorney working f o r Forney, opened the space up, showed Cranage around, and discussed leasing options with h im . Unbeknownst to Little, Barr had arranged for Cranage to visit the space because Barr w a s suspicious that he was being discriminated against; Cranage videotaped the meeting.5 E v e n tu a lly, a preexisting tenant with Forney negotiated a lease for the space. A t issue in this case is whether Knudsen and Little 6 impermissibly discriminated a g a in s t Long and Barr when they tried to lease a space in LeCroy or purchase LeCroy. Of th e Defendants, only Knudsen and Forney face personal liability, and Forney, for the offer to purchase only. The other Defendants face vicarious liability ­ for Forney because K n u d s e n and Little were allegedly her agents,7 for Aronov Brokerage, on the basis of e m p l o ye r liability, and for Aronov Management, on the basis of employer liability or because K n u d s e n was allegedly an agent. Liability for all Defendants depends principally upon two se p a ra te but interrelated events ­ the attempt to lease the LeCroy space and the attempt to

5

(Barr Dep. 166-67, Apr. 15, 2008 (Pls.' Evidentiary Submission Ex. A).)

Little is not a defendant, but Plaintiffs have premised Forney's liability, in part, on Little's actions. (See, e.g., Pls.' Resp. Br. to Def. Forney's Mot. for Summ. J. 19-20.) Plaintiffs admit in their response that, at least with respect to the leasing arrangement, "[Forney's] liability is premised upon the actions of her agents," and that the claim against Forney "does not rise and fall on her knowledge of [anyone's] race." (Pls.' Resp. Br. to Forney 20.) This admission appears to be limited, however, to Forney's role in the lease negotiations.
7

6

4

p u rc h a se LeCroy. The most salient disputed facts relate to Knudsen's meeting with Barr, and L ittle 's meeting with Cranage. III. STANDARD OF REVIEW " S u m m a ry judgment is appropriate `if the pleadings, depositions, answers to in te rro g a to rie s, and admissions on file, together with the affidavits, if any, show there is no g e n u i n e issue as to any material fact and that the moving party is entitled to judgment as a m atter of law.'" Greenberg v. BellSouth Telecomms., Inc., 498 F.3d 1258, 1263 (11th Cir. 2 0 0 7 ) (per curiam) (citation to former rule omitted); Fed. R. Civ. P. Rule 56(c) (Summary ju d g m e n t "should be rendered if the pleadings, the discovery and disclosure materials on file, a n d any affidavits show that there is no genuine issue as to any material fact and that the m o v an t is entitled to judgment as a matter of law."). The party moving for summary ju d g m e n t "always bears the initial responsibility of informing the district court of the basis fo r its motion, and identifying those portions of [the record, including pleadings, discovery m a te ria ls and affidavits], which it believes demonstrate the absence of a genuine issue of m a te ria l fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant may meet th is burden by presenting evidence indicating there is no dispute of material fact or by s h o w in g that the nonmoving party has failed to present evidence in support of some element o f its case on which it bears the ultimate burden of proof. Id. at 322-24. If the movant meets its evidentiary burden, the burden shifts to the nonmoving party to establish, with evidence beyond the pleadings, that a genuine issue material to each of its

5

claim s for relief exists. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); C e lo te x , 477 U.S. at 324; Fed. R. Civ. P 56(e)(2) ("When a motion for summary judgment is properly made and supported, an opposing party may not rely merely on allegations or d e n ia ls in its own pleading; rather, its response must . . . set out specific facts showing a g e n u in e issue for trial."). What is material is determined by the substantive law applicable to the case. Celotex, 477 U.S. at 248; Lofton v. Sec'y of the Dep't of Children & Family S e r v s ., 358 F.3d 804, 809 (11th Cir. 2004) ("Only factual disputes that are material under the su b stan tiv e law governing the case will preclude entry of summary judgment."). F u rth erm o r e, "[t]he mere existence of some factual dispute will not defeat summary ju d g m e n t unless that factual dispute is material to an issue affecting the outcome of the case." M c C o rm ick v. City of Fort Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003) (per curiam) (in te rn a l quotation marks and citation omitted). A genuine issue of material fact exists when the nonmoving party produces evidence th a t would allow a reasonable fact-finder to return a verdict in its favor. Greenberg, 498 F .3 d at 1263; Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001) (to establish a genuine issue of material fact, the nonmoving party must produce evidence s u c h that a reasonable trier of fact could return a verdict in his favor). If the evidence on w h ich the nonmoving party relies, however, "is merely colorable, or is not significantly p ro b a tiv e , summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 2 4 2 , 249-50 (1986) (citations omitted). "A mere `scintilla' of evidence supporting the

6

[ n o n m o v a n t's ] position will not suffice; there must be enough of a showing that the [trier of f a ct] could reasonably find for that party," Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1 9 9 0 ) (citation omitted), and the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith R a d io Corp., 475 U.S. 574, 587 (1986). Conclusory allegations based on subjective beliefs a re likewise insufficient to create a genuine issue of material fact and do not suffice to o p p o s e a motion for summary judgment. Holifield v. Reno, 115 F.3d 1555, 1564 n.6 (11th C ir. 1997) (per curiam) (Plaintiff's "conclusory assertions . . . in the absence of supporting e v id e n c e , are insufficient to withstand summary judgment."). Hence, when a plaintiff fails to set forth specific facts supported by appropriate evidence sufficient to establish the e x is te n c e of an element essential to his case and on which the plaintiff will bear the burden o f proof at trial, summary judgment is due to be granted in favor of the moving party. C e lo te x , 477 U.S. at 323 ("[F]ailure of proof concerning an essential element of the n o n m o v in g party's case necessarily renders all other facts immaterial."). Thus, in cases where the evidence before the court is admissible on its face or can be red u ce d to admissible form and indicates there is no genuine issue of material fact, and where the party moving for summary judgment is entitled to it as a matter of law, summary ju d g m e n t is proper. Celotex, 477 U.S. at 323-24 (summary judgment appropriate where p le a d in g s , evidentiary materials and affidavits before the court show there is no genuine issue as to a requisite material fact).

7

I V . DISCUSSION A. T h e Alleged Underlying Discriminatory Conduct P la in tif f s claim Defendants impermissibly discriminated against them on the basis of ra c e, violating their contractual and property rights under the civil rights statutes.8 Section 1 9 8 1 states, in relevant part, that "[a]ll persons . . . shall have the same right . . . to make and e n f o r c e contracts . . . as is enjoyed by white citizens." § 1981(a). The elements for a cause o f action are: "`(1) that the plaintiff is a member of a racial minority; (2) that the defendant in te n d e d to discriminate on the basis of race; and (3) that the discrimination concerned one o r more of the activities enumerated in the statute.'" Kinnon v. Arcoub, Gopman & Assocs., 4 9 0 F.3d 886, 891 (11th Cir. 2007) (quoting Jackson v. BellSouth Telecomms., 372 F.3d 1 2 5 0 , 1270 (11th Cir. 2004)). Section 1982 is similar to § 1981, "except that it focuse[s], not upon rights to make a n d enforce contracts, but rights related to the ownership in property." CBOCS W., Inc. v. H u m p h r ie s, 128 S. Ct. 1951, 1955 (2008). Section 1982 states, in relevant part, "[a]ll c itiz e n s of the United States shall have the same right . . . as is enjoyed by white citizens th e re o f to . . . purchase, lease, [and] sell . . . real . . . property." § 1982. The elements of a § 1982 claim "parallel" those of a § 1981 one: A plaintiff must show the same first two e le m e n ts , and "interference with the rights or benefits connected with the ownership of p ro p e rty." Daniels v. Dillard's, Inc., 373 F.3d 885, 887 (8th Cir. 2004); CBOCS W., Inc.,
8

Whether Long has standing to raise these claims is addressed later in the opinion. For purposes of this section, both Plaintiffs are treated identically.

8

1 2 8 S. Ct. at 1956 (noting that Supreme Court precedents "have long construed §§ 1981 and 1 9 8 2 similarly" and that the only difference in the statutes' language is the set of rights p r o te c te d ) ; see, e.g., Lawrence v. Courtyards at Deerwood Ass'n, 318 F. Supp. 2d 1133, 1 1 5 0 (S.D. Fla. 2004). Defendants argue that Plaintiffs have failed to meet the second and third elements of each claim, discriminatory intent and abridged rights.9 (Mot. Summ. J. Br. A ron o v Management & Knudsen 13.) 1. T h e Lease a. D irec t Evidence of Discriminatory Intent

Direct evidence of discriminatory intent satisfies the second element of a prima facie c a s e ­ discriminatory motive. See Kinnon, 490 F.3d at 891. "Direct evidence of

d is c rim in a tio n is evidence, that, `if believed, proves [the] existence of [a] fact in issue w ith o u t inference or presumption.'"1 0 EEOC v. Joe's Stone Crabs, Inc., 296 F.3d 1265, 1272 (1 1 th Cir. 2002) (per curiam) (alteration in original) (quoting Schoenfeld v. Babbitt, 168 F.3d 1 2 5 7 , 1266 (11th Cir. 1999)). "`[O]nly the most blatant remarks, whose intent could be
9

Section 1981 "prohibits discrimination based upon an . . . an interracial association" as well. Parr v. Woodmen of the World Life Ins. Co., 791 F.2d 888, 890 (11th Cir. 1986). Thus, discrimination in this case, at least theoretically, could be predicated not only on discrimination against Long for his race (or against Barr for his alleged business partnership with Long), but also for Barr's association with Long, or either or both Defendants' association with clientele of a specific race. See also Kelser v. Alcazar Shriners, No. 2:06-cv-818, 2007 WL 484551, at *2 (M.D. Ala. Feb. 9, 2007) (Watkins, J.). The distinction between direct and circumstantial evidence of discriminatory intent is not always readily discernible. Indeed, in instances where courts, including the Eleventh Circuit, have found direct evidence, there still is an inference that must be drawn between the evidence of discriminatory intent and the adverse action. Only when a person states, for example, "You cannot lease this property because you are black," is there no inference to be made (aside from the necessary inference between the comment and state of mind). Clearly, courts have recognized "direct" evidence presented in circumstances less direct than that.
10

9

n o th in g other than to discriminate' on the basis of some impermissible factor" is direct e v id e n c e . Schoenfeld, 168 F.3d at 1266 (quoting Carter v. City of Miami, 870 F.2d 578, 582 (1 1 th Cir. 1989)). The direct evidence of discriminatory intent in Kinnon was a voice mail during which th e defendant called the plaintiff a "`nig--r trying to sound important.'" Kinnon, 490 F.3d a t 889 (quoting the record) (alteration added). In a more analogous case addressing direct e v id e n c e , EEOC v. Alton Packaging, Corp., 901 F.2d 920 (11th Cir. 1990), a witness te stif ie d that the general manager at the plant with authority for making employment d e c is io n s said that "`if it was his plant, he wouldn't hire any black people.'" Id. at 922 ( q u o tin g the record). The court found this statement constituted direct evidence of

d is c rim in a tio n . Id. at 924.1 1 Similarly, in Caban-Wheeler v. Elsea, 71 F.3d 837 (11th Cir. 1 9 9 6 ), a statement by a decision-maker that "he wanted a black person to have a white e m p lo ye e 's job" was direct evidence that the white employee was terminated for racially d is c rim in a to ry reasons. Wilson v. B/E Aerospace, Inc., 376 F.3d 1079, 1087 (11th Cir. 2004) (c itin g Caban-Wheeler, 71 F.3d at 842-43).12 In this case, Barr testified that when he met with Knudsen to see the rental space, she to ld him that "they didn't want a black club there and they didn't want that Celebrations

11

Alton Packaging Corp., however, was not a § 1981 case.

See also Lamothe v. Bal Harbour 101 Condo. Ass'n, No. 07-11321, 2008 WL 800041, at *1-2 (11th Cir. Mar. 27, 2008) (per curiam) (The supervisor's comment about plaintiff that "`only a Haitian with brain cancer would write a note like that,'" stated contemporaneously with firing plaintiff, was direct evidence.)

12

10

th in g ." (Barr Dep. 153.) Celebrations was a business Barr ran but it had closed just prior to m e e tin g with Knudsen. (Barr Dep. 47, 50, 112.) The last iteration of Celebrations' format w a s as a "hip hop" bar, where the clientele visited to "dance and drink." (Barr Dep. 263.) P r io r to its closing, Celebrations received negative media attention, especially during the u ltim a te ly unsuccessful process of the government's attempt to shut it down. (Barr Dep. 2576 2 .) Knudsen expressed her concerns about having a bar like Celebrations before Barr told h e r that he ran it. (Barr Dep. 153.) D e f en d a n ts argue that Knudsen's comments are subject to more than one in te rp re ta tio n and that evidence subject to more than one interpretation cannot be direct e v id e n c e of discriminatory intent.1 3 (Mot. Summ. J. Br. Aronov Management & Knudsen 1 4 -1 6 .) "The undisputed evidence shows," Defendants argue, "that Knudsen's concern was n o t one of race; it was merely about the bad publicity Celebrations had received for criminal a c tiv ity." (Mot. Summ. J. Br. Aronov Management & Knudsen 15.) This argument is u n p e rsu a siv e , however, when considering the evidence in favor of the nonmovant. K n u d s e n 's comment about "black club[s]" was made separately from her comment about C e le b ra tio n s and "all that crap going on out there." (Barr Dep. 153.) Knudsen stated "they d id n 't want a black club there and they didn't want that Celebrations thing." (Barr Dep. 153

The arguments are asserted by different Defendants, depending on which Defendant's liability is at stake. "Defendants" will be used to discuss arguments raised by any one of the defendants, or several, if the identity of the defendant is not relevant to the outcome of the arguments. Arguments Aronov Brokerage makes in its motion for summary judgment duplicate the applicable arguments in Aronov Management and Knudsen's first motion for summary judgment.

13

11

( e m p h a sis added).) Also, in his deposition, Barr was asked whether Knudsen stated that " th e y didn't want a black club there," to which he replied "[w]ord for word." (Barr Dep. 1 5 6 -5 7 .) Knudsen's comment about "black club[s]" was made separately from what was a rg u a b ly just a comment about preferring no rowdy or notorious clubs. Defendants' argument ­ that Knudsen's statements were solely focused on the n e gative publicity Celebrations brought (Mot. Summ. J. Br. Aronov Management & Knudsen 1 5 -1 6 ) ­ arguably would be more persuasive had Knudsen stated they did not want a black c lu b like Celebrations in the rental space. When a factfinder reasonably could infer that a s ta te m e n t was "nothing more than an observation of a fact," in this case, that Celebrations w a s predominately frequented by African-Americans, the statement is not direct evidence of d is c rim in a to ry intent. Wilson, 376 F.3d at 1087. Knudsen explained, however, that they did n o t want a "black club" and that they did not want a club like Celebrations. Stated in that w a y, Knudsen's comment on race was not an observation about Celebrations' clientele.14 D e f e n d a n ts also argue that Knudsen's comments are not direct evidence because K n u d s e n was not a decision-maker with respect to accepting or rejecting an offer to lease the p r o p e r ty.1 5 (Mot. Summ. J. Br. Aronov Management & Knudsen 14-15.) Defendants' a rg u m e n t assumes, however, that the basis for liability is Forney's decision to reject the lease,

Besides, Knudsen claims that she was not aware that Celebrations catered to AfricanAmericans. See infra note 17. The question of whether Knudsen was a decision-maker for purposes of finding direct evidence of discriminatory intent is separate from whether the Aronov entities are vicariously liable for her actions.
15

14

12

b u t conduct prior to accepting or rejecting a lease can violate a plaintiff's rights under the re le v a n t statutes.1 6 Because Knudsen's conduct alone can be the basis of liability,1 7 a d e te rm in a tio n of Knudsen's role in Forney's decision-making process is therefore not n e c e ss a ry at this point. F in a lly, to be direct evidence of discriminatory intent, evidence must also "indicate th a t the complained-of [action] was motivated by [the person's state of mind]." Damon v. F le m in g Supermarkets of Fla., Inc., 196 F.3d 1354, 1359 (11th Cir. 1999). Barr testified that h e had told Knudsen what he and Long were envisioning for the space ­ a sports bar for A f ric a n -A m e ric a n s. (Barr Dep. 154.) From that point on, Knudsen was therefore aware that B a rr was planning on opening a sports bar catering to African-Americans, and that he was

See discussion on abridged rights infra. Besides, "[f]or statements of discriminatory intent to constitute direct evidence of discrimination, they must be made by a person involved in the challenged decision." Bass v. Bd. of County Comm'rs, 256 F.3d 1095 (11th Cir. 2001) (emphasis added) (quoting Trotter v. Bd. of Trustees, 91 F.3d 1449, 1453-54 (11th Cir. 1996)), abrogation on other grounds recognized by Crawford v. Carroll, 529 F.3d 961 (11th Cir. 2008). In Clover v. Total System Services, Inc., 176 F.3d 1346 (11th Cir. 1999), a Title VII retaliation case Defendants cite at length (e.g., Reply Br. Aronov Entities & Knudsen 9), the court rejected a theory of liability because the culpable employee was not a decision-maker. Clover, 176 F.3d at 1349, 1356. First, the court rejected employer liability because even though the employee was a part of department that reviewed and evaluated termination decisions as a general practice, the employee had not testified to authority to overrule the termination. Id Second, there was no testimony that the employee recommended the termination to the decision-maker. Id. There is circumstantial evidence in this case that Knudsen could have recommended to Forney that she not pursue negotiating a lease, but resolving the issue is not necessary now. Knudsen's conduct alone can be the basis of liability.
17

16

See discussion on abridged rights infra.

13

th e former owner of a bar with a "black format" 1 8 (Barr Dep. 67). Additionally, though a te m p o r a l gap between comments evidencing intent and the adverse action can be a reason f o r not finding direct evidence, see, e.g., Scott v. Suncoast Beverage Sales, Ltd., 295 F.3d 1 2 2 3 , 1227 (11th Cir. 2002), the relevant conduct in this case occurred contemporaneously o r shortly after Knudsen's comments allegedly evidencing discriminatory intent. b. C ir c u m s ta n tia l Evidence of Discriminatory Intent

E v e n if there is no direct evidence of intent, Plaintiffs have presented circumstantial e v id e n c e sufficient to survive summary judgment. The Eleventh Circuit has not yet clarified w h e th e r the test for proving discriminatory intent with circumstantial evidence is the same f o r § 1981 claims outside the employment context as it is for Title VII and § 1981 claims in th e employment context. For proving an employment discrimination § 1981 claim by circum stantia l evidence, the McDonnell Douglas framework applies. 1 9 Under the McDonnell D o u g la s framework, once the plaintiff establishes a prima facie case of discrimination, the b u rd e n shifts to the opposing party "to articulate some legitimate, nondiscriminatory reason" f o r the action, and if met, the plaintiff must show that the stated reason is pretextual.

Knudsen claims she was not aware that Celebrations was frequented by mostly AfricanAmericans. (Knudsen Dep. 115, 117.) An issue of material fact exists to this question, however, as there is sufficient testimonial evidence that Celebrations catered to an African-American clientele and that media reports directly or indirectly disseminated this information. Additionally, Knudsen was a real estate agent for commercial spaces in Montgomery. A reasonable factfinder could find her claimed ignorance not credible. E.g., Sledge v. Goodyear Dunlop Tires N.Am., Ltd., 275 F.3d 1014, 1015 n.1 (11th Cir. 2001) (per curiam) ("The McDonnell Douglas standard for a prima facie case is applicable in employment discrimination suits brought under [§ 1981]."). The framework is based on the Supreme Court's decision in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
19

18

14

M c D o n n e ll Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973). The McDonnell Douglas p rim a facie test requires proof that the plaintiff was treated less favorably than a similarlys itu a te d person outside of his protected class. See, e.g., Knight v. Baptist Hosp. of Miami, In c ., 330 F.3d 1313, 1316 (11th Cir. 2003) (per curiam). In Kinnon, however, the Eleventh C irc u it noted the district court "acknowledged that our circuit has not articulated a prima fa c i e test to apply in § 1981 cases involving commercial establishments, as opposed to e m p lo ym e n t cases." 20 490 F.3d at 889.2 1 T h e Sixth Circuit applies the McDonnell Douglas framework to § 1981 claims outside th e employment context, but the court has adopted a tailored prima facie test for commercial e s ta b li s h m e n t cases. Christian v. Wal-Mart Stores, Inc., 252 F.3d 862, 872, 879 (6th Cir. 2 0 0 1 ). The plaintiff must prove he is a member of a protected class, that he "sought to make o r enforce a contract for services ordinarily provided by the defendant," and that the plaintiff

But cf. Pinchback v. Armistead Homes Corp., 907 F.2d 1447, 1452 (4th Cir. 1990) (noting that the McDonnell Douglas scheme "is routinely used in housing and employment discrimination cases alike"). In Munnings v. Fedex Ground Package Sys., Inc., No. 6:07-cv-282, 2008 WL 1849003, at *17 (M.D. Fla. Apr. 22, 2008), the district court noted the lack of clarity of the law in this circuit: As observed by Judge Story in the Northern District of Georgia, `While courts have had little difficulty determining that the McDonnell Douglas burden-shifting test is the appropriate one, [c]ourts have struggled with the appropriate elements of a prima facie case to apply in the context of § 1981 claims.' Brooks v. Collis Foods, Inc., 365 F. Supp. 2d 1342, 1353 (N.D. Ga. 2005). The Eleventh Circuit has applied the standard Title VII prima facie elements to Section 1981 claims of discrimination in employment. E.g., Howard [v. B.P. Oil, Inc., 32 F.3d 520, 524 n.2 (11th Cir. 1994)]. However, the Eleventh Circuit has not yet articulated the appropriate prima facie elements to apply in cases outside of the traditional employment context. Kinnon, 490 F.3d at 889, 891, 893. Because the plaintiff could not show pretext in Kinnon, the court did not need to define the prima facie elements for a circumstantial non-employment § 1981 claim. 490 F.3d at 893.
21

20

15

" w a s denied the right to enter into or enjoy the benefits or privileges of the contractual re la tio n s h ip ." Id. at 872. To establish the third element, the plaintiff can show either that he w as "deprived of services while similarly situated persons outside the protected class were n o t" or that he "received services in a markedly hostile manner and in a manner which a re a so n a b le person would find objectively discriminatory." Id. at 874. This test "allows a p l a in tif f to state a claim when similarly-situated persons are not available," which, the C h r is tia n court noted, is often the case in commercial establishment claims. Id. at 873. The te s t is specifically designed to account for the unique challenges of showing similarlys itu a te d individuals in the commercial establishment context. Arguably, that same

ju s tif ic a tio n resonates here, but a specifically-tailored prima facie McDonnell Douglas sta n d a rd has not been articulated by the Eleventh Circuit. It also is not clear what test would a p p ly for proving § 1982 claims circumstantially. In Kinnon, the Eleventh Circuit declined to rule on the appropriate test for the prima fa c ie elements of a § 1981 non-employment claim proven by circumstantial evidence, but the c o u rt did apply the burden-shifting part of McDonnell Douglas, and found the plaintiff had f a ile d to rebut the legitimate, non-discriminatory reason the defendant had offered for the c o n d u c t. Kinnon, 490 F.3d at 893 (Kinnon failed to show evidence that the defendant's re a s o n s for the late delivery and surcharge on her order were pretextual. Id. at 893-94.). U n d e r the McDonnell Douglas framework, once a defendant has rebutted a plaintiff's prima fa c ie case by "`articulat[ing] some legitimate discriminatory reason' for the alleged

16

d iscrim inato ry action," the plaintiff carries the ultimate burden of proving discriminatory in te n t, and can do that indirectly, by showing that the proffered reason for the alleged d is c rim in a to ry conduct is pretextual. Perryman v. Johnson Prods. Co., 698 F.2d 1139, 1142 (1 1 th Cir. 1983) (quoting McDonnell Douglas, 411 U.S. at 802).22 T h e evidence on pretext "must reveal `such weaknesses, implausibilities, in c o n sis ten c ies , incoherencies or contradictions in the employer's proffered legitimate rea so n s for its actions that a reasonable factfinder could find them unworthy of credence.'" V e s s e ls v. Atlanta Indep. Sch. Sys., 408 F.3d 763, 771 (11th Cir. 2005) (per curiam) (quoting C o o p e r v. S. Co., 390 F.3d 695, 725 (11th Cir. 2004) (applying McDonnell Douglas in a § 1981 employment case)). Comparator evidence can be raised as a part of a showing of p re te x t. Rioux v. City of Atlanta, Ga., 520 F.3d 1269, 1276 (11th Cir.) (citing for one, M c D o n n e ll Douglas, 411 U.S. at 804), reh'g denied, 785 F. App'x 741 (11th Cir. 2008). K n u d s e n argues that the legitimate basis for her actions was "the adverse publicity regarding c rim in a l activities at Celebrations." (Mot. Summ. J. Br. Aronov Management & Knudsen 1 9 .) Knudsen's testimony bears that out. Plaintiffs have offered evidence, however, that would allow a reasonable factfinder to conclude Knudsen's reasons were pretextual. Even if her statements about a "black club" a re insufficient as direct evidence, they nevertheless can be circumstantial evidence that K n u d s e n 's otherwise benign excuse ­ that a place like Celebrations would damage the

22

Kinnon cites Perryman for these points. Kinnon, 490 F.3d at 893-94.

17

p ro p e rty ­ was pretextual. See Vessels, 408 F.3d at 770 ("Even where such evidence of race b ia s proves insufficient to prove [a] [plaintiff's] case through direct evidence, it can be re le v a n t in the circumstantial framework to show that the [defendant's] proffered reasons w e re pretextual."). There also is additional evidence relevant to pretext. After Barr's disclosure that he w a s associated with Celebrations and after he told Knudsen of his plans for the space, K n u d se n quoted Barr a rental rate of $4500 per month.2 3 (Barr Dep. 154.) Barr told K n u d s e n that the space would need $100,000 to $150,000 in improvements.2 4 (Barr Dep. 1 5 6 .) Knudsen told Barr that there would be no leasehold improvements at all. (Barr Dep. 1 5 9 .) When Little showed Cranage the rental space, however, Little told Cranage that F o r n e y would be willing to charge half rent for the first six months for the amount of the e x p e n s e s , as long as they were reasonable.2 5 (Video Tr. 18-19, June 13, 2007 (Pls.' E v id e n tia ry Submission Ex. A to Ex. I).) Little also stated that "they" were trying to "avoid" a n d "dodge" the "Celebrations guy" from securing the place, and when Cranage asked if the

Knudsen testified that $4500 was what Forney wanted for the space and that it was a dollar amount per square foot based on the current market rate for that type of property. (Knudsen Dep. 17778.) Knudsen argues that Barr discussed improvements costing $300,000, and that he mentioned that they would need to move a nearby tenant out of his space. (Knudsen Dep. 103-04.) Barr testified that though he asked about moving another tenant out, "it wasn't part of the criteria." (Barr Dep. 188.) Even when Little's comments are not attributable to other parties as a matter of vicarious liability, an issue addressed later in the opinion, they can still be circumstantial evidence of Knudsen's or Forney's lease communications. Knudsen testified to discussing the lease and Barr's interest in the space, with Little (Knudsen Dep. 152), and he was at least in contact with Forney as her attorney on other matters.
25 24

23

18

" C e le b ra tio n s guy" had made an offer, Little responded: "Oh, yeah. Yeah. I mean, she even g a v e him a high-a-- rent and s---, he didn't blink. Now, naturally, he's going to do it through s o m e o n e else." (Tr. 21.) Little also noted that "these are big white tenants. And sometimes d rug s---, black ghetto fight situation kicks off there, they're all leaving. And the landlord ain't going to put up with that." 26 (Tr. 26.) I t is not only Little's meeting with Cranage that bolsters a claim of pretext, but also K n u d s e n 's treatment of Cranage as it compares to her treatment of Barr. Cranage worked f o r an establishment that featured a variety of bands, and mainly catered to white clientele.2 7 (C ra n a g e Dep. 30, June 24, 2008 (Pls.' Evidentiary Submission Ex. G).) When Cranage c a lle d Knudsen, she expressed an interest in showing him the space. (Cranage Dep. 42.) C ra n a g e also discussed rent concessions with Knudsen for improvements to the space a m o u n tin g to $10,000 or $15,000.2 8 (Cranage Dep. 58-60.) Prior to Cranage's contact with K n u d s e n , however, Barr had asked Knudsen if he could see the space again. (Barr Dep. 1 8 4 .) Barr testified that when he called Knudsen, she asked him if his client was still Long,
26

Little also stated the following, but without reference to Knudsen or Forney: "And, by the way, what would you do ­ what would you be willing to include in the lease about something to keep the parking lot quiet? Because let me tell you, you've got a group of old white tenants, white people." (Tr. 26.) At one point, Little did qualify that "what [he] mean[s] by `they' don't like the music I like, I'm talking about it don't matter if it's black or white or whatever. I mean, there's as many white kids out there wearing the chains around their neck and all of that other crap that I don't want them in my place, you know." (Tr. 28.) Cranage testified, though, that the bar was starting to attract more African-Americans because of the strong military presence. (Cranage Dep. 30.) The space is currently rented for $4103 per month, some of which covers utilities, and the current tenant received about six months of free rent to "build out." (McGhar Dep. 19-20, Aug. 19, 2008 (Defs.' Additional Evidentiary Submission Ex. A).)
28 27

19

a n d after he replied in the affirmative, she stated the property was tied up in bankruptcy and th a t he could not get into the space.2 9 (Barr Dep. 184-85.) Only after Little showed Cranage th e rental space, when Barr called Knudsen again, this time asking about a back-up lease, did K n u d s e n relent and offer that she might be able to get in touch with the attorney to see the sp ac e. (Barr Dep. 178-79.) Defendants argue that Plaintiffs cannot identify a similarly-situated person not asso ciated with African-Americans, or not African-American, who was treated more f a v o ra b ly than Barr. (Mot. Summ. J. Br. Aronov Management & Knusden 20.) Defendants a rg u e first, that the current tenant for the property had to make improvements only in the ra n g e of $10,000. (Mot. Summ. J. Br. Aronov Management & Knusden 18.) Barr testified, h o w e v e r, that Knudsen offered no rent concessions for improvements to Barr. Cranage too is a similarly-situated person with respect to determining whether Plaintiffs were discouraged a n d deterred from renting the LeCroy space. Cranage was white and involved in an estab lish m en t catering mainly to whites. Cranage was treated more favorably than Barr. T h o u g h Cranage's establishment's reputation was less controversial than Celebrations', K n u d s e n ' s treatment of Cranage did not occur in a vacuum. She treated Cranage more fa v o rab ly than Barr in the context of her comments to Barr about "black club[s]," in addition
Knudsen offered the following as an explanation: "[Barr] wanted to go back and see it right then and there, and I can't just drop ­ I couldn't just drop everything at that moment," especially considering that at the last meeting, she had waited "an hour and a half" for Long, who never showed up. (Knudsen Dep. 126.) Knudsen also explained that showing the space to Barr did not seem "urgent" because he had already seen the property, and he had made no indication that his terms from the first meeting had changed and Forney had been made aware of the "problems" with leasing according to those terms (e.g., the improvements). (Knudsen Dep. 137-38.)
29

20

to the circumstantial evidence from Little's meeting with Cranage. That evidence combined is enough that a reasonable factfinder could find Knudsen's reason for her conduct was p re te x tu a l ­ that the excuse that Celebrations was rowdy was pretext for excluding "black c lu b [ s ]." 30 c. C o n d u ct Abridging Plaintiffs' Rights

D e f en d a n t s argue that Plaintiffs cannot establish that the alleged conduct abridged th e ir rights under § 1981 and § 1982. (Mot. Summ. J. Br. Aronov Management & Knudsen 2 0 .) The cases Defendants cite do not directly address the conduct a plaintiff must engage i n to fall within the ambit of either statute. Defendants rather assume that because neither P lain tif f offered to lease the LeCroy space, Plaintiffs cannot establish their rights were v io la te d under the statutes. (Mot. Summ. J. Br. Aronov Management & Knudsen 22.) P la in tif f s counter that Barr "attempted to engage in lease negotiations" and "attempted to put a back up lease on the property," and that the actions are not outside the statute just because D e f e n d a n ts "refused to deal with [Plaintiffs] in the leasing of the property and a written lease w a s never presented." (Pls.' Resp. Br. to Aronov Entities & Knudsen 17, 18 (citing relevant th o u g h non-precedential case law).)

Defendants have offered additional counter-evidence. For example, Knudsen submitted an affidavit that describes the number of African-American tenants in LeCroy that she helped to place. (Knudsen Aff. (Defs.' Additional Evidentiary Submission Ex. D).) The rulings in this opinion, however, are wed to the summary judgment standard; Defendants' evidence can be a matter for trial. It is just this sort of dispute, frequently implicating motives and intent, that juries are best suited to resolve.

30

21

T h e rights protected by § 1981 include the ability to make a contract, Kinnon, 490 F .3 d at 891, and the Supreme Court "has broadly construed [§ 1982] to protect not merely t h e enforceability of property interests acquired by black citizens but also their right to a c q u i re and use property on an equal basis with white citizens," City of Memphis v. Greene, 4 5 1 U.S. 100, 120 (1981) (emphasis added). Section 1982 covers "`every racially motivated ref u sal to sell or rent.'" 3 1 Greene, 451 U.S. at 121 (quoting Jones v. Alfred H. Mayer Co., 392 U .S . 409, 421-22 (1968)). Thus, the "unequal application of defendants' rental criteria" b e tw e e n a black plaintiff and white applicants has been held to violate § 1981 and § 1982.3 2 M a r a b le v. H. Walker & Assocs., 644 F.2d 390, 397 (5th Cir. Unit B May 1981)3 3 (finding th a t the unequal application of the rental criteria of marital status and employment and credit h i s t o r i e s discriminatory).3 4 The Eighth Circuit has gone so far as to find the civil rights s ta tu te s prohibit "all forms of discrimination, sophisticated as well as simpleminded, and thus d is p a rity of treatment between whites and blacks, burdensome application procedures, and

In Greene, the Court specifically noted as an example of cases broadly defining property rights a lower court case on "discrimination in modes of negotiation for sale of property." 451 U.S. at 122 n.35 (emphasis added) (discussing Newbern v. Lake Lorelei, Inc., 308 F. Supp. 407 (S.D. Ohio 1968)). The plaintiff in Marable, however, did apply for tenancy, unlike the plaintiffs here. Marable v. H. Walker & Assocs., 644 F.2d 390, 393 (5th Cir. Unit B May 1981). Decisions of Unit B of the former Fifth Circuit are binding precedent in this circuit. Stein v. Reynolds Sec. Inc., 667 F.2d 33, 34 (11th Cir. 1982). The court in Marable found that the district court erred in not considering comparative evidence that demonstrated pretext. See discussion on circumstantial evidence supra.
34 33 32

31

22

ta c tic s of delay, hindrance, and special treatment." 3 5 Williams v. Matthews Co., 499 F.2d 8 1 9 , 826 (8th Cir. 1974).

Also potentially relevant is the futile gesture doctrine. In the employment context, the futile gesture doctrine allows a plaintiff who never applied for an employment position to "nonetheless establish a prima facie case [of employment discrimination] by showing that she refrained from applying due to a justifiable belief that the employer's discriminatory practices made application a futile gesture." Joe's Stone Crabs, Inc., 296 F.3d at 1274. "When a person's desire for a job is not translated into a formal application solely because of his unwillingness to engage in a futile gesture he is as much a victim of discrimination as is he who goes through the motions of submitting and application." Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 365-66 (1977); Darby v. Heather Ridge, 806 F. Supp. 170, 174 (E.D. Mich. 1992) ("The doctrine recognizes that the class of victims of racial discrimination are not limited to those who first apply for employment and are rebuffed by overt discrimination, but also includes those who are discouraged from applying by a well-known, discriminatory policy."). This reasoning seems as applicable in housing discrimination ­ that a plaintiff could still sue even if she never made a formal lease or purchase offer. In fact, the Fourth Circuit explicitly adopted the doctrine as a basis for § 1981 and § 1982 liability outside of the employment context. Pinchback, 907 F.2d at 1450-51. Because "fair employment and fair housing statutes . . . have traditionally facilitated the development of common or parallel methods of proof when appropriate," the court extended the doctrine to fair housing claims. Id. at 1451 (noting, however, that the prima facie test from McDonnell Douglas was a "fundamental part" of fair housing law, which is not the case in this circuit). Establishing a fair housing violation under the futile gesture doctrine requires proof that: (1) the plaintiff was a member of a racial minority, a bona fide potential buyer (renter), and financially capable of purchasing (leasing) property when it was offered for sale (rent); (2) the owner discriminated against people of the plaintiff's race; (3) the plaintiff was reliably informed of this policy of discrimination and did not take steps to procure (lease) the property because of it; and (4) the owner would have discriminated against the plaintiff had he disclosed an interest in the property. See id at 1452. The parties in this case have not argued for the doctrine, nor is it clear that it is applicable. At the very least, however, the Eleventh Circuit recognizes it, and its application in this circumstance is sensible. A version of this doctrine seems to even have surfaced in a housing discrimination case in the former Fifth Circuit, Lee v. S. Home Sites Corp., 429 F.2d 290 (5th Cir. 1970). See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopted as binding precedent all decisions of the former Fifth Circuit issued prior to October 1, 1981). In Lee, the court stated that for any person who could present a letter received from Southern Home Sites offering to sell lots but explicitly requiring buyers to be white, and "who [could] show by competent evidence that, in good faith, he was either deterred or prevented from acquiring a lot by reason of the racial restriction" was "[o]bviously" entitled to relief. 429 F.2d at 297. Indeed, it would undermine the purposes of anti-discrimination laws to hold that they do not prohibit discrimination that deters rental and sales offers, and "[a] narrow construction of the language of § 1982 would be quite inconsistent with the broad and sweeping nature of the protection meant to be afforded by § 1 of the Civil Rights Act of 1866, from which § 1982 was derived" Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 237 (1969).

35

23

It is arguable, however, that not all negotiations fall under the civil rights statutory p ro v is io n s . In Grant v. Smith, 574 F.2d 252 (5th Cir. 1978), the former Fifth Circuit d is tin g u is h e d between discrimination under the civil rights statutes and discrimination under 4 2 U.S.C. § 3604, the Fair Housing Act. The court stated that § 3604(b) ­ which prohibits d is c rim in a tio n "in the terms, conditions, or privileges of sale or rental of a dwelling," among o th e r things ­ was in a "similar vein" as the civil right statutes. Grant, 574 F.2d at 255. In th o s e circumstances, it stated, a plaintiff's "good faith or lack of it would be pertinent to the c la im s ." Id. "The same is not true," the court continued, for claims asserted under sections (a ) and (d) of § 3604, which prohibit (a) the refusal to sell or rent after making a bona fide o f f er, as well as the refusal to negotiate or otherwise make unavailable or deny, and (d) the re p re s e n ta tio n that any dwelling is not available for inspection, sale, or rental. Grant, 574 F .2 d at 255. The court explained that "[b]oth negotiation and inspection involve aspects of re a l estate dealing which often precede the formation of any intent to buy or rent on the part o f a prospective customer." Id. (emphasis added). There is at least, however, a question of material fact as to whether Plaintiffs intended to lease the space (assuming "good faith" is indeed required for a § 1981 or § 1982 violation a n d "good faith" does not require a presentation of an official written lease). Barr expressed a n interest in renting the space during the meeting with Knudsen. Any comments he may h a v e made about the possibility of renting other spaces did not foreclose expressing an i n t e re s t in the LeCroy space. He followed up with Knudsen. He offered to purchase the

24

sa m e shopping area. He even asked about a back-up lease. At some point, his interest in p u rsu in g the space may have blended with or crossed over into his interest in confirming his s u s p ic io n s that Knudsen was discriminating against him, but there is no clear evidence that B a rr did not act with a good faith interest in leasing the property. In summary, therefore, even with the current lack of clarity on the law, there is a q u e stio n of material fact as to whether Barr's attempt to rent Lecroy's space was an abridged rig h t, and whether Knudsen's role in thwarting that attempt was motivated by discriminatory in ten t.36 2. T h e Sale a. K n u d se n 's Role

A f te r Barr met with Knudsen, Barr, through Grant Sullivan ("Sullivan"),3 7 made an o f f e r to purchase LeCroy for one million dollars, with a ten-percent commission to be paid b y Forney.3 8 Sullivan handled the transaction. Knudsen received the purchase and sales a g re e m e n t from Sullivan by fax. (Knudsen Dep. 121.) According to Knudsen, Forney was e-m ailed , and Knudsen scanned and faxed the agreement to her. (Knudsen Dep. 122.)

With respect to the discussion on direct evidence, Knudsen was clearly directly involved in "decision-making" in this sense ­ she was involved in aspects of the rental process that deterred Barr from renting: showing the space, negotiating the lease, or facilitating progress in the transaction. Sullivan was also the one who initially contacted Knudsen on behalf of Barr to lease the LeCroy space. (Sullivan Dep. 9, June 24, 2008 (Second Mot. Summ. J. Aronov Management Ex. H).) Sullivan testified that he never found the property listed for sale, nor was he aware that it was for sale. (Sullivan Dep. 19.) Barr just approached Sullivan and expressed wanting to make an offer to purchase the property. (Sullivan Dep. 19-20.)
38 37

36

25

K n u d s e n testified that Forney rejected the offer and declined to even propose a counteroffer b e c au s e the offer was "so far below what she needed to get out of the center." (Knudsen D e p . 122.) Knudsen claims that she called Sullivan and just told him there was no

c o u n te ro f f e r and that Forney had declined the offer, to which he did not respond favorably. (K n u d s e n Dep. 123.) She claims Barr called later to apologize for Sullivan's reaction, and to inquire further about leasing the space in LeCroy, though it does not appear that Barr p u sh ed purchasing LeCroy. (Knudsen Dep. 123-24.) There is no evidence to dispute what role Knudsen played in Barr's offer to purchase L e C ro y, and in Forney's rejection. Sullivan testified to not recalling any conversation with K n u d s e n about the contract, and having no reason to believe Knudsen did not present the c o n tra c t to Forney. (Sullivan Dep. 14 (Reply Br. Forney Ex. 3).)3 9 Even though Sullivan s ta te d that it was "unusual" for an owner to reject a contract outright without making a c o u n ter o f f e r (Sullivan Dep. 18 (Reply Br. Forney Ex. 3)), that fact is only relevant to F o r n e y's , not Knudsen's behavior. In fact, according to Sullivan's testimony, Knudsen s u p p lie d him with information (e.g., rental income, expenses) for calculating the value of the p ro p e rty based on the net operating income. (Sullivan Dep. 20 (Reply Br. Forney Ex. 3).) A d d itio n a lly, after the offer was rejected, Barr did not propose offering a higher price. (S u llivan Dep. 20-21.)

Aronov Management and Forney submitted different pages of Sullivan's deposition. The citations from Forney's submission are specially designated.

39

26

F o r n e y testified that when an offer for purchasing LeCroy was submitted, "[n]either K n u d s e n [n]or anyone else at Aronov played a role in [Forney's] decision not to make a c o u n te ro f f e r to Barr." (Forney Decl. ¶ 9 (Second Mot. Summ. J. Aronov Management Ex. C ).) Forney's testimony that "[Barr's] offer was so much lower than the previous asking p ric e of $1.9 million that [she] decided not to make a counteroffer to him" (Forney Decl. ¶ 9) c o n f irm s Knudsen's testimony on how the transaction was handled. There is no evidence s u f f i c ie n t for surviving summary judgment to show that Knudsen's role in the purchase tra n sa c tio n , at any point of the process, was other than as a reliable conduit. Liability p r e m is e d on Knudsen's discriminatory actions at the time of the purchasing proposal has not b e e n adequately shown. b. F o r n e y 's Role

K n u d s e n 's conduct prior to the purchasing proposal only matters insomuch as it may h av e affected why Forney later rejected the offer. Plaintiffs appear to premise Forney's liab ility for the sales discrimination on Forney's personal conduct as well.4 0 (Pls.' Resp. Br. to Forney 31 (describing evidence allegedly showing pretext on the part of why Forney re je c te d the offer).) Plaintiffs argue that based upon circumstantial evidence, Forney d is c rim in a te d against them with respect to the sales purchase. (Pls.' Resp. Br. to Forney 30.)

Plaintiffs do not clearly parse personal from vicarious liability at critical stages in their arguments. As Defendants note, "Plaintiffs do not apply their theories of liability to each of the agency relationships alleged to exist in this lawsuit." (Reply Br. Aronov Entities & Knudsen 5.)

40

27

P la in tif f s contend that they have "easily" met the standard for establishing a prima fa c ie case for housing discrimination and have also demonstrated pretext. (Pls.' Resp. Br. to Forney 30.) The case Plaintiffs rely upon to set out the prima facie elements (Pls.' Resp. B r. to Forney 29), however, addresses the legal framework for discrimination cases brought u n d e r the Fair Housing Act of 1968 and Title VII only. In that case, Secretary, U.S. Dep't H o u s. & Urban Dev. ex rel. Herron v. Blackwell, 908 F.2d 864 (11th Cir. 1990), the court a g r e ed with the Administrative Law Judge that the McDonnell Douglas test governed the F a ir Housing Act case.4 1 Id. at 870. The case did not concern § 1981 nor § 1982 claims. R e g a rd le ss , Plaintiffs fall short of proving pretext.4 2 Forney's reason for rejecting B a r r ' s offer is that it was significantly lower than the former asking price. Even Barr a c k n o w le d g e s that this reason is at least legitimate. (See Barr. Dep. 286 (stating that it was " [ c]o rre c t" that "if [Forney] didn't feel it was worth it ­ that it was worth more than a million d o lla rs , that would be good business on her part, to not accept a million," regardless of the

Blackwell, 908 F.2d at 870 ("In this case, the ALJ applied the legal framework developed by the federal courts in discrimination cases brought under the Fair Housing Act of 1968 and Title VII of the Civil Rights Act. We agree with the ALJ that the three-part burden of proof test developed in McDonnell Douglas governs in this case." (citations omitted) (emphasis added)). The court cited a Sixth Circuit case, Seldon Apartments v. U.S. Dep't Hous. & Urban Dev., 785 F.2d 152 (1986), that applies the test to a Fair Housing Act claim and to § 1981 and § 1982 claims. Id. at 159. In light of the prior discussion on the role of McDonnell Douglas in non-employment § 1981 and § 1982 claims in the Eleventh Circuit, a citation to a Sixth Circuit opinion applying McDonnell Douglas to housing discrimination under § 1981 and § 1982 does not determine definitively, the applicable test for this case, especially when the Eleventh Circuit was citing the case with respect to Fair Housing Act claims only. As noted above, the Eleventh Circuit in Kinnon avoided determining the appropriate prima facie test to apply in a non-employment § 1981 claim because Kinnon could not prove pretext.
42

41

28

o f f e ro r's race).)4 3 Plaintiffs argue, however, that there is no explanation for why Forney did n o t extend a counteroffer. (Pls.' Resp. Br. to Forney 30.) Forney did offer a legitimate ex p lana tio n for that too ­ that the offer was so low. (Forney Decl. ¶ 9.) Plaintiffs' reasons for why that reason is pretextual are weak. Though they point to K n u d s e n ' s and Little's comments, they fail to draw out the inference between those c o m m e n ts and Forney's actions. Knudsen testified that by the time Barr was persistently p u sh in g a back-up lease, Forney had been informed that he wanted $300,000 in im p ro v e m e n ts and to move the other tenant out, and that he was the former owner of C e leb ra tio n s. (Knudsen Dep. 137.) Forney argues, however, that "[t]here is no evidence in t h e record before the [c]ourt that any information was provided to [Forney] about [Barr] w h e n the sales contract was presented to her by [Knudsen]." (Reply Br. Forney 6 (emphasis a d d e d ).) Knudsen testified in addition that Forney never made discriminatory remarks to her (K n u d s e n Dep. 170), and in her declaration, Forney stated that Knudsen never mentioned the ra c e of a prospective tenant or prospective purchaser, or the race of their clientele (Forney D e c l. ¶ 7). Plaintiffs point to no proof that Knudsen or Little told Forney that Celebrations was a predominantly "black club," or that Barr was planning a sports bar for African-American c lie n te le with an African-American business partner. It is understandable that the evidence c o u ld be sparse, given the nature of what Plaintiffs are trying to prove, but pointing to

43

In fact, Forney would only have netted $900,000.

29

K n u d se n 's and Little's comments alone is not sufficient to show that Forney's legitimate re a so n for declining the offer to purchase was pretextual. Also, Little's comments about the la n d lo rd 's attitude toward black tenants interfering with her white tenants shed less light on w h a t Forney would have preferred had the ownership of the entire shopping complex ch an g ed hands. Plaintiffs have failed to raise a genuine issue of material fact that Forney's re a so n s for rejecting the offer and not offering a counteroffer in response were pretextual. B. V ica r io u s Liability 1. A r o n o v Brokerage

A ron o v Brokerage has not challenged its vicarious liability as Knudsen's employer. K n u d se n was acting as a "transaction broker" with respect to leasing Forney's space in L e C r o y. (Harris Dep. 28, June 23, 2008 (Pls.' Evidentiary Submission Ex. J).) A

tra n sa c tio n broker is "the type of relationship that a real estate company defaults to when th e re is no written agreement with one of the parties." (Mot. Summ. J. Br. Aronov

B r o k e r a g e 4.) It was as an employee of Aronov Brokerage that Knudsen was a transaction b ro k e r. (Harris Dep. 19.)44 2. A r o n o v Management

A ro n o v Management's second motion for summary judgment challenges its liability a s Knudsen's alleged employer; Aronov Management filed it after Aronov Brokerage was a d d e d to the complaint. (Second Mot. Summ. J. Br. Aronov Management 1-2.) Plaintiffs

44

(See Harris Dep. 27-28 for more explanation.)

30

a rg u e Aronov Management is liable for Knudsen's alleged discriminatory conduct on two th e o rie s: (1) because Aronov Management was a joint employer with Aronov Brokerage; and (2 ) because Knudsen was acting as an agent on behalf of Aronov Management. (Pls.' Resp. B r. to Aronov Entities & Knudsen 32-33.) a. " S in g le Employer" Liability

A ro n o v Brokerage is a wholly-owned subsidiary of Aronov Management, an entity th a t buys, sells, develops, and leases real property. Aronov Brokerage leases and sells A ro n o v Management properties, but unlike Aronov Management, does not manage property. T h e two companies: (1) share some office space; (2) use the same 401(k) plan; (3) use the s e rv ic e s of the human resources division of Aronov Management, though Aronov Brokerage m u st pay for using those services; (4) outsource their payroll to a third-party payroll p ro c e ss o r, funded by Aronov Management, which then receives reimbursement from Aronov B ro k e ra g e ; and (5) share five officers in common (five of Aronov Management's eight, and f iv e of Aronov Brokerage's seven). The companies do not share tax identification numbers, a n d employees receive W-2 forms from their respective employing companies. The

c o m p a n ie s have separate employee policies, meetings, and stationary, and the companies re im b u rs e employees separately. A n officer of both companies, Scott Harris ("Harris"), Aronov Brokerage's Senior V ic e President and a qualifying broker for both companies, oversees profitability and p e rs o n n e l for both companies' brokerage, commercial, and industrial divisions, and leases

31

an d sells property. He received separate checks from both entities until he received his salary b y direct deposit. Harris was Knudsen's supervisor at Aronov Management and after she c h a n g e d employers to Aronov Brokerage. Aronov Management hired Knudsen in 2003 as a commercial leasing agent. At A ro n o v Management, she needed special permission to rent spaces outside of the Aronov M a n a g e m e n t portfolio. Knudsen's paycheck came from Aronov Management until August 2 0 0 6 , and she used its business cards. When she became an employee of Aronov Brokerage, s h e was allowed to focus on leasing and selling other commercial property as well.4 5 Since A u g u s t 2006, Knudsen's salary and commission have come from Aronov Brokerage. A ro n o v Brokerage is the qualifying company on her real estate license. She is not eligible f o r certain reimbursements or a mobile phone from Aronov Management.4 6 P la in t if f s claim that Aronov Brokerage and Aronov Management are joint employers, b u t apply the test for determining whether two companies are a single employer. (See Pls.' R e sp . Br. to Aronov Entities & Knudsen 32.) Whether two entities are joint employers or a single employer are two distinct inquiries.4 7 "A `joint employer' relationship is different

In Knudsen's brokerage capacity, she could focus on leasing or selling any real estate. (Harris Dep. 44-45.) (Second Mot. Summ. J. Br. Aronov Management 3-5.) Plaintiffs do not appear to dispute the preceding facts. (See Pls.' Resp. Br. to Aronov Entities & Knudsen 8-9.) See, e.g., Swallows v. Barnes & Noble Book Stores, Inc., 128 F.3d 990, 993 n.4 (6th Cir. 1997) ("Although the State also uses the term `joint employer' in its brief to this Court, plaintiffs have never argued that [the parties] acted as their `joint employer.' . . . As other courts have explained, these concepts are analytically distinct." (citations omitted) (citing Virgo v. Riviera Beach Assocs., 30 F.3d 1350, 1360 n.6 (11th Cir. 1994), for one)).
47 46

45

32

f r o m , though sometimes confused with, a `single employer' situation." Virgo v. Riviera B e a c h Assocs., 30 F.3d 1350, 1360 n.6 (11th Cir. 1994). A "single employer" situation exists "where two nominally separate e n tities are actually part of a single integrated enterprise so that, for all p u r p o s e s , there is in fact only a `single employer.'" The single employer sta n d a rd is relevant when "separate corporations are not what they appear to b e, that in truth they are but divisions or departments of a `single enterprise.'" In contrast, in a "joint employer" relationship, there is no single in te g ra te d enterprise. A conclusion that employers are "joint" assumes that th e y are separate legal entities, but that they have merely chosen to handle c e rta in aspects of their employer-employee relationships jointly. C l in to n 's Ditch Coop. Co. v. NRLB, 778 F.2d 132, 137 (2d Cir. 1985) (citations omitted) (c ite d by the Eleventh Circuit in Virgo, 30 F.3d at 1359 n.6). "The single employer analysis inv o lves examining various factors to determine if two nominally independent entities are s o interrelated that they actually constitute a single integrated enterprise . . . ." Swallows v. B a r n e s & Noble Book Stores, Inc., 128 F.3d 990, 993 n.4 (6th Cir. 1997). The parties' a rg u m e n ts are focused on this test. "The showing required to warrant a finding of single employer status has been d e sc rib e d as `highly integrated with respec