Daniels v. Department of Housing and Urban Development et al

Filing 32

ORDER granting 14 26 defendants' motions to dismiss; denying 24 Plaintiff Byron Daniels's motions; and dismissing with prejudice all claims. Signed by Chief Judge Brian S. Miller on 7/25/2017. (kdr)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
BYRON K. DANIELS
v.

PLAINTIFF
CASE NO. 4:16-CV-00749 BSM

DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT, et al.

DEFENDANTS

ORDER
The motions to dismiss filed by defendants Department of Housing and Urban
Development [Doc. No. 26], Sunset Terrace, Metropolian Housing Alliance, Robyn Hornes,
Kathy Washington, and Kalimba Summerville [Doc. No. 14] are granted, and plaintiff Byron
Daniels’s motions for default judgment, judgement on the pleadings, and summary judgment
[Doc. No. 24] are denied.
I.

BACKGROUND

Accepting plaintiff Byron Daniels’s allegations as true, the material facts are as
follows. Lou White, Daniels’s mother, leased a two-bedroom unit at Sunset Terrace, a
property owned and operated by Housing Authority of the City of Little Rock, d/b/a
Metropolitan Housing Alliance (“MHA”).

Compl. ¶¶ 4–6, Doc. No. 2.

As an

accommodation to White’s disability, Daniels was permitted to live with White as a live-in
aide. Id. Daniels signed a live-in aide agreement in which he agreed he was an “employee
of Lou White” and that he “ha[d] no other rights to the unit.” Id. ¶ 11 (referencing live-in
aide agreement); id. n.1 (describing agreement); Doc. No. 3 at 6 (live-in aide agreement).
The agreement also provided that “[i]f the employer/employee relationship is severed,

[Daniels] will move out of the unit immediately”, and “[i]f [White] dies,[Daniels] has no
right to remain in the unit and will vacate the apartment immediately.” Doc. No. 3 at 6.
On September 16, 2016, White passed away. Daniels, however, did not vacate the
apartment immediately. He spoke to defendants Robyn Hornes, property manager, and
Kalimba Summerville, assistant property manager, about transferring White’s unit into
Daniels’s name. Compl. ¶ 11. Daniels was told he could not live in White’s two-bedroom
unit by himself and that he had no continued right to occupy the unit after his mother’s
passing. Id. In response, Daniels attempted to add his six-year old nephew to a lease.
Apparently, Hornes or Summerville worked with defendant Kathy Washington, interim
director of asset management, to either get approval of this relationship or to get approval to
transfer tenancy of White’s unit into Daniels’s name. The requests were denied. Id.
Daniels refused to move out and filed suit for money damages and an injunction. He
sued Sunset Terrace; MHA; Hornes; Summerville; Washington; and the Department of
Housing and Urban Development (“HUD”).

He claims defendants (1) unlawfully

discriminated based on familial status, race, and gender; (2) breached fiduciary duties; (3)
caused a contract to be signed under duress; and (4) refused live-in aides housing in an
unconstitutional manner. Defendants have all moved to dismiss, and Daniels moves for
judgment on the pleadings, for summary judgment, and for default judgment.
II.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits dismissal when the plaintiff fails to

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state a claim upon which relief may be granted. To meet the 12(b)(6) standard, a complaint
must allege sufficient facts to entitle the plaintiff to the relief sought. See Ashcroft v. Iqbal,
556 U.S. 662, 663 (2009). Although detailed factual allegations are not required, threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, are
insufficient. Id. In ruling on a 12(b)(6) motion to dismiss, materials embraced by the
pleadings, as well as exhibits attached to the pleadings and matters of public record, may all
be considered. Mills v. City of Grand Forks, 614 F.3d 495, 498 (8th Cir. 2010).
III.

DISCUSSION

All of Daniels’s claims are dismissed either because a party is immune or because he
has failed to state a claim upon which relief may be granted.
Before analyzing Daniels’s claims, one observation is necessary. The gravamen of
Daniels’s claims against defendants is that he acquired some property interest in White’s
apartment after becoming a live-in aide, and when defendants refused to allow him to remain
in White’s apartment after her passing, his property interest was impaired. This is a
fundamental misunderstanding of how one acquires property interests in an apartment. A
property interest arises from a written lease agreement for the unit in question, rather than
simply occupying the unit as caregiver. See 24 C.F.R. § 982.308 (“The tenant and the owner
must enter a lease for the unit. The lease must be executed by the owner and the tenant.”);
see also Ark. Code Ann. § 18-17-301(15) (defining “tenant” as “a person entitled under a
rental agreement to occupy a dwelling unit to the exclusion of others”). Here, there was no

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lease agreement between Daniels and defendants, and Daniels’s only right to occupy White’s
unit was premised on him providing caregiving services to White.
With that understanding in mind, each of Daniels’s claims will be discussed in turn.
A.

Daniels’s Motion for Default Judgment [Doc. No. 29]

Daniels’s motion for default judgment is denied. Daniels moved for default judgment
against HUD because of its failure to answer or move for dismissal in time. Doc. No. 29.
A clerk’s entry of default has not been entered, which must precede a grant of default
judgment under Rule 55(b). Johnson v. Dayton Elec. Mfg. Co., 140 F.3d 781, 784 (8th Cir.
1998). Even if an entry did occur, “a party is not entitled to a default judgment as a matter
of right, even where the defendant is technically in default.” Lewis v. Lynn, 236 F.3d 766,
767 (5th Cir. 2011); see Ackra Direct Mktg Corp. v. Fingerhut Corp., 86 F.3d 852, 856 (8th
Cir. 1996) (review of order on default judgment is for abuse of discretion); Oberstar v.
Federal Deposit Ins. Corp., 987 F.2d 494, 504 (8th Cir. 1993) (“We have frequently
endorsed the strong judicial policy against default judgments. Applying this policy, we
recently held a district court abused its discretion by entering a default judgment for a
marginal failure to comply with the time requirements.”) (citations and quotation omitted).
As discussed below, Daniels’s claims against HUD must be dismissed, and therefore his
request for default judgment is denied. See Fed. R. Civ. P. 55(d) (“A default judgment may
be entered against the United States, its officers, or its agencies only if the claimant
establishes a claim or right to relief by evidence that satisfies the court.”) (emphasis added).

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B.

HUD

Daniels’s claims against HUD for violating the Fair Housing Act (Title VIII of the
Civil Rights Act of 1968), 42 U.S.C. § 1982, 42 U.S.C. § 1983, and state tort law are
dismissed. As explained below, Daniels’s claims are barred by sovereign immunity, but even
if they were not, he has failed to state a claim.
First, Daniels’s claims are barred by sovereign immunity. The sovereign immunity
doctrine provides that the “United States may not be sued without its consent and [the]
existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S.
206, 212 (1983). Thus, unless waived, “sovereign immunity shields the Federal Government
and its agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475 (1994). Any waiver of
immunity must be by federal statute, see, e.g., Presidential Gardens Assocs. v. United States,
175 F.3d 132, 139 (2d Cir. 1999), and purported waivers must be strictly construed in favor
of the government, S.E.C. v. Credit Bancorp., Ltd., 297 F.3d 127, 136 (2d Cir. 2002).
Although the Housing Act, 42 U.S.C. § 1437 et seq., contains a limited waiver, this
waiver is only for suits against HUD with respect to its functions under the Housing Act, not
whether local entities discriminated against tenants in violation of the Fair Housing Act. 42
U.S.C. § 1404a (“[t]he Secretary of Housing and Urban Development [to] be sued only with
respect to its functions under the United States Housing Act of 1937, as amended, and title
II of Public Law 671 . . . .” ) (emphasis added); see Unimex, Inc. v. U.S. Dep’t of Hous. &
Urban Dev., 594 F.2d 1060, 1061 (5th Cir. 1979) (1979) (“The direct claims against HUD

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are barred by sovereign immunity because the United States has not consented to suit under
the civil rights statutes.”); City of Shaker Heights v. Shaker Heights Hous. Assocs, Case No.
C85-9, 1985 U.S. Dist. LEXIS 23207, at *17-18 (N.D. Ohio Jan. 23, 1985) (“Claims against
HUD under Title VIII of the Civil Rights Act of 1968 . . . are barred because they do not fall
within any applicable waiver of the United States’ sovereign immunity.”). Similarly, the
waiver would also not apply to general claims under the civil rights statutes. See Little Earth
of United Tribes, Inc. v. U.S. Dept. of Housing and Urban Development, 584 F. Supp. 1292,
1300 (D. Minn. 1983) (“[Section] 1404a . . . do[es] not constitute a waiver of sovereign
immunity with respect to the civil rights statutes and constitutional claims[.]”).
Furthermore, Daniels’s claims against HUD must be dismissed because he made no
factual allegation against the agency. His claims focus entirely on actions done by Sunset
Terrace, MHA, Summerville, Hornes, and Washington. Although he collectively references
the defendants having “produced, implemented, and enforced a policy that was unfair” or
“knowingly and willingly requir[ing Daniels] to sign a waiver giving up his rights,” he
provides no factual allegation to substantiate these conclusions. Compl. ¶¶ 24-25; Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 545 (2007) (a complaint “requires more than labels and
conclusions”). Put simply, he alleged improper conduct against five of the six defendants,
but then concludes the sixth defendant must have been liable in some undisclosed way.
These issues aside, there are also fundamental flaws with Daniels’s claims. For
example, he alleges HUD, a federal agency, committed civil rights violations under 42

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U.S.C. § 1983, but “[o]nly state actors can be held liable under Section 1983.” Youngblood
v. Hy-Vee Food Stores, Inc., 266 F.3d 851, 855 (8th Cir. 2001) (emphasis added). Although
Daniels is correct that Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971),
implied a cause of action against federal actors, a Bivens action is not an action brought
under section 1983. Moreover, the Bivens doctrine is limited to suits against an individual
who violated one’s rights, not an entire federal agency. F.D.I.C. v. Meyer, 510 U.S. 471, 486
(1994). As another example, Daniels has not alleged that he first presented his tort claims
to the appropriate federal agency before filing suit as required. 28 U.S.C. § 2675(a); Mader
v. United States, 654 F.3d 794, 797 (8th Cir. 2011); see McNeil v. United States, 508 U.S.
106, 113 (1993) (“The FTCA bars claimants from bringing suit in federal court until they
have exhausted their administrative remedies. Because petitioner failed to head that clear
statutory command, the District Court properly dismissed his suit.”).
Accordingly, all claims against HUD are dismissed.
C.

Unlawful Discrimination Based on Familial Status, Race, and Sex
1.

Familial Status (Counts One and Three)

Defendants’ motion to dismiss is granted because Daniels has not alleged familial
status discrimination.
The Fair Housing Act, 42 U.S.C. § 3601 et seq, prohibits housing discrimination,
which includes refusing to rent, sell, or negotiate on the basis of a protected class. 42 U.S.C.
§ 3604(a)-(b). One such protected class is familial status. Familial status is defined as “one

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or more individuals (who have not attained the age of 18 years) being domiciled with (1) a
parent or another person having legal custody of such individual or individuals; or (2) the
designee of such parent or other person having such custody, with the written permission of
such parent or other person.” Id. § 3602(k)(1)-(2). Here, Daniels has not stated a claim
because he failed to plead facts suggesting he (1) is his nephew’s parent or legal custodian
or (2) a designee with written permission permitting his nephew to live with him. See, e.g.,
Anderson v. Herbert, Case No. 2:13-CV-211 RJS/BCW, 2014 U.S. Dist. LEXIS 167879, at
*9 (D. Utah Oct. 22, 2014), recommendation adopted, 2014 U.S. Dist. LEXIS 166371, at *2
(D. Utah Dec. 1, 2014).
Count three is similar to count one and must be dismissed for the same reason. Count
three alleges “discriminatory pretext evidence of discrimination based on familial status.”
Compl. ¶¶ 35-41 (footnote omitted).

In other words, Daniels alleges defendants

discriminated against him based on familial status but mask that intent by evicting him
because his live-in aide status was terminated. Of course, an assumption here is that Daniels
fits the familial status definition, which he does not.
Accordingly, counts one and three are dismissed for the failure to state a claim upon
which relief may be granted.
2.

Race and Sex Discrimination (Count Five)

Defendants’ motion to dismiss count five is granted because Daniels has not alleged
defendants discriminated against him based on his race or sex.

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Daniels argues that defendants prefer single fathers (i.e., a single male with a child
matching the familial status definition over single males without children) and that these
actions have a “discriminatory effect” on single, black males. Compl. ¶ 45-47. Alleging a
discriminatory effect of facially neutral policies requires more than concluding such an effect
exists. See Horras v. Am. Capital Strategies, Ltd., 729 F.3d 798, 801 (8th Cir. 2013) (“A
pleading that offers labels and conclusions or a formulaic recitation of the elements of a
cause of action will not do.”) (quotations omitted). The Supreme Court directed lower courts
to “examine with care whether a plaintiff has made out a prima facie case of disparate
impact” so that cases failing to sufficiently allege a violation reach a “prompt resolution.”
Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct.
2507, 2523–24 (2015). This is one such case that must be promptly dismissed before
discovery ensues.
Daniels made no allegation supporting his disparate impact claim. See Inclusive
Communities, 135 S. Ct. at 2523 (“A plaintiff who fails to allege facts at the pleading stage
or produce statistical evidence demonstrating a causal connection cannot make out a prima
facie case of disparate impact.”); Gallagher v. Magner, 619 F.3d 823, 834 (8th Cir. 2010)
(A prima facie case for disparate impact claims requires “that the objected-to actions resulted
in a disparate impact upon protected classes compared to a relevant population.”). Daniels
cannot complain of discrimination based on race or sex when a white man without children
or a black woman without children would been treated the same. He made no allegations

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suggesting how anyone else other than him was impacted or would be impacted, but simply
that he did not receive preferential treatment with respect to the apartment unit he preferred.
Although reaching outside Daniels’s complaint is improper, the reality of this
conclusion was clear at the preliminary injunction hearing. Daniels’s request to live in
White’s two-bedroom unit was denied but the parties acknowledged Daniels was approved
for a one-bedroom unit, but he would be placed in a queue of others approved for housing.
Daniels would receive preferential treatment if he obtained a “homeless certification,” but
he had not done so. See Doc. No. 15 at 2; Doc. No. 7 at 4. Instead, he filed suit to prevent
his eviction. This demonstrates that there was no discrimination – whether directly or
implied through disparate impact – simply because Daniels did not receive his preferred unit.
Accordingly, count five is dismissed for the failure to state a claim upon which relief
may be granted.
D.

Breach of Fiduciary Duty (Count Two)

Defendants’s motion to dismiss count two is granted because there was no fiduciary
duty owed.
Daniels alleges that defendants breached their fiduciary duty “to act [in] good faith
and fair dealing” with clients. Compl. ¶ 20. He alleges he was a “pre-existing household
member” of White’s unit “and did not qualify as a live-in aide.” Id. ¶ 19. In signing the livein agreement, he claims he “was not properly advised” that he was giving up his status as
White’s biological son. Id. ¶ 22.

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Again, Daniels is placing the cart in front of the horse as defendants owed no fiduciary
duty to him. At its core, breaching a fiduciary duty “involves a betrayal of trust and benefit
by the dominant party at the expense of one under its influence.” Cole v. Laws, 76 S.W.3d
878, 883 (Ark. 2002). A simple business deal or contract does not create such a relationship;
rather, a fiduciary duty arises when a “particular relationship of trust or confidence developed
because of the agreement.” Evans Indus. Coatings, Inc. v. Chancery Court of Union Cty.,
Third Div., 870 S.W.2d 701, 703–04 (Ark. 1994). The only relationship here was between
White and Daniels as employer-employee, and Daniels acknowledged this was the nature of
the relationship in his live-in agreement. Doc. No. 3 at 6. There is nothing inherently special
about a landlord and a tenant’s live-in caregiver that creates a relationship based on trust or
confidence to create a fiduciary relationship. See, e.g., W. Memphis Adolescent Residential,
LLC v. Compton, 374 S.W.3d 922, 926–27 (Ark. Ct. App. 2010) (agreements do not
necessarily create fiduciary relationships).
Accordingly, defendants’ motion to dismiss count two is granted for the failure to
state a claim upon which relief may be granted.
E.

Contractual Duress (count three)

Daniels alleges defendants unlawfully forced him to give up his rights as White’s
family member during a time when his mother was in need of a live-in caregiver.
Defendants’ motion to dismiss count three is granted.
The fact that Daniels had no property interest aside, “contractual duress” is not a cause

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of action. Duress is an affirmative defense that justifies voiding a contract if it is shown “he
voluntarily accepted the terms of the opposing party, that the circumstances permitted no
other alternative, and that the circumstances resulted from coercive acts by the opposing
party.” Newsom v. Rabo Agrifinance, Inc., 427 S.W.3d 688, 697 (Ark. 2013). Daniels has
not been sued on the basis of any contract and the live-in agreement he claims was signed
under duress has little to do with the lack of any entitlement to White’s old apartment.
Daniels’s claims all ask that he remain in White’s apartment, which he has no property
interest in regardless of whether he signed the live-in agreement or not. Thus, even if the
live-in agreement was cancelled, he still has no right to the apartment. The agreement
allowed him to temporarily live in White’s apartment while he provided caregiving services,
but after White’s passing, Daniels was no longer providing those services. As such, he could
no longer live in the apartment. The fact that he is White’s son is of no consequence; a right
to occupy requires consent of the landlord and tenant, and no such rental agreement existed
between Daniels and any of defendants.
Accordingly, defendants’ motion to dismiss count three is granted because of the
failure to state a claim upon which relief may be granted.
F.

Refusing Live-in Aides is Unconstitutional (Count Four)

Defendants’ motion to dismiss count four is granted because Daniels stated no cause
of action.
Daniels alleges live-in aides are permitted to occupy dwelling space, yet they acquire

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“separate[] but equal” rights as tenants in violation of the Constitution. Compl. ¶ 52. As has
been stated many times before, Daniels assumes he acquired a property interest in White’s
apartment (apparently, a separate but equal right to White’s interest) when he became her
caregiver. Doc. No. 3 at 6. Daniels acquired no rights, however, as his permission to
temporarily live with White was premised on his caregiver status.
Daniels’s concern that parties similar to defendants may “lie” and refuse housing
because someone was a “live-in [a]ide]” is misplaced. Compl. ¶ 52. Daniels was not refused
housing after White passed away. Rather, Daniels’s permission to occupy the unit was
connected to his services to White. Without White, Daniels had no permission to occupy.
After White’s passing, Daniels’s ability to reside in the unit was terminated and he was
required to vacate immediately. Indeed, he signed an agreement acknowledging this reality.
Doc. No. 3 at 6.
This situation makes sense. Presumably, White was not forced to have her son as her
live-in caregiver. If she selected a non-family member, Daniels’s argument would then allow
that non-family member to live in White’s apartment without competing with everyone else
waiting for housing, such as Daniels himself. The fact Daniels was also White’s son does
not impact the analysis.
Accordingly, defendants’ motion to dismiss count four is granted for the failure to
state a claim upon which relief may be granted.
IV.

CONCLUSION

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Accordingly, defendants’ motions to dismiss [Doc. Nos. 14, 26] are granted, and
Daniels’s motions [Doc. No. 24] are denied. All claims are dismissed with prejudice.
IT IS SO ORDERED this 25th day of July 2017.

_________________________________
UNITED STATES DISTRICT JUDGE

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