United States of America v. Sabbia et al

Filing 36

MEMORANDUM Opinion Signed by the Honorable Samuel Der-Yeghiayan on 5/19/2011: Mailed notice (mw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES,

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Plaintiff,
v.
DANIEL SABBIA, et al.,
Defendants.

No. 10 C 5967

MEMORANDUM OPINION

SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant Jeffrey Lowe’s (Lowe) and
Defendant The Lowe Group Chicago, Inc.’s (Lowe Group) (collectively referred to
as “Lowe Defendants”) motion to dismiss. This matter is also before the court on
Defendant Midwest Realty Ventures, LLC d/b/a Prudential Rubloff Properties’
(Midwest) motion to dismiss. For the reasons stated below, the court denies the
motions to dismiss in their entirety.

BACKGROUND
In January 2008, Defendant Daniel Sabbia and Defendant Adrienne Sabbia
(Sabbias) allegedly retained the services of Lowe, a licensed real estate agent. Lowe

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is allegedly the sole officer, director, and shareholder of Lowe Group. Midwest is
allegedly a real estate brokerage firm, and Lowe and Lowe Group allegedly act as
agents of Midwest.
The Sabbias allegedly instructed Lowe to list, market, and sell a property in
Chicago, Illinois with a five bedroom, 8,000 square foot single-family home on it
(Property), and the Sabbias allegedly told Lowe that they would prefer not to sell the
Property to an African-American. The Property was allegedly listed and then taken
off the market for a short period. The Sabbias allegedly re-listed the Property with
Lowe in April 2009 at a reduced price of 1.799 million dollars.
In January 2010, Plaintiff George Willborn, his wife, Plaintiff Peytyn
Willborn, and their two children (collectively referred to as “Willborns”), allegedly
hired Dylcia Cornelious (Cornelious) to act as their real estate agent and assist them
in purchasing a home. On January 2, 2010, the Willborns allegedly viewed the
Property and, according to the Government, Defendant Daniel Sabbia was sitting in
his car as the Willborns left the Property and he waived to the Willborns. On the
same day, the Willborns allegedly extended an offer on the Property for 1.5 million
dollars, and after negotiations back and forth between the parties, the Sabbias
allegedly extended a final counteroffer of 1.7 million dollars. On January 4, 2010,
the Willborns allegedly accepted the counteroffer, and Cornelious prepared a sales
contract (Contract). That same day when Cornelious and Lowe were discussing the
transaction, Cornelious allegedly informed Lowe that George Willborn was a radio
personality. According to the Willborns, Lowe indicated that the Sabbias had
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researched George Willborn on the internet. The Willborns contend that such
internet searches would have led to photographs of George Willborn, clearly
indicating that he is an African-American.
On January 5, 2010, Lowe allegedly forwarded the Contract, which contained
the terms that they had agreed to during the negotiations, to the Sabbias for their
signature. For several days, there was allegedly no response from the Sabbias, and
on January 11, 2010, Lowe indicated that the Sabbias would not sign the Contract
and that they were taking the Property off the market. Lowe allegedly indicated that
the Sabbias had decided not to sell because they had changed their mind about
moving. The Sabbias also allegedly indicated that they could not find a suitable new
home and that they wanted to keep their children in their current schools, but did not
explain why the Property had been on the market or why they had been negotiating
the sale of the Property.
On January 12, 2010, the Property was allegedly taken off the market. On
January 28, 2010, George Willborn, Peytyn Willborn, and Cornelious filed a verified
complaint with the United States Department of Housing and Urban Development
(HUD), alleging that Defendants had violated the Fair Housing Act (FHA), 42
U.S.C. § 3601 et seq. (HUD Complaint). In February 2010, the Sabbias and Lowe
allegedly received notice of the HUD Complaint. Shortly after receiving the HUD
Complaint, the Sabbias allegedly directed Lowe to offer the Willborns the
opportunity to buy the Property for 1.799 million dollars. The Willborns allegedly
rejected the offer, and in March 2010, Lowe allegedly re-listed the Property at 1.799
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million dollars. The Willborns contend that, prior to the filing of the HUD
Complaint, the Sabbias refused to sell the Property to the Willborns because they are
African-Americans.
On March 19, 2010 and July 14, 2010, the Willborns filed amended
complaints with HUD. The HUD Office of Fair Housing and Equal Opportunity
determined that there was reasonable cause to believe that a discriminatory housing
practice occurred, and on August 9, 2010, the General Counsel of HUD brought
charges against Defendants. In accordance with 42 U.S.C. § 3612(a), the Willborns
elected to have their HUD claims decided in a civil action instead of in an
administrative hearing, and on August 26, 2010, the Willborns brought an action in
federal court (Case Number 10 C 5382)(Willborn Action). The Willborns included
in their complaint FHA claims, claims alleging violations of 42 U.S.C. § 1982
(Section 1982), claims alleging violations of 42 U.S.C. § 1981 (Section 1981), and
claims alleging violations of the Illinois Human Rights Act (IHRA), 775 ILCS 5/3301 et seq.
On September 20, 2010, the United States (Government) brought an action
against Defendants on behalf of the Willborns for violations of the FHA, pursuant to
42 U.S.C. § 3612(o), which authorizes the Attorney General to commence a civil
action for violations of the FHA (Case Number 10 C 5967)(Government Action).
This court found that the Government Action was related to the instant action and
on January 14, 2011, the Government Action was reassigned to the undersigned
judge based on a finding of relatedness. The Lowe Defendants and Midwest have
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filed motions to dismiss the claims in the Willborn Action and the Government
Action.

LEGAL STANDARD
In ruling on a motion to dismiss brought pursuant to Federal Rule of Civil
Procedure 12(b)(6) (Rule 12(b)(6)), a court must “accept as true all of the allegations
contained in a complaint” and make reasonable inferences in favor of the plaintiff.
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(stating that the tenet is “inapplicable
to legal conclusions”); Thompson v. Ill. Dep’t of Prof’l Regulation, 300 F.3d 750,
753 (7th Cir. 2002). To defeat a Rule 12(b)(6) motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Iqbal, 129 S.Ct. at 1949 (internal quotations omitted)(quoting
in part Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint that
contains factual allegations that are “merely consistent with a defendant’s liability
. . . stops short of the line between possibility and plausibility of entitlement to
relief.” Iqbal, 129 S.Ct. at 1949 (internal quotations omitted).

DISCUSSION
Lowe Defendants and Midwest move to dismiss all claims brought against
them in the Willborn Action and the Government Action.

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I. Lowe Defendants
Lowe Defendants contend that there are not sufficient allegations in the
complaint in the Willborn Action or the complaint in the Government Action
(collectively referred to as “Complaints”) to indicate any involvement by the Lowe
Defendants in racial discrimination.

A. FHA Claims
Lowe Defendants argue that there are not sufficient allegations in the
Complaints to state FHA claims against them under 42 U.S.C. § 3604 (Section
3604), 42 U.S.C. § 3605 (Section 3605), or 42 U.S.C. § 3617 (Section 3617).

1. Section 3604 Claims
Lowe Defendants contend that there are not sufficient allegations in the
Complaints to state Section 3604 claims against them, arguing that Lowe did not
make the Property unavailable and that there are no allegations that Lowe acted
because of the Willborns’ race. Section 3604 provides in part that “it shall be
unlawful . . . [t]o refuse to sell or rent after the making of a bona fide offer, or to
refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a
dwelling to any person because of race, color, religion, sex, familial status, or
national origin.” 42 U.S.C. § 3604(a). Lowe Defendants contend that there are no
allegations in the Complaints indicating that Lowe made the Property “unavailable”
as specified in Section 3604. Lowe Defendants argue that the allegations in the
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Complaints indicate that Lowe worked diligently to complete the sale to the
Willborns and that it was the Sabbias who refused to sign the Contract. Lowe
Defendants contend that once the Sabbias refused to sign the Contract, Lowe had no
power or authority to sell the Property to the Willborns. Lowe Defendants also argue
that Lowe did not violate Section 3604 merely by conveying a message to Cornelious
that the Sabbias had refused to sign the Contract. Lowe asserts that he did not force
the Sabbias to refuse to sign the Contract.

a. Knowledge and Intent
Lowe Defendants argue that there is no “allegation of actual knowledge” by
Lowe of any unlawful practices under Section 3604 in the Complaints sufficient to
hold Lowe liable under Section 3604. (L Reply 3); see also Rivera v. Incorporated
Village of Farmingdale, 2011 WL 1260195, at *6 (E.D.N.Y. 2011)(dismissing
claims against a defendant because the plaintiffs had “proffered no evidence that [the
defendant] had any knowledge of any allegedly unlawful conduct on the part of”
another defendant). Lowe Defendants also argue that there is no allegation of
unlawful intent by Lowe. See Metropolitan Housing Development Corp. v. Village
of Arlington Heights, 558 F.2d 1283, 1290 (7th Cir. 1977)(indicating that an FHA
claim can be based a showing of intent to discriminate or upon a discriminatory
impact). As explained above, at the pleading stage, a complaint needs only to
“contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Iqbal, 129 S.Ct. at 1949 (internal quotations omitted)(quoting
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Twombly, 550 U.S. at 570).
The Willborns allege that the “Sabbias told Lowe that they would prefer not to
sell the [Property] to an African-American. . . .” (W Compl. Par. 3.07). The
Government alleges that “Daniel Sabbia advised Lowe that he would prefer not to
sell his home to an African-American. . . .” (G Compl. Par. 11). The Willborns and
the Government also allege that Lowe acted as the Sabbias’ real estate agent during
the negotiations with the Sabbias and conveyed the Sabbias’ positions to Cornelious,
which plausibly suggests that the Sabbias discussed the Willborns with Lowe. (W
Compl. Par. 3.13-3.17); (G Compl. Par. 16-25). Lowe also allegedly knew that the
Willborns were African-Americans prior to sending the Contract to the Sabbias. (G
Compl. Par. 16).
The Willborns also allege facts that indicate that the Sabbias changed their
mind about selling the Property to the Willborns for no apparent reason and that
Lowe was aware that the Sabbias had changed their mind after researching George
Willborn on the internet and presumably observing from photos of George Willborn
that he is an African-American. (W. Compl. Par. 3.16-3.22). The Government also
alleges that the Sabbias changed their mind about selling the Property to the
Willborns for no apparent reason, and that Daniel Sabbia had previously observed
the Willborns when they viewed the Property and thus was aware that the Willborns
were African-Americans. (G. Compl. Par. 15). Based on such allegations, it is
plausible that Lowe may have had knowledge that the Sabbias were acting
unlawfully. The allegations in the Complaints plausibly suggest that Lowe may have
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been aware of the Sabbias’ alleged unlawful motives and that Lowe continued to
assist the Sabbias in cancelling the deal that had been made with the Willborns. The
allegations also plausibly suggest that Lowe profited from his work for the Sabbias,
thus providing an incentive to continue to act as the Sabbias’ agent. It is plausible
that Lowe was paid to act as the Sabbias’ agent during the dealings with the
Willborns and when the Property was subsequently re-listed in March 2010. If Lowe
had withdrawn from representing the Sabbias when they allegedly sought to engage
in unlawful discrimination, Lowe would have lost the opportunity to earn money on
the relisting and lost the opportunity to obtain referrals of future clients from the
Sabbias.
Lowe Defendants contend that there is no allegation that Lowe personally
harbored an animus against the Willborns because of their race. However, if Lowe
knowingly assisted the Sabbias in their unlawful conduct, he could be held liable for
such conduct. See, e.g., Moore v. Townsend, 525 F.2d 482, 485 (7th Cir.
1975)(indicating that a real estate agent could be liable for assisting the owner in
racial discrimination); Dillon v. AFBIC Development Corp., 597 F.2d 556, 562 (5th
Cir. 1979)(stating in FHA case that “an agent who assists his principal in committing
a tort is himself liable as a joint tortfeasor”).
Lowe Defendants also point out that the Willborns indicate that Lowe
informed the Sabbias that racial discrimination would be unlawful. The Willborns
allege that when the Sabbias indicated their preference not to sell to African-

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Americans, Lowe informed the Sabbias that refusing to sell the Property to AfricanAmericans would be a violation of federal and state housing laws. (W Compl. Par.
3.07-3.08). However, even if that is true, it remains a factual issue as to whether
Lowe knowingly continued to assist in unlawful discrimination after making such a
disclaimer to the Sabbias. Lowe could not insulate himself from any liability merely
by making such an oral disclaimer. Lowe Defendants also contend that the
allegations in the Complaints show that, rather than preventing the sale of the
Property, Lowe worked hard to close the sale. However, even if the allegations
indicate that Lowe took steps to close the sale, it remains a factual issue whether, at
the point that the Sabbias decided not to sell the Property to the Willborns, Lowe
knowingly assisted in the unlawful discrimination. Lowe Defendants also contend
that Lowe merely forwarded offers to the Willborns, as required by the Illinois Real
Estate License Act, but as Lowe Defendants acknowledge, the Act does not authorize
an agent to knowingly commit or acquiesce to unlawful discrimination. (L Mem.
Dis. 9).
Lowe Defendants also argue that even if he had withdrawn from any
involvement in the sale of the Property, the Property would not have been sold and
the Willborns would still have been deprived of their fair housing rights. However,
whether that is true involves factual considerations outside the pleadings. Also, even
if Lowe’s withdrawal would not have altered the ultimate outcome of the sale, Lowe
would not have been allowed to potentially profit from his continued involvement in

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the sale of the Property. Thus, based on reasonable inferences that can be drawn
from the allegations in the Complaints when separately considered, and when the
allegations are accepted as true, it is more than merely possible that Lowe had the
requisite knowledge and intent. It is plausible that Lowe may have knowingly and
with the requisite intent taken part in the alleged unlawful discrimination and the
refusal to sell the Property to the Willborns because of their race in violation of
Section 3604.

b. Strict Liability for Conduct as an Agent
Lowe also argues that a real estate agent cannot be held strictly liable for the
actions of his client. Lowe argues that he only acted as the Sabbias’ agent and did
not have authority to sell the Property to the Willborns himself. However, in the
instant actions, the allegations in the Complaints plausibly suggest that Lowe may
have been a knowing participant in the unlawful discrimination. Thus, neither the
Government nor the Willborns are attempting to hold Lowe strictly liable under
Section 3604 solely on the basis that he acted as a real estate agent for the Sabbias.
In the instant actions, Lowe can be liable under the FHA, even though he only
possessed authority to act as the Sabbias’ agent and did not possess the authority to
sell the Property himself. See, e.g., Dillon, 597 F.2d at 562.
The Seventh Circuit has indicated that the courts “‘must hold those who
benefit from the sale and rental of property to the public to the specific mandates of
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anti-discrimination law if the goal of equal housing opportunity is to be reached.’”
City of Chicago v. Matchmaker Real Estate Sales Center, Inc., 982 F.2d 1086, 1097
(7th Cir. 1992)(quoting Walker v. Crigler, 976 F.2d 900, 905 (4th Cir. 1992)). It is
plausible, when accepting the allegations in the Complaints as true, that Lowe was an
individual that benefitted from the alleged unlawful conduct by the Sabbias and that
Lowe thus may be liable under Section 3604.
Lowe Defendants also argue that Lowe did not have knowledge of any
unlawful intent on the part of the Sabbias and that the instant actions are based on an
“untenable ‘shoot-the messenger’ theory of liability.” (L Reply 3). Whether Lowe
actually had knowledge of the Sabbias’ alleged motives in refusing to sell the
Property to the Willborns and whether Lowe possessed the requisite intent for a
Section 3604 claim is a factual matter that is premature to address at this juncture.
At the pleadings stage, when accepting the allegations in the Complaints as true, the
Complaints each, when separately considered, contain sufficient allegations to
plausibly suggest that Lowe Defendants acted in a manner that would subject them to
liability under Section 3604. Therefore, the court denies the Lowe Defendants’
motion to dismiss the Section 3604 claims. At the summary judgment stage, the
Government and the Willborns will need to point to sufficient evidence showing that
Lowe Defendants are liable under Section 3604.

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2. Section 3605 Claims
Lowe Defendants argue that the Section 3605 claims should be dismissed as
duplicative, arguing that the Section 3605 and the Section 3604 claims are based on
the same facts and injury. Section 3605 provides that “[i]t shall be unlawful for any
person or other entity whose business includes engaging in residential real estaterelated transactions to discriminate against any person in making available such a
transaction, or in the terms or conditions of such a transaction, because of race, color,
religion, sex, handicap, familial status, or national origin.” 42 U.S.C. § 3605. The
Seventh Circuit has held that the fact that there may be “overlap in some
circumstances” in the protections provided in the FHA does not render such
protections duplicative. See Bloch v. Frischholz, 587 F.3d 771, 782 (7th Cir.
2009)(comparing Section 3604 and Section 3617); N.A.A.C.P. v. American Family
Mut. Ins. Co., 978 F.2d 287, 298 (7th Cir. 1992)(comparing Section 3604 and
Section 3605 and quoting United States v. Naftalin, 441 U.S. 768 (1979) for the
proposition that “that there may be some overlap is neither unusual nor
unfortunate”). Thus, the mere fact that some of the underlying facts may be the same
for the Section 3604 claims and the Section 3605 claims and that there is overlap in
the protections of such provisions does not warrant a dismissal of the Section 3605
claims as duplicative. Lowe Defendants cite Beringer v. Standard Parking O’HARE
Joint Venture, 2008 WL 4890501, at *1 (N.D. Ill. 2008) to support their position, but
Beringer did not even involve claims made under the FHA, much less Section 3604

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and Section 3605. The claims at issue in Beringer were claims brought pursuant to
the Fair and Accurate Credit Transactions Act, 15 U.S.C. § 1681c(g). Id. In
addition, this action is merely at the pleadings stage and the Willborns are only
required to provide a limited record of facts at this juncture. It can be properly
ascertained whether the Section 3604 and Section 3605 claims are truly duplicative
at the summary judgment stage after discovery has been conducted. Also, even if the
Section 3604 and Section 3605 claims are deemed to be duplicative, if one type of
such claims is resolved in favor of Lowe Defendants at the summary judgment stage,
the other type of claim might still be available to the Willborns as an alternative
claim. It is therefore premature to dismiss the Section 3605 claims as duplicative.
Lowe Defendants also argue that to the extent that Section 3604 and Section 3605
claims are similar, the Section 3605 claims should be dismissed for the same reasons
given for dismissing the Section 3604 claims. However, as indicated above, the
Willborns have stated valid Section 3604 claims against Defendants. Therefore, the
court denies Lowe Defendants’ motion to dismiss the Section 3605 claims.

3. Section 3617 Claims
Lowe Defendants contend that the Section 3617 claims should be dismissed.
Section 3617 provides that “[i]t shall be unlawful to coerce, intimidate, threaten, or
interfere with any person in the exercise or enjoyment of, or on account of his having
exercised or enjoyed, or on account of his having aided or encouraged any other
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person in the exercise or enjoyment of, any right granted or protected by section
3603, 3604, 3605, or 3606 of” the FHA. 42 U.S.C. § 3617. For a Section 3617
claim, a plaintiff must establish: (1) that “[]he is a protected individual under the
FHA,” (2) that “[]he was engaged in the exercise or enjoyment of h[is] fair housing
rights,” (3) that “the defendants coerced, threatened, intimidated, or interfered with
the plaintiff on account of h[is] protected activity under the FHA,” and (4) that “the
defendants were motivated by an intent to discriminate.” Bloch v. Frischholz, 587
F.3d 771, 783 (7th Cir. 2009).
Lowe Defendants contend that the Complaints fail to include valid Section
3604 and Section 3605 claims and that they therefore cannot support Section 3617
claims. However, as explained above, it is premature to dismiss the Section 3604
claims and Section 3605 claims. Lowe Defendants also argue that there are no
allegations that Lowe interfered with the Willborns’ fair housing rights. Lowe
Defendants contend that Lowe merely acted as an intermediary between the
Willborns and Sabbias and that there are no allegations that indicate that Lowe
coerced, threatened, or intimidated the Willborns to relinquish their fair housing
rights. However, as explained above, it is premature to assess whether Lowe took
part in the alleged unlawful discrimination or had an intent to further the
discrimination. It is plausible, when accepting the allegations in the Complaints as
true, and separately considering the Complaints, that Lowe interfered with the
Willborns’ fair housing rights.

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Lowe Defendants argue that there are no allegations of confrontational
conduct such as coercion or intimidation. However, Section 3617 contains no such
requirement and in fact, in addition to making it unlawful “to coerce, intimidate, [or]
threaten,” Section 3617 makes it unlawful to “interfere” with an individual’s fair
housing rights. 42 U.S.C. § 3617; see also Walker v. City of Lakewood, 272 F.3d
1114, 1129 (9th Cir. 2001)(stating that “interference, in particular, has been broadly
applied to reach all practices which have the effect of interfering with the exercise of
rights under the federal fair housing laws”)(internal quotations omitted)(quoting
United States v. Hayward, 36 F.3d 832, 835 (9th Cir. 1994)); Scialabba v. Sierra
Blanca Condominium No. One Ass’n, 2001 WL 803676, at *5 (N.D. Ill. 2001)(citing
United States v. Wagner, 940 F. Supp. 972, 979 (N.D. Tex. 1996), for the proposition
that Ҥ 3617 is broadly applied to all practices that interfere with the exercise of
federal fair housing rights”).
Lowe Defendants also argue that for a Section 3617 claim, the Willborns must
point to a pattern of harassment instead of an isolated occurrence. Lowe Defendants
point to Bloch v. Frischholz, 587 F.3d 771 (7th Cir. 2009) for that proposition. (L
Mem. Dis. 15). However, in Bloch the plaintiffs were bringing FHA claims against
their condominium association for alleged harassment based on the plaintiffs’
religion and race. Id. at 772. The court in Bloch stated that “‘[i]nterference’ is more
than a ‘quarrel among neighbors’ or an ‘isolated act of discrimination,’ but rather is a
‘pattern of harassment, invidiously motivated.’” Id. at 783 (quoting Halprin v.

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Prairie Single Family Homes of Dearborn Park Ass'n, 388 F.3d 327, 330 (7th Cir.
2004)). However, as the Government correctly points out, it would make little sense
to require a showing of a pattern of harassment in the context of the alleged FHA
violations relating to the sale of a residential property. By its nature, if a prospective
buyer is deterred from purchasing a property in violation of the FHA, the relationship
between the seller and the prospective buyer will be severed. Thus, the refusal or
deterrence in the purchase may be only an isolated event and not a pattern of
harassment with the prospective buyer. In the instant action, once the Sabbias
decided not to sell to the Willborns, they severed the relationship between
themselves and the Willborns, and it is not necessary for the Willborns to show an
extensive pattern of harassment for a Section 3617 claim. If Lowe knowingly and
intentionally took part in the interference, then he too may be liable under Section
3617. Therefore, the court denies the Lowe Defendants’ motion to dismiss the
Section 3617 claims.

B. IHRA Claims
Lowe Defendants argue that the Willborns have failed to state IHRA claims
under 775 ILCS 5/3-102 (Section 5/3-102) of the IHRA. The complaint filed in the
Government Action did not include any IHRA claims. In addition, we note that
although the Willborns have stated that they are bringing claims under 775 ILCS 5/3103, (W Compl. Par. 5.02-5.04), it is apparent from the content of their allegations
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that they intended to refer to Section 5/3-102. Section 5/3-102 provides the
following:
§ 3-102. Civil Rights Violations; Real Estate Transactions. It is a civil rights
violation for an owner or any other person engaging in a real estate
transaction, or for a real estate broker or salesman, because of unlawful
discrimination or familial status, to (A) Transaction. Refuse to engage in a real
estate transaction with a person or to discriminate in making available such a
transaction; (B) Terms. Alter the terms, conditions or privileges of a real estate
transaction or in the furnishing of facilities or services in connection
therewith; (C) Offer. Refuse to receive or to fail to transmit a bona fide offer
to engage in a real estate transaction from a person; (D) Negotiation. Refuse to
negotiate for a real estate transaction with a person; (E) Representations.
Represent to a person that real property is not available for inspection, sale,
rental, or lease when in fact it is so available, or to fail to bring a property
listing to his or her attention, or to refuse to permit him or her to inspect real
property; (F) Publication of Intent. Print, circulate, post, mail, publish or cause
to be so published a written or oral statement, advertisement or sign, or to use
a form of application for a real estate transaction, or to make a record or
inquiry in connection with a prospective real estate transaction, which
expresses any limitation founded upon, or indicates, directly or indirectly, an
intent to engage in unlawful discrimination; (G) Listings. Offer, solicit, accept,
use or retain a listing of real property with knowledge that unlawful
discrimination or discrimination on the basis of familial status in a real estate
transaction is intended.
775 ILCS 5/3-102. The Willborns indicate in their complaint that Defendants
violated subsections A through G of Section 5/3-102. (W Compl. Par. 5.02-5.04).
Lowe Defendants argue that Lowe did not have control over the Property and thus
could not have violated any provision of Section 5/3-102. However, as explained
above, it is premature to assess whether Lowe took part in the alleged unlawful
discrimination. It is plausible, based on the facts in the complaint in the Willborn

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Action, when accepted as true, that Lowe took part in violations of subsections A and
C through E. The allegations in the complaint in the Willborn Action indicate a
refusal to engage in a real estate transaction and thus state a claim under subsection
A. The allegations in the complaint in the Willborn Action indicate a refusal to
receive a bona fide offer in a real estate transaction, and thus state a claim under
subsection C. The allegations in the complaint in the Willborn Action indicate a
refusal to negotiate in a real estate transaction, and thus state a claim under
subsection D. The allegations in the complaint in the Willborn Action indicate
representations that a property is not available when it is in fact available, and thus
state a claim under subsection E.
In regard to subsection G, the allegations in the complaint in the Willborn
Action indicate that Lowe placed the listing for the Property with knowledge of the
alleged prejudice by the Sabbias, and thus did so with knowledge that unlawful
discrimination in the real estate transaction was intended. Thus, the Willborns have
also stated a valid claim under subsection G. Therefore, at this juncture, it is
premature to dismiss the IHRA claims premised on subsections A, C through E, and
G.
Lowe Defendants argue that there are no allegations in the Complaints that
would plausibly suggest that any Defendants were involved in a civil rights violation
relating to an alteration of the terms, conditions, or privileges of a real estate
transaction or in the furnishing of facilities or services in connection with the

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transaction. There are sufficient allegations in the complaint that the Sabbias altered
the terms of the sale with the intent to violate the civil rights of the Willborns.
Therefore, it is premature at this juncture to grant the motion to dismiss the claim
premised on subsection B.
Lowe Defendants also argue that subsection F is not applicable in this case
because there are no allegations in the complaint in the Willborn Action that any
Defendants were involved in a civil rights violation relating to the publication or
mailing of statements, or advertisements, or the use of a form of an application for a
real estate transaction. There are sufficient allegations in the complaint to plausibly
suggest that the Sabbias violated the civil rights of the Willborns in the context of
advertising the sale of the Property. Therefore, it is premature at this juncture to
grant the motion to dismiss the claims premised on the IHRA.

C. Negligence and Conspiracy Claims
Lowe Defendants argue that negligence and conspiracy claims are pre-empted
by the IHRA. The IHRA provides that “[e]xcept as otherwise provided by law, no
court of this state shall have jurisdiction over the subject of an alleged civil rights
violation other than as set forth in th[e]” IHRA. 775 ILCS 5/8-111(D). Illinois
common law is preempted by the IHRA if it is “inextricably linked with a civil rights
violation” and the “plaintiff can[not] establish the necessary elements of the tort
independent of any legal duties created by the Illinois Human Rights Act.”
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Maksimovic v. Tsogalis, 687 N.E.2d 21, 24 (Ill. 1997). Lowe Defendants argue that
the negligence and conspiracy claims are premised on the underlying duty not to
discriminate against the Willborns. While it appears possible that the allegations in
the complaint in the Willborn Action and the allegations supporting the negligence
and conspiracy claims are related, it is premature at this juncture to resolve this issue.
Therefore, the motion to dismiss the negligence and conspiracy claims is denied.
Based on the above, Lowe Defendants’ motion to dismiss is denied in its entirety.

II. Midwest’s Motion to Dismiss
Midwest adopts the arguments of Lowe Defendants. Midwest also argues that
the court should dismiss the conspiracy claims for failure to state a claim and that, to
the extent that Plaintiffs seek punitive damages, such requests should be stricken. In
regard to the FHA claims, as explained above, the Complaints contain sufficient
allegations to plausibly state FHA claims. Midwest argues that there are no
allegations that Midwest had knowledge of the circumstances of the dealings
between the Willborns and the Sabbias or the conversations that took place between
Lowe and the Sabbias. However, Lowe and Lowe Group allegedly were acting as an
agent of Midwest. (W Compl. Par. 3.04); (G Compl. Par. 7). As explained above,
the conduct and liability of Lowe Defendants cannot be determined at the pleadings
stage. It is plausible, based on the allegations in the Complaints, that Midwest had
knowledge of the alleged discrimination or ratified the actions of Lowe. See, e.g.,
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Meyer v. Holley, 537 U.S. 280, 285 (2003)(stating that “[i]t is well established that
traditional vicarious liability rules ordinarily make principals or employers
vicariously liable for acts of their agents or employees in the scope of their authority
or employment”); City of Chicago v. Matchmaker Real Estate Sales Center, Inc., 982
F.2d 1086, 1100 (7th Cir. 1992)(stating that “[a] principal is liable for punitive
damages for the discriminatory acts of her agent only if she knew of or ratified the
acts”)(emphasis in original)(internal quotations omitted)(quoting Hamilton v. Svatik,
779 F.2d 383 (7th Cir. 1985)). In addition, it also plausible that Lowe may have
acted as a managerial agent of Midwest and was acting in the scope of employment,
which could potentially make Midwest liable for punitive damages. See, e.g.,
Kolstad v. American Dental Ass’n, 527 U.S. 526, 538 (1999); Lincoln v. Case, 340
F.3d 283, 289 (5th Cir. 2003). Whether there is sufficient evidence to support such
conclusions and thus whether punitive damages are recoverable against Midwest can
be better assessed at the summary judgment stage.
Midwest also argues that the Government and the Willborns have not alleged
that Defendants’ conduct was motivated by an evil motive or intent or that
Defendants engaged in wanton and willful misconduct. See, e.g., Matchmaker, 982
F.2d at 1099(stating that “[i]n fair housing cases, punitive damages are awarded to
punish and deter outrageous conduct” and “[p]unitive damages are appropriate when
defendants act wantonly and willfully or are motivated in their actions by ill will,
malice, or a desire to injure the plaintiffs”). Based on the allegations in the

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Complaints, when accepted as true, it is plausible that Defendants may have engaged
in subterfuge, motivated by ill will, to purposefully deprive the Willborns of the
opportunity to purchase a home because of their race. Thus, at this juncture, it is
premature to strike the requests for punitive damages. Therefore, based on the
above, Midwest’s motion to dismiss is denied in its entirety.

CONCLUSION
Based on the foregoing analysis, the court denies Lowe Defendants’ motion to
dismiss in its entirety and denies Midwest’s motion to dismiss in its entirety.

___________________________________
Samuel Der-Yeghiayan
United States District Court Judge

Dated: May 19, 2011

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