United States of America v. Noble Homes, Inc. et al

Filing 182

Order denying Defendants' Motion for summary judgment (Related Doc # 112 ); denying Plaintiff's Motion for partial summary judgment (Related Doc # 114 ); granting Plaintiff's Motion for leave to supplemental authority (Related Doc # 138 ); granting Plaintiff's Motion for leave to file supplemental authority(Related Doc # 140 ). Judge John R. Adams on 3/23/16.(L,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
United States of America
Plaintiff,
vs.
Noble Homes, Inc., et al.,
Defendants.

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CASE NO. 5:13CV2659
JUDGE JOHN R. ADAMS

MEMORANDUM OF OPINION
AND ORDER

Pending before the Court is a motion for summary judgment filed by Defendants
Guardian Property Management, Inc., Noble Homes, Inc., and Dean Windham (collectively,
“Noble Homes”). Doc. 112. In addition, Plaintiff the United States of America has moved for
partial summary judgment on the issue of liability. Doc. 114. Finally, the United States has
twice sought leave to file notices of supplemental authority. Docs. 138, 140. These latter two
motions are GRANTED to the extent that the Court acknowledges that the cases cited were
decided after the briefing in this matter. The Court now undertakes its review of the pending
dispositive motions.
I. FACTS
Windham Bridge condominium development consists of 13 four-unit buildings and one
two-unit building. This latter two-unit building is not at issue herein. Certificates of occupancy
were issued for the 13 buildings at issue from August 29, 2006 to July 20, 2011.

The units

themselves have a main floor that includes a dining room, a kitchen, three bedrooms, and two
bathrooms. Each unit also has some form of a garage with a mechanical garage door and an
entry door that leads to a laundry room.

Hampton Court is a three-story building with 14 units and is located at Windham Bridge.
The building has four ground floor units. These ground floor units have two bedrooms and two
bathrooms, and the certificate of occupancy for the building was issued on August 29, 2006.
Milton Studer and Studer Architects, LLC, along with Noble Homes, designed and
constructed both Windham Bridge and Hampton Court.

Defendant Guardian Property

Management, Inc. owned the property on which the buildings were constructed until the time
construction was complete.
On December 2, 2013, the United States filed its two-count complaint in this matter. In
its first count, the Government contends that:
Defendants have failed to design or construct the covered units at Windham
Bridge in accordance with 42 U.S.C. § 3604(f)(3)(C). The violations include, but
are not limited to, the following:
a. There are no accessible building entrances on an accessible route at
approximately thirty-one covered dwelling units;
b. Public use and common use portions are not readily accessible to and usable by
individuals with disabilities;
c. The units do not contain the following features of adaptive design: (i) an
accessible route into and through the dwelling; (ii) reinforcements in bathroom
walls to allow later installation of grab bars; and (iii) usable kitchens and
bathrooms such that an individual using a wheelchair can maneuver about the
space.
Doc. 1 at 7. In its second count, the Government asserts that the conduct of the Defendants
herein constitutes:
a. A pattern or practice of resistance to the full enjoyment of rights granted by the
Fair Housing Act, 42 U.S.C. §§ 3601-3619; or
b. A denial to a group of persons of rights granted by the Fair Housing Act, 42
U.S.C. §§ 3601-3619, which raises an issue of general public importance.
Doc. 1 at 8.
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Noble Homes moved for summary judgment on both claims, and the United States
moved for partial summary judgment on the issue of liability. The motions are fully briefed and
the Court now resolves the parties’ arguments.
II.

LEGAL STANDARD FOR SUMMARY JUDGMENT
Under Federal Rule of Civil Procedure 56(a), the Court “shall grant summary judgment if

the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” The party moving for summary judgment may satisfy
its burden under Rule 56 in either of two ways: (1) “submit affirmative evidence that negates an
essential element of the nonmoving party’s claim,” or (2) “demonstrate to the Court that the
nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving
party’s claim.” Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986).
A movant is not required to file affidavits or other similar materials negating a claim on
which its opponent bears the burden of proof, so long as the movant relies upon the absence of
the essential element in the pleadings, depositions, answers to interrogatories, and admissions on
file. Id. Likewise, the moving party’s burden of production “may be discharged by ‘showing’ –
that is, pointing out to the district court – that there is an absence of evidence to support the
nonmoving party’s case.” Id. at 325.
In reviewing summary judgment motions, this Court must view the evidence in a light
most favorable to the non-moving party to determine whether a genuine issue of material fact
exists. Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970); White v. Turfway Park Racing Ass’n.,
909 F.2d 941, 943-44 (6th Cir. 1990). A fact is “material” only if its resolution will affect the
outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Determination of whether a factual issue is “genuine” requires consideration of the applicable
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evidentiary standards. Thus, in most civil cases the Court must decide “whether reasonable jurors
could find by a preponderance of the evidence that the [non-moving party] is entitled to a
verdict.” Id. at 252.
Summary judgment is appropriate whenever the non-moving party fails to make a
showing sufficient to establish the existence of an element essential to that party’s case and on
which that party will bear the burden of proof at trial. Celotex, 477 U.S. at 322. Moreover, “the
trial court no longer has a duty to search the entire record to establish that it is bereft of a genuine
issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989),
citing Frito-Lay, Inc. v. Willoughby, 863 F.2d 1029, 1034 (D.C. Cir. 1988). The non-moving
party is under an affirmative duty to point out specific facts in the record as it has been
established which create a genuine issue of material fact. Fulson v. Columbus, 801 F.Supp. 1, 4
(S.D.Ohio 1992). The non-movant must show more than a scintilla of evidence to overcome
summary judgment; it is not enough for the non-moving party to show that there is some
metaphysical doubt as to material facts. Id.
III.

ANALYSIS
With respect to Noble Homes’ motion for summary judgment, two arguments must be

resolved prior to addressing the substantive issues. First, Noble Homes contends that its units
are not “covered units” and therefore not subject to the Fair Housing Act. Second, Noble Homes
contends that this suit and/or its damages fall outside the statute of limitations. The Court finds
no merit in either claim.
The FHA embodies “a national commitment to end the unnecessary exclusion of persons
with [disabilities] from the American mainstream” by increasing the stock of accessible housing
in furtherance of Congress's “goal of independent living.” H.R.Rep. No. 100–711, at 18 (1988),
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reprinted in 1988 U.S.C.C.A.N. 2173, 2179. The design and construction requirements of the
Fair Housing Amendments Act of 1988 (“FHAA”) apply only to new construction of
multifamily dwellings built for first occupancy after 1991. See 42 U.S.C. § 3604(f)(3)(C). As
used in this section of the FHAA, “covered multifamily dwellings” mean: “(A) buildings
consisting of 4 or more units if such buildings have one or more elevators; and (B) ground floor
units in other buildings consisting of 4 or more units.” 42 U.S.C. § 3604(f)(7). Congress has
delegated authority to HUD to administer the statute at issue pursuant to 42 U.S.C. §3608(a) and
to issue regulations regarding the statute pursuant to 42 U.S.C. § 3614a. One court has described
HUD’s role as follows:
Congress authorized the Secretary of HUD to promulgate regulations to
implement the FHA and provide technical assistance to help achieve the Act’s
accessibility requirements. Id. at §§ 3601, 3604(f)(5)(C). Pursuant to this
authority, HUD issued implementing regulations in 1989 that expounded on the
FHA’s design and construction requirements. 24 C.F.R. § 100.200 et seq. HUD
issued the Guidelines two years later. 56 Fed.Reg. 9473–9515 (Mar. 6, 1991).
The HUD Guidelines guide builders to compliance, but they are merely examples
of compliance and therefore not mandatory. Id. at 9472. “The purpose of the
Guidelines is to describe minimum standards of compliance with the specific
accessibility requirements of the Act.” Id. at 9476. A failure to meet the
requirements as interpreted in the Guidelines does not constitute unlawful
discrimination. Id. The Guidelines are “intended to provide a safe harbor for
compliance with the accessibility requirements of the Fair Housing Amendments
Act.... Builders and developers may choose to depart from the Guidelines, and
seek alternate ways to demonstrate that they have met the requirements of the Fair
Housing Act.” Id. at 9473. The FHA and the Guidelines also provide that another
acceptable way to make these areas and features accessible is through compliance
with American National Standards Institute (“ANSI”) 117.7–1986, American
National Standard for Buildings and Facilities—Providing Accessibility and
Usability for Physically Handicapped People. Thus, the Guidelines, though
relevant and highly significant, are not decisive. The real question is whether the
units and common areas are reasonably accessible and usable for most physically
disabled people.
If a construction feature does not comply with the Guidelines, then the housing
provider defending an FHA violation has the burden of showing that the feature is
nonetheless accessible. See id. (“Builders and developers may choose to depart
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from the Guidelines, and seek alternate ways to demonstrate that they have met
the requirements of the Fair Housing Act.”); United States v. Hallmark Homes,
Inc., No. CV01–432, 2003 WL 23219807, at *8 (D.Idaho Sept. 29, 2003). The
Guidelines provide that compliance may be achieved by meeting a “comparable
standard”—i.e., one that provides “access essentially equivalent to or greater than
required by ANSI A117.1.”3 54 Fed.Reg. 3243.
Memphis Ctr. for Indep. Living v. Richard & Milton Grant Co., No. 01-2069-D`, 2004 WL
6340158, at *3-4 (W.D. Tenn. June 29, 2004). HUD has detailed the use of the Guidelines:
The Charging Party may establish a prima facie case by proving a violation of the
Guidelines. A respondent can then rebut the presumption established by the
violation of the Guidelines by demonstrating compliance with a recognized,
comparable, objective measure of accessibility. Giving the Guidelines the status
of a rebuttable presumption, contrary to the ALJ, is not inconsistent with the
concept that the Guidelines are not mandatory; because even if a respondent
violates the Guidelines, the respondent can demonstrate that the property satisfies
another comparable and objective standard of accessibility and thus avoid a
liability finding.
The Sec’y, United States Dep't of Hous. & Urban Dev., on Behalf of Montana Fair Hous., Inc.,
Charging Party, & Montana Fair Hous., Inc., Intervenor, HUDALJ 05-068FH, 2006 WL
4573902, at *5 (Sept. 21, 2006). This burden shifting was upheld on review by the Ninth
Circuit. See HUD v. Nelson, 320 Fed. Appx. 635 (9th Cir. 2009).
Furthermore, under a Chevron analysis, rules and regulations promulgated by an
administrative agency “are given controlling weight unless they are arbitrary, capricious, or
manifestly contrary to the statute.” Chevron v. Nat’l Res. Def. Council, 467 U.S. 837, 844
(1984). As long as HUD’s interpretation is not arbitrary, capricious, or manifestly contrary to the
FHA, this Court is directed to defer to that interpretation, HUD being the agency with the
authority and expertise to interpret the FHA. See U.S. v. Edward Rose, 246 F.Supp.2d 744
(E.D.Mich. 2003).
With respect to whether the units herein are multistory units, the Guidelines provide that
“‘[m]ultistory dwelling unit’ means a dwelling unit with finished living space located on one
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floor and the floor or floors immediately above or below it.” Final Fair Housing Accessibility
Guidelines, 56 FR 9472-01, 9500 (Mar. 6, 1991). “If the basement is part of the finished living
space of a dwelling unit, then the dwelling unit will be treated as a multistory unit, and
application of the Act’s accessibility requirements will be determined as provided in the
Guidelines for Requirement 4. If the basement space is unfinished, then it would not be
considered part of the living space of the unit, and the basement would not be subject to the
Act’s requirements.” Id. at 9481.
The record before this Court indisputably establishes that the dwellings at issue are not
multi-story dwellings. The dwellings were both marketed and sold as single-story ranch units.
Further, the evidence is overwhelming that the units were sold with unfinished basements.
Noble Homes’ sole response to this evidence appears to be that certain owners have chosen to
use this space as living space, despite its unfinished nature, and that certain elements like the
water heater cannot be accessed without visiting the basement.
Noble Homes contends that a 2013 Policy Statement that works heavily against them
cannot be used because it post-dates construction of the units at issue. Assuming that this would
result in an unfair post hoc analysis, Noble Homes’ overarching argument still fails. As the
United States notes, “[s]afe harbors standards that constitute compliance with the FHA do not
require “water heater[s],” “electrical panels,” “HVAC” systems, and “shutoff valves” to be
accessible… and in fact explicitly exempt these elements from accessibility requirements.” Doc.
118 at 19 (citing appropriate ANSI standards). Furthermore, the photographs submitted by both
parties show that the basements have no wall partitions of any kind, have exposed mechanical
equipment such as furnaces, water heaters, and sump pumps, have exposed ductwork and
plumbing, and exposed joists in the ceilings. None of those features support a finding that the
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basements can constitute living space.

Noble Homes’ anecdotal evidence that residents are in

fact using this space is insufficient to create a genuine issue of material fact. In fact, as many, if
not all, of the features relied upon by Noble Homes in those photographs were not a part of the
design of the basement, they cannot be relied upon. Accordingly, the Court finds no merit in the
contention that the units at issue are multi-story units. 1
Similarly, the Court finds no merit in the contention that the claims herein are untimely.
Under the Fair Housing Act, the statute of limitations requires a plaintiff to file a complaint
within two years after the “occurrence or termination of an alleged discriminatory housing
practice ... whichever occurs last.” 42 U.S.C. § 3613(a)(1)(A). Additionally, in actions brought
under the Fair Housing Act, the Supreme Court has recognized that a complaint alleging a
continuing illegal practice, rather than an isolated incident of violative conduct, is timely when
filed within two years of the last occurrence of the illegal practice. Havens Realty Corp. v.
Coleman, 455 U.S. 363, 380-81 (1982). As the United States has properly alleged a pattern and
practice claim and the final unit of Windham Bridge was sold on May 8, 2012, the complaint
filed on December 2, 2013 was timely filed. The Court would note that the overlap between
planning and construction of both Windham Bridge and Hampton Court supports the Court’s
view to treat them as one and the same for purposes of the statute of limitations.
With respect to claimed violations, the United States contends that: 1) the 33 units in
Windham Bridge with steps leading to the front doors are not accessible; 2) that various slopes
on walkways leading to front entrances cause them to be inaccessible; 3) the mailboxes at both
complexes are not accessible; 4) various doors are too narrow for those with wheelchairs; 5)

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This is to say nothing about the substantial evidence that Defendants repeatedly marketed the
units as single-story units and should be estopped herein from even raising an argument that the
units are multi-story.
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various door thresholds are too high; 6) various kitchens lack sufficient clear floor space to be
used by those in wheelchairs; and 7) the hall bathrooms in various units lack sufficient clear floor
space to be used by those in wheelchairs.
There can be no doubt that the United States has alleged deviations from the safe harbors.
While the parties vehemently dispute the nature and extent of such deviations, they no doubt
exist, even if not in every category argued by the United States. As such, to some extent, the
burden shifting discussed in Nelson above is applicable.

Noble Homes, therefore, must

demonstrate compliance with a recognized, comparable, objective measure of accessibility. In
an attempt to do so, Noble Homes relies upon its two experts, Mark Wales and Paul Sheriff.

At

the same time, the United States relies heavily upon its expert, Gina Hilberry, to press its claims.
As a result, this matter has effectively become a battle of experts. In examining a similar issue,
another district judge has noted:
Each case must be evaluated on an individual basis and “turn on its own facts.”
Id. The determination of whether evidence indicates a pattern or practice of
discrimination is ordinarily a question of fact for the jury. Id.; see also United
States v. Garden Homes Management Corp., 156 F.Supp.2d 413, 420
(D.N.J.2001).
Judged against these standards, the court has little difficulty concluding that
plaintiff is not entitled to summary judgment on its FHA pattern or practice claim.
Even if all the conditions identified by plaintiff deviate from the specifications in
the FHA Guidelines, the guidelines are neither mandatory nor prescribe specific
requirements which, if not met, would constitute unlawful discrimination. See
Barker, 2009 WL 500719 at *7, citing 24 C.F.R. Ch. I, Subch. A, App. III (1991).
There are other ways to achieve compliance with the accessibility requirements of
the FHA. See 56 Fed.Reg. 9472, 9478 (Mar. 6, 1991). Moreover, defendants have
adduced expert testimony that all 32 JPI properties are accessible to and usable by
persons with disabilities. It is particularly within the jury’s ken to examine the
more than 500 accessibility barriers alleged by plaintiff and determine whether
such evidence constitutes a pattern or practice of discrimination. See, e.g. Fair
Housing Council v. Village of Olde St. Andrews, Inc., 250 F.Supp.2d 706, 720
(W.D.Ky.2003) (denying motion for summary judgment in FHA disability
discrimination case where only uncontested evidence was that properties failed to
meet requirements of FHA Guidelines); United States v. Hallmark Homes, Inc.,
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No. CV–01–432–N–EJL, 2003 WL 23219807 at *8 (D.Idaho Sept.29, 2003)
(government not entitled to summary judgment with respect to liability under
FHA where defendants offered some evidence to dispute alleged violations);
United States v. Pacific Northwest Electrical Co., No. CV–01–019–S–BLW, 2003
WL 24573548 at *13 (D.Idaho Mar.21, 2003) (same).
United States v. JPI Const., L.P., No. 3-09-CV-0412-B-BD, 2011 WL 6963160, at *4-5 (N.D.
Tex. Nov. 10, 2011) report and recommendation adopted, No. 3:09-CV-412-B, 2012 WL 43507
(N.D. Tex. Jan. 9, 2012). Given the overlap in experts (Sheriff and Wales were also experts in
that matter), this Court has little trouble reaching the same conclusion. For each deviation from
the safe harbors, Wales and Sheriff have proposed that no obstacle to accessibility was created.
As such, there remain genuine issues of material of fact as to whether any deviation from the safe
harbors resulted in a violation of the FHA and its standards. As such, the pending motions for
summary judgment are DENIED.
V.

CONCLUSION
Each of the pending motions for summary judgment is DENIED. As noted above,

several defenses raised by Noble Homes are untenable. However, there remain genuine issues of
material fact for a jury to resolve on the underlying pattern and practice claim.
IT IS SO ORDERED.

DATE: March 23, 2016

/s/ John R. Adams_________________
Judge John R. Adams
UNITED STATES DISTRICT COURT

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