Jones et al v. McGrath et al

Filing 63

ORDER granting 40 defendants' Motion for Summary Judgment. This case is dismissed and terminated on the docket. Signed by Judge Herman J. Weber on 9/5/14. (mb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
KEESHANN JONES, et al,
Plaintiffs
v.

Case No. 1:12-cvB946-HJW

MARK MCGRATH, et al.,
Defendants
ORDER
Pending is the defendants’ “Motion for Summary Judgment” (doc. no. 40),
which the plaintiffs oppose. The defendants have submitted proposed findings of
fact and conclusions of law, which the plaintiffs have highlighted as true, false, or
irrelevant (doc. no. 52). The Court held a hearing on July 16, 2014, at which counsel
presented oral arguments. Having fully considered the record, including the
parties’ briefs, exhibits, proposed findings, oral arguments, and applicable
authority, the Court will grant the motion for the following reasons: 1
I. Background
The pertinent facts are largely straightforward, and any disputed
characterizations will be noted herein. 2 Mr. Mark McGrath is a licensed real estate
broker who manages a variety of rental properties for different owners. He has
done so on a professional basis for over twenty years through his company Home
1

For clarity’s sake, the Court will cite to the page numbers in the docket, rather
than citing a document’s internal page numbers.
2

Plaintiffs have red-lined as “disputed” various correct facts in the Proposed
Findings because they are disputing the legal implications of those facts, not the
facts themselves.
1

Information Network, Inc. Approximately 65% of the persons he leases property to
(over 130 tenants) are “persons of color.” He has not had previous complaints of
discrimination filed against him. In 2010, his clients Mr. and Mrs. Patel owned a
4-bedroom home located at 923 Pond Court, Lebanon, Ohio. 3 The Patels wanted to
sell or lease the house. On April 23, 2010, they signed an Exclusive Listing
Contract (“listing”) with Home Information Network, valid through July 24, 2010
(doc. no. 43, Plaintiffs’ Ex. 2). The home was listed at $209,900.00 for purchase.
The listing contract indicated that the realtor was also authorized to use his “best
efforts” to obtain a qualified tenant for a one year lease. The Patels preferred to
sell the home, or alternatively, lease it with a purchase option. They would
consider renting it, but this was the least desirable option for them. Mr. Patel
informed Mr. McGrath that he would prefer someone who was interested in
actually purchasing the property. 4 In the event of a lease, the listing indicated the
tenant would be responsible for monthly rent and utilities (gas, electric, water,
sewer, and garbage removal), as well as maintenance of the interior and exterior.
On June 4, 2010, realtor Sara Buck emailed Mr. McGrath a rental application
on behalf of her clients, James and Keeshann Jones. Ms. Buck had showed them
the house. She FAXed her own forms, rather than the application form used by
3

Although plaintiffs “dispute” that the ‘property has four bedrooms” (doc. no. 52
at 5, Proposed Findings, ¶ 10), the listing plainly shows 4-bedrooms (doc. no 40,
Ex. 4). Plaintiffs have pointed to no evidence suggesting otherwise, and in fact,
acknowledge in their brief that the house has four bedrooms (doc. no. 48 at 8).
4

Although plaintiffs “dispute” this, Mr. McGrath has consistently so testified
(2013 McGrath Dep., doc. no. 43 at 93; 2014 McGrath Dep., doc. no. 38 at 40).
Plaintiffs have pointed to no evidence to the contrary.
2

Home Information Network. The forms were incompletely filled out. Plaintiffs
indicated they had a bank account at Huntington Bank, but left the lines blank for
the account number. Under “credit references,” they listed several credit cards
and their auto lender, but omitted the requested contact information. In her email,
Ms. Buck asked if the rental price ($1,850 per month) was “negotiable” (doc. no. 38
at 87). That day, Mr. McGrath provided Ms. Buck with the correct application form,
and requested that the Jones complete and return it. He also indicated he would
check with the Patels about some repair items, including improving “the lower
level bathroom with an installed sink & toilet” (Id., copy of email and response).
Through Ms. Buck, the Jones also submitted an incomplete two-page form
(which was not the form used by Mr. McGrath) (2014 McGrath Dep., doc. no. 38 at
32 “she returned her application, not mine”). They omitted contact information for
their current landlord, even though the form asked for this information in two
places. Mr. McGrath noted this omission on the printed copy of Ms. Buck’s email
(Id. at 87). The Jones also left blank their reason for leaving their current rental and
their length of residence there. They left blank the spaces for account information
for their credit cards. They listed monthly income of $3,200.00 before taxes from
Mr. Jones’ job and $3,909.00 per month from Children Services (for caring for six
foster children). The Jones indicated they had a total of nine children currently
living with them. No employment was listed for Mrs. Jones (Id. at 90, indicating
“wife job between”).
The Jones attached a letter explaining the debt collection problems reported
3

on their credit history (doc. no. 48-7 at 2, ¶ 12 indicating they were writing the letter
to explain “the items on our credit history”). They indicated that as of 2010, they
had now paid various past-due bills that had been in collection, including some
medical bills they were “unaware” of until they obtained a copy of their credit
report. Plaintiffs attached five letters from several collection agencies (American
General Financial Services and FCC Columbus, Inc.) regarding past due bills that
had been in collection. Plaintiffs also attached a bill from “Lowe’s/GEMB”
addressed to Keeshann Jones at a post office box. The bill reflects a payment due
date of 6/15/2010 and the amount “$4003” hand-written in the space for “payment
enclosed.” 5 Plaintiffs also provided a copy of part of a receipt from a clothing
store (“Maurices”) indicating “MCC Payment.” The account number, due date, and
amount of payment are not visible on the copy.
In their letter, the Jones further explained that they had been unable to
afford the monthly mortgage payment on their five bedroom home, were unable to
obtain refinancing, and (after foreclosure proceedings were filed against them in
2003) had provided Wells Fargo with a “deed in lieu of foreclosure.” They indicated
“currently, we are trying to rebuild our credit that has been damaged by this
process.” They subsequently rented a house in Lebanon, Ohio. On their
application to rent the Patels’ house, they left blank several requests for
information, including: “How long?” (at the prior rental) and “Reason for leaving.”

5

The attached copy was only part of the bill and does not indicate the balance
due, payment history, or that the bill was paid in full.
4

The Jones indicated they currently owed approximately $43,000.00 to several
creditors, including $17,000.00 for a time share and “about $20,000” on a loan for a
2009 Charger automobile (doc. no. 38 at 91). They listed several additional
creditors on the two-page form that they did not list on the one-page form.
Mr. McGrath indicates that upon receiving all this information from Ms. Buck
(just prior to going on vacation for a week), he followed the same procedure he
uses for every residential lease application. Home Information Network has a
written list of “Criteria for Rental Approval,” which provides:
The following sources are used to qualify tenants who complete
and sign the rental application:
1) At least 1 year time on job
2) Favorable reference from current landlord if tenant is
currently renting
3) Satisfactory credit as provide by tenant or through credit
report
4) Satisfactory walk through of current residence
(doc. no. 38 at 107). The list indicates that steps one and two are required, and that
steps three and four may also be considered. The list also refers to additional
factors for consideration, such as pets, smoking, negative comments about the
property, past evictions, and felony convictions. 6 Home Information Network

6

Although plaintiffs “dispute” that Mr. McGrath followed his “usual procedure,”
the record reflects that he followed the criteria set forth on this list, which was
provided to the OCRC early in the state case. He indicates he viewed Mr. Jones’ 15
year employment history favorably, and that he checked with the Jones’ current
landlord. The Jones had provided information about their credit (including
collection letters regarding payment of past due bills), and Mr. McGrath did not run
a credit report. At the fourth step, he asked for a “walk through of current
residence.” He indicates that in light of the unusually large number of proposed
tenants and the presence of a dog, he was concerned about wear and tear on the
Patels’ house, as well as any pet damage.
5

indicates its “objective is to qualify tenants based on their ability to consistently
pay rent on time as agreed in rental agreement and their ability to maintain the
premises in a safe and orderly condition” (Id.). Mr. McGrath indicates he typically
reviews the application, verifies the applicant’s employment, calls the current
landlord, and checks on the court website to see if there is any “litigation or
criminal activity associated with the applicant” (doc. no. 40 at 3; McGrath Aff. ¶ 11).
When he reviewed the plaintiffs’ application, he noted the missing
information, 7 as well as the attached collection letters and the plaintiffs’ own letter
about the debt collection problems on their credit history. 8 He also noted that the
Jones were wanting to put 11 people in a 4-bedroom house (although they
previously lived in a 5-bedroom house), which he indicates immediately raised
concerns about possible overcrowding and wear and tear on the Patels’ house. Mr.
McGrath wrote a note on Ms. Buck’s email that the plaintiffs’ application was
missing “current landlord contact info.” He also noted “Smoking?” which is
presumably a reference to his need to find out if these prospective tenants
smoked. He also circled the fact that the plaintiffs had a dog.
Mr. McGrath obtained the telephone number for the Jones’ current landlord

7

Although he had sent the correct application form to Ms. Buck and specifically
requested that the Jones complete and sign it, they did not do so. The record only
reflects Ms. Buck’s own forms, which were incomplete. Regardless, Mr. McGrath
proceeded to consider their application.

8

Although plaintiffs “dispute” that in “reviewing the application, Mr. McGrath
noticed that Plaintiffs had a number of debts that went to collection agencies”
(doc. no. 52 at 6, ¶ 15), it is undisputed that plaintiffs attached multiple collection
letters to their application, which Mr. McGrath reviewed.
6

(Mark Armstrong) and spoke with him by phone. Mr. McGrath wrote notes on the
Jones’ application about information he learned in this conversation. He noted
“not ok, some late pays” (doc. no. 38 at 91). 9 He also spoke with the Jones. He
noted that their reason for leaving their current rental was “problems in house,”
that they were currently paying $2,300 in monthly rent, that they were moving out
of that rental after only “1 yr. 1 mos.” (Id. at 37 “they said there’s some mold in the
bathroom”). When he checked for any litigation or criminal history, he found
various filings associated with the foreclosure proceedings against them, as well
as more recent tax delinquency (doc. no. 43, Ex. 7, Complaint for Foreclosure filed
08-28-2003; Judgment Entry and Decree of Foreclosure filed 03-04-2003; Notice of
Sheriff’s Sale for Foreclosure on 05-22-2003; Complaint for delinquent real estate
taxes filed January 4, 2008). 10
Given all this information, Mr. McGrath indicates he was concerned about
the plaintiffs’ reliability in making payments. He was also concerned about the
large number of people and resulting excessive wear and tear on the house, which
9

It is undisputed that Mr. McGrath wrote this on the application. Plaintiffs contend
that they had merely asked to split their rent payment in two on several occasions.
Mr. McGrath apparently equated this with “slow pay” and/or “late pay.”(Id. at 79, ¶
20 indicating he learned that the Jones had “requested permission to pay their
rent late on multiple occasions”).
10

Plaintiffs red-line as “disputed” the assertion that “Mr. McGrath checked the
court website to see if Plaintiffs had any record of litigation or criminal activity ...
litigation activity he found there was associated with a foreclosure problem that
plaintiffs had” (doc. no. 52, Proposed Findings ¶ 17). Merely underlining this
factual assertion creates no genuine dispute of material fact. Mr. McGrath
testified that he checked the court website, and the exhibits in the record reflect
the foreclosure filings (doc. no. 43, Ex. 7). The Jones describe their past
foreclosure problems in their own letter.
7

his client preferred to sell (2013 McGrath Dep. at 92 “as far as the number of
occupants in the house ... I knew it was a concern. And it would be a concern for
the owner as well” and at 93, indicating that Mr. Patel “was concerned about the
number of occupants”).
When Mr. McGrath met with the Jones at the Pond Court residence to review
the application with them (doc. no. 48-6 at 2, Jones Aff. ¶ 15), he verified that they
were non-smokers and that they had a dog. Plaintiffs specifically told him they
were not interested in buying the house. They had indicated on their application
that they were interested in a two year lease and a month-to-month arrangement
after that. As the listing authorized him to use his best efforts to obtain a tenant for
a one year lease, Mr. McGrath asked them if they would be interested in a lease
shorter than two years. Although their application had not yet been approved, the
Jones had apparently assumed (based on their conversation with their own
realtor) that they would “finalize” matters that day (doc. no. 48-6, J. Jones Aff. ¶ 11
“I believed that I would be signing a lease that day”). 11 Mr. McGrath, however, had

11

In her declaration (doc. no. 48-8 at ¶¶ 16-18), Mrs. Jones attempts to use hearsay
statements (about what her realtor allegedly said Mr. McGrath allegedly said) to
prove the truth of the matter asserted, i.e. that he was going to approve their rental
application. Fed.R.Civ.P. 56(c)(4) requires that affidavits be based on personal
knowledge, not hearsay statements. See, e.g., Basinger v. CSX Transp., Inc., 1996
WL 400182, *6 (6th Cir. (Ohio)), cert. denied, 519 U.S. 1111 (1997) (“inadmissible
hearsay evidence in an affidavit will not defeat summary judgment”). It is
well-settled that inadmissible hearsay may not be considered on summary
judgment review. See Alexander v. CareSource, 576 F.3d 551, 558 (6th Cir. 2009)
(only admissible evidence may be considered); White v. Ohio, 2 Fed. Appx. 453,
459 (6th Cir. 2001) (affirming exclusion of hearsay); Ky. v. Louis Trauth Dairy, Inc.,
1998 WL 199717, *7 (6th Cir. (Ky.)) (affirming exclusion of hearsay).
8

not told the Jones their application was approved. He requested to view their
current rental. Plaintiffs agreed to this, and they viewed the premises together.
After speaking further with the Patels, Mr. McGrath indicated on June 16, 2010 that
the Jones’ rental application was declined. He recorded in his notes: “declined,
walk through of current rental - poor condition” and “several late payments, slow
pay” on Ms. Buck’s email (doc. no. 38 at 87). When he called the Jones to advise
their application was declined, he also mentioned the “items” on their credit
report, i.e. their history of debts in collection and other financial problems.
Subsequently, an agent for a married couple from Michigan (the
“Rainwaters”) inquired about a one-year lease of the house (doc. no. 38 at 54, 56).
Mr. McGrath was not aware of their race. As he did for the Jones, he provided them
with information about leasing the property. The Rainwaters did not follow through
due to a job change. Another married couple (“the Kirkwoods”) thereafter inquired
about the house and specifically indicated they were interested in purchasing the
property, which was an important factor to the Patels. Although this couple
(Caucasian, two children) had a prior bankruptcy, their application to lease the
property with a purchase option was eventually approved, and they did in fact
purchase the home with financing from a traditional lender (Id. at 65). 12
Meanwhile, in September 2010, the Jones complained to “Housing

12

Although plaintiffs “dispute” that “the Kirkwoods expressed immediate interest
in a purchase option”(Proposed Findings ¶ 52), the evidence reflects that the
Kirkwoods submitted a complete Home Information Network application form and
entered a lease with a purchase option. They subsequently bought the house.
Plaintiffs have pointed to no evidence to the contrary.
9

Opportunities Made Equal, Inc.” (“HOME”), an organization that tests fair housing
compliance “by assigning two of its testers to inquire about the availability of a
house” (doc. no. 48-2 at 2). On September 17, 2010, HOME sent Elbert Lewis (age
63, African-American male) to inquire about another house that Mr. McGrath was
advertising for sale at 413 N.Section Ext., South Lebanon, Ohio. On September 23,
HOME sent Jamie Hoffpauir (age 45, Caucasian female) to inquire about the same
house. The testers reported that they were both given prompt appointments,
treated in a professional and courteous manner, shown the house, and given
informative answers in response to their questions. They both received followed
up phone calls afterwards. No remarks of any kind were made that would permit
any inference of discrimination. This did not satisfy the Jones, who were “upset”
that their rental application had been declined (doc. no. 48-5, J. Jones Aff. ¶ 26).
The Jones filed a state housing discrimination charge with Ohio Civil Rights
Commission (“OCRC”) on October 12, 2010. The OCRC’s preprinted “conciliation
agreement” would have required the defendants to pay “actual, compensatory,
and punitive damages” and attend “Fair Housing Training” (Plaintiffs’ Ex. 16).
Defendants maintained that they had not discriminated against the plaintiffs and
elected to have the matter addressed in a civil action (doc. no. 57, Ex. B). On May 3,
2012, a civil action was filed in the Warren County Court of Common Pleas, Case
No. 12-cv-81987 (doc. no. 8-1 at 7).
While the state case was pending, plaintiffs filed a complaint in federal court
on December 7, 2012, asserting causes of action under 42 U.S.C. §§ 1981, 1982,
10

3604(a) and Ohio R.C. § 4112.02(H). Plaintiffs subsequently amended their
complaint to allege a single claim under § 3604 of the FHA (doc. no. 20 at 5, ¶ 37).
Plaintiffs seek compensatory and punitive damages, costs, and attorney fees.
After discovery concluded in the state case, 13 and just weeks before the
scheduled hearing on the fully-briefed motion for summary judgment, the OCRC
voluntarily dismissed the state case on June 5, 2013 (doc. nos. 17, 18, “Notices” of
dismissal). Meanwhile, in the federal case, the defendants had moved to dismiss
based on Younger abstention and the two years statute of limitations (plaintiffs
had filed their federal lawsuit two and a half years after their application was
declined). In light of the dual enforcement structure of the FHA, the Court found
that Younger abstention did not apply. Plaintiffs also now indicated for the first
time (in response to the Court’s show cause order) that they had in fact initially
filed a HUD complaint which had been referred to the OCRC. Given that HUD’s
letter to the plaintiffs about tolling and the two year time limit was arguably
ambiguous, the Court declined to dismiss the case as time-barred.
After discovery concluded on February 14, 2014 in the federal case, the
defendants moved for summary judgment. After additional extensions of time,
plaintiffs filed a response with some attached exhibits (including the two HOME
tester reports from 2010 and related affidavits dated May 1, 2014). Defendants
moved to strike those exhibits, arguing that plaintiffs had not disclosed this
evidence prior to the discovery deadline, had violated the discovery rules, and
13

Mr. McGrath was deposed in 2013 for the state case and again in 2014 for the
federal case.
11

should not be permitted to rely on this belated evidence (doc. no. 51). The
defendants further asserted that even if considered, the belated evidence was of
little significance because it reflected no discriminatory behavior by Mr. McGrath
and created no genuine disputes of material fact in this case. On July 16, 2014, the
Court held a motions hearing, at which respective counsel presented oral
arguments. The motions are fully briefed and ripe for consideration.
II. Standard of Review
Rule 56(a) of the Federal Rules of Civil Procedure provides in relevant part:
A party may move for summary judgment, identifying
each claim or defense or the part of each claim or
defense on which summary judgment is sought. 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.
Rule 56(c)(1) further provides that:
A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by: (A) citing to
particular parts of materials in the record . . . or (B)
showing that the materials cited do not establish the
absence or presence of a genuine dispute, or that an
adverse party cannot produce admissible evidence to
support the fact.
The moving party bears the burden of proving that no genuine issue of
material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586 (1986). The court must construe the evidence and draw all reasonable
inferences in favor of the nonmoving party. Id. at 587. In doing so, courts must
distinguish between evidence of disputed material facts and mere “disputed
matters of professional judgment,” i.e. disagreement as to legal implications of
12

those facts. Beard v. Banks, 548 U.S. 521, 529 30 (2006). On summary judgment
review, the court must determine whether the evidence presents a sufficient
dispute of material fact so as to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251-52 (1986). A party opposing summary judgment
“may not rest upon the mere allegations or denials of his pleading, but ... must set
forth specific facts showing that there is a genuine issue for trial.” Id. at 248.
III. Discussion
A. The Evidence Before the Court
The Court must first determine whether the late-disclosed evidence may be
considered on summary judgment. The Court’s Scheduling Order set a discovery
deadline of February 14, 2014. Prior to that time, plaintiffs’ counsel obtained
HOME’s file, including the 2010 reports by the two testers, but did not timely
disclose this information to the defendants as part of the Rule 26 obligation to
supplement disclosures and identify potential witnesses in a timely manner. Two
days before the deposition of Mr. McGrath on March 14, 2014, plaintiffs’ counsel
advised defense counsel of the existence of the 2010 reports (of which the
defendants were previously unaware). Defense counsel objected several times at
deposition to the use of the belated evidence (doc. no. 38 at 11, 15, 19, 43, 46, 50).
Defendants timely moved for summary judgment on March 31, 2014.
Plaintiffs sought (and were granted) several extensions of time to respond. When
they responded on May 6, 2014, they attached the late-disclosed 2010 tester
13

reports and some newly-created affidavits of those testers (doc. no. 48, Affs. of
Lewis and Hoffpauir, dated May 1, 2014). Plaintiffs also attached several new
affidavits for authentication purposes (Id., Affs. of Brown and Craig). The
defendants moved to strike the late exhibits on the basis that Rule 37 does not
allow a party to use late-disclosed evidence to support a dispositive motion.
“Striking” material from the record is a drastic remedy that is disfavored and
only sparingly used by courts. See Brown & Williamson Tobacco Corp. v. United
States, 201 F.2d 819, 822 (6th Cir. 1953). This Court found that removal of the
challenged evidence from the record was not warranted and denied the motion on
that limited basis (doc. no. 59, Order). See, e.g., Fox v. Mich. State Police Dept., 173
Fed.Appx. 372, 375 (6th Cir. 2006) (explaining that Rule 12 does not require courts
“to remove documents other than pleadings from the record in a case”).
The Court now addresses the more pertinent issue of whether, for purposes
of summary judgment, the challenged evidence must be disregarded due to the
plaintiffs’ unexcused late disclosure. Defendants point out that Rule 37(c)(1)
provides that “If a party fails to provide information or identify a witness as
required by Rule 26(a) or (e), the party is not allowed to use that information or
witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure
was substantially justified or is harmless.” Fed.R.Civ.P. 37(c)(1). The defendants
correctly assert that the plaintiffs have offered no justification for their failure to
disclose this evidence in a timely manner (doc. no. 51 at 3).
At the hearing, plaintiffs’ counsel acknowledged that he had received the
14

2010 tester reports prior to the discovery deadline, but had not timely provided
them to the defendants. He offered no explanation for the failure to supplement the
Rule 26 disclosures before the discovery deadline. Although he provided the
reports to the defendants just before the March 2014 deposition, this does not
excuse the late disclosure. To the extent the plaintiffs rely on affidavits that were
newly-created in May 2014, plaintiffs were admittedly aware of such witnesses
during the discovery period. Plaintiffs could have disclosed these potential
witnesses and obtained their affidavits in a timely manner, but did not do so.
Plaintiffs have offered no justification, much less any “substantial justification,”
for ignoring their disclosure obligations and the discovery deadline. Where a party
fails to disclose evidence in discovery and then seeks to rely on it when opposing
a motion for summary judgment, a court may properly disregard that evidence.
See, e.g., Gipson v. Vought Aircraft Indus., Inc., 387 Fed. Appx. 548, 554-555 (6th
Cir. 2010) (excluding affidavit as sanction under Rule 37(c)(1) for failure to
supplement initial disclosures). While the Court has been generous with
extensions of time in this case, the parties are expected to follow the Court’s
Scheduling Order and the federal rules.
At the hearing, plaintiffs’ counsel suggested that the late evidence is “not
critical” to the plaintiffs’ case. This provides no substantial justification, nor does
it mean the late disclosure was “harmless” under Rule 37. One purpose of Rule 37
and the Court’s Scheduling Order is to allow full discovery to all parties, followed
by sufficient time for them to utilize that discovery in their briefs. The suggestion
15

that a last-minute disclosure is “harmless” because the evidence is “not critical”
is not persuasive, particularly since the plaintiffs attempt to rely on such evidence
in an effort to withstand summary judgment.
Even supposing that Rule 37 did not bar the use of this late evidence, the
reports reflect that Mr. McGrath treated the testers similarly. He returned their
phone calls, promptly met with them to show the house, was courteous, gave them
his card, answered their questions, provided walk-throughs of the property,
engaged them in conversation, and followed up by contacting each individual
afterwards. He made no comments about race or neighborhood that might suggest
any discriminatory motivation. The testers both indicate his demeanor was
professional. In sum, the reports do not substantiate any disparate treatment of
the testers, and therefore, even if admissible, the reports would not provide any
basis to infer that Mr. McGrath had any racial animus regarding the Jones.
Although both testers were shown the house and treated courteously,
plaintiffs claim in their brief that Mr. McGrath expressed “greater preference for
[Ms. Hoffpauir] as a prospective buyer” and “just went through the motions with
Mr. Lewis” (doc. no. 48 at 6, 17). Plaintiffs’ subjective characterization is not
substantiated by the objective information in the reports. Mr. Lewis indicated “Mr.
McGrath was informative and forthcoming with information on the property and
was equally involved in the conversation during the tour” (doc. no. 38 at 123). In
fact, Mr. Lewis checked “yes” for “Did agent offer to call you back,” while Ms.
Hoffpauir checked “no” for the same question (doc. no. 48-3 at 7, ¶ 63, and at 15, ¶
16

63). This point actually favors Mr. Lewis, not Ms. Hoffpauir. When viewing the
entire test report, any minor differences recorded by the testers do not suggest
any sort of racial animus. See, e.g., Fair Hous. Opps. of NW Ohio v. Am. Family
Mut. Ins. Co., 684 F.Supp.2d 964, 974 fn. 6 (N.D.Ohio 2010) (observing that “the
testing results did not indicate disparate treatment”).
To the extent plaintiffs claim that the testers were given slightly different
information about the status of the listing, the record reflects that the testers
visited one week apart, and that Mr. McGrath gave them accurate information at
the time (2014 McGrath Dep., doc. no. 38 at 48-49 explaining that “it had been an
expired listing. [The owner] had been trying to sell it for some time. It was off the
market. We agreed to leave the sign out, and maybe generate some sign calls with
the idea we’re going to put it back on the market.”). When Mr. McGrath spoke with
Mr. Lewis on September 17, he explained that it had been temporarily off the
market, but that he could show him the house. In fact, Mr. McGrath arranged to
show him the house that same day. A week later, when the next tester inquired, Mr.
McGrath explained that the house was back on the market because they had
received some calls about it, and that he had shown it to one person the previous
week (but had not received an offer). This is accurate information devoid of any
racial animus.
Even supposing the belated evidence were admissible, plaintiffs’ subjective
characterization of it would not be sufficient to withstand summary judgment. A
party opposing summary judgment “may not rest upon the mere allegations or
17

denials of his pleading, but ... must set forth specific facts showing that there is a
genuine issue for trial.” Anderson, 477 U.S. at 248; Cox v. Ky. DOT, 53 F.3d 146,
150 (6th Cir. 1995) (observing that Supreme Court precedent provides that
“subjective” allegations do not preclude summary judgment). It is well-settled that
a nonmoving party may not avoid summary judgment merely by relying on
“subjective” beliefs, speculation, or conjecture. Arendale v. City of Memphis, 519
F.3d 587, 605 (6th Cir. 2008) (“In order to survive summary judgment, plaintiff
cannot rely on conjecture”); Grizzell v. City of Columbus Div. of Police, 461 F.3d
711, 724 (6th Cir. 2006) (“conjecture and speculation are insufficient”); Lyons v.
Metr. Gov. of Nashville & Davidson Cty., 416 Fed.Appx. 483, 490 (6th Cir. 2011)
(same). Here, the objective evidence reflects that the testers were treated similarly.
Even if the belated evidence were considered, it would not establish any genuine
disputes of material fact.
B. the Motion for Summary Judgment on the FHA Claim
Defendants assert that they are entitled to summary judgment on the
plaintiffs’ FHA claim. They argue that Jones were not qualified to lease the house
because they were trying to pack too many people in the house, that their rental
application was declined for legitimate non-discriminatory reasons (primarily
financial),

and

that

the

Jones

have

not

shown

that

such

legitimate

non-discriminatory reasons were merely a “pretext” for discrimination.
The federal Fair Housing Act (“FHA”) provides in relevant part that: “it shall
be unlawful – (a) to refuse to sell or rent after the making of a bona fide offer, or to
18

refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny,
a dwelling to any person because of race, religion, sex, familial status, or national
origin.” 42 U.S.C. § 3604(a). The plaintiffs allege that the defendants “refused” to
rent a house to them due to their race.
A plaintiff may establish a violation of the FHA by showing that the
defendant intended to discriminate against the plaintiff on the basis of race
(“disparate treatment’). Graoch Assocs. v. L’ville/Jefferson Cty. Metro H.R.C., 508
F.3d 366, 381 (6th Cir. 2007) (Moore, J., concurring). “To prevail on a disparate
treatment claim, a plaintiff must show proof of intentional discrimination.” HDC,
LLC v. City of Ann Arbor, 675 F.3d 608, 612 (6th Cir. 2012); Hollis v. Chestnut Bend
Homeowners Assoc., --- F.3d ----, 2014 WL 3715088, *5 (6th Cir. (Tenn.)) (“analysis
of such a claim focuses on the defendant's intent”). Here, the plaintiffs have no
direct evidence of discrimination. Mr. McGrath never made any comments or notes
that would indicate any sort of racial basis for declining their rental application.
Plaintiffs therefore proceed under the burden-shifting evidentiary framework for
claims based on circumstantial evidence (doc. no. 48 at 10-11).
In FHA disparate-treatment cases based on circumstantial evidence, courts
apply “the three-part burden of proof test established in McDonnell Douglas.”
Graoch, 508 F.3d at 371. The Sixth Circuit Court of Appeals has explained that:
First, the plaintiff must state a prima facie case by showing that
he is a member of a protected class, that he applied to and was
qualified to rent or purchase certain housing, that he was
rejected, and that the housing remained available thereafter...
Second, the defendant may then articulate a legitimate
non-discriminatory basis for its challenged decision ... Third, if
19

the defendant does proffer such a basis, the plaintiff must
establish that the articulated reason is pretextual ... The burden
of persuasion always remains with the plaintiff.
Id. (citing Selden Apts. v. Dept. of HUD, 785 F.2d 152, 160 (6th Cir. 1986) and Maki v.
Laakko, 88 F.3d 361, 364 (6th Cir. 1996), cert. denied, 519 U.S. 1114 (1997)).
C. the Prima Facie Case
The evidence reflects, and the parties do not dispute, that the plaintiffs are
members of a protected class (African-American), applied to rent a house
managed by the defendants, were rejected, and that the house remained available
for sale or lease thereafter.
As for whether the Jones were “qualified” to lease the house, the term
“qualified” has been defined as being “ready and able to accept defendants' offer
to rent or buy.” Campbell v. Robb, 162 Fed.Appx. 460, 475-76 (6th Cir. 2006) (citing
Mencer v. Princeton Square Apts., 228 F.3d 631, 635 (6th Cir. 2000)). The test is an
objective one, i.e. the determination of whether a prospective renter is “qualified”
is based on objective facts. Id. at 475-76 (finding that a single person was not
“qualified” to rent a subsidized three-bedroom residence because Section 8 only
allows a single person to have a one-bedroom residence) (citing 24 C.F.R. §
982.402(b)(7) (2005) (“the family unit size for any family consisting of a single
person must be either a zero or one-bedroom unit”).
In the Proposed Conclusions of Law, the plaintiffs do not dispute the
defendants’ assertion that the plaintiffs “were not qualified to lease 923 Pond
Court” (doc. no. 52 at 15, ¶ 22). If not qualified, that would conclude this case. In
20

their response brief, however, the plaintiffs address the issue of whether they were
qualified (doc. no. 48 at 11, Part E). The Court will therefore consider this issue.
The defendants contend that the plaintiffs were trying to pack too many
people (11 people, plus a dog) into the 4-bedroom residence. They point to the
International Property Maintenance Code (“I-Code”) which sets forth standards for
occupancy limits based on square footage. See § 404.5 (“Overcrowding: Dwelling
units shall not be occupied by more occupants than permitted by the minimum
area requirements” and § 404.4.1 “every bedroom occupied by more than one
person shall contain at least 50 square feet (4.6 m2) of floor area for each occupant
thereof”). 14
The listing for the house indicates that in addition to the master bedroom, it
has three upstairs bedrooms with dimensions of 12 x 10, 12 x 11, and 13 x 11 feet.
Under the I-Code standards, the sleeping areas did not have sufficient floor area to
put nine children in the upstairs bedrooms. Defendants assert that the house was
simply too small for a family of 11 individuals. Mr. McGrath indicates that when he
reviewed their application, he was concerned about possible overcrowding and
resulting wear and tear on the Patels’ house, as well as possible occupancy
restrictions (doc. no. 43 at 92, 2013 McGrath Dep. at 90 “When I was talking to Mr.
Patel he was concerned about it as well”).

14

Although the plaintiffs red-line as “disputed” the defendants’ discussion of the
I-Codes and the specific standard that “every bedroom occupied by more than one
person shall contain at least 50 square feet of floor area for each occupant”
(Proposed Conclusions of Law, ¶¶ 14-20), Section 404.4.1 specifically so provides
(doc. no. 38 at 101).
21

The FHA expressly provides that nothing in the statute “limits the
applicability of any reasonable local, State, or Federal restrictions regarding the
maximum number of occupants permitted to occupy a dwelling.” 42 U.S.C. §
3607(b)(1). This provision was included in the FHA primarily to alleviate concerns
that housing providers would have to accommodate families even to the extent of
having to violate occupancy laws. City of Edmonds v. Oxford House, Inc., 514 U.S.
725, 735 (1995) (“Maximum occupancy restrictions ... cap the number of occupants
per dwelling, typically in relation to available floor space or the number and type of
rooms; these restrictions ordinarily apply uniformly to all residents of all dwelling
units and are intended to protect health and safety by preventing dwelling
overcrowding.”) (citing International Conference of Building Officials, Uniform
Housing Code § 503(b) (1988)). The Supreme Court pointed out that this part of the
FHA was enacted to allay “fears that landlords would be forced to allow large
families to crowd into small housing units” (Id. at 735, fn.8 “Section 3607(b)(1)
makes it plain that, pursuant to local prescriptions on maximum occupancy,
landlords legitimately may refuse to stuff large families into small quarters.”); see
also, Fair Housing Adv. Assoc, Inc. v. City of Richmond Hts., Ohio, 209 F.3d 626,
638 (6th Cir. 2000) (affirming summary judgment to defendants, finding that the
maximum occupancy ordinances were “reasonable” for purposes of the FHA). The
Supreme Court has emphasized that “rules that cap the total number of occupants
in order to prevent overcrowding of a dwelling ‘plainly and unmistakably’ fall
within § 3607(b)(1)'s absolute exemption from the FHA's governance.” City of
22

Edmonds, 514 U.S. at 735 (quoting A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493
(1945)).
The plaintiffs do not challenge the I-Code occupancy standards referred to
by the defendants. Instead, they point to an Ohio regulation for the protection of
foster children, OAC § 5101.2-7-05(B)(2), that provides that “a bedroom for foster
children shall accommodate no more than four children” (doc. no. 48 at 8).
Plaintiffs argue that with two parents in the master bedroom and four children in
each of the other three bedrooms, the Patels’ house could hold up to 14 people.
Plaintiffs do not address the square footage standards of the I-Code or cite any
occupancy regulations in Lebanon, Ohio. 15
The defendants point out that the bedrooms must still be adequate in size to
hold this maximum number of children. They assert that, when read together in a
logical manner, the I-Code standard and the Ohio foster regulations mean that, if a
room is large enough, it could hold up to four children. They assert that “the
correct way to interpret OAC § 5101:2-7-05(B)(2) is in conjunction with
International Property Maintenance Code § 404.4.1; up to 4 children, and no more,
may abide in a large bedroom of 200 square feet or more, but a smaller space may
not accommodate more than one child unless the room has at least 50 square feet
of space per occupant” (doc. no. 50 at 4). 16

15

Mrs. Jones indicates that she “knows from personal experience with the
process that that (sic) the county regulations permit a two‐parent family in a four‐
bedroom house to care for up to 10 children,” but cites no regulation (doc. no.
48-8, K. Jones Decl. ¶ 35).
16
Although the I-Codes have been widely adopted as law across the nation,
23

Plaintiffs base their response on their own understanding of the regulation
governing foster care in the state of Ohio, but do not address other pertinent parts
of the same regulation. They ignore the fact that the regulation further specifies
that foster children over the age of five who share a bedroom must be of the same
sex. OAC § 5101.2-7-05(C). Plaintiffs do not mention the age and sex of the nine
children living with them at the time of their rental application. Plaintiffs were
bound to comply with the applicable regulations for the protection of foster
children. Moreover, the largest part of the Jones’ income (and ability to pay their
rent) was derived from receiving payment from Children’s Services for the care of
the six foster children. In other words, in order to continue caring for this number
of foster children and in order to continue receiving monthly payment for doing so,
the Jones had to comply with the regulations for appropriately housing those
children. Plaintiffs have not shown that the 4-bedroom house they sought to rent
would have met the requirements of those regulations, and thus, that they were
qualified (i.e. “ready and able”) to rent that property.
The defendants point out that under the foster care regulation that plaintiffs
themselves cite as authority, the Patels’ house could not accommodate all the
children. Although plaintiffs indicate they liked the house because it had four
bedrooms and “a big basement” for the children (K. Jones Aff. ¶ 35), defendants
including specific locations in Ohio, the record here does not indicate whether the
I-Code occupancy standards have been adopted into law by the City of Lebanon.
Even so, such widely-known standards could properly inform Mr. McGrath’s
concern about overcrowding. Mr. McGrath indicates that he and Mr. Patel were
both concerned at the time about the large number of people that the Jones
wanted to place in the home.
24

correctly point out that the Jones “could not have lawfully alleviated the
overcrowding of the bedrooms by sticking some of the children in the basement”
(doc. no. 40 at 14). The regulations for the protection of foster children specifically
forbid this. See OAC 5101:2-7-05(B)(8) (“A bedroom for foster children shall: not be
... in a basement ...”). The plaintiffs do not dispute this in the Proposed
Conclusions of Law (doc. no. 52 at 15, ¶ 21 “applicable housing codes prohibit
using other spaces as bedrooms ... plaintiffs could not have lawfully alleviated the
overcrowding of the bedrooms by sticking some of the children in the basement”).
Plaintiffs are presumably aware of this, as they indicate they are knowledgeable
about the rules for foster care and their previous home had five bedrooms (doc.
no. 48 at 8).
For purposes of making a prima facie case, the plaintiffs have the burden to
show that they were “qualified,” i.e. “ready and able” to lease the premises.
Plaintiffs’ citation of a portion of a foster care regulation does not establish that
they could permissibly house all the foster children in the rental home at issue, nor
does it meet the initial burden at the prima facie stage to show that they were ready
and able to rent the home. Plaintiffs’ statements that they were “qualified” are
entirely conclusory (doc. no. 48-8 at 2, ¶ 13). Plaintiffs have not shown that they
could place this many children in the rental house under the foster regulations.
D. Legitimate, Non-Discriminatory Reasons
Even assuming a prima facie case, the defendants have articulated
legitimate, non-discriminatory reasons for declining plaintiffs’ rental application:
25

-- Plaintiffs had no interest in a purchase option, an important
consideration to the property owner;
-- the unkempt condition of plaintiffs’ then-current residence;
-- too many occupants, crammed into too few bedrooms, plus a
dog;
-- Plaintiffs’ history of late bill payment, to the point of being
pursued by multiple collection agencies;
-- their then-current landlord informing Mr. McGrath that
Plaintiffs paid their rent late on multiple occasions.
Mr. McGrath has consistently indicated that although he had multiple concerns
about the Jones’ application, he denied it primarily for financial reasons (2013
McGrath Dep., doc. no. 43 at 21, 93, 96; 2014 McGrath Dep., doc. no. 38 at 77, 104,
and McGrath Aff. ¶¶ 19-20, 22).
E. Pretext
The evidentiary burden then shifts to the plaintiffs to point to evidence that
the stated reasons: (1) had no basis in fact, (2) were not the actual reasons, or (3)
were insufficient to explain the action. Manzer v. Diamond Shamrock Chemicals
Co., 29 F.3d 1078, 1084 (6th Cir. 1994), overruled on other grounds by Gross v. FBL
Fin. Servs., Inc., 557 U.S. 167 (2009)). Although plaintiffs’ brief suggests that
“plaintiffs are not required to prove racial animus” (doc. no. 48 at 17), they bear the
burden of pointing to evidence that demonstrates the existence of genuine
disputes

of

material

fact

as

to

whether

the

defendants’

legitimate

non-discriminatory reasons were merely a pretext for discrimination.
It is undisputed that the plaintiffs were not interested in a purchase option
and informed Mr. McGrath of this. Plaintiffs have not pointed to any evidence to
dispute the testimony that the lease purchase option was an important
26

consideration to the Patels. Mr. McGrath testified that “renting” was the least
attractive option to the Patels (doc. no. 38 at 40).
Plaintiffs point to no evidence to dispute that their former rental was in
“unkempt” and/or “poor” condition when Mr. McGrath viewed it.
Although the Jones suggest that they could put up to four foster children in
each upstairs bedroom (without reference to the size of the room), their reliance
on part of a foster care regulation is not evidence showing that Mr. McGrath’s
concern about “too many occupants, crammed into too few bedrooms, plus a dog”
(and resulting wear and tear on the house) was merely a pretext for discrimination.
Turning to the financial considerations, it is undisputed that the Jones had a
history of late bill payment. They admittedly had multiple past due debts that were
subject to collection. They attached bill collection letters to their application
showing that certain past due bills had been paid off in 2010. The letters indicated
that the Jones had been past due on various consumer accounts, resulting in
collection efforts. The fact that the Jones had eventually paid these bills is beside
the point. The record plainly shows that they had a history of late payments. Mr.
McGrath was aware of this information. Mrs. Jones acknowledges that Mr.
McGrath referred to the collection items on their credit history when he advised
her that their application was declined.
Although the plaintiffs allege that they “have never made a late rent or
mortgage payment” (doc. no. 48-7 at 2, ¶ 11, K. Jones Aff.), they acknowledge that
foreclosure proceedings were filed against them. By definition, foreclosure occurs
27

when a person has defaulted on their mortgage payments. See Black’s Law
Dictionary (9th ed. 2009) (defining “default” as “the failure to pay a debt when
due”). Plaintiffs admit that they were unable to afford their previous mortgage
payments. In addition to the plaintiffs’ foreclosure problems in 2003, Mr. McGrath
found more recent court filings in 2008 regarding the Jones’ tax delinquency. Even
construing the evidence in the light most favorable to plaintiffs, they have not
shown that Mr. McGrath’s concern about their reliability in making payments had
“no basis in fact”, was not the “real reason,” or was “insufficient” to explain his
recommendation. Plaintiffs have not pointed to objective evidence suggesting that
declining their rental application for financial reasons was merely a “pretext” for
discrimination.
This brings us to the last articulated consideration of Mr. McGrath -- that the
Jones then-landlord informed him that the Jones had paid their rent late multiple
times. Mr. McGrath had noted “several late pays, slow pay” on Ms. Buck’s email
and “not ok, some late pay” on their application (doc. no. 38 at 87, 91). Even
assuming that this refers to the rent payments (as opposed to other late bill
payments of record), the Jones acknowledge that “twice, our landlord Mark
Armstrong agreed to let us split our rent into two payments.” They contend that
they were not actually “late” in paying and have submitted an affidavit of Mr.
Armstrong to that effect, i.e. he was willing to accept timely partial payments (doc.
no. 48-1 at ¶¶ 6-8, indicating that when Mr. McGrath called and asked if the Jones
paid their rent on time, he told him “a couple of times they asked in advance to
28

break their payment into two payments that month, instead of on its due date”).
Whether these payments were properly characterized as “slow and/or late” or
were merely “irregular,” it is undisputed that the Jones did not pay their rent as
they had agreed under their rental contract. The Jones’ requests to make irregular
partial payments (even if the landlord agreed to accept them) would tend to
suggest possible financial difficulties, particularly in light of the Jones’ history of
foreclosure (2003), tax delinquency (2008), and multiple past-due debts in
collection (albeit paid off in 2010). The financial information before Mr. McGrath,
including the landlord comments, provided legitimate reasons to decline the
Jones’ rental application. Plaintiffs have not shown that Mr. McGrath’s concerns
about their reliability in making payments were pretextual.
The plaintiffs’ contention that Mr. McGrath’s stated reasons were not the
“real reason” is a subjective belief not supported by any evidence. The Sixth
Circuit Court of Appeals has repeatedly explained that a “nonmoving party may
not avoid a properly supported motion for summary judgment by simply arguing
that it relies solely or in part upon credibility considerations or subjective
evidence.” Lyons, 416 Fed.Appx. at 490 (quoting Cox v. Ky. DOT, 53 F.3d 146, 150
(6th Cir. 1995)). For example, although the Jones question Mr. McGrath’s
motivation in asking them about a different term of lease, this is not
“discriminatory.” Just as the Jones’ realtor (Sara Bush) could inquire about
whether the amount of rent was “negotiable,” the Patels’ realtor (Mr. McGrath)
could inquire about whether the plaintiffs were interested in a shorter length of
29

lease (particularly since the listing contract indicated he was authorized to seek a
one-year lease). Contrary to plaintiffs’ suggestion, this raises no inference of
discrimination. Plaintiffs’ contention that such inquiries were pretextual is mere
speculation.
Similarly, the Jones also suggest (based on their own belief that Mr.
McGrath was going to approve their application) that he “changed his mind” and
did not approve their application after he met with them. They attribute this to
racial animosity. The problem with this argument (indeed, their entire case) is that
it is largely based on their own subjective belief, whereas the objective evidence
shows that Mr. McGrath had not yet approved their application and had sound
(non-discriminatory) financial reasons for declining their application.
Finally, plaintiffs argue that the “best evidence that defendants (sic) reasons
are pretextual is their protean nature” (doc. no. 48 at 12). Contrary to such
suggestion, the record does not reflect “changing” reasons. Mrs. Jones
acknowledges in her declaration that Mr. McGrath has asserted “since June of
2010” that they wanted to put too many people in the house (doc. no. 48-8 at 4, K.
Jones Decl. ¶ 35). Mr. McGrath has consistently asserted that he was concerned
about various factors (all of them legitimate and non-discriminatory), but declined
the Jones’ application primarily for financial reasons relating to their reliability in
making payments (2013 McGrath Dep., doc. no. 43 at 93, Q: And you had said that
your recommendation was primarily based on the financial issues that you had
found with their application, the Jones' application, is that correct? A: That's
30

correct.). After considering all the information before him, he indicates he based
his recommendation to Mr. Patel primarily on the financial information (Id. at 21
indicating that “reliability on their payments” was the most important factor). Mrs.
Jones acknowledges that when Mr. McGrath called her on June 16 to advise that
their application was declined, he told her the reason was financial, i.e., “the items
on their credit report.” The fact that he had various concerns about their
application (and has repeatedly explained them) does not mean that the reasons
have “changed.” This is simply a mischaracterization by plaintiffs’ counsel and
does not raise any permissible inference of discriminatory intent.
Although the Jones attached bill collection letters regarding paid-off debts
to their application, they now argue that “the application does not call for any past
payment history of bills” (doc. no. 48 at 15). This argument makes little sense. The
Jones voluntarily provided information about their past financial problems, and
Mr. McGrath could properly consider such information. The Jones’ own letter
discussed various collection items on their credit report, as well as the foreclosure
proceedings against them. Although they intended this to illustrate that they had
paid off some past-due debts, they can hardly expect a prospective landlord to
ignore the fact that they had recently had multiple bills in collection. While it is
commendable that plaintiffs were attempting to remedy their past delinquencies, it
does not mean that their financial history of late payments was not significant (and
legitimately so) to Mr. McGrath. Throughout this litigation (and the state case), he
has consistently maintained that he had various concerns, but was most
31

concerned about the Jones’ reliability in making payments. This is consistent with
the Home Information Networks’ stated objective of finding tenants qualified
“based on their ability to consistently pay rent on time as agreed in rental
agreement and their ability to maintain the premises in a safe and orderly
condition” (Id.). The Jones have not pointed to evidence suggesting that these
legitimate concerns were pretextual.
In sum, the plaintiffs have not presented sufficient evidence from which a
trier of fact could infer that racial discrimination was a motivating factor in the
denial of their rental application. Even supposing the plaintiffs had established a
prima facie case, their case fails at the pretext stage. Defendants are entitled to
summary judgment on the FHA claim.
Accordingly, the defendants’ “Motion for Summary Judgment” (doc. no. 40)
is GRANTED. This case is DISMSSED and TERMINATED on the docket of this
Court.
IT IS SO ORDERED.
s/Herman J. Weber
Herman J. Weber, Senior Judge
United States District Court

32