Sioux City woman awarded damages for quid pro quo sexual harrassment claim under FHA

by Allison Arends

Quigley v. Winter
(Federal 8th Circuit Court of Appeals, March 16, 2010)

Jaymie Quigley rented a home from Dale Winter, a property owner in Sioux City Iowa, who often rented out homes to low-income individuals who received Section 8 housing vouchers from the Sioux City Housing Authority (SCHA). Quigley used housing vouchers to pay rent to Winter. In 2002 Winter began initiating numerous unwanted interactions of a sexual nature towards Quigley including visiting her home unannounced, refusing to leave her home when asked, and unwanted physical advances. Quigley felt so uncomfortable with Winter’s behavior that she met with her SCHA worker to report Winter’s actions. The SCHA worker informed Quigley that if she was to break her lease she would lose her housing voucher and that if she was to change the locks to the house she was required to provide Winter with a key. When Quigley approached Winter about releasing her from the lease, Winter refused and Quigley changed the locks on her door without giving Winter a key. When Quigley’s lease expired, she moved out of the property. Winter did not return her deposit. Quigley filed a complaint with the Sioux City Human Rights Commission and in 2006 she filed a complaint against Winter in the district court alleging sexual harassment, sex discrimination, coercion, intimidation, threats and interference with Quigley’s rights, in violation of the Fair Housing Act (FHA) and the Iowa Civil Rights Act (ICRA). Winter brought a breach of contract counterclaim against Quigley  insisting she owed him unpaid rent and failed to leave the rental home in a “clean and satisfactory condition.” The jury found in favor of Quigley and awarded her $13,685 in compensatory damages for the housing claims, $400 for Quigley’s breach of contract claim, and $250,000 in punitive damages.

Following the district court’s judgement, Winter filed a motion for a new trial objecting to the award of punitive damages. The district court entered an order denying  Winter’s motions for a new trial and judgment as a matter of law, yet reduced Quigley’s punitive damages from $250,000 to $20,527.50. Quigley appealed the district court’s judgment with respect to the amount of punitive damages and attorney fees. Winter cross-appealed asserting various errors at trial and objecting to any award of punitive damages.

The 8th Circuit Court of Appeals addressed Winter’s claims that the district court erred in denying Winter’s post-trial motions in relation to Quigley’s claims that there was (1) hostile housing environment caused by sexual harassment; (2) “quid pro quo” sexual harassment; (3) sex discrimination; and (4) coercion, intimidation, and interference with housing rights.

In response to Winter’s first objection the Court evaluated whether Winter successfully proved a “complete absence of probative facts” which would discredit Quigley’s claim of hostile housing environment. The Court determined that there was adequate evidence to support a hostile housing environment claim noting that, “[S]exual harassment is actionable when the offensive behavior unreasonably interferes with use and enjoyment of the premises.” The Court found sufficient evidence of numerous unwanted interactions of a sexual nature and, more importantly, that these interactions took place in Quigley’s own home where she was, “entitled to feel safe and secure and need not flee.” Winter was unable to provide proof sufficient to show that the jury’s decision was unreasonable.

Winter further argued that the district court erred in denying his motion for judgment as a matter of law on Quigley’s “quid pro quo” sexual harassment claim. Quid pro quo harrassment occurs when housing benefits are explicitly or implicitly conditioned on sexual favors.  In order for Quigley to prevail with this claim, the court recognized that she must demonstrate “(1) she was a member of a protected class; (2) she was subjected to unwelcome harassment in the form of sexual advances or requests for sexual favors; (3) the harassment was based on sex; and (4) her submission to the unwelcome advances was an express or implied condition for receiving job benefits or her refusal to submit resulted in a tangible job detriment”  The Court found that the specific words exchanged and advancements made during the inappropriate interactions between Winter and Quigley met the standards of “quid pro quo” harassment.  For example, when Quigley inquired about the likelihood of receiving her deposit back from Winter, Winter fluttered his hand against Quigley’s stomach and said, “My eagle eyes have not seen everything yet.” The jury could reasonably infer Winter was telling Quigley the return of her deposit was conditioned upon Winter seeing more of Quigley’s body or even receiving a sexual favor, which would amount to “quid pro quo” sexual harassment.

One of the grounds for a claim for coercion, intimidation or interference with housing rights under the FHA is retailiation, which the statute defines as “Retaliating against any person because that person has made a complaint, testified, assisted, or participated in any manner in a proceeding under the Fair Housing Act.”   Winter argued that Quigley’s coercion, intimidation, or interference with housing rights claim was essentially a retaliation claim, which she failed to prove.  However, the Court recognized that retaliation was only one form of conduct prohibited under 3617 and found that there was more than sufficient evidence supporting Quigley’s claim on the other grounds.

In response to Winter’s last claim, the court found that the provisions of the Fair Housing Act provide sufficient evidence supporting Quigley’s claim that Winter engaged in discriminatory housing practices when he coerced, intimidated, and interfered with her enjoyment of rights. The court affirmed the district court’s judgment with respect to Winter’s claims on cross-appeal.

The court also addressed Quigley’s claims that the court (1) improperly reduced the jury’s punitive damage award from $250,000 to $20,527.50, and (2) failed to conduct a proper analysis of Quigley’s entitlement to attorney fees and awarded an insufficient amount. Winter, however, conversely claims the district court erred when awarding any punitive damages at all.

In response to Winter’s claim the court recognized that the FHA provides for the recovery of punitive damages by victims of discriminatory housing practices using the same standard for punitive damages in FHA cases involving employment discrimination and civil right cases. The court notes that punitive damages are, “appropriate in a federal civil rights action when the defendant’s conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others.” Winter confirmed he knew that sexual harassment was unlawful and Quigley presented sufficient evidence of sexual harassment by Winter. The court affirmed that punitive damages were appropriate.

The court then turned to Quigley’s claims to assess whether the punitive damages awarded were reasonable. In order to make this assessment the court considered: (1) “degree of the reprehensibility of the defendant’s conduct,” (2) the ratio between punitive damages and actual harm, and (3) “the civil or criminal penalties that could be imposed for comparable misconduct.”

After an evaluation of Winter’s actions directed specifically towards Quigley, the court found that Winter’s conduct was reprehensible because of her financial vulnerability and the power Winter held over Quigley and her family. However, when evaluating the ratio between punitive damages and actual harm, the court took guidance from the Supreme Court’s assessment of single-digit multipliers and found that the circumstances of this case and due process did not justify the jury’s original punitive damages award, which was eighteen times greater than the compensatory damages. Finally, in assessing sanctions for comparable misconduct, the court concluded that the reduced damages of $20,527.50 inadequately reflected the reprehensibility of Winter’s actions, and recommended an amount of $54,750 in punitive damages, which was four times the compensatory damages award ($13,685). The court also concluded that a reasonable attorney fee award in this case was $78,044.33.

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