The Midwest Planning BLUZ • Iowa State University Extension and Outreach

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.

by Gary Taylor

Bloch v. Frischholz and Shoreline Towers Condominium Association
(Federal 7th Circuit Court of Appeals, November 13, 2009)
(For a map of the geographic boundaries of the federal courts of appeals click here)

7th Circuit Court of Appeals remands to district court claim for post-sale discrimination under Fair Housing Act.

The Blochs are long-time residents of the Shoreline Towers condominiums, subject to the rules and regulations of the Shoreline Towers Condominium Association (STCA). For roughly 30 years the Blochs displayed a mezuzah (a small rectangular box that houses scriptures from the Torah) on the exterior doorpost of their home (Many Jews believe they are commanded by God to affix a mezuzah on the right doorpost when facing into the home. They touch the mezuzah and pray when entering the home). In 2001 the STCA rules committee enacted a set of rules to govern activities taking place in the common hallways. Lynne Bloch chaired that committee and voted in favor of the rules, one of which was that “mats, boots, shoes, carts or objects of any sort are prohibited outside unit entrance doors.” Until mid-2004 the STCA did not remove mezuzot (plural of mezuzah) or any other object affixed to the outside unit doors or doorposts; however, in 2004 after the building hallways were remodeled the STCA began removing and confiscating the mezuzot, using the above-referenced rule for support. The STCA also began confiscating crucifixes, wreaths, Christmas ornaments, political posters “and Chicago Bears pennants.”

The Blochs voiced their concerns to the STCA and its president, Edward Frischholz; however, their concerns were not heeded. Instead Frischholz “accused Lynne Bloch of being a racist, called her a liar, encouraged other tenants to vote against her re-election to the Association’s Board of Managers, and told her that if she did not like the way the rules were enforced she should ‘get out.'” He also admitted that he purposefully held Board events on Friday nights, knowing that she could not attend due to her religious obligations. The Board rejects any rules change, and went on to warn the Blochs that they would be fined if they continued to display a mezuzah. For over a year, each time the Blochs put their mezuzot back up, the STCA took them down, even on the occasion when Lynne Bloch and her family were out of the building at the cemetery for the funeral of Lynne’s husband. On the occasion of the funeral, the STCA even left tables and chairs near the door in the hallway in place – tearing down only the mezuzah.

In September 2005 the Blochs filed suit, seeking an injunction to prevent the STCA from removing the mezuzot, and damages for emotional distress. The Blochs asserted three theories based on the Fair Housing Act (FHA). First, section 3604(a) makes it unlawful to “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.” The Blochs asserted that the “otherwise make unavailable” language allows claims for actions that take place after the sale, and that the actions of the STCA in this case constituted “constructive eviction,” by rendering Shoreline Towers unavailable to them and other observant Jews because their religion does not permit them to live in a dwelling where a mezuzah is not permitted to be affixed to the doorway. The 7th Circuit ruled against the Blochs on this theory based on the fact that they never vacated the condominium, nor ever attempted to sell it to an observant Jew or any other individual.

The Bloch’s second claim was based on section 3604(b), which makes it unlawful “to discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.” On this claim the 7th Circuit remanded the case to the district court, stating that because the Blochs purchased a dwelling subject o the condition that the STCA can enact rules that restrict the buyer’s rights in the future, section 3604(b) prohibits the Association from discriminating against the Blochs through its enforcement of the rules, even if the rules themselves are neutral as written.

The Bloch’s final FHA claim was based on section 3617, which makes it 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 person in the exercise or enjoyment of any right granted or protected by …section 3604…of this title.” The Blochs argued that this section supports a post-acquisition discrimination claim independent of any allowed under section 3604. “Interference” with the enjoyment of fair housing rights, they argued, encompasses a broader swath of conduct than an outright deprivation of those rights. Noting that other federal courts are split on this issue, the 7th Circuit concluded that section 3617 does support an independent claim, because to hold otherwise would give section 3617 no independent meaning. The court reasoned that in the Bloch’s case, even though the STCA’s enforcement of the rules did not constructively evict them, it does not foreclose the possibility that the STCA “interfered” with their enjoyment of their section 3604 rights or “coerced” or “intimidated” them on account of their having exercised those rights. To rule otherwise would require the Blochs to vacate their home before they could sue.

In order to move forward with any FHA claim, the Blochs must be able to prove discriminatory intent (the FHA allows a claim under a theory of disparate impact, but the Blochs waived any right to raise a disparate impact claim by not arguing it in the district court). As the court characterized it, “the evidence must indicate that the STCA was not simply indifferent when it reinterpreted the rules, the evidence must show that the STCA reinterpreted the rules with Jews in mind.” The 7th Circuit concluded that the record included sufficient evidence of discriminatory intent that their case should be allowed to go forward at the district court, although the case “may be difficult to prove.” Frischholz’s comments, the repeated actions to take down the mezuzot, and leaving the tables and chairs in place at the time of the funeral – only to take down the mezuzah, provided sufficient evidence for the claims to survive summary judgment.

Tag: Fair Housing Act

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

FHA claims held to apply to post-sale actions of condo association

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