10-000327 Daniel W. Mcmahon vs. Suncoast Schools Federal Credit Union Status: Closed Recommended Order on Wednesday, April 27, 2011.

Summary: Petitioner failed to establish that he was not allowed to apply for a mortgage loan because he was disabled.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DANIEL W. MCMAHON, ) )

)

Petitioner, ) Case No. 10-0327

vs. )

)

SUNCOAST SCHOOLS FEDERAL CREDIT )

UNION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on November 17, 2010, and February 23, 2011, in Naples, Florida,

before Susan B. Harrell, an Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel W. McMahon, pro se

2311 Woodland Estates Road

Naples, Florida 34117

For Respondent: Ashley Nicole Richardson, Esquire

McConnaughhay, Duffy, Coonrod

Pope & Weaver, P.A.

1709 Hermitage Boulevard, Suite 200

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent discriminated

against Petitioner based on Petitioner's disability.

PRELIMINARY STATEMENT

On October 12, 2009, the Florida Commission on Human

Relations (Commission), received a Housing Discrimination

Complaint from Petitioner, Daniel W. McMahon (Mr. McMahon),

alleging that Respondent, Suncoast Schools Federal Credit Union

(Suncoast), had discriminated against him based on his

disability when seeking a mortgage loan. On December 16, 2009,

the Commission issued a Notice of Determination of No Cause to

believe that a discriminatory housing practice had occurred.

On January 10, 2010, Mr. McMahon filed a Petition for

Relief (Petition), alleging that Suncoast had discriminated

against him because of his disability. The case was forwarded

to the Division of Administrative Hearings on January 20, 2011,

for assignment to an Administrative Law Judge to conduct the

final hearing. The case was originally assigned to

Administrative Law Judge Carolyn S. Holifield, but was

transferred to Administrative Law Judge Susan B. Harrell.

The final hearing was continued four times. On

November 17, 2010, the final hearing was commenced, but was not

concluded. The final hearing was reconvened on February 23,

2011.

At the final hearing, Mr. McMahon testified on his own

behalf and called Carolyn Stepp and Jack Behling as his

witnesses. Petitioner's Exhibits 1, 2, 4, 5, and 7 through 13

were admitted in evidence. At the final hearing, Suncoast

called the following witnesses: Jacqueline Gilbert, Linda

Fales, and Ben Felder. Respondent's Exhibits 1 through 6 were

admitted in evidence.

Volume I of the two-volume Transcript was filed on

February 25, 2011. Volume II of the Transcript was filed on

March 18, 2011. The parties agreed to file their proposed

recommended orders within ten days of the filing of the

Transcript. On March 16, 2011, Suncoast filed an Unopposed

Motion for Extension of Time to File Proposed Recommended Order.

By Order dated March 16, 2011, the time for filing proposed

recommended orders was extended to April 4, 2011. Suncoast

timely filed its Proposed Recommended Order, which has been

considered in the preparation of this Recommended Order. As of

the date of this Recommended Order, Mr. McMahon has not filed a

post-hearing submittal.

FINDINGS OF FACT

1. Mr. McMahon was a member of Suncoast beginning in

approximately 1986. In 2008 and 2009, Mr. McMahon had a

checking account, a VISA card, a savings account, and a loan

with Suncoast.

2. Mr. McMahon claims that he is disabled and that he

suffers from personality disorders, post-traumatic stress,

passive aggression, and obsessive compulsive disorder. No

medical evidence was presented to substantiate his claims. He

has been receiving benefits from the Social Security

Administration based on a personality disorder since

approximately 1996. Suncoast perceived Mr. McMahon as having a

disability, based on his repeated assertions that he was

disabled.

3. In November 2008, Mr. McMahon filed a complaint with

the Better Business Bureau of West Florida, Inc. (BBB), alleging

that Suncoast was discriminating against him by not

accommodating his communication disability. The BBB

investigated and found that Suncoast had blocked access to

Mr. McMahon's accounts because he was delinquent on a loan. The

BBB contacted Suncoast concerning the complaint, and Suncoast

provided Mr. McMahon a three-month payment due date extension on

the loan, lowered his monthly payments, and unblocked his

account.

4. In January 2009, Mr. McMahon was delinquent on his

loan. Again Suncoast tried to help Mr. McMahon with his

delinquent account. At some point, Mr. McMahon's loan payments

were put on automatic payments in order to reduce his

delinquencies. Money would automatically be taken out of his

account to make the monthly loan payments. Mr. McMahon had a

direct deposit for his Social Security benefits payments. After

the loan payments began being deducted automatically,

Mr. McMahon canceled his direct deposits into the account from

which his payments were automatically being deducted. Thus,

there was no money in the account to make the monthly payments

on his loan, and Mr. McMahon ceased making payments on the loan

and again became delinquent on his loan.

5. When one of Suncoast's members becomes overdrawn with

regards to either a checking or savings account or credit card,

or is delinquent in making payments on any credit card or loan

obligation, that member loses access to his or her services,

including use of all internet services, ATM cards, ATM machines,

credit cards, and debit cards. The member would also be unable

to access his or her account balance or make deposits into

overdrawn accounts if the member attempted to make a deposit via

ATM, as those services are suspended. These restrictions are

typically automatically placed upon the accounts of any member

with a delinquent loan account after 60 days of delinquency, and

within 30 days of any overdrawn share draft account.

6. Any member with a delinquent or overdrawn account,

where services were suspended would be prevented from applying

for a mortgage loan. If the member contacted Suncoast staff to

apply for a mortgage loan or to utilize any other services, the

member would be directed to the loss mitigation section of

Suncoast, and loss mitigation would attempt to collect the debt

or rectify the delinquency.

7. Because Mr. McMahon again became delinquent on his loan

payments after stopping the direct deposits, his accounts were

restricted, meaning that he could not access the accounts.

Mr. McMahon began a campaign of making repeated calls to

Suncoast, screaming and yelling at Suncoast representatives,

talking over the representatives, making vulgar statements, and

using profanity. Mr. McMahon attributes his behavior to his

communication disability and requested on numerous occasions

that Suncoast accommodate his disability with "patience and

understanding." A note was placed in the loss mitigation's note

system and in Suncoast's host system, so that all employees of

Suncoast who were working with Mr. McMahon could see and

accommodate his request for patience and understanding.

8. Suncoast representatives did provide Mr. McMahon with

an abundance of patience and understanding. However, nothing

seemed to appease Mr. McMahon, and his repeated calls were

unproductive. Because of the repeated nature of Mr. McMahon's

calls and his behavior during the telephone calls, there were

numerous complaints by Suncoast's representatives to management.

Jacqueline Gilbert (Ms. Gilbert), vice president of loss

mitigation, determined that in order to protect Suncoast's

representatives from Mr. McMahon's harassing behavior that all

calls should be directed to her; Linda Fales (Ms. Fales), vice

president of risk management, cardholder disputes, and DSA

compliance for Suncoast; or Ben Felder (Mr. Felder), Suncoast's

general counsel.

9. Suncoast's representatives were advised that

Mr. McMahon's calls should be transferred to Ms. Gilbert,

Ms. Fales, or Mr. Felder. When the representatives would tell

Mr. McMahon that they could not help him and that his call would

have to be transferred, Mr. McMahon was verbally abusive to the

representatives. Many times, if Mr. McMahon was going to be

transferred, he would hang up and call right back to speak with

a different representative. Sometimes, Mr. McMahon would call

and hang up when a representative answered the call.

10. At different times, Ms. Gilbert, Ms. Fales, and

Mr. Felder talked with Mr. McMahon to attempt to discuss the

reasons that his account was restricted. However, they had

little success in communicating with Mr. McMahon because of his

behavior. Although Mr. Felder was not able to service

Mr. McMahon's account, he decided to handle all Mr. McMahon's

requests and assign any work to be done to the appropriate

employee because Mr. McMahon's behavior toward Ms. Gilbert and

other Suncoast employees was unacceptable.

11. Mr. McMahon did not make any loan payments between

May 2009 and August 2009. During this same time period,

Mr. McMahon's VISA credit card was well overdrawn. Carolyn

Stepp (Ms. Stepp) had cosigned on Mr. McMahon's loan. On or

about September 4, 2009, Suncoast exercised its "right of

offset" and used funds in both Mr. McMahon's and Ms. Stepp's

accounts to pay off the loan. There was still an outstanding

balance of $1,046.86 on his VISA credit card.

12. On September 10 and 14, 2009, Mr. McMahon asked to

apply for a mortgage loan by telephone. He was not sure that

Suncoast would give him a loan because of his delinquent

accounts, but he felt that he should have the opportunity to

apply because the loan had been satisfied when Suncoast

exercised its right of offset. Although the loan was satisfied,

Mr. McMahon still had an outstanding balance on his VISA credit

card, which he had not been able to use for several months

because his accounts had been restricted. He was advised that

he would have to contact Mr. Felder to discuss the status of his

account.

13. On September 11, 2009, Mr. Felder and Mr. McMahon

discussed his account. Part of the discussion concerned

Suncoast's writing off Mr. McMahon's loan and VISA credit card

balance, returning the offset amounts to Mr. McMahon's and

Ms. Stepp's accounts, disbursing the remaining amounts in

Mr. McMahon's account to him, and closing Mr. McMahon's

accounts. At the conclusion of the conversation, Mr. Felder

understood that Mr. McMahon was in favor of this solution and

began to take steps to accomplish the tasks.

14. Mr. Felder advised Mr. McMahon by telephone on

September 17, 2009, that the tasks had been completed and that

Mr. McMahon's accounts with Suncoast were closed, meaning that

services at Suncoast were terminated and that Mr. McMahon's

access to information was no longer available. Mr. Felder

followed up the telephone conversation with a letter dated

September 17, 2009, confirming the telephone conversation.

15. Individuals who are not members of Suncoast are not

qualified to apply for a mortgage loan with Suncoast. At the

time that Mr. McMahon applied for a mortgage loan on

September 14, 2009, his accounts at Suncoast were in the process

of being closed.

16. Mr. McMahon's requests to apply for a mortgage with

Suncoast were not denied because Mr. McMahon was disabled. They

were denied because Mr. McMahon had various account

delinquencies.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2010).

18. Mr. McMahon has alleged that Suncoast discriminated

against him related to an application for a mortgage loan.

Section 760.25, Florida Statutes (2009), 1/ provides:

(1) It is unlawful for any bank, building

and loan association, insurance company, or

other corporation, association, firm, or

enterprise the business of which consists in

whole or in part of the making of commercial

real estate loans to deny a loan or other

financial assistance to a person applying

for the loan for the purpose of purchasing,

constructing, improving, repairing, or

maintaining a dwelling, or to discriminate

against him or her in the fixing of the

amount, interest rate, duration, or other

term or condition of such loan or other

financial assistance, because of the race,

color, national origin, sex, handicap,

familial status, or religion of such person

or of any person associated with him or her

in connection with such loan or other

financial assistance or the purposes of such

loan or other financial assistance, or

because of the race, color, national origin,

sex, handicap, familial status, or religion

of the present or prospective owners,

lessees, tenants, or occupants of the

dwelling or dwellings in relation to which

such loan or other financial assistance is

to be made or given.

19. Because the Florida Fair Housing Act, sections 760.20

through 760.37, is patterned after the federal Fair Housing Act,

45 U.S.C. sections 3601 through 3631, federal case law dealing

with the federal Fair Housing Act is applicable. See Fla. Dep't

of Cmty. Aff. v. Bryant , 586 So. 2d 1205 (Fla. 1st DCA 1991).

20. Discrimination claims under the Florida Fair Housing

Act are subject to the McDonnell Douglas Corp. v. Green , 411

U.S. 792 (1973) burden-shifting analysis. Massaro v. Mainlands

Section 1 & 2 Civic Ass'n, Inc. , 3 F.3d 1472, 1476 n. 6 (11th

Cir. 1993). Under that analysis, Mr. McMahon has the burden of

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establishing a prima facie case of discrimination by a

preponderance of the evidence. § 760.34(5). If he sufficiently

establishes a prima facie case, the burden shifts to Suncoast to

articulate some legitimate, nondiscriminatory reason for its

actions. The burden then shifts to Mr. McMahon to show that the

reason asserted by Suncoast was pretextual.

21. To establish a prima facie case of housing

discrimination, Mr. McMahon must prove that: (1) he is a member

of a protected class; (2) he attempted to apply for a mortgage

loan and met all relevant qualifications for doing so;

(3) Suncoast denied him the opportunity to apply despite his

qualifications; and (4) Suncoast allowed similarly-qualified

persons outside of Mr. McMahon's protected class to apply for

mortgage loans. Alcegueire v. EMC Mortgage Corp. , Case No. 03-

2153, 2003 Fla. Div. Adm. Hear. LEXIS 1086, at ¶ 16 (Fla. DOAH

Dec. 17, 2003) (quoting Hickson v. Home Fed. of Atlanta , 805 F.

Supp. 1567, 1571-72 (N.D. Ga. 1992)), adopted, Order No. 04-001

(FCHR Feb. 26, 2004). Accord , Sec'y, Hous. & Urban Dev. ex.

Rel. Herron v. Blackwell , 908 F.2d 864, 870 (11th Cir. 1990).

22. Mr. McMahon has failed to establish a prima facie case

of discrimination. He has established that Suncoast perceived

him as having a disability. He established that he did verbally

request to apply for a mortgage loan. Mr. McMahon did not

establish that he was qualified to apply for a loan. It is

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clear that, when a member of Suncoast is delinquent on an

account, the member's services are curtailed until the account

is brought up to date. This would include being able to apply

for a loan. At the time that Mr. McMahon requested to apply for

a loan on September 10, 2009, he had a delinquent, over-drawn

VISA credit card account, and his account was still restricted.

Additionally, his loan account had been delinquent for so long,

that Suncoast had to exercise its right of setoff to get the

loan paid. When Mr. McMahon requested to apply for a mortgage

loan on September 14, 2009, his accounts were in the process of

being closed, and his delinquent loan and VISA account were

being written off pursuant to the agreement reached with

Mr. Felder. Mr. McMahon failed to establish that Suncoast

allowed members who were not disabled to apply for mortgages

when their accounts were in arrears or when their accounts were

in the process of being closed.

23. Suncoast has established that Mr. McMahon was not

allowed to apply for a loan because of his delinquent loan

account and his overdrawn, delinquent VISA credit card. These

reasons are legitimate business reasons and have nothing to do

with Mr. McMahon's disability.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered finding

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that Suncoast did not commit an unlawful housing practice and

dismissing Mr. McMahon's Petition.

DONE AND ENTERED this 27th day of April, 2011, in

Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of April, 2011.

ENDNOTE

1/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2009 version.

COPIES FURNISHED :

Ashley Nicole Richardson, Esquire

McConnaughhay, Duffy, Coonrod

Pope & Weaver, P.A.

1709 Hermitage Boulevard, Suite 200

Tallahassee, Florida 32302

Daniel W. McMahon

2311 Woodland Estates Road

Naples, Florida 34117

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Denise Crawford, Agency Clerk

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Larry Kranert, General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.

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