11-002270 Florida Commission On Human Relations, On Behalf Of Steven And Jamie Terry vs. Hoyt And Nancy Davis, Florida Coastal Jacksonville Realty, Inc., And John Mcmenamy Status: Closed Recommended Order on Wednesday, May 30, 2012.

Summary: Petitioners have proven by direct evidence housing discrimination based on familial status but there is no basis for an award of monetary damages.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA COMMISSION ON HUMAN ) )

RELATIONS, ON BEHALF OF STEVEN )

AND JAMIE TERRY, )

Petitioner, )

)

vs. ) Case No. 11-2270

)

HOYT AND NANCY DAVIS, FLORIDA )

COASTAL JACKSONVILLE REALTY, )

INC., AND JOHN MCMENAMY, )

)

Respondents. )

)

RECOMMENDED ORDER

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

on November 29, 2011, in Jacksonville, Florida, before W. David

Watkins, a designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioners: David A. Organes, Esquire

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

For Respondents Hoyt and Nancy Davis:

Geoffrey T. Heekin, Esquire,

Hilary Wilson, Esquire

One Independent Drive, Suite 2200

Jacksonville, Florida 32202

For Respondents John McMenamy and Florida Coastal

Jacksonville Realty, Inc.:

N. Mark New, II, Esquire

McGlinchey Stafford, PLLC

10407 Centurion Parkway North, Suite 200

Jacksonville, Florida 32256

STATEMENT OF THE ISSUE

Whether Respondents engaged in a discriminatory housing

practice in violation of the Florida Fair Housing Act, as

amended, sections 760.20 through 760.37, Florida Statutes

(2011) 1 / .

PRELIMINARY STATEMENT

Petitioner, the Florida Commission on Human Relations

("Commission"), is a state agency charged with investigating

complaints of housing discrimination filed pursuant to the

Florida Fair Housing Act. §§ 760.22 - 760.37, Fla. Stat.

On August 16, 2010, Steven and Jaime Terry filed a complaint

with the Commission – dual-filed with the U.S. Department of

Housing and Urban Development -- alleging Respondents, Hoyt and

Nancy Davis, John McMenamy, and Florida Coastal Jacksonville

Realty, Inc., discriminated against them on the basis of

familial status in violation of section 760.23(1), Florida

Statutes, and section 804(a) of the Federal Fair Housing Act of

1988. 42 U.S.C. § 3604(a).

An investigation of the complaint was made by the

Commission. On September 17, 2010, the Commission issued its

determination that there was reasonable cause to believe a

discriminatory housing practice had occurred in violation of

section 760.23(1). The Commission's efforts to conciliate were

unsuccessful, as stated in the Notice of Failure of Conciliation

entered by the Commission on April 26, 2011. Mr. and Mrs. Terry

elected to have the Commission act on their behalf pursuant to

section 760.35(3)(a) Florida Administrative Code Rule 60Y-

7.001(8)(b)7. On May 5, 2011, the Commission filed a petition

for relief on behalf of Mr. and Mrs. Terry.

On May 5, 2011, the case was referred to the Division of

Administrative Hearings ("DOAH") and assigned to Administrative

Law Judge Lawrence P. Stevenson to conduct a formal hearing on

the matter. However, on July 12, 2011, the case was transferred

to the undersigned, and on September 19, 2011, an Order Granting

Continuance and Re-scheduling Hearing was issued setting the

final hearing for November 29 and 30, 2011, in Jacksonville, Florida. The final hearing was conducted as noticed, at which time

Petitioners called as witnesses Jamie Terry, John McMenamy and

Nancy Davis, and offered in evidence nine exhibits. Respondents

Hoyt and Nancy Davis recalled Nancy Davis as its sole witness,

and offered four exhibits in evidence. Respondents John McMenamy

and Florida Coastal Jacksonville Realty, Inc. called Hoyt Davis

as their only witness, and offered one exhibit in evidence.

At the conclusion of the final hearing, the parties

stipulated that proposed recommended orders would be filed

within 14 days of the filing of the two-volume official

transcript with the Division, which occurred on January 18,

2012. Thereafter the parties filed two separate requests for

extensions of time to file proposed recommended orders, and

those requests were granted. On March 5, 2012, Petitioners and

Respondents Hoyt and Nancy Davis timely filed Proposed

Recommended Orders, both of which have been carefully considered

by the undersigned.

Based on the testimony and documentary evidence presented

at hearing, the demeanor and credibility of the witnesses, and

on the entire record of this proceeding, the following findings

of fact are made:

FINDINGS OF FACT

Background

1. Respondents Hoyt and Nancy Davis (the Davises) own a

residential property located at 1856 Cross Pointe Way,

St. Augustine, Florida (the Property). The Property is utilized

exclusively as a rental.

2. Respondent Florida Coastal Jacksonville Realty, Inc.

("Florida Coastal") and its principal John McMenamy ("McMenamy")

acted as listing agents for the Property (collectively, the

"Broker Respondents"). Mr. McMenamy and his company have

managed the rental of the Property for approximately six years.

3. In association with their listing of the Property, the

Broker Respondents were responsible for advertising, showing,

accepting applications for and assisting in the selection of

tenants for the Property.

4. At the time of the events in question, the Property was

being offered for lease at a rate of $1,450 per month.

Generally, due to its location within a St. Johns County golf

community and proximity to good schools, the Property rents

easily and quickly.

The Rental Applications

5. On May 14, 2010, Petitioner Jaime Terry (Mrs. Terry)

contacted McMenamy regarding the Property. McMenamy instructed

Mrs. Terry on the rental application process. On the afternoon

of Sunday, May 16, 2010, Petitioners submitted via e-mail their

rental application, dated May 15, 2010.

6. On their application, the Petitioners disclosed that

they had previously declared bankruptcy. The bankruptcy was

entered in December 2007 and discharged in January 2009.

Petitioners also disclosed that they were currently living with

Mrs. Terry's parents. The application included a statement of

the Terrys' monthly income, and also disclosed that they had

three children residing with them -- aged eleven, five and two

at the time. A memo attached to the application elaborated on

the bankruptcy and other details of their employment and

financial situation. Mrs. Terry testified that during the

application process the Respondents did not solicit additional

information concerning her employment history.

7. On May 18, 2010, McMenamy ran a credit check on the

Terrys using the "Online Rental Exchange." The credit report

for Jaime Terry reflected a credit score of 664, while Steven

Terry's assigned score was 649. However, both reports noted

"conditional" approval because of the bankruptcy filing.

8. Although the exact date is unknown, at approximately

the same time that the Terrys submitted their application,

another couple, Rick and Jessica Egger (the Eggers) contacted

McMenamy regarding their interest in possibly renting the

Property.

9. On the evening of Thursday, May 20, 2010, the Eggers

formally submitted an application to rent the Property. The

Eggers' application disclosed that, unlike the Terrys', they did

not have a bankruptcy in their history. In addition, the

Eggers' combined monthly income was higher than the Terrys' 2 / and

the younger of their two children was nine years old. The

credit report obtained for the Eggers reflected a credit score

of 672 for Jessica Egger and 696 for Rick Egger, with an

unconditional approval rating.

Respondents' Tenant Selection Process

10. McMenamy testified that in evaluating applications,

potential tenants must meet certain minimum criteria. Factors

he considers in assessing applicants include credit checks,

criminal background checks, employment status, and rental

history. However, he agreed that the evaluation process he uses

is subjective.

11. McMenamy acknowledged that bankruptcy would not

automatically disqualify a potential tenant, and in fact,

confirmed that he has rented to tenants who have a bankruptcy in

their history. With regard to credit scores, McMenamy testified

that he considered a score below 500 to be unacceptable.

12. Mrs. Davis testified that McMenamy manages the entire

process of renting the Property on behalf of herself and her

husband. Once McMenamy determines the suitability of a

prospective tenant, he discusses that tenant with the Davises.

McMenamy does not discuss applicants with the Davises that he

does not consider eligible. The Davises do not participate in

the background screening process and they do not review

applicants' credit ratings. However, Mrs. Davis was aware of

McMenamy's process for selecting tenants, and she confirmed her

understanding that applicants must meet certain minimum

requirements. In selecting a tenant, McMenamy looks not only

for a candidate that is financially qualified, but also one who

will rent the property for a significant period of time, will

take good care of the property, and will make monthly rent

payments in a timely manner, according to Mrs. Davis.

Denial of Petitioners' Lease Application

13. Mr. Davis testified that he and Mrs. Davis discussed

the Petitioners' application with McMenamy. At hearing,

Mr. Davis recounted that conversation as follows:

Cross-examination by Mr. Organes:

Q. Mr. Davis, you stated that you had

discussed with Mr. McMenamy the application

of Steven and Jaime Terry?

A. Yes.

Q. And that’s a common practice with Mr.

McMenamy as when he receives reasonably

qualified applicants, he discusses them with

you?

A. Yes.

Q. And that’s what he did with the Terrys?

A. Yes.

Q. And you said you did not tell him not to

rent to them because of their children?

A. That is true, we did not tell him.

Q. The issue of children wasn’t discussed

at all?

A. No.

Q. What reason did you give him to tell

them why their application was being denied?

A. Because of their past rental history and

their bankruptcy foreclosure.

Q. In general if you don’t approve of an

applicant, what reason would you give for

denying that applicant?

A. I would give that reason, that we didn’t

feel that, you know, we probably would get a

better applicant and the reason we turned

them down is because we didn’t feel that

they were suitable for our rental.

14. There is no evidence in this record as to precisely

when the above conversation between the Respondents took place,

although based upon Mr. Davis's statement that "we probably

would get a better applicant" it is reasonable to infer that it

was prior to the Eggers submitting their application on the

evening of Thursday, May 20, 2010. 3 /

15. Early on the morning of Friday, May 21, 2010, McMenamy

sent an e-mail to Ms. Terry, which read:

Jaime

I left a message yesterday but did not

hear from you. I spoke to the owner about

the application and she was concerned about

not really having any rental history and the

number of small children. She is a

perfectionist and just had the home

professionally painted. The one family who

lived there had small children and there

were handprints all over the walls so that

it needed to be repainted. So this was her

main concern and therefore does not want to

rent to you and the family.

If you have any questions please call.

Sincerely,

John

16. At hearing, Mrs. Davis maintained that the

Petitioners' children were not the determining factor in the

decision to deny their application. Rather, it was based on

their finances and lack of rental history. Consistent with Mr.

Davis's testimony, Mrs. Davis also testified that she and her

husband did not instruct McMenamy to reject the Petitioners'

application because of their children.

17. After being informed that their application was

denied, Petitioners immediately began searching for alternate

housing. Mrs. Terry testified that their primary concern was to

locate a rental in a high quality school district. Within a

couple of weeks of receiving the denial e-mail from McMenamy,

the Terrys located a home at 983 Lilac Loop, St. Johns, Florida.

Petitioners entered into a lease for this property on June 6,

2010; the rent was $ 1,200 per month. Although the Lilac Loop

home was acceptable, the Terrys considered it to be inferior to

the Property, and Petitioners paid to have the home repainted

and wired for cable access. The cable installation fee was

$150.00.

18. On September 22, 2010, Petitioners were notified that

the Lilac Loop house was in foreclosure. Petitioners appealed

to a default-law organization in an attempt to enforce their

one-year lease, but were ultimately unsuccessful. As a result

of the foreclosure, Petitioners were forced to seek alternative

housing within the same school district, and in November 2010,

leased a property at 1528 Summerdown Way, Fruit Cove, Florida,

32259. The monthly rent at 1528 Summerdown Way was $1,600

monthly. Petitioners also incurred additional expenses

necessitated by hiring a moving service, in the amount of

$773.50. At of the hearing, Petitioners continued to reside in

the Summerdown Way rental.

The Commission Investigation

19. On August 16, 2010, the Terrys filed a Housing

Discrimination Complaint with HUD alleging they had been

unlawfully discriminated against by Respondents based upon their

familial status. Thereafter, the Commission opened an

investigation of the allegation. As part of that investigation,

Respondents were invited to submit written statements setting

forth their version of the events at issue, and any defenses to

the allegation they wished to raise.

20. On August 19, 2010, the Davises submitted a written

statement to the FCHR. In the first paragraph of that submittal

the Davises stated:

To Whom it May Concern:

We enlisted realtor John MaMenamy to find a

new tenant for our rental house at 1856

Cross Pointe Way, St. Augustine, FL 32092.

Mr. McMenamy was told that we preferred not

to rent to someone with more than one, if

any, very small children at this particular

time. The reason being we just had to have

the interior of the house professionally

repainted and repairs made to several areas,

the walls in particular. Additionally, in

light of the fact there were several highly

qualified persons interested in and looking

at the house concurrently.

21. The submittal continued by identifying four former

tenants of the Property, as well as the current tenants (the

Eggers), all of whom had children living with them.

22. It is found that McMenamy's e-mail of May 21, 2010,

and the Davises' letter of August 19, 2010, constitute direct

evidence that Respondents' decision not to rent to Petitioners

was based upon their familial status. The testimony of McMenamy

and the Davises that familial status was not the reason for

refusing to rent to Petitioners is rejected as not credible.

CONCLUSIONS OF LAW

23. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter pursuant to

sections 120.569 and 120.57, Florida Statutes (2011).

24. The Florida Fair Housing Act, codified in sections

760.20 through 760.37 provides, in pertinent part, that:

(1) It is unlawful to refuse to sell or

rent after the making of a bona fide offer,

to refuse to negotiate for the sale or

rental of, or otherwise to make unavailable

or deny a dwelling to any person because of

race, color, national origin, sex, handicap,

familial status , or religion.

(2) It is 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, national origin, sex,

handicap, familial status , or religion.

§ 760.23, Fla. Stat. (emphasis added)

25. Familial status is "established when an individual who

has not attained the age of 18 years is domiciled with . . . a

parent. . . " § 760.22(5), Fla. Stat.

26. The federal Fair Housing Act is "a broad remedial

statute," therefore, its provisions are to be generously

construed and "its exemptions must be read narrowly." City of

Edmonds v. Washington State Bldg. Code Council , 18 F.3d 802, 804

(9th Cir.1994), aff'd , 514 U.S. 725, 115 S. Ct. 1776, 131 L. Ed.

2d 801 (1995). See Massaro v. Mainlands Section 1 & 2 Civic

Ass'n, Inc. , 3 F.3d 1472, 1475 (1lth Cir. 1993) ("Exemptions

from the Fair Housing Act are to be construed narrowly, in

recognition of the important goal of preventing housing

discrimination."). In enacting the Florida Fair Housing Act,

the legislature "essentially codified" the U.S. Fair Housing

Amendments Act of 1988, 42 U.S.C. et seq. Dornbach v. Holley ,

854 So. 2d 211, 213 (Fla. 2d DCA 2002). Because the provisions

of the Florida Act are virtually identical to those provisions

of the federal Act, federal case authority is persuasive in

interpreting Florida's statute.

27. Petitioners bear the initial burden of proof to

establish a prima facie case of discrimination by a

preponderance of the evidence. In evaluating housing

discrimination claims, courts have applied the burden-shifting

analysis developed in McDonnell Douglas Corp. v Green , 411 U.S.

792, 802-804 (1973), and later refined in Texas Department of

Community Affairs v. Burdine , 450 U.S. 248, 252-253 (1981).

Following this approach, Petitioners must make a prima facie

case for discrimination.

28. Petitioners may prove discrimination through any

combination of direct and indirect evidence, including

statistical evidence. However, if they establish a prima facie

case of discrimination and Respondents produce any evidence of a

legitimate business purpose, Petitioners must prove that the

real reason for the complained-of action is discrimination. It

is not enough to show that the legitimate business purpose is a

pretext. St. Mary's Honor Center v. Hicks , 509 U.S. 502, 113 S.

Ct. 2742 (1993). In other words, Petitioners at all times

retain the burden of proving that either or both Respondents

discriminated against Petitioners.

29. To state a claim of discrimination in the leasing of

property pursuant to the FFHA, a petitioner must prove the

following: a) The petitioners were members of a protected

class; b) The respondents were aware of the petitioner's

protected class; c) The petitioners were ready, willing and able

to rent the property at issue; and d) The respondents refused to

allow the petitioners to rent the property. Woolington v. 1st

Orlando Real Estate Servs. , 2011 U. S. Dist. LEXIS 100426; Dkt.

# 6:ll-cv-l107 (M.D. Fla. 2011).

30. Petitioners have proven by direct evidence housing

discrimination by both Respondents based on familial status in

this case. 4 /

31. Section 760.35(3)(b) authorizes section 120.569 and

120.57(1) hearings on allegations of discriminatory housing

practices. Section 760.35(3)(b) provides that, if the

administrative law judge finds a discriminatory housing

practice, he or she shall issue a recommended order "prohibiting

the practice and recommending affirmative relief from the

effects of the practice, including quantifiable damages and

reasonable attorney's fees and costs." Section 760.35(3)(b)

further provides that any circuit court with jurisdiction may

enter judgment on the final order of the Florida Commission on

Human Relations.

32. Section 760.35(3)(b), Florida Statutes, authorizes the

Commission to award compensatory damages to the victim of a

"discriminatory housing practice," but only if the damages are

quantifiable and their amount has been established by competent

substantial evidence. In this instance, the undersigned

concludes that based upon this record there is no basis to award

monetary damages to Petitioners. Rent paid by Petitioners for

the Lilac Loop home was $250.00 per month less than rent for the

Property, and in one month alone this differential more than

offset the $150.00 cost of cable installation at the Lilac Loop

home. Likewise, it would be inappropriate to assess as damages

the moving costs and higher rent payments associated with

Petitioners' relocation from the Lilac Loop home to the

Summerdown property. That relocation was the result of the

foreclosure on the Lilac Loop home, an intervening event that

was remote in time from, and not proximately caused by, the

wrongful act at issue. Moreover, the costs associated with that

move were not "natural, direct, and necessary consequences" of

Respondents' discriminatory housing practice. Rost v. Bowling ,

861 So. 2d 1246 (Fla. 2d DCA 2003).

33. Petitioners did not present any evidence upon which an

award of attorney's fees and costs may be based.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Florida Commission on Human Relations

enter a final order finding Respondents guilty of a

discriminatory housing practice against the Terrys in violation

of section 760.23(1) and (2), and prohibiting further unlawful

housing practices by Respondents.

DONE AND ENTERED this 30th day of May, 2012, in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

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 30th day of May, 2012.

ENDNOTES

1/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2011 version.

2/ This finding is based upon Mr. McMenamy's testimony at

hearing. The Eggers' Rental Application (McMenamy Ex. 1) does

not reflect a monthly income for Rick Egger, but does reflect a

net monthly income for Jessica Egger of $2,600.00.

3/ This inference is corroborated by the statement in Mr.

McMenamy's e-mail of May 21, 2010, to Mrs. Terry that "I left a

message yesterday but did not hear from you" after which he

recounts his conversation with Mrs. Davis and informs Mrs. Terry

that their application had been denied.

4/ Should the Commission in its Final Order award damages in

favor of Petitioners, all Respondents, including Florida Coastal

Jacksonville Realty, Inc. and John McMenamy, would be jointly

and severally liable, since were acting as agents for the

Davises.

COPIES FURNISHED :

Geoffrey T. Heekin, Esquire

Post Office Box 477

Jacksonville, Florida 32201

N. Mark New, II, Esquire

McGlinchey Stafford, PLLC

Suite 200

10407 Centurion Parkway, North

Jacksonville, Florida 32256

David A. Organes, Esquire

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, FL 32301

Lawrence F. Kranert, Jr., Esquire

Florida Commission on Human Relations

Suite 100

2009 Apalachee Parkway

Tallahassee, Florida 32301

[e-mail]

Denise Crawford, Agency Clerk

Florida Commission on Human Relations

Suite 100

2009 Apalachee Parkway

Tallahassee, Florida 32301

[e-mail]

Steven Terry

Jamie Terry

1528 Summerdown Way

St. Johns, Florida 32259

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.