14-000437 Rolstan And Letitia Hodge vs. Watson Realty, Inc. Status: Closed Recommended Order on Thursday, September 25, 2014.

Summary: Petitioners did not prove that Respondent discriminated against them on the basis of race or familial status in the provision of rental housing by requiring a guarantor based on a past legal debt, or disallowing co-applicant spouse to act as guarantor.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROLSTA N AND LETITIA HODGE ,

Petitioner s ,

vs. Case No. 14 - 0437

WATSON REALTY, INC. ,

Respondent .

/

RECOMMENDED ORDER

This case was heard on July 8, 2014 , in Jacksonville ,

Florida, before Suzanne Van Wyk , a designated Administrative Law

Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jamison Jessup, Qualified Representative

557 Noremac Avenue

Deltona , Florida 32738

For Respondent: William J. Bosch, Esquire

Conner Bosch Law, P.A.

4488 North Oceanshore B ou l e v ar d

Palm Harbor, Florida 32137

STATEMENT OF THE ISSUE

Whether Petitioner s were subject to discrimination in the

rental of a dwelling , or in the terms, conditions, or privileges

of rental of a dwelling , base d on their race or familial status,

in violation of the Florida Fair Housing Act, c hapter 760,

Part II, Florida Statutes.

PRELIMINARY STATEMENT

On October 28, 2013 , Petitioners filed a Complaint of

Discrimination with the Florida Commission on Human Relations

(FCHR), alleging that Respondent discriminated a gainst them

b ased on their race and familial status . The basis for the

claim of discrimination was that Respondent required Petitioner ,

Rolstan Hodge, to obtain a guarantor as a condition of approval,

and Respondent did not allow Petitioner, Leticia Hodge , to act

as guarantor.

An investigation of the complaint was made by FCH R. On

December 19, 2013 , FCHR issued its Determination of No Cause and

Notice of Determination of No Cause , conclud ing that there was

no reasonable cause to believe that a discriminatory housing

practice had occurred based on either Petitioners Ó race or

familial status .

Petitioner s disagreed with FCHRÓs determination and , on

January 24, 2014, filed a Petition for Relief. The petition was

forwarded to the Division of Administrative Hearings for a

formal hearing.

The case was originally assigned to Judge Barbara Staros.

The final hearing was scheduled for April 24, 2014 , in

Jacksonville, Florida, but was rescheduled to Ma y 22 and 23,

2014, following a prehearing conference conducted by Judge

Staros. The hearing date was canceled due to illness of

PetitionersÓ Qualified Representative and was briefly continued.

This case was transferred to the undersigned during its

conti nuance and t he final hearing date was rescheduled for

July 8, 2014.

At the hearing, Petitioner s testified on their own behalf ,

and offered Composite Exhibits 1 and 2 which were received in

evidence. Respondent offered the testimony o f Anne Fletchall,

RespondentÓs Application S pecialist; and Wendell Davis,

RespondentÓs Executive Vice President. RespondentÓs Exhibits 1

through 4, 10 through 12, 14, and 16 through 18 were admitted

into evidence, as well as the deposition testimony of Heather

Cornett.

The parties ordered a copy of the Transcript of the

proceedings, which was filed on August 4, 2014. On August 6,

2014, Petitioners filed notice electing not to file a proposed

recommended order. Respondent timely filed a Proposed

Recommended Order on August 14, 2014, which has been considered

in the preparation of this Recommended Order.

FINDINGS OF FACT

1 . Petitioners, Rolstan and Leticia Hodge, are African -

American and currently reside in Virginia Beach, Virginia.

Petitioners have six children.

2 . Respondent , Watson Realty Corp. , 1/ is a real estate and

property management company with offices throughout the state of

Florida and an office in Georgia . Wendell Davis is the

companyÓs Executive Vice President in charge of Watson Realty

Management Divisi on, including its Jacksonville office located

at 4456 Sunbeam Road, Jacksonville, Florida 32257.

3 . On June 3, 2013 , Petitioners completed applications to

rent a property from Respondent located at 2314 Creekfront Drive

in Green Cove Springs , Florida (t he Property) .

4 . Petitioners Ó applications were taken by Gayle Aljets ,

S ecretary at RespondentÓs Westside office . Ms. Aljets sent , via

facsimile transmission, PetitionersÓ applications, along with

copies of their photo identification , social security cards, and

proof of income , to Anne Fletchall , Application Specialist in

RespondentÓs Sunbeam office. 2/

5 . Ms. Fletchall entered pertinent information from

PetitionersÓ applications, including personal identification and

income information , into a system run by LexisNexis , a company

with which Respondent contract ed to conduct background ,

criminal, and financial screening of applicants. 3 /

6 . LexisNexis screens applicants based on criteria

selected by Respondent . For example, Respondent requires

applicants to establish income of three times the rental amount ,

applies the combined income of multiple applicants for the same

property (roommates), and requires criminal background checks on

applicants 18 years of age and older. On debt issues,

Respond ent screens applicants for legal debts (e.g., judgments)

of $1 , 000 or more within the most recent 48 months ; as well as

ta x liens, landlord debt , and utility debt within the most

recent 24 months.

7 . The screening system allows for exceptions, or

Ðoverri des,Ñ on negative results for specified criteria. For

example, if an applicant has a legal debt of $1,000 or more in

the most recent 48 months , or a tax lien, landlord debt, or

utility debt w ithin the most recent 24 months , the system will

return an override code of Ð800,Ñ allowing approval of the

applicant with a co - signor, or guarantor. The override

determinations were made by Respondent at the time Respondent

contracted with LexisNexis.

8 . Ms. Fletchall entered Petition ersÓ information

separately as two roommates applying for the Property.

9 . LexisNexis report ed to Ms. Fletchall that Mr. Hodge had

a legal debt of $1,000 or more within the last 48 months, thus

failing one of the screening criteria. However, the program

assigned an override code of Ð800,Ñ meaning the application

could be approved if Mr. Hodge obtain ed a guarantor.

10 . M r s. Hodge passed all the LexisNexis screening

criteria.

11 . LexisNexis further reported PetitionersÓ rent - to -

income ratio as 24.73 percent, based on a monthly rent of

$1,195.00 and a combined income of $5,055.00.

12 . According to the criteria established by Respondent

when setting up the screening process, a guarantor must

establish an income of three and one - half ti mes the amount of

the monthly rent.

13 . Mrs. HodgeÓs individual verified income was

approximately $1,400.00, less than three and one - half times the

monthly rental amount.

14 . Ms. Fletchall sent an email to Heather Cornett,

property manager in the Westside office, informing her that

Mr. Hodge was approved conditioned upon obtaining a guarantor.

15 . Ms. Cornett informed Mr. Hodge by phone that he would

need a guarantor in order to qualif y to rent the Property.

Mr. Hodge asked why a guarantor would be required , but

Ms. Cornett was unable to explain . Ms. Cornett informed

Mr. Hodge that he would receive a letter from the third - party

screening company that explained the details. During that

telephone conversation , Mr. Hodge requested a telephone numb er

for LexisNexis.

16 . Ms. Cornett did not have the LexisNexis telephone

number and informed Mr. Hodge she would have to call him back

with the number. Ms. Cornett obtained the number and made a

return call to Mr. Hodge with the telephone number the same day.

17 . Through contact with LexisNexis, Mr. Hodge learned

that a judgment against him by Freedom Furniture and Electronics

had caused him to fail the applicable screening criteria , thus

triggering the need for a guarantor .

18 . Mr. Hodge contacted Ms. Cornett and informed her that

the debt had been satisfied. Ms. Cornett asked Mr. Hodge to

obtain a letter from the debtor on the debtorÓs letterhead

verifying the debt had been satisfied.

19 . Mr. Hodge subsequently met with Ms. C ornett in her

office and presented a letter from Freedom Furniture and

Electronics . The letter represented that Mr. Hodge had entered

into a payment agreement to satisfy the debt and that, thus far,

payments had been made on time.

20 . Ms. Cornett faxed t he letter to Ms. Fletchall to

submit to LexisNexis as additional information .

21 . Ms. Fletchall called Ms. Cornett and told her the

letter was only proof that payments were being made on the debt,

not that the debt had been satisfied.

22 . Ms. Cornett ca lled Mr. Hodge and informed him that the

letter did not change the status of his application, and a

guarantor was still required.

23 . Mr. Hodge requested Ms. Cornett submit the matter to a

manager for review.

24 . Ms. Cornett took the HodgeÓs applications, the letter,

and the LexisNexis repor t to Terri Brown, RespondentÓs Regional

M anager. Ms. Cornett spoke to Ms. Brown via telephone, who

confirmed that a guarantor would still be required for approval.

Ms. Cornett again called Mr. Hodge with this information.

25 . Mr. Hodge did not obtain a guarantor and did not make

another application , or otherwise arrange with Respondent to

rent the Property.

26 . On June 10, 2013, Respondent received an application

from a different set of applicants to rent the Property . The

applicants were white and listed on their application that they

had three children . 4/

27 . Ms. Fletchall processed two separate applications for

the applicants as roommates , just as she did with PetitionersÓ

applicati ons.

28 . The LexisNexis report showed that the male applicant

failed three of the screening criteria, while the female

applicant passed all the criteria. The system assigned an

override code of Ð800Ñ for the male applicantÓs prior landlord

debt, triggering the requirement for a guarantor. The system

also assigned an override code of Ð92 0Ñ based on the male

applicantÓs prior issue with a personal check, triggering a

requir ement that the male applicant pay monthly rent by

certified funds.

29 . On June 21, 201 3 , the new applicants entered into a

lease for the Property. The tenant s obtained a guarantor who

signed a lease guarantee which was incorporated into the lease.

CONCLUSIONS OF LAW

30 . The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding . § 120.57(1), Fla. Stat . (201 4 ) .

31 . FloridaÓs Fair Housing Act, sections 760.20 through

760.37 , Florida Statutes (2013) , 5 / makes it unlawful to

discriminate against any person in the provision of rental

housing because of race or familial status. In that regard,

section 760.23( 1 ) , provides as follows :

(1) It is unlawful to refuse to sell or

rent after the making of a bona fide offer,

to refuse t o negotiate for the sale or

rental of, or other wise to make unavailable

or den y a dwelling to any person because of

race, color, national origin, sex, handicap,

familial status, or religion.

32 . It is likewise unlawful to discriminate against any

person in the terms, conditions, or privileges of rental

housing. In that regard, section 760.23(2) , provides as

follows:

(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 pr ovision of services or

facilities in connection therewith, because

of race, color, national origin, sex,

handicap, familial status, or religion.

33 . In cases involving a claim of rental housing

discrimination, the burden of proof is on the complainant.

§ 760.34(5), Fla. Stat .

34 . The Florida Fair Housing Act is patterned after Title

VIII of the Civil Rights Act of 1968, as amended by the Fair

Housing Act of 1988, and discrimination covered under the

Florida Fair Housing Act is the same discrimination prohibited

under the Federal Fa ir Housing Act. Savanna h Club Worship Serv.

v. Savanna h Club Homeowners Ó AssÓn , 456 F. Supp. 2d 1223, 1224

(S.D. Fla. 2005) ; see also Loren v. Sasser , 309 F.3d 1296, 1300

(11th Cir. 2002) . When Ða Florida statute is modeled after a

federal law on the same subject, the Florida statute will take

on the same constructions as placed on its federal prototype.Ñ

Brand v. Fla. Power Corp. , 633 So. 2d 504, 509 (Fla. 1st DCA

1994) ; see also Mil sap v. Cornerstone Residential Mgmt. ,

2010 U.S. Dist. LEXIS 8031 (S.D. Fla. 2010) ; Dornbach v. Holley ,

854 So. 2d 211, 213 (Fla. 2d DCA 2002) ; Fla. Dep't of Cmty. Aff.

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

35 . A plaintiff may proceed under the Fair Housing Act

under theories of either disparate impact or disparate

treatment, or both. Head v. Cornerstone Residential Mgmt. , 2010

U.S. Dist. LEXIS 99379 (S.D. Fla. 2010) . To establish a prima

facie case of disparate impact, Petitioner s would have to prove

a significantly adverse or disproportionate impact on a

protected class of persons as a result of RespondentÓs

f acially - neutral acts or practices. Head v. Cornerstone

Residential Mgmt. , supra , ( citing E.E.O.C. v. JoeÓs Stone Crab,

In c. , 220 F.3d 1263, 1278 (11th Cir. 2000) ) . To prevail on a

disparate treatment in housing claim, Petitioner s would have to

come forward with evidence that they were treated differently

than similarly - situated tenants. Id . ( citing Schwarz v. City of

Treas ure Island , 544 F.3d 1201, 1216 (11th Cir. 2008) and

Hallmark Dev., Inc. v. Fulton Cnty . , 466 F.3d 1276, 1286 (11th

Cir. 2006) ) .

36 . In establishing that they w ere the subject of

discrimination based upon their race, Petitioner s could either

produce direct evidence of discrimination that motivated

disparate treatment in the provision of services to them , or

prove circumstantial evidence sufficient to allow the trier of

fact to infer that discrimination was the cause of the disparate

treatment. See Ki ng v. Auto, Truck, Indus. Parts & Supply ,

21 F. Supp. 2d 1370, 1381 (N.D. Fla. 1998) .

3 7 . Direct evidence is evidence that, if believed, would

prove the existence of discriminatory intent without resort to

inference or presumption. Denney v. City of Alb. , 247 F.3d

1172, 1182 (11th Cir. 2001) ; Holifield v. Reno , 115 F.3d 1555,

1561 (11th Cir. 1997) . Courts have held that ÐÒonly the most

blatant remarks, whose intent could be nothing other than to

discriminate. . .Ó will constitute direct evidence of

discr imination.Ñ Damon v. Fleming Supermarkets of Fla., Inc. ,

196 F.3d 1354, 1358 - 59 (11th Cir. 1999)(citations omitted) .

3 8 . Petitioner s presented no direct evidence of

discrimination by Respondent related to its processing and

action on PetitionersÓ rental application s . There were no

statements or acts of any kind that could have been construed to

have been directed to PetitionersÓ race or familial status .

39 . When there is no direct evidence of discrimination,

fair housing cases are subject to the three - part test set forth

in McDonnell Douglas Corp. v. Green , 411 U.S. 792 (1973) and

Texas Dep artment of C ommunity Affairs v. Burdine , 450 U.S. 248

(1981) . Boykin v. Bank of Am . Corp. , 162 Fed. App Ó x. 837, 838 ;

2005 U.S. App. LEXIS 28415 (11th Cir. 2005) ; see also M assaro v.

Mainlands Section 1 & 2 Civic AssÓn , 3 F.3d 1472, 1476 n.6 (11th

Cir. 1993) ; SecÓy, U.S. DepÓt of Hous. & Urban Dev. on behalf of

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

Savannah Club Worship Serv. , 456 F. Supp. 2d at 1231 - 32 .

4 0 . Under the three - part test, Petitioner s ha ve the

initial burden of establishing a prima facie case of unlawful

discrimination. McDonnell Douglas , 411 U.S. at 802; Burdine ,

450 U.S. at 252 - 253; Burke - Fowler v. Orange Cnty. , 447 F.3d

1319, 1323 (11th Cir. 2006) ; Valenzuela v GlobeGround N . Am . ,

LLC. , 18 So. 3d 17, 22 . ÐT he elements of a prima facie case are

flexible and should be tailored, on a case - by - case basis, to

differing factual circumstances . Ñ Boykin , 162 F. App Óx. at

838 - 39, ( citing Fitzpatrick v. City of Atlanta , 2 F.3d 1112,

1123 (11th Cir. 1993) ) .

4 1 . If Petitioner s are able to prove a prima facie case by

a preponderance of the evidence, the burden shifts to Respondent

to articulate a legitimate, non - discriminatory reason for its

actions. Burdine , 450 U.S. at 255 ; DepÓt of Corr. v. Chandler ,

582 So. 2d 1183 (Fla. 1st DC A 1991) . Respondent has the burden

of production, not persuasion, to demonstrate to the finder of

fact that its action as a landlord, upon which the complaint was

made, was non - discriminatory. Chandler , 582 So. 2d 1183 . This

burden of production is "exc eedingly light." Holifield , 115

F.3d at 1564 ; Turnes v. Amsouth Bank , 36 F.3d 1057, 1061 (11th

Cir. 1994) .

42 . If Respondent produces evidence that the basis for its

action was non - discriminatory, then Petitioner must establish

that the proferred reason was not the true reason but merely a

pretext for discrimination. St. MaryÓs Honor Center v. Hicks ,

509 U.S. 502, 516 - 18 (1993). In order to satisfy this final

step of the process, Petitioner must Ðshow[] directly that a

discriminatory reason more likely than not motivated the

decision, or indirectly by showing that the proferred reason for

the employment decision is not worthy of belief.Ñ Chandler , 582

Co. 2d at 1186 (citing Burdine , 450 U.S. at 252 - 56). Pretext

can be shown by inconsistencies a nd/or contradictions in

testimony. Reeves v. Sanderson Plumbing Prods. , 530 U.S. 133,

143 (2000); Blackwell , supra ; Woodward v. Fanboy, L.L.C. , 298

F.3d 1261 (11 th Cir. 2002 ). The demonstration of pretext

Ðmerges with the plaintiffÓs ultimate burden of s howing that the

defendant intentionally discriminated against the plaintiff.Ñ

Holifield , 115 F.3d at 1565.

43 . Failure to establish a prima facie case of

discrimination ends the inquiry. See Ratliff v. State , 666

So. 2d 1008, 1013 n.7 (Fla. 1st DCA), affÓd , 679 So. 2d 1183

(Fla. 1996) (citing Arnold v. Burger Queen Sys. , 509 So. 2d 958

(Fla. 2d DCA 1987)) .

44 . As applied to this case, the standard established in

McDonnell - Douglas requires Petitioner s to establish in their

prima facie case that : (1) they belong to a protected class;

(2) Respondent was aware of it; (3) they were ready, willing,

and able to rent the Property; and (4 ) Respondent refused to

allow them to rent the Property. Jackson v. Comberg , Case No.

8:05 - cv - 1713 - T - 24TMAP, 2006 U.S. Dis t. LEXIS 66405, *9 (M.D.

Fla. 2006).

Discrimination b ased on Race

45 . Petitioner s are African American, and are thus member s

of a protected class. Respondent was also aware of PetitionersÓ

race. 6/ Thus, Petitioners satisfied the first two prongs to

establish a prima facie case.

46 . However, Petitioners failed to establish by a

preponderance of the evidence that they were ready, willing, and

able to rent the Property, or that Respondent refused to allow

them to rent the Property.

47 . Mr. Hodge was required to obtain a guarantor, which he

did not obtain. While Mrs. Hodge was approved without

conditions, she did not qualify to rent the Property based on

her income alone. Petitioners met the income qualification

based on their combined income.

4 8 . Conditional approval of Mr. HodgeÓs application was

not a refusal to rent , or to negotiate for rental of the

Property , and did not otherwise make the Property unavailable to

rent . Petitioners needed only to satisfy the condition of

approval i n order to rent the Property.

4 9 . Thus, Petitioners failed to establish a prima facie

case of discrimination based on race .

50 . Assuming, arguendo, Petitioners established a prima

facie case, Respondent met the burden to demonstrate that the

condition imposed, provision of a guarantor, was a legitimate,

non - discriminatory rental condition. Mr. Hodge clearly failed

the criteria of an outstanding legal debt of $1,000 or more

within the last 48 months, triggering the requirement for a

guarantor. RespondentÓs refusal to waive the guarantor

requirement upon review of the letter from Freedom Furniture and

Electronics was also legitim ate and non - discriminatory. The

preset screening criteria is any Ðlegal debt within the previous

48 monthsÑ regardless of whether the debt has been satisfied.

5 1 . Further, Petitioner failed to demonstrate that the

condition was mere pretext for unlawful racial discrimination.

The next applicants for the Property, who did not belong to a

protected class, were likewise subjected to the guarantor

requirement because one of the applicants failed a similar debt

criterion.

Discriminat ion based on Familial Sta tus

5 2 . Petitioners alternately argue that Respondent

discriminated against them by disallowing Mrs. Hodge to act as

the guarantor on the account because Petitioners are married

persons.

5 3 . Petitioners are married and have children, and

Respondent was aware of PetitionersÓ familial status. Thus,

Petitioners satisfied the first two prongs to establish a prima

facie case of discrimination based on familial status.

54 . However, Petitioners did not prove by a preponderance

of the evidence that Mrs. Hodge was ready, willing, and able to

act as guarantor for the rental. T here was no credible evidence

that Petitioners requested Mrs. Hodge to be the approved

guarantor. The record was devoid of any evidence that Mr. Hodge

ever inquired whether Mrs. Hodge cou ld serve as the required

guarantor or that he otherwise put her forward as the guarantor.

In fact, Mr. Hodge testified that he did not attempt to obtain a

guarantor.

5 5 . Assuming, arguendo, that Petitioners established a

prima facie case of discrimination based on familial status,

Respondent met the burden to demonstrate a legitimate non -

discriminatory reason for disapproving Mrs. Hodge as guarantor.

Mrs. Hodge did not have the required income of three and one -

half times the monthly rent to act as the guarantor. The record

is devoid of evidence that Mrs. Hodge would have been

dis approved based on her marital or familial status.

5 6 . For the reasons set forth herein, Petitioner s ha ve

failed to prove that Respondent discriminat ed against them by

refusing to rent, refusing to negotiate for the rent, or

otherwise making unavailable to rent, the subject Property ,

based on either their race or familial status . Likewise,

Petitioners failed to prove Respondent discriminated against

them in the terms, conditions, or privileges of rental of the

Property based on either their race or familial status, in

violation of the Florida Fair Housing Act, chapter 760, Part II,

Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conc lusions of

Law, it is RECOMMENDED that the Florida Commission on Human

Relations issue a final order dismissing the Petition for Relief

filed in FCHR No. 2014H0082 .

DONE AND ENT ERED this 25 th day of September , 2014 , in

Tallahassee, Leon County, Florida.

S

Suzanne Van Wyk

Administrative Law Judge

Division of Administrative Hearings

The DeSotoBuilding

1230 Apalachee Parkway

Tallahassee, Florida32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

t his 25 th day of September , 2014 .

ENDNOTE S

1/ Respondent is incorrectly identified in the case style as

Watson Realty, Inc.

2/ Both the Westside and Sunbeam offices are located in

Jacksonville, Florida.

3 / The screening operations of LexisNexis have since been

purchased by First Advantage.

4 / The deposition transcript of Heather Cornett is the only

evidence introduced to support a finding that the second

applicants were white. Statements contained in the deposition

transcript are hearsay exceptions, pursuant to section

90.803(22), Florida Statute s.

5 / All citations to the Florida Statutes herein are to the 2013

version, unless otherwise noted.

6 / Ms. FletchallÓs testimony that she was not aware of

PetitionersÓ race when processing their rental applications is

not accepted as credible. The inf ormation faxed to

Ms. Fletchall from Ms. Aljets to process PetitionersÓ

application included copies of PetitionersÓ driverÓs licenses.

COPIES FURNISHED :

Chey a nne Costill a , General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

(eServed)

Robert Warren Schupp, Esquire

Robert W. Schupp, P.A.

9745 Touchton Road Unit 2803

Jacksonville, Florida 32246

(eServed)

William J. Bosch, Esquire

Conner Bosch Law, P.A.

4488 North Oceanshore Bouleva rd

Palm Harbor, Florida 32137

(eServed)

Jamison Jessup

557 Noremac Avenue

Deltona, Florida 32738 - 7313

(eServed)

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.