Clifton Terrace Associates, Ltd. v. United Technologies Corp.

Citations: 728 F. Supp. 24; 1990 U.S. Dist. LEXIS 322; 1990 WL 1538Docket: Civ. A. 89-1030-OG

Court: District Court, District of Columbia; January 10, 1990; Federal District Court

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Clifton Terrace Associates, Ltd., the owner of an apartment complex in Columbia Heights, D.C., filed a lawsuit against Otis Elevator Company, alleging unlawful discrimination due to Otis's refusal to repair the complex's elevators. The case was presented in the U.S. District Court for the District of Columbia, where Otis sought to dismiss the complaint or for summary judgment. The court granted Otis's motion to dismiss, concluding that the complaint failed to state a valid claim.

The plaintiff asserts that Otis's refusal to service the elevators is discriminatory against the predominantly black, handicapped, and elderly residents. The complaint requests declaratory and injunctive relief for immediate elevator repairs, along with unspecified compensatory, punitive, and treble damages. The facts indicate that Otis installed six elevators in 1971 and serviced them until the termination of the maintenance contract in 1980. No contract existed between Otis and Clifton Terrace after 1980, despite the plaintiff's assumption of ongoing maintenance when purchasing the property from HUD in 1983.

Since acquiring the property, the plaintiff experienced intermittent elevator service and found other companies unable to maintain operations effectively. Despite repeated requests for a service bid from Otis, no response was received until a contact was made in 1988. Otis's records indicate no communications had occurred since the contract's cancellation, and the court noted that Otis required written credit references from the plaintiff, which were not provided, leading Otis to believe there was no ongoing interest in contracting. The court ultimately sided with Otis, dismissing the plaintiff's claims.

On December 6, 1988, the Elevator Supervisor for the District of Columbia notified the plaintiff that elevators at Clifton Terrace were out of service due to disrepair. On December 16, 1988, Mr. Marshall sent a letter to Otis and its executives, accusing Mr. Ammermuller of failing to provide a promised inspection and repair proposal. The letter alleged that Otis was neglecting elevator maintenance due to the socio-economic status of the residents, which included a significant number of elderly and handicapped individuals, resulting in substantial damages. Mr. Marshall demanded prompt repairs, stating that if repairs were not initiated by December 21, he would consider legal action, potentially involving United Technologies. The letter highlighted the negative publicity surrounding Clifton Terrace, referencing past criminal actions related to its ownership. A copy was sent to the Elevator Supervisor in response to the inspection report. 

In response, on December 23, 1988, defendants expressed concerns about payment issues and the lack of promised credit information, indicating that they believed Clifton Associates had lost interest in repairs. Continued correspondence followed, culminating in a January 31, 1989, letter from defendants stating they could not continue discussions due to threats of litigation and concerns for employee safety. Plaintiff filed a lawsuit in April 1989, alleging that the refusal to repair the elevators violated the Fair Housing Act, Civil Rights Acts, D.C. Human Rights Act, and D.C. Consumer Protection Act.

Plaintiff alleges that defendants, specifically Otis, violated implied warranties regarding service and fair dealing, and that their refusal to negotiate a service contract for elevators at Clifton Terrace is unconscionable and against public policy. The plaintiff contends that Otis's refusal is discriminatory, targeting residents who are predominantly poor, black, handicapped, or elderly. In contrast, Otis argues that the breakdown in negotiations stemmed from the plaintiff's unresponsiveness to requests for legitimate business information and threatening litigation. Otis asserts that several other companies in the area can provide the needed elevator services, an assertion the plaintiff acknowledges, though it claims these companies have also declined to engage with Clifton Terrace.

Since initiating the lawsuit, the plaintiff's parent company has launched its own elevator repair service, which is currently addressing the elevator issues at Clifton Terrace. The plaintiff admits this may lessen the need for the originally requested injunctive relief but notes that technical assistance from Otis may still be necessary.

Otis has moved to dismiss the case, claiming the plaintiff lacks standing and has not adequately stated a cause of action. Alternatively, Otis seeks summary judgment, arguing the plaintiff has not proven discrimination and that legitimate business reasons exist for Otis's refusal to contract. Otis maintains that the plaintiff's alleged injuries are not directly linked to Otis's actions but rather to the plaintiff's neglect of the elevator maintenance. Furthermore, Otis contends the plaintiff cannot assert claims on behalf of Clifton Terrace residents, as legal standing generally requires plaintiffs to claim their own rights.

The court views the critical issue as determining whether Otis is the appropriate defendant for the claims made, necessitating an evaluation of the factual and legal basis of the plaintiff's allegations. Thus, the motion is treated as one for summary judgment.

Summary judgment standards require the moving party to demonstrate the absence of evidence supporting the nonmovant's case, after which the nonmovant must present specific factual evidence to establish a genuine issue for trial. Mere allegations or denials are insufficient; affirmative evidence is necessary. Summary judgment is an integral component of the Federal Rules, not merely a procedural shortcut. If the overall record does not lead a rational trier of fact to rule for the nonmoving party, no genuine issue for trial exists.

In the present case, the only disputed issue is Otis's reasons for refusing to contract with the plaintiff, with Otis claiming legitimacy and the plaintiff asserting unlawfulness. The court finds that the plaintiff has not provided concrete facts to support claims of unlawful discrimination, as their allegations are deemed conclusory and speculative.

In Count I, the plaintiff alleges violations of the Fair Housing Act of 1968, specifically sections 3604(a) and (b), asserting that Otis's refusal to negotiate made housing unavailable and discriminated against residents. However, the court determines that section 3604(a) does not apply, as it specifically relates to the sale or rental of dwellings, not services related to them. The plaintiff failed to demonstrate any hindrance in acquiring a dwelling, and Otis is not positioned as a landlord capable of denying rental opportunities. Thus, Otis's refusal to service the elevators does not violate section 3604(a) of the Fair Housing Act.

The plaintiff contends that Otis's refusal to service Clifton Terrace elevators violates Section 3604(b) of the Fair Housing Act, which prohibits discrimination in the provision of services related to housing. However, the Court finds that the plaintiff's interpretation of the statute lacks context and meaning, as Section 3604(b) is aimed at housing providers like landlords, not private service companies. The Court references case law where the provision has been applied to landlords and municipal service providers but notes no precedent for applying it to private contractors like Otis, who had no contractual connection to Clifton Terrace since 1980. Therefore, the Court concludes that Otis's refusal to contract with the plaintiff does not violate Section 3604(b), resulting in a failure to state a claim.

Additionally, the plaintiff alleges that Otis's actions interfere with the rights of Clifton Terrace residents under the Act's civil anti-intimidation provision, 42 U.S.C. § 3617, which prohibits retaliation against those exercising their Fair Housing rights. The plaintiff argues that if Otis is withholding services due to the actions of Clifton Associates in supporting tenants' rights, it could be liable under § 3617. The Court finds this argument unmeritorious, lacking both legal and factual support, as the intimidation or coercion required under § 3617 is not present in this case.

In Evans v. Tubbe, a white defendant restricted access to a residential road by installing a locked gate, providing keys only to white property owners while denying access to a black plaintiff. In Grieger v. Sheets, a female tenant faced coercion from her landlord, who demanded sexual favors for housing repairs. Stackhouse v. DeSitter involved a black resident who was vandalized and firebombed by a white resident to intimidate him into leaving the community. The plaintiff in the current case failed to provide compelling authority or evidence to demonstrate that the defendant’s inaction constituted intimidation or coercion under the anti-intimidation provisions of 42 U.S.C. § 3617. The court emphasized that mere speculation is insufficient; the plaintiff must present affirmative evidence of a genuine issue for trial. Consequently, the defendant is entitled to summary judgment.

In Count II, the plaintiff alleges violations of 42 U.S.C. §§ 1981 and 1982, claiming that United/Otis is denying residents of Clifton Terrace, based on race, the same rights to make and enforce contracts and to lease real property as enjoyed by white citizens. Section 1981 guarantees equal rights to make contracts, while Section 1982 ensures equal rights to property transactions. The court acknowledges that while the plaintiff, a business owned by white individuals, can bring a civil rights action, it is not a tenants' association representing minority tenants, and none of the residents are parties to the suit. Significant concerns exist regarding the appropriateness of the plaintiff in asserting these claims. Even assuming standing, the plaintiff has not established a prima facie case of discrimination under §§ 1981 and 1982, as purposeful discrimination must be proven, placing the initial burden on the plaintiff.

Both parties agree that the same standards apply to claims under 42 U.S.C. §§ 1981 and 1982. The plaintiff's claims are fundamentally flawed, as they do not argue that the defendant engaged in intentional discrimination. Instead, they assert that Otis’s refusal to provide elevator maintenance adversely impacted the predominantly black, poor, and handicapped residents of Clifton Terrace. The plaintiff has established a prima facie case, noting that all tenants are African American and that Otis was aware of their race and needs but neglected their service requests.

However, the court emphasizes that the case does not involve intentional discrimination based on the plaintiff's own admissions. The plaintiff's counsel acknowledged uncertainty regarding intentional discrimination during oral arguments. A complaint under § 1981 lacks evidentiary support when it relies on the hope that discovery will uncover supporting facts. Additionally, Otis provided a legitimate rationale for its refusal to contract with the plaintiff, indicating that the plaintiff did not pursue the contract reasonably. Communications suggest that the plaintiff’s references to past controversies surrounding Clifton Terrace undermined their claim of being ready for negotiations.

The plaintiff argues there is a disputed fact about whether financial information was requested or provided, inferring that Otis's refusal was discriminatory. However, this inference is deemed speculative, with no evidence suggesting Otis acted out of discriminatory motives. The overall record supports Otis's legitimate business concerns, and the factual dispute raised by the plaintiff does not present a genuine trial issue. Consequently, summary judgment is warranted for the defendant regarding the plaintiff's claims under §§ 1981 and 1982, as the plaintiff has not demonstrated that Otis acted with intent to discriminate or sufficiently countered Otis's legitimate business justifications.

Plaintiff alleges violations of the D.C. Human Rights Act (DCHRA) in Count III, specifically citing provisions related to Equal Opportunities, Unlawful Discriminatory Practices in Real Estate Transactions, and Public Accommodations. The DCHRA prohibits discrimination based on race and location in service provision. To establish a prima facie case of discrimination, a plaintiff typically must demonstrate membership in a protected class, qualification for services, denial of those services, and that discrimination was a substantial factor in the decision. However, the plaintiff, Clifton Terrace Associates, a white-owned business, does not claim to belong to a protected class nor does it provide evidence of standing to assert the rights of its tenants under the DCHRA. The Court questions whether the DCHRA applies to Otis, an uninvolved third party with no ownership or contractual obligations regarding elevator services. Additionally, the DCHRA's prohibitions require evidence of discriminatory intent, which the plaintiff fails to provide, instead only alleging a discriminatory effect. Otis has presented substantial justification for its actions based on business grounds, which the plaintiff has not successfully disputed. Consequently, the claims under the DCHRA are dismissed.

In Count IV, the plaintiff alleges unfair trade practices under the D.C. Consumer Protection Procedures Act (CPPA), asserting that Otis misrepresents its commitment to elevator maintenance while reserving the right to discriminate against certain elevator owners without disclosure.

Plaintiff's claims are deemed meritless as the Court determines that the Consumer Protection Procedures Act (CPPA) protects only consumer-plaintiffs, not corporations, as evidenced by legislative history and case precedents. Clifton Terrace Associates, Ltd., a limited partnership managing low-income housing, lacks the consumer status required to bring forth a CPPA claim, which is therefore dismissed. In Count V, the plaintiff’s assertion of an implied "warranty of continued service" and "warranty of fair dealing" fails due to the absence of a contractual relationship. The cited case, Hais v. Smith, involved a contract, unlike the current dispute. Consequently, no implied warranty claim exists against Otis for elevator repairs. Count VI's allegation of "unconscionability" similarly fails, as this doctrine applies only within the context of an existing contract, which is not present here. The plaintiff's claims do not fall within the Fair Housing Act or the CPPA, and there is no evidence of discriminatory intent by the defendant. Summary judgment for the defendant is warranted on claims under the Civil Rights Act and the D.C. Human Rights Act, with all common law claims dismissed due to lack of legal support. The motion regarding United Technologies Corporation is moot due to the resolution of the case. Additionally, claims under specific provisions of the Fair Housing Act related to discrimination against the handicapped are also found to be without merit.

Plaintiff's argument that the provision 3617 is often used against non-housing providers is unsupported by two cited cases. In United States v. Gilbert, the case involved the criminal anti-intimidation provision of the Fair Housing Act, specifically 42 U.S.C. 3631, rather than the civil provision 3617. Additionally, the In re Malone case did not analyze the 3617 claim at all. Furthermore, the prudential limitation against third-party standing does not apply to the plaintiff's Fair Housing Act claims, as established in Havens Realty Corp. v. Coleman. The court also notes that the tone of correspondence from Mr. Marshall, which referenced the high visibility of Clifton Terrace and past criminal involvement of the Mayor's wife with the property, undermines the plaintiff's assertion of being prepared to negotiate contracts reasonably.