Lakeside Resort Enterprises, Lp Lakeside Waters Edge, Inc. Paupack Holding, Inc. Lakeside Water System, Inc. Edwin, Inc. Mark Gawron Marcella Gawron Gerald Gawron Jerome Gawron v. Board of Supervisors of Palmyra Township Palmyra Township

Citations: 455 F.3d 154; 2006 U.S. App. LEXIS 18223; 2006 WL 2021020Docket: 05-1163

Court: Court of Appeals for the Third Circuit; July 20, 2006; Federal Appellate Court

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The case involves Lakeside Resort Enterprises, LP, and related parties (Appellants) against the Board of Supervisors of Palmyra Township (Appellees) concerning the denial of a conditional use application for a property intended to be used as a drug and alcohol-treatment facility. The facility's residents, although expected to stay for slightly over two weeks due to funding constraints, would treat it as a home, leading the court to classify it as a "dwelling" under the Fair Housing Act (FHA).

The background reveals that in late summer 2000, Lakeside negotiated a sale of a property zoned as Community Commercial to Greenway, Inc., which intended to convert it into the treatment center. However, after the Palmyra Board enacted a zoning ordinance in January 2001 that prohibited such centers in that district, Lakeside's application was denied, causing the sale to collapse.

Lakeside subsequently filed a lawsuit in the Middle District of Pennsylvania, challenging the ordinance's validity under the Fair Housing Amendments Act (FHAA) of 1988. Following a series of legal motions, including summary judgment motions from both parties, a mistrial occurred after Lakeside presented most of its case. A new trial commenced in December 2004, where the court denied multiple motions for judgment as a matter of law from the Board concerning the FHA claim.

Ultimately, the District Court reconsidered its earlier denial of the Board's motion and granted judgment in favor of the Board under Federal Rule of Civil Procedure 50(a). Lakeside's motion for reconsideration was subsequently denied, prompting Lakeside to appeal. The appellate court affirmed it had jurisdiction and reviewed the case under a plenary standard, focusing on whether the District Court applied the correct legal standard regarding the FHA claim.

The Fair Housing Act prohibits discrimination in the sale of dwellings based on the handicap of prospective residents. A dwelling is defined broadly to include any structure intended for residential occupancy and any land offered for residential construction. The determination of whether a proposed drug and alcohol-treatment facility qualifies as a dwelling under the Act requires a generous interpretation of the statute's language. Previous cases have established that both summer bungalows and nursing homes are considered dwellings under the Act. The key factor is whether occupants intend to stay for a significant period and regard the facility as a residence to which they will return. The Act does not limit its coverage to year-round residences, as demonstrated by cases where facilities with varying lengths of stay, such as children's homes and hospices, were deemed dwellings. Ultimately, the analysis concludes that the proposed nursing home qualifies as a dwelling, as it would serve as a permanent home for its residents.

The District Court determined that there was insufficient clarity regarding the duration of residents' stays at the Lakeside treatment facility, leading to the denial of summary judgment on the Fair Housing Amendments Act (FHAA) claim. However, following trial testimony that indicated the average length of stay was 14.8 days, the Court later ruled that the facility did not qualify as a dwelling. The Court reasoned that this average stay was not significant, that residents would not perceive the facility as a permanent home since their purpose was solely treatment, and that they would act as transients rather than long-term occupants. The excerpt also references similar cases where courts have addressed the "dwelling" issue under the FHAA, highlighting varying outcomes based on the intended duration of stays in different facilities. Two key factors are established for determining if a facility is a dwelling: whether it is designed for occupants intending to stay for a significant period, and whether occupants view it as a place to return to. The Court noted that while five months is considered significant, the average stay of 14.8 days at this facility does not meet that threshold, in contrast to other cases with stays ranging from one month to four years. Additionally, it was mentioned that the shorter average stay may be influenced by health insurance limitations, while some residents have stayed longer under different circumstances.

The average stay at the proposed Lakeside facility, although limited by funding to 14.8 days, does not negate its classification as a dwelling under the Fair Housing Act, as defined by Congress. The Act states that a dwelling is any facility occupied or intended for occupancy as a residence by one or more families. The Lakeside facility is designed for longer stays, typically around 30 days, and has provisions for some residents to stay longer. Despite the average stay being shorter than previously recognized significant periods, it exceeds typical stays in motels or bed and breakfasts, which are not considered dwellings under the Act.

Testimony indicates that residents at Lakeside engage in communal activities, receive mail, decorate their rooms, and treat the facility as home, fulfilling the requirement of being a "place to return to." As such, the facility is recognized as a dwelling under the Fair Housing Act.

Further, Lakeside raised issues regarding the discriminatory nature of the ordinance amendment and its justification, which the Board contends are not before the court at this time, as they were previously directed to a jury. The court has determined that the facility qualifies as a dwelling, leading to the reversal of the District Court's order and remanding the case for further proceedings on the remaining issues.

Honorable Tom Stagg, Senior District Judge for the Western District of Louisiana, is presiding. Plaintiffs/appellants include members of the Gawron family and entities they control, referred to as Lakeside. Their claim is identified as the "FHAA claim," which arises under Title VIII of the Civil Rights Act of 1968, known as the Fair Housing Act. The second claim pertains to the Americans with Disabilities Act (ADA). The notice of appeal became effective only after the District Court's ruling on a motion for reconsideration, with a jury verdict for the Board on the ADA claim in December 2004, which is included in the appeal but not briefed, resulting in waiver.

The document notes that recovering alcoholics and drug addicts are considered handicapped under certain conditions according to previous court rulings. The Fair Housing Act prohibits discrimination in housing based on the handicap of buyers or renters, including those associated with them. Group homes are classified as dwellings under the FHAA, with references to legislative intent against discrimination in congregate living arrangements for people with disabilities.

The Board contends that the Lakeside facility, originally built as a hotel, does not qualify as a dwelling intended for residential occupancy. However, the court disagrees, highlighting Greenway's intention to convert the property into a drug and alcohol treatment center, drawing parallels to a previous case where an office building was converted into an AIDS hospice. Data from 2004 indicates brief stays are common among travelers, with the implication that visitors to hotels do not perceive them as home, contrasting with the residential nature intended for Lakeside.