Comm'n on Human Rights ex rel



Comm'n on Human Rights ex rel. Martin

v. Hudson Overlook, LLC

OATH Index No. 137/06 (Aug. 30, 2006), aff’d, Comm’n Dec. (Dec. 5, 2006), appended

Landlord’s actions of sending notice of termination and a letter discontinuing rent subsidy to tenant with pending discrimination action found to be unlawful retaliation under section 8-107(7) of the City Human Rights Law. Complaint dismissed against employee of managing agent due to absence of proof employee was aware of complaint. Although evidence was insufficient to support award of mental anguish damages, nature of retaliation, number of rental units, and landlord’s demonstrated scofflaw attitude toward its legal obligations found to warrant a $25,000 fine.

_______________________________________________________

NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of

COMMISSION ON HUMAN RIGHTS,

EX REL. EVELYN MARTIN

Petitioner

- against -

HUDSON OVERLOOK, LLC, STEPHEN SMITH,

ARC REALTY MANAGEMENT, and SETH MILLER

Respondents

______________________________________________________

REPORT AND RECOMMENDATION

JOHN B. SPOONER, Administrative Law Judge

This is a proceeding referred by the New York City Commission on Human Rights ("Commission") on behalf of complainant, Evelyn Martin, pursuant to sections 8-107(7) and 8-107(19) of the Administrative Code of the City of New York. The verified complaint alleges that respondents, Hudson Overlook, LLC (“Hudson”), Stephen Smith, ARC Realty Management (“ARC Realty”), and Seth Miller, discriminated against her by attempting to terminate her tenancy, preventing her from attending the August 19, 2004 housing discrimination hearing before this tribunal and refusing to accept her rent subsidy status, all in retaliation for filing a complaint with the Commission challenging respondents’ discriminatory practices.

For the reasons provided below, I find that respondents Hudson, ARC Realty, and Miller retaliated against Ms. Martin in violation of the Human Rights Law and recommend that the Commission impose $25,000 as a civil penalty.

PROCEDURAL BACKGROUND

The 80-year-old complainant, Evelyn Martin, has resided at 736 Riverside Drive in apartment 3M on the third floor since 1959.[1] The building in question, owned by Hudson, is located at the southeast corner of Riverside Drive and 151st Street in Manhattan. Respondent ARC Realty is the managing agent of the building. Respondent Seth Miller is an officer of respondent Hudson, while respondent Stephen Smith is employed by respondent ARC Realty Management ("ARC Realty"), the managing agent for the building. In July 2005, Hudson sold the building to 736 Riverside, LLC, which is not a party to this action.[2] Throughout most of her tenancy, Ms. Martin has received federal rent subsidy benefits pursuant to 42 USC § 1437f (d)(1)(B)(ii), a federal program which pays a portion of the rent for low income tenants.

Ms. Martin’s problems with regard to access to her apartment began in 2001, when her leg was amputated below the knee and she was confined to a wheelchair. Because the building has three steps from the sidewalk to the entrance doors, she has been unable to use the stairs in front of her building to enter and exit the building on her own. In November 2003, Ms. Martin’s physician sent a letter to ARC Realty requesting that the landlord install a ramp to accommodate her wheelchair. When the landlord failed to respond to this letter, Ms. Martin initiated her first human rights action by filing a verified complaint with the Commission on March 12, 2004. This complaint alleged that respondents Hudson and Miller engaged in housing discrimination by denying her a reasonable accommodation of a ramp in violation of sections 8-107(5)(a)(2) and 8-107(15)(a) of the Administrative Code. Respondents did not file an answer in response and failed to appear at a hearing conducted on August 19, 2004, before a judge of this tribunal. On the day of the housing discrimination hearing, the elevator in Ms. Martin's building was out of service for a few hours. As a result, Ms. Martin was unable to leave her building and testified at the hearing via speaker phone.

On October 25, 2004, respondents Hudson and Miller filed a motion to vacate the default. In support of this motion, respondents asserted that they failed to appear at the hearing because Ms. Martin was not a legal tenant and attached a copy of a notice of termination (Pet. Ex. 2) served upon her on October 12, 2004. It is this notice which is one of the alleged acts of retaliation alleged in the instant retaliation claim.[3]

After evaluating the record of the August 19, 2005, housing discrimination proceeding, this tribunal found that respondents discriminated in violation of the Human Rights Law by not providing a reasonable accommodation for Ms. Martin's disabilities and recommended that the Commission order the installation of a ramp and accessible doors, assess $10,000 in damages and impose $5,000 as a civil penalty. See Comm'n on Human Rights ex rel. Martin v. Hudson Overlook, LLC, OATH Index No. 2094/04 (Jan. 20, 2005), aff'd, Comm'n Dec. & Order (Mar. 23, 2005). The Commission adopted this decision. The Commission subsequently obtained an Order from New York State Supreme Court, enforcing its order in its entirety in the form of a judgment against respondents Hudson and Miller.

On March 31, 2005, Ms. Martin and the Commission filed the present complaint against respondents Hudson, ARC Realty, Miller, and Smith, alleging retaliation in violation of sections 8-107(7) and 8-107(19) of the Administrative Code. The complaint alleges that respondents’ actions of seeking to terminate her tenancy and refusing to recognize her section 8 housing status were in retaliation for filing the initial complaint. In addition, petitioner asserts that the elevator failure which occurred on August 19, 2004, was a retaliatory effort by the owner to prevent Ms. Martin from attending the hearing.

A hearing was held on the retaliation complaint on January 10, 2006, with Ms. Martin testifying for petitioner and Mr. Miller testifying for respondents. Petitioner also called as a rebuttal witness a Commission investigator who spoke with Mr. Miller after the Martin complaint was filed. Although the record was held open until February 13, 2006, for post-trial briefs, only petitioner submitted a closing brief. On June 15, 2006, Judge Kara Miller of this tribunal, who had presided over the January hearing, recused herself from presiding over this case due to a pending complaint before the Commission filed by her husband. A new hearing was therefore scheduled before me and the parties were notified by letter of this hearing date of July 24, 2006. The attorney for petitioner appeared at the new hearing date, but neither the respondents nor their representatives appeared. At petitioner’s request, the testimony and exhibits from the January 10 hearing were admitted into the record as a basis for adjudicating the claims made in the complaint.

ANALYSIS

Petitioner’s retaliation claims in the instant case are based upon three actions taken by the landlord after Ms. Martin filed her initial discrimination complaint with the Commission in March 2004. As mentioned above, Hudson served a notice of termination of tenancy on Ms. Martin on October 12, 2004, stating that her tenancy would be terminated because she failed to return a renewal lease to the landlord (Pet. Ex. 2). About three months later, on January 18, 2005, ARC Realty sent Ms. Martin a letter indicating that the landlord would no longer participate in a rent subsidy program (Pet. Ex. 3). Finally, petitioner asserts that the elevator failure which occurred on August 19, 2004, the date of the first OATH hearing before Judge Miller, was a deliberate and retaliatory effort by the owner to prevent Ms. Martin from attending the hearing.

It was undisputed that Hudson served Ms. Martin by mail with both the notice of termination (Pet. Ex. 2) on October 12, 2004, and a letter (Pet. Ex. 3) dated January 18, 2005, stating the landlord would not renew the housing assistance contract and would no longer accept rent from her housing assistance subsidy. The termination notice is from Hudson, and signed by Mr. Miller as the “Registered Managing Agent.” The letter as to the housing subsidy is on the letterhead of “Hudson Overlook, LLC, c/o Arc Realty Management” and is signed by Mr. Smith.

As to the elevator shutdown, petitioner relied solely upon the testimony of the complainant to establish that the landlord was responsible for the lack of elevator service which prevented Ms. Martin from attending the August 19, 2004 OATH hearing. Ms. Martin stated that, on August 19, 2004, when she tried to use the elevator in order to go by wheelchair from her third floor apartment to the street, the elevator was not working. She stated that the elevator had been working both the day before and earlier that morning, when a friend used it to visit Ms. Martin in her apartment (Tr. 14). The elevator was also working later in the day (Tr. 34). Some other tenants in the building later told Ms. Martin that the superintendent had stopped the elevator, although she did not observe him do so (Tr. 33).

At the January 10 retaliation hearing, respondents offered evidence that the landlord’s actions were in response to Ms. Martin’s refusal to sign and return a renewal lease, as she was required by law to do. Mr. Miller testified that, since acquiring the building in 1999, respondents had sent a series of renewal leases to Ms. Martin, which she failed to sign or return. Mr. Miller denied ever receiving either of the signed lease renewal forms (Resp. Exs. B1 and B2) retrieved from the Housing Authority files (Tr. 42). As a result of not receiving the renewals, in 2003 or 2004, Hudson sent Ms. Martin a notice of termination of tenancy in an attempt to force her to sign her renewal lease. He testified that the notice was sent even though Hudson recognized that a tenant could not be evicted for not signing a renewal lease (Tr. 38). He also stated that, after the first notice, he met with Mr. Lehrer, Ms. Martin’s Legal Aid attorney, and Hudson agreed to withdraw the first eviction action. Mr. Miller stated that Hudson served the second notice in late September 2004 because “someone” in his office reminded him that Ms. Martin still had not renewed her lease. Mr. Miller believed he was no longer bound by any commitment made earlier to Mr. Lehrer and that “someone” therefore started a new eviction action against Ms. Martin (Tr. 61). Although he insisted that it was the landlord’s practice to serve “dozens and dozens” of termination notices upon tenants every year, he did not have copies of any other notices which had been served because all of Hudson Overlook’s files had been turned over to the new owner (Tr. 68-69).

With respect to Ms. Martin's section 8 subsidized rent status, Mr. Miller testified that Hudson decided to withdraw from the section 8 program because it was not a lucrative way to manage the building and the process of getting authorization for increased rents was difficult. He stated that landlords had been obliged to accept section 8 subsidies up until 2005, but that he had been told by his attorney of a 2005 court case which permitted landlords to discontinue their participation in the section 8 program, once the tenant's lease expired (Tr. 44). This was one of the factors which prompted the owner to put the building up for sale and ultimately to sell it on July 29, 2005 (Tr. 44-45).

Mr. Miller professed to have no knowledge about an elevator failure on August 19, 2004, but stated that the landlord has a contract with an elevator company to repair and maintain the elevator at all times. He denied that he or any member of his staff would deliberately turn off the elevator to prevent Ms. Martin from leaving her apartment (Tr. 45-46).

To prevail on a claim of retaliation, petitioner must demonstrate by a preponderance of the reliable evidence that 1) the complainant engaged in a protected activity, 2) respondents were aware of that activity, 3) respondents subsequently subjected her to an adverse action, and 4) there was a causal connection between this adverse action and her protected activity. See Marks v. BLDG Management Co., Inc., 2002 U.S. Dist. LEXIS 7506, at 28-29 (S.D.N.Y. 2002), aff'd, 56 Fed. Appx. 62, 2003 U.S. App. LEXIS 3360 (2d Cir. 2003); see also, Gordon v. New York City Bd. of Educ., 232 F.3d 111, 113 (2d Cir. 2000); Cosgrove v. Sears, Roebuck & Co., 9 F.3d 1033, 1039 (2d Cir. 1993); Cassidy v. Dep't of Correction, OATH Index No. 646/98 (Oct. 23, 1997), aff'd, Comm'n Dec. and Order (Jan. 28, 1998).

In the present case, Ms. Martin was engaged in a protected activity when she filed her initial complaint in March 2004 with the Commission opposing respondents' discriminatory housing practices. Respondents Hudson and Miller, who was an officer of Hudson, were certainly aware of this activity, since they were served with the complaint, contacted by telephone and mail by the Commission, and notified of the hearing date. Although they did not appear at the August 2004 hearing, they filed a motion to vacate the default a few weeks later, confirming that they knew of the pending action.

As to ARC Realty and Stephen Smith, the other named respondents, less convincing proof was offered as to their awareness of Ms. Martin’s complaint. The record supports a finding that Mr. Miller exercised sufficient control over ARC Realty such that notice to Mr. Miller constituted notice to ARC Realty. This finding is based upon three factors. First, the section 8 notice is on the letterhead of “Hudson Overlook LLC, c/o ARC Realty Management,” clearly indicating that, at least for purposes of dealing with Ms. Martin, Hudson and ARC Realty were agents, if not alter egos, of one another. In his capacity as a principal of Hudson, Mr. Miller was therefore also presumably imbued with authority to act on behalf of ARC Realty. Second, in his testimony, Mr. Miller stated that “we” sent out the section 8 letter of January 18, 2005 (Tr. 44), indicating that he participated in its preparation and mailing on behalf of ARC Realty, even though the letter was signed by Mr. Smith. Finally, in the two lease renewals (Resp. Exs. B1 and B2) submitted by respondents, Mr. Miller signed both forms on behalf of ARC Realty, further confirming Mr. Miller’s authority to act for both Hudson and ARC Realty.

This factual record is sufficient to find that Mr. Miller and Hudson were both closely affiliated with ARC Realty and that notice to Mr. Miller and to Hudson of Ms. Martin’s pending human rights complaint also constituted notice to ARC Realty. See Carrero v. New York City Housing Authority, 890 F.2d 569, 578 (complaint to equal opportunity officer at Housing Authority sufficient to place employer on notice of sexual harassment complaint); New York State Dep’t of Correctional Services v. McCall, 109 A.D.2d 953, 486 N.Y.S.2d 443 (3d Dep't 1985) (complaint of sexual discrimination to affirmative action office and other "high ranking officials" held sufficient to demonstrate actual notice on the part of the State Department of Correctional Services).

Petitioner’s proof as to the requisite elements of retaliation failed as to two portions of the claims. Petitioner offered no proof to establish that the fourth respondent, Stephen Smith, was aware of Ms. Martin’s human rights complaint. In respondents’ answer, Mr. Smith is identified simply as an employee of ARC Realty, with no indication that he had any authority to manage or act on behalf of the company. Certainly, the mere fact that he signed a letter to Ms. Martin regarding her rent indicates little in the way of his participation in the management of ARC Realty itself. Neither Mr. Miller nor Ms. Martin mentioned ever speaking with Mr. Smith about Ms. Martin’s discrimination complaint at any time, and certainly not prior to the sending of the January 2005 letter. Thus, I find that the evidence fails to establish a prima facie case of retaliation by Mr. Smith and the complaint must be dismissed as to him.

Petitioner’s proof that the elevator failure on August 19, 2004, was orchestrated by one or all of the respondents was also deficient. It is undisputed that Ms. Martin did not appear at the hearing and that she attributed her nonappearance solely to the fact that the elevator was not working when she attempted to leave the building on her way to the hearing. However, petitioner offered no evidence that the failure of the elevator to respond to Ms. Martin’s call was attributable to any of the respondents. Ms. Martin herself offered only the sketchiest of information on this issue, recalling that she waited for the elevator, it did not come, and she returned to her apartment. She did recall that the elevator had been working earlier that morning and was also working the following day. She stated that she heard later from other tenants that the superintendent had turned the elevator off, but could offer no details as to who provided her with this hearsay information or how these individuals came to have the information, leaving open the unsettling possibility it was based upon either gossip or idle speculation. Notably, no evidence was offered as to how long the elevator failure lasted or as to whether Ms. Martin notified the landlord of the broken elevator. In the absence of even circumstantial evidence to establish that the elevator’s failure was the result of wrongdoing, either deliberate or negligent, by the landlord, I must find that petitioner failed to establish a prima facie case of retaliation with respect to the elevator allegation and recommend that it be dismissed.

There was convincing evidence to suggest a causal connection between the complaint and the other two landlord actions. Ms. Martin filed her original complaint with the Commission to compel her landlord to install a ramp at the front entrance of her building in March 2004. Five months after the complaint was filed and approximately one month after a hearing was held on the discrimination complaint, respondents sought to evict Ms. Martin from the building by claiming that she was not a legal tenant. In motion papers filed to vacate their default at the hearing, respondents Hudson and Miller argued that the notice of termination showed that Ms. Martin was not a legal tenant. Three months later, as Ms. Martin’s eligibility for rent subsidies were due to expire, they announced they would no longer accept the rent subsidies she had been receiving for over two decades. I find that the proximity of these actions by the landlord is sufficient to show a causal connection. See Grant v. Bethlehem Steel Corp., 622 F.2d 43, 46 (2d Cir. 1980); accord, Davis v. State University of New York, 802 F.2d 638, 642 (2d Cir. 1986).

Since petitioner established a prima facie case of retaliation with respect to the landlord’s efforts to evict her from her apartment and refusal to accept her subsidized housing payments, the burden shifted to respondents. Grant v. Bethlehem Steel Corp., 622 F.2d at 46. See also St. Mary's Honor Center v. Hicks, 509 U.S. 502, 113 S.Ct. 2742 (1993); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817 (1973). Respondents must then set forth legitimate nondiscriminatory reasons for the alleged acts of reprisal.

The record suggests that Ms. Martin did not sign renewal leases for 2001 and several years thereafter. Although Ms. Martin recalled receiving various leases from the landlord and testified that she sent them back, upon instructions from her attorney (Tr. 33), the record indicated that the 2001 and 2002 leases were not executed until well after the previous leases had expired. Respondent presented into evidence two lease renewal forms for 2001-2002 and September 2002-2004 (Resp. Exs. B1 and B2) obtained from the New York City Housing Authority (“NYCHA”). The lease forms indicate that Ms. Martin signed both leases on June 11, 2004. No explanation was offered by either party as to why the leases were executed so late or how they came to be filed with NYCHA. Ms. Martin confirmed that the signatures were hers, but stated she did not recall signing the leases (Tr. 30). Mr. Miller denied ever seeing either of the signed lease renewal forms until his attorney obtained them from NYCHA just prior to the hearing (Tr. 42) and suggested that Ms. Martin must have mailed the forms to NYCHA without providing them to the landlord.

The lease renewal forms with June 11, 2004 signatures confirm the landlord’s contention that, at least until that date, Ms. Martin had no current lease in effect. However, the lease renewal forms also demonstrate that, as of the time the termination notice was sent out in October 2004, Ms. Martin had apparently executed a renewal lease. Although Mr. Miller denied ever having seen the lease renewals until 2005, the weight to be accorded to this uncorroborated statement seemed minimal, particularly as to an issue so central to the discrimination allegations as the landlord’s intent in sending out the termination notice. If the landlord were aware a lease had been executed, the landlord’s notice of a pending eviction based upon the supposed failure to execute a lease would likely be found to be bad faith and highly retaliatory.

Although there is some reason to suspect that Mr. Miller’s denial of having known about the lease renewals might not be truthful, I nonetheless found no proof this denial was false. Since the public assistance program of section 8 is, in essence, a contract between the landlord and NYCHA, it seems more likely that the lease renewal forms would have been provided to NYCHA by Hudson rather than by Ms. Martin. However, since Ms. Martin herself did not confirm when or why she signed the renewals or indicate that she sent the signed renewal forms to the landlord, I find no convincing evidence to refute Mr. Miller’s denial of knowledge of the leases. I therefore credit Mr. Miller’s assertion that, as of September 2004, the landlord had not received any signed lease renewals from Ms. Martin. This testimony was sufficient to articulate a legitimate business reason for the sending of the notice of termination.

The issue of whether the law permits a landlord to discontinue participation in the section 8 program was vigorously disputed. The primary argument in support of the notion that a landlord’s participation in the program was voluntary was based upon a temporary amendment to the section 8 law, enacted by Congress in 1996, which was made permanent in 1998. See 42 USC § 1437f (d)(1)(B)(ii). This amendment was ambiguously drafted and could be interpreted as giving landlords an opportunity to opt out of the section 8 program. Indeed, several landlord organizations promoted the view that landlords could discontinue participation if they wished to. See Rosario v. Diagonal Realty, LLC, 9 Misc.3d 681, 684, 803 N.Y.S.2d 343, 347 (Sup. Ct. NY Co. 2005). Courts have apparently been split on the issue and the primary decision permitting landlords to opt out of the section 8 program, alluded to by Mr. Miller, was recently overturned, See Licht v. Moses, 5 Misc.3d 1023A, 799 N.Y.S.2d 161 (Sup. Ct. Kings Co. 2004), rev'd, 11 Misc.3d 76, 813 N.Y.S.2d 849 (App. Term 2d Dep't 2006). The New York City Housing Authority ("NYCHA"), which administers the section 8 program in New York City, has issued a policy statement stating, "our landlords of occupied rent stabilized apartments must offer a continuation of Section 8 subsidy as a condition of renewal with their tenants" Rosario, 9 Misc.3d at 702, 803 N.Y.S.2d at 359, citing NYCHA Leased Housing Department Memorandum, July 22, 2003 (LHD # 03-26). Based upon the existence of some legal support for respondents’ contention that landlords could decline to accept the section 8 rent subsidies, I find that Mr. Miller advanced a legitimate non-discriminatory reason for Hudson notifying Ms. Martin that it would no longer accept her section 8 subsidized status.

Respondents having satisfactorily asserted legitimate non-discriminatory reasons for their adverse actions against the complainant, the burden shifts back to petitioner to demonstrate that respondents' reasons are a pretext for illegal retaliation. In this regard, I did not find Mr. Miller’s explanation as to the intent or the timing of the notices to be credible. Ms. Martin’s legal status had been unchanged since 2001, when her last lease expired. As explained by Mr. Miller, after Ms. Martin’s 2001 lease expired, the landlord declined to initiate legal proceedings on the renewal issue because the minimal additional rent to be gained did not justify the considerable legal expenses involved in pursuing an eviction action. Nonetheless, some three years later Hudson announced its intention to bring an eviction action against Ms. Martin based upon her failure to sign a renewal lease (Tr. 38). Mr. Miller provided no reason for this change of course.

After sending the first notice of termination, Hudson declined to pursue it after discussions with Ms. Martin’s attorney. Mr. Miller did not clarify what these discussions were except to state that they concerned “contentious issues” arising out of a fire in the building in 2001. Mr. Miller characterized Hudson’s withdrawal of the actions as a gratuitous gesture of “good faith” and insisted that it was not pursuant to a binding legal agreement. Mr. Miller’s explanation that the timing of the second termination notice was due to the initiative of “someone” in his organization suddenly realizing that Ms. Martin still had not renewed her lease was decidedly unpersuasive. Although not mentioned in Mr. Miller’s testimony, within days after the notice was served upon Ms. Martin, Hudson filed a motion to vacate relying upon the notice to argue that Ms. Martin was not a legal tenant. The proximity of the notice and the motion to vacate left little doubt that the primary purpose of the notice was to aid Hudson in avoiding or at least delaying an unfavorable disposition of Ms. Martin’s pending human rights complaint.

Notably, the contentions made in the motion to vacate are utterly at odds with Mr. Miller’s testimony. In his testimony, Mr. Miller stated that Hudson served the notice to terminate Ms. Martin’s tenancy with the knowledge that she could not be evicted and that the best remedy they could expect would be a court order for her to execute a renewal lease. The motion to vacate states in unequivocal terms that Ms. Martin was not a legal tenant. The central inconsistencies between Mr. Miller’s testimony and the contentions embodied in the motion to vacate papers undermine Mr. Miller’s credibility and demonstrate even more convincingly that Mr. Miller’s statements about the coincidental timing of the service of the notice of termination is not to be credited.

This evidence thus shows that the motivation for the landlord to seek to evict Ms. Martin in October 2004 was twofold -- to concoct an excuse for Hudson’s and Mr. Miller’s failure to appear at the August 19, 2004 hearing and, more importantly, to rid themselves of a rent-regulated tenant whose continued tenancy required the landlord to construct a ramp. The landlord may also have believed the legal actions would be all the more likely to succeed due to Ms. Martin’s physical infirmities, which made it extremely difficult for her to appear and oppose the eviction action. Certainly, the landlord was well aware that evicting Ms. Martin would not only end her tenancy but might also moot the pending order from the Commission to build an expensive ramp, a significant financial incentive.

After attempting to evict Ms. Martin in October 2004, respondents increased the pressure on Ms. Martin by notifying her in January 2005 that they would no longer accept her rent subsidy. Mr. Miller’s assertions that the timing for this action was also coincidental rang false. He claimed that he had recently been advised by his attorney that Hudson could withdraw from the section 8 program if it wished and that he sent similar notices to all of his section 8 tenants, but he supplied no corroboration for either of these statements. He then indicated that he decided to refuse section 8 payments because of the extra expense and inconvenience caused by the NYCHA bureaucracy. A far more plausible motivation for notifying Ms. Martin that the landlord would be refusing to cooperate in the rent subsidy program was to make it more difficult for her to pay her monthly rent and enhance the prospect that she might leave or ultimately be evicted for nonpayment.

Respondents’ general failure to provide corroborative documentation for the statements made by Mr. Miller further undermined his credibility. Although Mr. Miller attempted to excuse the absence of records by suggesting that the records had all been transferred when Hudson sold the building in July 2005, this explanation seemed suspect. Since the retaliation claim filed by Ms. Martin was filed some four months before this sale, and since the rent records and eviction files were highly relevant to this claim, it seemed highly unlikely that Hudson would not have retained copies if not originals of all documents which would demonstrate that the legal actions taken against Ms. Martin were also taken against other tenants. And even assuming that the records were given over to the new owner, it seems highly likely that copies could have been obtained with the new owner’s consent. Mr. Miller mentioned no efforts to contact the new owner and obtain any relevant records which it may have had.

In short, the more Mr. Miller portrayed the landlord’s actions as routine, the clearer it became these assertions were a pretext for retaliation designed to harass and intimidate Ms. Martin and avoid a finding of discrimination. I thus find that petitioner met its initial burden of establishing that respondents retaliated against Ms. Martin by attempting to evict her and terminate her section 8 status and also their burden of establishing that respondents' non-discriminatory reasons for taking adverse action against Ms. Martin were pretextual.

Accordingly, I find that respondents Hudson, ARC Realty, and Miller have violated Administrative Code section 8-107(7), which prohibits retaliation, and section 8-107(19), which prohibits interference with protected rights.

FINDINGS AND CONCLUSIONS

1. Petitioner proved by a preponderance of the credible evidence that respondents Hudson Overlook, LLC, ARC Realty, and Seth Miller discriminated against Evelyn Martin by taking retaliatory actions in seeking to terminate her tenancy and her rent subsidy, in violation of sections 8-107(7) and 8-107(19) of the Administrative Code.

2. Petitioner failed to prove respondent Stephen Smith is individually liable for either of the retaliatory actions taken by Hudson Overlook, LLC, or by ARC Realty.

DAMAGES

The Commission requested an award of $50,000 for Ms. Martin's extreme emotional distress. Section 8-120(a)(8) of the Administrative Code permits the Commission to award damages to complainants who suffer mental anguish because of discrimination. Admin. Code § 8-120(a)(8) (LEXIS 2006). See DaSilva v. New York City Racing Ass'n., NYCCHR Comp. No. E95-0668/16F-95-0141, Rec. Dec. & Order (Apr. 16, 1996), aff'd Dec. & Order (June 25, 1996) aff'd sub. nom. N.Y. Racing Ass'n v. Comm'n on Human Rights, N.Y.L.J., Jan. 10, 1997, at 25, col. 4 (Sup. Ct. Queens Co.). Compensation for mental anguish may be awarded upon a sufficient showing of the existence and extent of such injury, and the evidence must support a determination that "a reasonable person of average sensibilities could be fairly expected to suffer mental anguish from the incident." Batavia Lodge No. 196 v. N.Y.S. Division of Human Rights, 43 A.D.2d 807, 810, 350 N.Y.S.2d 273, 278 (4th Dept. 1973)(dissenting opinion), rev'd on other grounds, 35 N.Y.2d 143, 359 N.Y.S.2d 25 (1974). Credible testimony by a complainant corroborated by reference to the circumstances can be sufficient to sustain an award for mental anguish. New York City Transit Auth. v. N.Y.S. Div. of Human Rights, 78 N.Y.2d 207, 216, 573 N.Y.S.2d 49, 54 (1991); see also Cullen v. Nassau County Civil Service Comm'n, 53 N.Y.2d 492, 442 N.Y.S.2d 470 (1981).

There was no testimony from Ms. Martin or anyone else indicating that she suffered mental anguish as a result of respondents' actions in this case. In the prior discrimination action, Ms. Martin was awarded $10,000 for the mental anguish suffered after the landlord refused to comply with her request that a ramp be provided. See Comm'n on Human Rights ex rel. Martin v. Hudson Overlook, LLC, OATH Index No. 2094/04 (Jan. 20, 2005) aff'd, Comm'n Dec. & Order (Mar. 23, 2005). Certainly, any compensatory award made in the instant case must therefore be based solely upon Ms. Martin’s suffering with regard to the two retaliatory notices sent to her October 2004 and January 2005.

The evidence suggests that Ms. Martin had very little reaction to the two notices she received from the landlord. When shown the notice of termination, she initially testified that she did not remember receiving it (Tr. 15). She later stated that she showed the notice to her Legal Aid attorney and he told her “not to worry about it” because her tenancy was rent stabilized (Tr. 28). She never had to appear in court or sign papers with regard to the termination action (Tr. 28). Although she seemed to recall receiving the letter with regard to the section 8 subsidy, she stated that her response was to write a letter: “I put a letter in when I paid my rent telling them my rent was controlled. I had been living there for all this time” (Tr. 17). Thus, there is no indication in the record that Ms. Martin suffered as a result of the two notices she received other than speaking to an attorney about them.

Although petitioner contends that mental suffering can be presumed by virtue of the acts themselves, Ms. Martin’s age, and her disability, this contention has no support in prior cases, which suggest that such a presumption is inappropriate. Rather, the cases indicate that damages are awarded based upon credible testimony of some degree of emotional distress caused by the discriminatory acts. See New York City Transit Auth., 78 N.Y.2d at 217, 573 N.Y.S.2d at 54; Comm'n on Human Rights ex rel. Thomas v. Space Hunters, Inc., OATH Index No. 997/04 (May 31, 2005), aff'd, Comm'n Dec. & Order (July 26, 2005); Comm'n on Human Rights ex rel. Cherry v. Stars Model Management, OATH Index No. 1464/05 (Mar. 7, 2006), aff'd, Comm'n Dec. & Order (Apr. 13, 2006). In this case, I must therefore conclude that compensatory damages for mental anguish based upon the retaliation cannot be awarded.

The Commission further requested that respondents be assessed a civil penalty of $75,000 for denying a disabled woman a reasonable accommodation for over four years and retaliating against her for filing a complaint with the Commission. A fine is authorized by section 8-126(a) of the Administrative Code, which provides that the Commission may, to vindicate the public interest, impose a civil penalty of not more than $50,000 upon a party found to be engaging in unlawful discrimination. In the case of a willful, wanton or malicious act of discrimination, the Commission may impose a civil penalty not to exceed $100,000.[4] Admin. Code § 8-126(a) (LEXIS 2006).

The civil penalty "is not intended to compensate the complainant but to punish the violator." 119-121 East 97th Street Holding Corp. v. New York City Comm'n on Human Rights, 220 A.D.2d 79, 88, 642 N.Y.S.2d 638, 644 (1st Dep't 1996). In fashioning a penalty, consideration is given to "how egregious the violation is and its impact on the public." Southgate v. United African Movement, NYCCHR Complaint No. MPA95-0851, PA95-0031, Rec. Dec. & Ord. (June 30, 1997), aff'd in part, modified in part, Dec. & Order (Sept. 24, 1997). Other factors to be considered in assessing a civil penalty include the violation was willful and whether there have been prior findings of discrimination against the same party. See Comm'n on Human Rights ex rel. Martin v. Hudson Overlook, LLC, OATH Index No. 2094/04 (Jan. 20, 2005) aff'd, Comm'n Dec. & Order (Mar. 23, 2005); Comm'n on Human Rights v. Park West Realty, NYCCHR Complaint No. H-93-0877, Rec. Dec. & Order. (Sep. 26, 1995), aff'd, Comm'n Dec. & Order (Dec. 12, 1995).

The record here demonstrates that respondents willfully retaliated against an 80-year-old disabled woman after she sought the Commission’s assistance in obtaining a ramp to enter and leave her building. The retaliation took the form of written notices that the tenant would be evicted and her rent subsidies discontinued. Certainly, this retaliation, taken against a particularly vulnerable tenant, deserves to be punished by a substantial fine.

The evidence demonstrates that respondents’ actions were willful, taken in defiance of both the Human Rights Law and the Commission. Ted Finkelstein, Director of Disability Access at the Commission, credibly testified that he spoke with Mr. Miller soon after the Commission received Ms. Martin’s original complaint. At that time, Mr. Finkelstein explained to Mr. Miller what the Human Rights Law was and how it applied to landlords such as Hudson. Mr. Finkelstein indicated that Mr. Miller was “hostile” and told Mr. Finkelstein he “doesn’t care what the law is” and “no government agency tells [me] what to do” (Tr. 83). Mr. Miller then hung up the telephone. Subsequent letters and phone calls from Mr. Finkelstein were unanswered (Tr. 83-84). Moreover, Hudson and Mr. Miller then did not appear at the first OATH hearing in August 2004. Although they did appear at the first retaliation hearing before Judge Miller, they again failed to appear at the July 2006 hearing before me.

Thus, after being made aware of the Commission staff’s opinion that Ms. Martin was legally entitled to the ramp, respondents nonetheless refused to provide it and at the same time launched dubious legal attacks upon Ms. Martin’s tenancy rights and rights to low income subsidies, most likely in the hope that she would abandon her complaint. Even after being fined $5,000 by the Commission and receiving an order to build a ramp, respondent Miller displayed a scofflaw attitude toward both the Human Rights Law and the Commission by refusing to install the ramp before they sold the property in July 2005. The sustained and unrepentant defiance demonstrated by these actions constitutes not only an attack upon Ms. Martin but on the very process designed to protect her. A substantial penalty is needed to demonstrate to respondents and other landlords that such malicious actions will not be tolerated.

The impact of respondents’ acts of discrimination on the public could be substantial. During the hearing for this current case, Mr. Miller testified that, in addition to this property, respondents owned and managed other properties which contained "almost 500 units" (Tr. 38, 40). The large number of apartments controlled by the respondents indicates a significant potential impact on the public interest and further supports a severe penalty. See 119-121 East 97th Street Holding Corp. v. New York City Comm'n on Human Rights, 220 A.D.2d 79, 642 N.Y.S.2d 638 (1st Dep't 1996); Comm'n on Human Rights ex rel. Thomas v. Space Hunters, Inc., OATH Index No. 997/04 (May 31, 2005), aff'd, Comm'n Dec. & Order (July 26, 2005); Comm'n on Human Rights ex rel. Cherry v. Stars Model Management, OATH Index No. 1464/05 (Mar. 7, 2006), aff'd, Comm'n Dec. & Order (Apr. 13, 2006).

I note that, although respondents Miller and Hudson were found guilty of discrimination in Judge Miller’s January 20, 2005 report, this decision was issued only after both of the notices here had been sent to Ms. Martin. Thus, at the time of the retaliatory acts themselves, no prior findings of discrimination existed and the prior Order of the Commission, which was not issued until two months after the last retaliatory act, cannot fairly be considered as a basis to enhance the fine in the instant case.

Recognizing that the choice of penalty must be tailored to the facts of each case, some guidance as to the size of a penalty can be gleaned from the prior Commission cases. Two cases suggest that the appropriate penalty for an isolated violation, with few aggravating factors, should be $5,000. In Southgate v. United African Movement, NYCCHR Complaint No. MPA95-0851, PA950031, Dec. and Order (Sept. 24, 1997), a respondent was fined $5,000 for discriminating against a reporter on the basis of race by denying her entrance into a publicly advertised forum. In determining the appropriate civil penalty, the court noted that the public was not greatly impacted by respondent's actions, but that the manhandling of a Commission on Human Rights Law Enforcement Bureau tester by respondents was an aggravating factor.

In Comm'n on Human Rights v. Silver Dragon Restaurant, OATH Index No. 677/03 (May 30, 2003), modified on penalty, Comm'n Dec. (July 28, 2003), modified on penalty, Silver Dragon Restaurant v. City of New York Commission on Human Rights, NYLJ, Mar. 31, 2004, at 24 (Sup. Ct. Kings Co.), a restaurant was fined $5,000 for discriminating against a customer on the basis of race by requiring her to pay for her order before she received her food while not requiring the same from other customers. In determining the appropriate civil penalty, the court noted the lack of aggravating factors other than the offensive nature of the act itself.

In Comm’n on Human Rights v. Space Hunters, Inc., OATH Index No. 997/04 (May 31, 2005), aff’d, Dec. and Order (July 26, 2005), the Commission levied a $15,000 penalty against an apartment broker who refused to accept the complainant as a client because she was a transsexual and cursed and hung up on City representatives who tried to help the complainant. The ALJ arrived at this penalty after finding that the violation was willful, that the same business had indulged in past discrimination, and that the broker’s large volume of apartment listings suggested its discriminatory actions would have “a significant negative impact on the public interest.”

The retaliatory actions taken in the instant case, unseemly as they may be, may not appear, at first blush, to be as egregious as the actions taken in the prior case which resulted in a $25,000 fine, the highest penalty in any reported Commission decision. In 119-121 East 97th Street Holding Corp. v. New York City Comm'n on Human Rights, 220 A.D.2d 79, 642 N.Y.S.2d 638 (1st Dep't 1996), a landlord retaliated against an HIV positive tenant by paying thugs to burglarize his apartment, disabling his door locks, shutting off his electricity, refusing to accept rent checks, and commencing eviction proceedings. The Commission initially awarded the tenant $100,000 for mental anguish and assessed a civil penalty of $75,000. On appeal the Appellate Division upheld the $100,000 mental anguish award, but reduced the civil penalty to $25,000, noting that the size of the landlord’s real estate holdings and the absence of prior findings of harassment suggested that the maximum award would be inappropriate. In the instant case, the landlord’s actions against Ms. Martin were less outrageous than those taken against the tenant in 119-121 East 97th Street Holding Corp. However, the fact that the landlord here is in control of a large number of rental units and has acted in such blatant defiance of both Ms. Martin’s rights and the Commission itself would seem to support a comparable award.

Weighing all of these factors, I recommend that a civil penalty be imposed in the amount of $25,000. This penalty is supported by the prior precedent and adequately takes into account the large size of the landlord’s rental holdings as well as the willful nature of the retaliatory actions taken.

John B. Spooner

Administrative Law Judge

August 30, 2006

SUBMITTED TO:

PATRICIA GATLING

Commissioner

APPEARANCES:

AVERY MEHLMAN, ESQ.

Attorney for Petitioner, Commission on Human Rights

CALABRO & FLEISHELL, P.C.

Attorneys for Respondents

BY: GREGORY G. CALABRO, ESQ.

Commission on Human Rights’ Decision, Complaint # 05-1016680, December 5, 2006

____________________________________________________

CITY OF NEW YORK

COMMISSION ON HUMAN RIGHTS

In the Matter of

EVELYN MARTIN

Petitioner

- Against -

HUDSON OVERLOOK LLC, STEPHEN SMITH,

ARC REALITY MANAGEMENT & SETH MILLER

Respondents

____________________________________________________

DECISION AND ORDER

On March 31, 2005, the petitioner (an 80 year-old woman who had her right leg amputated below the knee and requires the assistance of a wheelchair for mobility) filed a Verified Complaint with the New York City Commission on Human Rights (hereafter referred to as the “Commission”) alleging violations of the Administrative Code of the City of New York. Specifically, the complaint alleged that the petitioner had previously filed a complaint of discrimination against the respondents (Commission # 04-1015686 files on March 12, 2004) and that the respondents retaliated against her for filing that complaint by taking the elevator out of service on the morning of August 19, 2004 (the date the petitioner was scheduled to appear at a hearing relating to her complaint), sending her a Notice of Termination of Tenancy on September 14, 2004 for her alleged failure to sign a lease renewal in 2001, and advising her that her rent subsidies would no longer be accepted on January 18, 2005.

A hearing was held before Administrative Law Judge Kara Miller on January 10, 2006. The petitioner and respondent Seth Miller were the main witnesses at the hearing.

In June 2006, prior to a Report and Recommendation, ALJ Miller recused herself from the matter due to a potential conflict and a new hearing was scheduled for July 24, 2006 before ALJ John B. Spooner. Neither the respondents nor their attorney appeared at the rescheduled hearing. The transcript and evidence from the January 10th hearing were submitted to ALJ Spooner and constituted the sole basis for his Report and Recommendation, submitted to the Commission on August 30, 2006.

ALJ Spooner’s Report and Recommendation found the following:

● That there was insufficient evidence in the record to establish that Stephen Smith was anything more than an employee of the respondents, necessitating dismissal of the complaint against him.

● The remaining respondents were so intertwined with regard to the management of 736 Riverside Drive that they are deemed to have knowledge of and be responsible for the actions of the others as they relate to the petitioner.

● That there was no evidence to establish that the August 19, 2004 elevator failure was caused by the respondents to thwart the petitioner’s appearance at a hearing.

● That the September 14, 2004 Notice of Termination of Tenancy and the January 18, 2005 notice that the respondents would no longer accept the petitioner’s rent subsidies constituted retaliation in violation of §8-107(7) of the Administrative Code of the City of New York (The Human Rights Law).

● That there was insufficient evidence to establish that the retaliation caused the petitioner to suffer mental anguish above and beyond that previously awarded.

As the result of these findings, ALJ Spooner recommended that the respondents pay a find of $25,000.

The Commission believes that the findings and recommendations of ALJ Spooner are completely appropriate and adopts them. It is hereby

ORDERED, that the respondents pay a fine in the amount of $25.000 to the City of New York.

Failure to abide by this Order may result in penalties authorized by section 8-124 of the Administrative Code of the City of New York.

SO ORDERED:

New York City Commission on Human Rights

GRACE LYU-VOLCKHAUSEN, Commissioner, Commission on Human Rights

JONATHAN CAPEHART, Commissioner, Commission on Human Rights

EDNA HASTICK, Commissioner, Commission on Human Rights

-----------------------

[1] The source for a small portion of the facts contained in this summary come from the prior discrimination action of Comm'n on Human Rights ex rel. Martin v. Hudson Overlook, LLC, OATH Index No. 2094/04 (Jan. 20, 2005), aff'd, Comm'n Dec. & Order (Mar. 23, 2005).

[2] This tribunal’s records indicate that, on June 6, 2006, the new owner settled an action brought by Ms. Martin to enforce the Commission’s Order to build the ramp.

[3] The motion to vacate was denied. See Comm'n on Human Rights ex rel. Martin v. Hudson Overlook, LLC, OATH Index No. 2094/04 at 2-4 (Jan. 20, 2005), aff'd, Comm'n Dec. & Order (Mar. 23, 2005).

[4] The New York City Human Rights Law was amended in October 2005, to allow for fines up to $250,000. Since this case was filed before October 2005, the amended sections of the law do not apply.

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