DENISE BELL v. TOWER MANAGEMENT SERVICES, L.P.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3165-08T3

DENISE BELL,

Plaintiff-Appellant,

v.

TOWER MANAGEMENT

SERVICES, L.P., d/b/a

SUNNYBRAE APARTMENTS

and BARBARA PERRY,

Defendants-Respondents.

_____________________________

 

Argued April 26, 2010 - Decided

Before Judges Rodr guez, Reisner and Chambers.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, L-958-07.

Steven M. Leder and Stuart H. Weiner argued the cause for appellant (Community Health Law Project, attorney; Mr. Leder and Lois Krieger, on the brief).

Elizabeth F. Lorell argued the cause for respondent Tower Management Services, L.P. d/b/a Sunnybrae Apartments and Barbara Perry (Gordon & Rees, L.L.P., attorneys; Ms. Lorell, of counsel and on the brief; Sarir Zandi, on the brief).

Elizabeth Speidel, Assistant Deputy Public Advocate, argued the cause for amicus curiae Department of the Public Advocate (Stefanie A. Brand, Acting Public Advocate, attorney; Catherine Weiss, of counsel and on the brief; Ms. Speidel and Amy K. Brown, Assistant Deputy Public Advocate, on the brief).

Charles S. Cohen, Deputy Attorney General, argued the cause for amicus curiae Division on Civil Rights (Paula T. Dow, Attorney General, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel; Leland S. McGee, Deputy Attorney General, on the brief).

Christopher J. Hanlon argued the cause for amicus curiae New Jersey Apartment Association (Scarinci Hollenbeck, L.L.C., attorneys; Mr. Hanlon, on the brief).

PER CURIAM

Plaintiff Denise Bell appeals from a trial court order dismissing on the pleadings her amended complaint alleging discrimination on the bases of disability and income source, in violation of the Law Against Discrimination (LAD), N.J.S.A. 10:5-4.1, N.J.S.A. 10:5-12(g)(2) and N.J.S.A. 10:5-12(g)(4). We reverse and remand for further proceedings consistent with this opinion.

Because the trial court dismissed the complaint on the pleadings, we must consider the Supreme Court's guidance concerning the generous view we must take of the complaint on such a motion:

We approach our review of the judgment below mindful of the test for determining the adequacy of a pleading: whether a cause of action is "suggested" by the facts. In reviewing a complaint dismissed under Rule 4:6-2(e) our inquiry is limited to examining the legal sufficiency of the facts alleged on the face of the complaint. However, a reviewing court "searches the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary." At this preliminary stage of the litigation the Court is not concerned with the ability of plaintiffs to prove the allegation contained in the complaint. For purposes of analysis plaintiffs are entitled to every reasonable inference of fact. The examination of a complaint's allegations of fact required by the aforestated principles should be one that is at once painstaking and undertaken with a generous and hospitable approach.

[Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) (emphasis added) (citations omitted).]

In addressing Bell's complaint, we decline the parties' invitation to make sweeping legal pronouncements at this stage of the case. However, we make two preliminary observations. First, we do not construe plaintiff's complaint as asserting a general theory of "economic discrimination" and we do not address such an issue. Second, in fairness to both sides, we note defendant's vigorous denial of plaintiff's allegations of discrimination.

Those comments aside, we will not consider the extraneous facts that the parties and their various supporting amici curiae have sought to place before us. This case was decided on the pleadings, before defendant filed an answer and before any discovery was conducted. Our only concern at this point is to determine whether the complaint can possibly be read as stating one or more causes of action under the LAD. See ibid. In undertaking that task, we also consider the well-understood principle that where a case involves novel legal issues, it is desirable to allow the parties to create a record before deciding the issues. State v. Moore, 180 N.J. 459, 460 (2004) (Novel legal issue should be decided on a "full and complete record.")

Bell's amended complaint asserted two separate but related causes of action under the LAD, N.J.S.A. 10:5-1 to -49. Bell claimed that because she is physically disabled from working, she qualifies for a State rental subsidy known as "S-RAP," which is intended to allow disabled tenants to obtain market rate housing. She further alleged that her monthly income together with her S-RAP subsidy would enable her to afford the $874 per month rent on an apartment in a building operated by defendant Tower Management Services. However, defendant rejected her as a tenant based on defendant's policy of refusing to rent to any applicant who does not have an annual income of at least $28,000.

According to her complaint, plaintiff asked defendant to waive the income limit "as a reasonable accommodation" to her disability, "because, although her disability prevented her from working and thus meeting defendants' minimum income policy, the S-RAP subsidy enabled her to satisfy the underlying reason for the policy (i.e., to ensure that tenants had sufficient income to pay their rental obligation)." Plaintiff contended that defendant's refusal to waive the minimum income policy for a disabled person proposing to pay her rent by using a government subsidy specifically intended to assist disabled persons, constituted an illegal refusal to make a reasonable accommodation to her disability, in violation of the LAD, N.J.S.A. 10:5-4.1 and -12g(2), and implementing regulations, N.J.A.C. 13:13-3.4(f)2. See Giebeler v. M&B Assocs., 343 F.3d 1143, 1152-55 (9th Cir. 2003).

In the second count of her complaint, plaintiff contended that the minimum income policy violated a different section of the LAD, which prohibits refusal to rent to a prospective tenant "because of the source of any lawful income received by the person or the source of any lawful rent payment to be paid for the real property." N.J.S.A. 10:5-12g(4). This section is aimed at preventing landlords from refusing to rent to tenants who receive rental subsidies through the Section 8 program or through other government programs designed to assist low income persons to obtain housing. See Franklin Tower One, L.L.C. v. N.M., 157 N.J. 602 (1999) (construing N.J.S.A. 2A:42-100, the predecessor statute to N.J.S.A. 10:5-12g(4)); Pasquince v. Brighton Arms Apartments, 378 N.J. Super. 588, 593-95 (App. Div. 2005). Plaintiff's complaint asserted that defendant's income policy had a discriminatory impact on persons who pay their rent using government subsidies, and that the policy was not justified by business necessity because the policy "has little or no relationship to S-RAP voucher holders' ability to afford the rents for Defendants' housing."

Addressing the disparate impact claim first, the theory of disparate impact discrimination is well-recognized under the LAD, as well as under federal anti-discrimination law. See e.g., Gerety v. Atl. City Hilton Casino Resort, 184 N.J. 391, 399-400 (2005); Griggs v. Duke Power Co., 401 U.S. 424, 430-32, 91 S. Ct. 849, 853, 28 L. Ed. 2d 158, 164 (1971). The elements of such a claim are that the defendant enforces a policy which is neutral on its face but which has the effect of disproportionately excluding a class of persons who are protected under the anti-discrimination laws. However, the law also recognizes the defense of business necessity; that is, even if the plaintiff proves disparate impact, the landlord may defend by proving that there is a business necessity for the policy. Griggs, supra, 401 U.S. at 431, 91 S. Ct. at 853, 28 L. Ed. 2d at 164.

Our discussion need go no further at this point. The complaint clearly states a cause of action for discrimination based on the adoption of a policy that is allegedly not justified by business necessity but which allegedly has the impact of excluding almost all applicants who intend to pay their rent through an S-RAP subsidy. Of course, merely by articulating plaintiff's claim, we imply no view of its merits. We hold only that she is entitled to proceed with discovery.

We reach the same preliminary conclusion with respect to the reasonable accommodation claim. As previously noted, this claim is closely related to the disparate impact allegation, and in a sense, simply restates that claim as a violation of a different section of the LAD. Again, plaintiff is not claiming a general theory of economic discrimination; nor is she asking for an accommodation based on a lack of financial resources due to her disability. Rather, plaintiff's claim is premised on her receipt of a government subsidy that is directly related to her disability and is intended to enable disabled persons to obtain housing. In other words, she claims that she has the resources necessary to pay the rent, albeit due to her disability her resources take a different form than those ordinarily required by the landlord.

Plaintiff claims that defendant's refusal to waive the income limitation denies her a reasonable accommodation of her disability, and the landlord could waive the income limit without undue hardship, i.e, without compromising the economic purpose for which the policy was adopted. We recognize that discovery relating to plaintiff's disparate impact theory may elicit evidence about the impact of minimum income policies on disabled tenants as well as S-RAP recipients, and the business need for those policies, and thus may also bear upon her disability discrimination theory. Given the Legislature's strong policy to eradicate discrimination, we conclude that plaintiff should be entitled to develop her novel disability discrimination theory through discovery. See Franklin Tower, supra, 157 N.J. at 620; Andersen v. Exxon Co., U.S.A., 89 N.J. 483, 495 (1982); Estate of Nicolas v. Ocean Plaza Condo. Ass'n, Inc., 388 N.J. Super. 571, 586-87 (App. Div. 2006). Again, while we remand to permit discovery, we intimate no view as to the merits of plaintiff's claim.

Reversed and remanded.

 

We will refer to Tower Management Services, L.P., d/b/a Sunnybrae Apartments, and its director of operations, Barbara Perry, collectively as "defendant."

Bell's third cause of action, asserting a claim under the Federal Fair Housing Act, was dismissed after defendant removed the case to federal court; we address only the LAD claims that remained after the federal court remanded the case to State court.

N.J.A.C. 13:13-3.4(f)2 makes it unlawful for a landlord to "[r]efuse to make reasonable accommodations in rules, policies, practices or services, when such accommodations may be necessary to afford a person with a disability equal opportunity to use and enjoy a dwelling."

A facially neutral policy may also be a pretext for intentional discrimination. That is, a landlord might adopt a minimum income requirement for the discriminatory purpose of keeping out tenants who need to pay their rent with government subsidies. It is too early in the case to articulate any conclusions about defendant's apparent defense that its income policy is needed to determine if applicants are "creditworthy," a criterion we have recognized may be legitimate or may be a pretext for discrimination. See Pasquince v. Brighton Arms Apartments, supra, 378 N.J. Super. at 600-01. See also id. at 592; T.K. v. Landmark W., 353 N.J. Super. 223, 225 (App. Div. 2002).

We do not understand plaintiff to be asserting that because she has limited finances due to her disability, she is entitled to a direct financial accommodation; for example, she is not claiming a right to pay less rent, or to pay less for goods or services, because she is disabled. Nothing in this opinion should be read as an endorsement of such a legal theory.

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A-3165-08T3

June 11, 2010