Murphy v. Fullbright et al, No. 3:2012cv00885 - Document 30 (S.D. Cal. 2012)
Court Description: ORDER Granting 23 Coldwell Banker's Motion to Dismiss with leave to amend; Denying 24 Fullbright's Motion to Strike. Signed by Judge Jeffrey T. Miller on 10/4/2012. (srm)
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Murphy v. Fullbright et al Doc. 30 1 JM 2 3 4 UNITED STATES DISTRICT COURT 5 SOUTHERN DISTRICT OF CALIFORNIA 6 7 Case No. 12-cv-885-JM (WVG) CAROL MURPHY, ORDER DENYING DEFENDANT’S MOTION TO STRIKE AND GRANTING DEFENDANT’S MOTION TO DISMISS Plaintiff, 8 vs. 9 10 11 12 CARMEN FULLBRIGHT, in her individual capacity and as trustee of CARMEN FULLBRIGHT TRUST, and COLDWELL BANKER RESIDENTIAL BROKERAGE, 13 Defendants. 14 15 16 17 18 19 20 21 22 23 24 25 Plaintiff Carol Murphy (“Murphy”) filed a first amended complaint (“FAC”) on June 20, 2012 against Carmen Fullbright (“Fullbright”) and Coldwell Banker Residential Mortgage (“Coldwell Banker”) (together “Defendants”). On July 5, 2012, Fullbright submitted a motion to strike under Fed. R. Civ. P. 12(f), and Coldwell Banker filed a motion to dismiss under Fed. R. Civ. P. 12(b)(6). For the reasons explained below, defendant Fullbright’s motion to strike is DENIED, and defendant Coldwell Banker’s motion to dismiss is GRANTED with leave to amend. I. BACKGROUND Murphy is an individual with psychiatric and physical disabilities who receives rental vouchers issued by the San Diego Housing Commission under the 1 Dockets.Justia.com 1 federal government’s Housing Choice Voucher program. Compl. ¶ 4. These rental 2 vouchers are commonly referred to as “Section 8 vouchers.” Id. Fullbright is a 3 licensed real estate broker employed by Coldwell Banker. Id. at ¶ 5. Fullbright is 4 also the trustee of the Carmen Fullbright Trust, which owns the Temecula 5 Apartments and other rental properties. Id. 6 On July 21, 2011, Murphy met with the Temecula Apartments’ on-site 7 manager. Id. at ¶ 9. After visiting the Temecula Apartments, Murphy asked 8 whether the owner accepted Section 8 vouchers. Id. at ¶ 10. The on-site manager 9 was unsure and told Murphy to speak directly with Fullbright. Id. Murphy called 10 Fullbright to ask if she accepted Section 8 vouchers, and Fullbright responded that 11 she would consider renting to Murphy. Id. at ¶ 12. 12 Around July 27, 2011, Murphy and Fullbright met regarding her rental 13 application at Coldwell Banker’s Point Loma office. Id. at 14. At the meeting, 14 Fullbright asked Murphy about her disability. Id. at ¶ 15. Murphy replied that she 15 had anxiety and depression problems along with physical problems. Id. at ¶ 15. 16 Fullbright then declined to rent a Temecula Apartment to Murphy, explaining that 17 she believed most people receiving Section 8 vouchers were disabled and did not 18 want to rent to anyone who had “a mental impairment or emotional problems.” Id. 19 at ¶ 17. 20 Murphy alleges that Fullbright’s rejection of her rental application for the 21 Temecula Apartments was a violation of the federal Fair Housing Act (“FHA”) as 22 well as California’s Fair Employment and Housing Act (“FEHA”), Unruh Civil 23 Rights Act (“UCRA”), and Disabled Person’s Act (“DPA”). Murphy further 24 alleges that the Defendants were negligent when they violated their duty to operate 25 2 1 the Temecula Apartments without discriminating against disabled persons. Id. at 2 ¶ 24-47. 3 4 II. FULLBRIGHT’S MOTION TO STRIKE 5 A. Legal Standard 6 Federal Rule of Civil Procedure 12(f) provides that the court “may strike 7 from a pleading an insufficient defense or any redundant, immaterial, impertinent, 8 or scandalous matter.” Fed. R. Civ. P. 12(f). “The function of a 12(f) motion to 9 strike is to avoid the expenditure of time and money that must arise from litigating 10 spurious issues by dispensing with those issues prior to trial . . . .” Whittlestone, 11 Inc. V. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quoting Fantasy, Inc. 12 v. Fogerty, 984 F2d. 1524, 1527 (9th Cir. 1993), rev’d on other grounds 510 U.S. 13 517 (1994)). “However, striking the pleadings is considered “an extreme 14 measure,” and Rule 12(f) motions are therefore generally “viewed with disfavor 15 and infrequently granted.” Stanbury Law Firm v. IRS, 221 F.3d 1059, 1063 (8th 16 Cir. 2000) (quoting Lunsford v. United States, 570 F.2d 221, 229 (8th Cir. 1977)); 17 see also 5C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & 18 PROCEDURE § 1380 (3d ed. 2010) (“Both because striking a portion of a pleading is 19 a drastic remedy and because it often is sought by the movant simply as a dilatory 20 or harassing tactic, numerous judicial decisions make it clear that motions under 21 Rule 12(f) are viewed with disfavor by the federal courts and are infrequently 22 granted.” (footnotes omitted)). 23 24 25 3 1 B. Discussion Fullbright brought a motion to strike paragraphs 25(b),1 25(d),2 33,3 and 424 2 3 from the amended complaint (Doc. No. 13); these paragraphs concern violations 4 related to the Defendants’ alleged refusal to accept Section 8 vouchers. Fullbright 5 asserts that her refusal to accept Plaintiff’s Section 8 voucher presents “a purely 6 legal issue that the [c]ourt may properly resolve on motion to strike.” Fullbright relies heavily on Salute v. Stratford Greens Garden Apartments, 7 8 136 F.3d 293 (2d. Cir. 1998), a case in which the Second Circuit upheld the 9 dismissal of FHA claims brought against an apartment manager who, as a matter of 10 policy, refused to rent apartments to prospective residents who wished to utilize 11 Section 8 vouchers. Under the FHA, only reasonable accommodations that do not 12 cause undue hardship or mandate fundamental changes in a program are required. 13 Salute v. Stratford Greens Garden Apartments, 136 F.3d 293, 301 (2d. Cir. 1998). 14 The Second Circuit reasoned that economic discrimination resulting from the 15 refusal to accept Section 8 vouchers was not a reasonable accommodation under 16 the FHA. Id. at 302. 17 The Ninth Circuit, however, criticized Salute in Giebeler v. M&B Assocs., 18 343 F.3d 1143 (9th Cir. 2003), a case which neither party addressed. In Giebeler, 19 the Ninth Circuit held that the appellant’s request for a co-signer, which remedied 20 1 21 Paragraph 25(b) alleges that the Defendants violated the FHA by establishing a policy against accepting Section 8 vouchers with discriminatory motive. 22 2 23 24 Paragraph 25(d) alleges that the Defendants violated the FHA by failing to make reasonable accommodations for a disabled person. 3 Paragraph 33 asserts that the Defendants violated the FEHA by establishing a policy against accepting Section 8 vouchers with discriminatory motive. 4 25 Paragraph 42 claims that the Defendants violated the DPA by failing to make reasonable accommodations for a disabled person. 4 1 his economic status to qualify as a tenant, was a reasonable accommodation within 2 the meaning of the FHA. Giebeler, 343 F.3d at 1159. Giebeler noted that the 3 Supreme Court’s decision in U.S. Airways, Inc. v. Barnett, 535 U.S. 391 (2002), 4 rejected the notion that courts “should never get to the reasonableness inquiry 5 where economic circumstances related to disability are at stake.” Giebeler v. 6 M&B Assocs., 343 F.3d 1143, 1154 (9th Cir. 2003). Giebeler also noted Judge 7 Calabresi’s dissent in Salute, which reasoned “that where the individuals in 8 question are poor because they are disabled, a reasonable adjustment of policies 9 requiring tenants to qualify on the basis of their own income rather than on the 10 basis of other financial resources available to them for paying rent is, like allowing 11 a blind tenant to keep a seeing eye dog despite a rule against pets, an 12 accommodation of a need created by the disability.” Id. at 1153 (emphasis in 13 original) (quoting Salute v. Stratford Greens Garden Apartments, 136 F.3d 293, 14 302 (2d. Cir. 1998) (Calabresi, J., dissenting). 15 However, another Ninth Circuit decision, Park Vill. Apt. Tenants Ass’n v. 16 Mortimer Howard Trust, 636 F.3d 1150 (9th Cir. 2011), contains some 17 contradictory analysis. In Mortimer, the Ninth Circuit upheld a prohibitory 18 injunction that permitted Section 8 residents to remain in their rental units, but also 19 overturned the district court’s mandatory injunction requiring the landlord to enter 20 into Housing Assistance Payment (“HAP”) contracts with the Oakland Housing 21 Authority because the Plaintiffs failed to show a likelihood of irreparable injury if 22 the Defendants did not enter into HAP contracts. Park Vill. Apt. Tenants Ass’n v. 23 Mortimer Howard Trust, 636 F.3d 1150, 1163 (9th Cir. 2011). Mortimer cited 24 Salute in dicta, noting that congressional intent indicates that the burdens of 25 Section 8 participation are sufficiently substantial that landlords should not be 5 1 forced to participate in Section 8. Id. at 1161. Mortimer also noted that once a 2 landlord accepts a Section 8 tenant, that landlord could no longer turn away other 3 Section 8 tenants, which could also constitute an unreasonable economic hardship. 4 Id. 5 Nevertheless, as Giebeler expressly permits the court to look at economic 6 accommodations under the FHA, a motion to strike is not appropriate to resolve 7 this dispute even if the economic accommodation may prove to be unreasonable 8 under the FHA. Cf. RDF Media Ltd. v. Fox Broadcasting Co., 372 F. Supp. 2d 9 556, 566 (C.D. Cal. 2005) (“Motions to strike are generally disfavored because of 10 the limited importance of pleadings in federal practice.”). But irrespective of 11 Giebeler, the disfavored nature of Rule 12(f) motions and the present inability of 12 the court to determine whether the challenged allegations are “so unrelated to the 13 plaintiff’s claims as to be unworthy of any consideration as a defense and that their 14 presence in the pleading throughout the proceeding will be prejudicial to the 15 moving party,” 5C Wright & Miller § 1380 (3d ed.2004), weigh heavily in favor of 16 court denying the motion to strike these defenses, without prejudice. Accordingly, 17 defendant Fullbright’s motion to strike is DENIED. 18 19 IV. COLDWELL BANKER MOTION TO DISMISS 20 A. Legal Standard 21 For a plaintiff to overcome this 12(b)(6) motion, her complaint must contain 22 “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. v. 23 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the 24 plaintiff pleads factual content that allows the court to draw the reasonable 25 inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 6 1 Iqbal, 556 U.S. 662, 678 (2009). Factual pleadings merely consistent with a 2 defendant’s liability are insufficient to survive a motion to dismiss because they 3 only establish that the allegations are possible rather than plausible. Id. at 678-679. 4 The court should grant 12(b)(6) relief only if the complaint lacks either a 5 “cognizable legal theory” or facts sufficient to support a cognizable legal theory. 6 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 7 B. Discussion In its motion to dismiss, Coldwell Banker asserts that Murphy’s amended 8 9 complaint does not contain the requisite factual specificity to assert that it was 10 vicariously liable because Murphy failed to provide any facts indicating that 11 Fullbright’s conduct was related to her employment with Coldwell Banker. 12 Coldwell Banker Motion to Dismiss at 4-5. California law holds an employer 13 vicariously liable for risks broadly undertaken by an employee on behalf of an 14 employer under the doctrine of respondeat superior. 5 Jacobus v. Krambo Corp., 78 15 Cal. App. 4th 1096, 1101 (Cal. Ct. App. 2000); Bailey v. Filco, Inc., 48 Cal. App. 16 4th 1552, 1558-1559 (1996). An employer is not responsible for an employee’s 17 tortious conduct when the employee is acting outside the scope of employment. 18 Baptist v. Robinson, 143 Cal. App. 4th 151, 161-162 (Cal. Ct. App. 2006). 19 Determining whether a tort was committed within the scope of employment is a 20 question of fact. Id. Federal law similarly applies agency law and vicarious 21 liability principles to liability under federal statutes. Meyer v. Holley, 537 U.S. 22 280, 285-286 (2003) (“And the Court has assumed that, when Congress creates a 23 tort action, it legislates against a legal background of ordinary tort-related vicarious 24 5 25 Four of the Plaintiff’s five claims are based on California law: FEHA, UCRA, DPA, and Negligence. The fifth claim is based on the FHA. 7 1 liability rules . . . .”); RESTATEMENT (THIRD) OF AGENCY § 2.04 (“An employer is 2 subject to liability for torts committed by employees while acting within the scope 3 of their employment.”). To establish vicarious liability under either state or federal 4 law, Plaintiff must therefore plead facts sufficient to suggest that Fullbright was 5 acting as Coldwell Banker’s employee when she refused to rent a Temecula 6 Apartment to the Plaintiff. Coldwell Banker concedes that Fullbright was its employee at the time of 7 8 the tortious conduct but asserts that she had no actual authority on behalf of 9 Coldwell Banker regarding the Temecula Apartments. In support of its motion to 10 dismiss, Coldwell Banker submitted a Certified Trust Transfer Deed and a 11 Certified Grant Deed to Carmen Fullbright for the Temecula Apartments. 12 Coldwell Banker therefore stresses that Fullbright’s renting of the Temecula 13 Apartments was for own personal purposes. 14 Murphy, however, believed that Fullbright was acting as Coldwell Banker’s 15 agent regarding the rental of the Temecula Apartments because Fullbright used her 16 Coldwell Banker email address on the Temecula Apartments’ application form and 17 her Coldwell Banker Office to discuss the apartment rental. Compl. ¶ 21. 18 Accordingly, Murphy believed that Fullbright was acting within the scope of her 19 employment with Coldwell Banker and that Coldwell Banker could therefore be 20 held vicariously liable for Fullbright’s allegedly tortious actions. But even if 21 Fullbright was not acting as Coldwell Banker’s agent when renting the Temecula 22 Apartments, Murphy asserts that Coldwell Banker can still be held liable because 23 Murphy had apparent or ostensible authority6 on behalf of Coldwell Banker. An 24 25 6 Under the California Code, apparent authority is instead referred to as “ostensible authority.” 8 1 agent has apparent or ostensible authority “when the principal intentionally or by 2 want of ordinary care, causes a third person to believe another to be his agent who 3 is not really employed by him.” Cal. Civ. Code § 2300; RESTATEMENT (THIRD) OF 4 AGENCY § 2.03 (“The power held by an agent or other actor to affect a principal’s 5 legal relations with third parties when a third party reasonably believes the actor 6 has authority to act on behalf of the principal and belief is traceable to the 7 principal’s manifestation.”). 8 However, these facts cited by the Plaintiff are at best only consistent with 9 the possibility that Fullbright was acting as Coldwell Banker’s actual agent when 10 renting out the Temecula Apartments. Moreover, Coldwell Banker has submitted 11 evidenced that Fullbright owned the Temecula Apartments and was acting outside 12 the scope of her employment and on her own behalf. No factual allegations cited 13 in the FAC indicate that Coldwell Banker took any affirmative action to represent 14 Fullbright as its agent for the Temecula Apartments. As Murphy’s complaint is 15 devoid of any factual allegations that Fullbright was acting within the scope of her 16 employment with Coldwell Banker or as Coldwell Banker’s affirmative agent, 17 Coldwell Banker’s motion to dismiss is GRANTED with leave to amend. 18 V. CONCLUSION 19 For the reasons stated above, defendant Fullbright’s motion to strike is 20 DENIED and defendant Coldwell Banker’s motion to dismiss is GRANTED. 21 IT IS SO ORDERED. 22 23 DATED: October 4, 2012 ______________________________ Jeffrey T. Miller United States District Judge 24 25 9
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