United States v. Hylton , 590 F. App'x 13 ( 2014 )

13-3278-cr
United States v. Hylton
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the
2 Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
3 27th day of October, two thousand fourteen.
4
5 PRESENT: ROBERT D. SACK,
6 DEBRA ANN LIVINGSTON,
7 RAYMOND J. LOHIER, JR.,
8 Circuit Judges.
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11 UNITED STATES OF AMERICA,
12 Plaintiff-Appellee,
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14 DEMECHIA WILSON,
15 Intervenor-Plaintiff-Appellee,
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17 JERMAINE AND TAIKA BILBO,
18 Intervenors-Plaintiffs-Counter-Defendants-Appellees,
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20 D.E. WILSON, D.A. WILSON,
21 Intervenors-Plaintiffs,
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23 -v- No. 13-3278-cv
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25 CLIFTON HYLTON, MERLINE HYLTON,
26 HYLTON REAL ESTATE MANAGEMENT, INC.,
27 Defendants-Counter-Claimaints-Appellants,
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29 LAW OFFICES OF NAIR & LEVIN P.C.,
30 Interested Party.
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2 NDIDI N. MOSES (Edward Chang, on the brief),
3 Assistant United States Attorneys, Of Counsel, for
4 Deirdre M. Daly, United States Attorney for the
5 District of Connecticut, New Haven, CT, for
6 Plaintiffs-Appellees.
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8 ANTHONY C. DEFILIPPIS, JR., DeFilippis Law, LLC,
9 West Hartford, CT, for Defendants-Appellants.
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12 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
13 DECREED that the judgment of the district court is AFFIRMED.
14 Defendants-Appellants Clifton Hylton (“Mr. Hylton”), Merline Hylton (“Mrs. Hylton”), and
15 Hylton Real Estate Management, Inc. (“HREM”) appeal from a judgment of the United States
16 District Court for the District of Connecticut (Hall, J.), entered May 8, 2014, following a bench trial.
17 Defendants-Appellants were held liable for violations of three provisions of the Fair Housing Act
18 (“FHA”): refusing to negotiate for the sublease of a house at 5 Townline Road (“the Property”) to
19 DeMechia Wilson (“Ms. Wilson”) because of Ms. Wilson’s race, in violation of 42 U.S.C.
20 § 3604(a); discriminating against the current tenants, Jermaine and Taika Bilbo (“Mr. and Mrs.
21 Bilbo”), and Ms. Wilson in the terms, conditions, or privileges of renting the Property because of
22 race, in violation of 42 U.S.C. § 3604(b); and making discriminatory statements based on race with
23 respect to the rental of the Property, in violation of 42 U.S.C. § 3604(c). The district court awarded
24 compensatory and punitive damages, attorneys’ fees, and injunctive relief. On appeal, Defendants-
25 Appellants challenge the substance of the court’s judgment of liability on a number of grounds, and
26 also challenge the relief awarded by the district court. We assume the parties’ familiarity with the
27 facts of the case and the issues presented for appellate review.
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1 I.
2 This Court reviews a district court’s findings of fact in a bench trial “for clear error.” White
3 v. White Rose Food, 237 F.3d 174, 178 (2d Cir. 2001). “Under the clearly erroneous standard, ‘there
4 is a strong presumption in favor of a trial court's findings of fact if supported by substantial
5 evidence. We will not upset a factual finding unless we are left with the definite and firm conviction
6 that a mistake has been committed.’” Id. (quoting Travellers Int’l, A.G. v. Trans World Airlines,
7 Inc., 41 F.3d 1570, 1574 (2d Cir. 1994)). Defendants-Appellants contend that the district court erred
8 by concluding (1) that Defendants-Appellants failed to present sufficient evidence of a non-
9 discriminatory reason for refusing to sublet to Ms. Wilson, (2) that Mrs. Hylton failed to qualify for
10 an exemption under 42 U.S.C. § 3603(b), and (3) that Mrs. Hylton was vicariously liable for the
11 FHA violations of Mr. Hylton and HREM. We detect no error in these conclusions.
12 A. Non-Discriminatory Reason
13 Defendants-Appellants first argue that the district court committed clear error in finding that
14 they did not “present[] any evidence that they had a legitimate” – ie., non-discriminatory – “reason
15 for refusing to sublet to Ms. Wilson.” United States v. Hylton, 944 F. Supp. 2d 176, 187 (D. Conn.
16 2013). They contend that the district court should have credited Mr. and Mrs. Hylton’s testimony
17 at trial that they refused to sublet to Ms. Wilson because they were concerned about Ms. Wilson’s
18 ability to pay the rent. “[C]lear error review mandates that we defer to the district court’s factual
19 findings, particularly those involving credibility determinations.” Phoenix Global Ventures, LLC
20 v. Phoenix Hotel Assocs., Ltd., 422 F.3d 72, 76 (2d Cir. 2005) (per curiam). Defendants-Appellants
21 did not offer any evidence, apart from their own testimony, to support the claim that they had
22 financial motives in declining to sublet to Ms. Wilson. There is no evidence in the record, for
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1 example, that Defendants-Appellants asked Ms. Wilson (or anyone else) for her financial records
2 in order to make a determination whether she had the ability to pay. Taking these facts into account,
3 and particularly noting that the district court based its conclusion on a credibility determination –
4 finding Mr. Bilbo’s account of his conversation with Mr. Hylton more credible than Mr. Hylton’s
5 testimony claiming that he had a legitimate reason for refusing to rent to Ms. Wilson – we discern
6 no clear error in the district court’s factual determination.
7 Defendants-Appellants next argue, in effect, that Mr. Hylton could not have made the
8 racially discriminatory comments attested to by Mr. Bilbo because Mr. Hylton and his wife are
9 themselves black, and Mr. Hylton had rented to Mr. Bilbo, who is African-American, six weeks
10 before the conversation at issue. “Because of the many facets of human motivation, it would be
11 unwise to presume as a matter of law that human beings of one definable group will not discriminate
12 against other members of their group.” Castaneda v. Partida, 430 U.S. 482, 499 (1977). The
13 district court did not commit clear error in crediting Mr. Bilbo’s testimony instead of Mr. Hylton’s.
14 See Feingold v. New York, 366 F.3d 138, 155 (2d Cir. 2004) (rejecting district court’s suggestion
15 that inference of discrimination cannot be drawn when defendant discriminates against a member
16 of his own group).
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18 B. § 3603(b) Exemption
19 Mrs. Hylton’s alleged violations of §§ 3604(a) and (b) are subject to the exemptions in
20 § 3603(b). To be eligible for an exemption, the property at issue must be a “single-family house
21 sold or rented by an owner. . . [provided that] such house is sold or rented . . . without the use in any
22 manner of the sales or rental facilities or the sales or rental services of any . . . person in the business
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1 of selling or renting dwellings.” 42 U.S.C. § 3603(b). The district court held that Mrs. Hylton failed
2 to qualify for the exemption because she used the services of Mr. Hylton in renting the property, and
3 Mr. Hylton testified that he is in the business of owning and managing rental properties. Mr. Hylton
4 conducted the leasing of the Property even though he held no ownership stake in it, and he used
5 rental applications and leases for the Property with the name of his company, HREM, on them. The
6 district court’s findings that Mr. Hylton was a “person in the business of selling or renting
7 dwellings,” and that Mrs. Hylton used his services to rent the Property, were thus not in error, much
8 less clearly so.
9 C. Vicarious Liability
10 Defendants-Appellants next argue that the district court erred in finding Mrs. Hylton
11 vicariously liable for her husband’s comments because there is no evidence that Mrs. Hylton
12 intended to create an agency relationship with her husband with respect to the Property. Though the
13 FHA does not mention vicarious liability, “it is well established that the Act provides for vicarious
14 liability” because “when Congress creates a tort action, it legislates against a legal background of
15 ordinary tort-related vicarious liability rules and consequently intends its legislation to incorporate
16 those rules.” Meyer v. Holley, 537 U.S. 280, 285 (2003). Defendants-Appellants’ argument that
17 Mrs. Hylton “in no way engaged Mr. Hylton or HREM,” Appellant’s Br. at 9, is conclusory. The
18 district court’s findings that only Mr. Hylton interacted with prospective tenants, that Mr. Hylton
19 sent only the applications of certain applicants to Mrs. Hylton, and that Mr. Hylton received the
20 checks from the Bilbos and then sent them to Mrs. Hylton all demonstrate that Mrs. Hylton
21 “engaged Mr. Hylton” as her representative, at least informally. There was thus no error in the
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1 district court’s determination that Mrs. Hylton was vicariously liable for Mr. Hylton’s discriminatory
2 actions.
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4 II.
5 Defendants-Appellants argue that the district court erred by awarding monetary and
6 injunctive relief that is unreasonable and burdensome. This Court sets aside the computation of
7 damages when the district court is the factfinder “only if [it is] clearly erroneous.” Ragin v. Harry
8 Macklowe Real Estate Co., 6 F.3d 898, 907 (2d Cir. 1993). In reviewing “damage awards, whether
9 compensatory or punitive,” this Court asks “whether the award is so high as to shock the judicial
10 conscience and constitute a denial of justice.” O’Neill v. Krzeminski, 839 F.2d 9, 13 (2d Cir. 1988)
11 (quoting Zarcone v. Perry, 572 F.2d 52, 56 (2d Cir. 1978)) (internal quotation marks omitted). As
12 to injunctive relief, we review the district court’s decision for abuse of discretion. Mullins v. City
13 of New York, 626 F.3d 47, 51 (2d Cir. 2010).
14 Defendants-Appellants first challenge the district court’s award of compensatory damages,
15 claiming that they should not be responsible for damages resulting from the transmittal of the
16 discriminatory statements to Mrs. Bilbo or Ms. Wilson because the statements were made only to
17 Mr. Bilbo – an argument they did not raise below. “It is a well-established general rule that an
18 appellate court will not consider an issue raised for the first time on appeal” unless “manifest
19 injustice would otherwise result.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 130 (2d Cir. 2012)
20 (brackets and internal quotation marks omitted). Seeing no manifest injustice here, we decline to
21 address this argument. We similarly decline to address the argument that the district court erred in
22 awarding Ms. Wilson damages for lost housing opportunity (on the ground that she failed to provide
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1 evidence that she was financially eligible to rent the Property) because this argument, too, was raised
2 for the first time on appeal.
3 Defendants-Appellants also argue with respect to Mr. and Mrs. Bilbo that they were awarded
4 an unreasonable amount of compensatory damages – $10,000 and $5,000 respectively – for
5 emotional harm resulting from the discriminatory comments. The district court made specific
6 findings of fact justifying the damages award for Mr. Bilbo based on Mr. Bilbo’s testimony as to the
7 shock and pain the comments caused him. The court similarly granted Mrs. Bilbo a damages award
8 based on specific findings regarding the emotional distress she felt in hearing such comments as the
9 wife of an African-American man and mother of African-American children. Taking into account
10 these findings, the awards are not so high as to shock the judicial conscience.
11 Defendants-Appellants challenge the district court’s decision to award punitive damages –
12 but not the amount of those damages – by arguing that there was no evidence that Mr. Hylton
13 intended to injure Ms. Wilson or knew that his comments would violate federal law. But the FHA
14 expressly allows “for the recovery of punitive damages by plaintiffs who have suffered
15 discriminatory housing practices” in cases “in which the defendant has engaged in intentional
16 discrimination and has done so with malice or with reckless indifference to the federally protected
17 rights of an aggrieved individual.” United States v. Space Hunters, Inc., 429 F.3d 416, 427 (2d Cir.
18 2005) (quoting Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 529-30 (1999)) (brackets and internal
19 quotation marks omitted). “A plaintiff may establish the requisite state of mind for an award of
20 punitive damages with evidence (1) that the defendant discriminated in the face of a perceived risk
21 that its actions violated federal law, or (2) of egregious or outrageous acts that may serve as
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1 evidence supporting an inference of the requisite evil motive.” Id. (internal quotation marks, citation,
2 and brackets omitted). This is a disjunctive test. See Farias v. Instructional Sys., Inc., 259 F.3d 91,
3 101 (2d Cir. 2001) (“As an alternative to proving that the defendant knew it was acting in violation
4 of federal law, ‘egregious or outrageous acts may serve as evidence supporting an inference of the
5 requisite evil motive’” necessary to support an award of punitive damages.) (quoting Kolstad, 527
6 U.S. at 538). In this case, the district court made a specific finding that the second prong of the
7 punitive damages standard was satisfied, holding that “Mr. Hylton’s conduct was, by its very nature,
8 indicative of evil motive,” and further, that Mr. Hylton “showed no remorse for his conduct,” but
9 rather, “continued to make discriminatory comments to the HUD investigator pursuing” the FHA
10 claims in this case. Hylton, 944 F. Supp. 2d at 198. Thus, the district court applied the correct legal
11 standard in awarding punitive damages.
12 Finally, Defendants-Appellants argue that the permanent injunction handed down by the
13 district court is onerous because there is “no claim or evidence of a broader practice of
14 discrimination” and they run a “mom and pop operation.” Appellant’s Br. at 15. Section 3613(c)(1)
15 of the FHA allows courts to award injunctive relief. We review the district court’s injunctive order
16 for abuse of discretion. Ragin, 6 F.3d at 909. The argument by Defendants-Appellants that the
17 discriminatory conduct here was isolated, not meriting injunctive relief, is belied by the district
18 court’s factual finding that Mr. Hylton made discriminatory comments on multiple occasions.
19 Hylton, 944 F. Supp. 2d at 198. And as to the claim that Defendants-Appellants run a “mom and
20 pop operation,” the record shows that they rent at least seven different properties. The district court
21 did not abuse its discretion in ordering injunctive relief.
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1 We have considered all of Defendants-Appellants’ remaining arguments and find
2 them to be without merit. For the foregoing reasons, the judgment of the district court is hereby
3 AFFIRMED.
4 FOR THE COURT:
5 Catherine O’Hagan Wolfe, Clerk
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