Brooks v. Center Park Associates

The court delivered a PER CURIAM opinion. BOYCE F. MARTIN, Jr., Circuit Judge (pp. 587-89), delivered a separate concurring opinion.

PER CURIAM.

Fair Housing Contact Service, a tenant representative organization, appeals an award of attorney’s fees to landlord Center Park Associates in this action under the Fair Housing Act, 42 U.S.C. § 3601 et seq., involving housing discrimination on the basis of family status. The district court observed that Fair Housing, in filing suit, disregarded the inconclusive results of its own investigation as well as a finding by the United States Department of Housing and Urban Development that there was no reasonable cause to believe discrimination had occurred. Given these circumstances, the district court found that Fair Housing knowingly ran the risk of paying Center Park’s attorney’s fees under the Act, and then held Fair Housing solely liable for those fees. For the following reasons, we vacate the fee award and remand for further factual findings.

In March 1990, Christopher and Peggy Brooks began looking for a rental apartment in Cuyahoga Falls, Ohio. On March 15, they answered an ad in a local newspaper for a one-bedroom apartment renting at $315 a month, plus electricity. The apartment is located at 737 Center Avenue in Cuyahoga Falls, in a complex managed by Center Park Associates.

After allegedly making an appointment to meet a female Center Park representative at 4:00 p.m. that same day, the couple went to the apartment complex with $945 in cash. This was intended to cover two months’ rent and the security deposit for the apartment. Peggy Brooks was six and one-half months pregnant at the time, and her condition was apparent to a casual observer. At 4:00, a woman allegedly arrived at the complex, saw Christopher and Peggy Brooks from a distance, got back in her car, and departed. After waiting for fifteen minutes, Christopher Brooks called Center Park’s off-site rental office. Brooks was told that the woman with whom they had made the appointment was not there, and that the couple should come to the office and discuss the possibility of renting the apartment.

Because the couple did not own a car, they realized that they could not make it to the rental office before it closed. Christopher Brooks decided to call and explain that he and his wife would be unable to come in that day. Brooks alleges that the man who answered the phone, after learning that Brooks was married, asked him if he had any children. Brooks informed the man that his wife was pregnant. In response to further questioning, Brooks also stated that he was earning roughly $640 per month working full-time at a Sohio gas station, and that his wife was unemployed. The man replied that a prospective tenant had to earn at least $1,300 per month in order to rent the apartment in question, and also stated that the apartment was too small for them. After Brooks inquired about a two-bedroom apartment, the man told Brooks that he did not make enough money to rent such an apartment either, and allegedly hung up.

On July 31, the Brooks couple and Fair Housing Contact Service, an investigative agency and advocate for fair housing, filed a complaint in United States District Court against Center Park. The individual named defendants were Center Park and its limited and general partners. The complaint, as subsequently amended, alleged the following: (1) housing discrimination on the basis of familial status, in violation of 42 U.S.C. § 3604; (2) breach of contract, based on fraud and discrimination; and (3) intentional infliction of emotional distress. The Brooks couple requested $120,000 in compensatory and punitive damages, plus costs and attorney’s fees. Fair Housing Contact Service initially requested $50,000 in compensatory damages and costs.

The district court denied Center Park’s pretrial motions for summary judgment and for sanctions under Federal Rule of Civil Procedure 11. On the first day of trial, Fair Housing amended part of the complaint to request only injunctive relief. After the plaintiffs presented their case, the district court granted Center Park’s motion for a directed verdict¹ with respect to the state contract and tort causes of action, but denied the motion with respect to the federal housing discrimination claim. The court also denied Center Park’s second motion for a directed verdict just before submitting this issue to a jury. The jury subsequently found for Center Park on the discrimination claim.

After prevailing before the jury on the merits, Center Park filed another motion for sanctions under Rule 11 and, in a separate motion, requested $28,621.90 in attorney’s fees and costs as a prevailing party under 42 U.S.C. § 3613(c)(2). The district court denied the motion for sanctions, but granted attorney’s fees and costs to Center Park in the amount of $10,330.29. The court held Fair Housing Contact Service solely liable for the entire amount of this award, despite the fact that Fair Housing was only one of three plaintiffs in the case.

Under Section 3613(c)(2) of the Fair Housing Act, a district court may award attorney’s fees to a prevailing defendant if the plaintiffs ease was “frivolous, unreasonable, or groundless, or ... the plaintiff continued to litigate after it clearly became so.” Foster v. Barilow, 6 F.3d 405, 408 (6th Cir.1993) (quoting Christiansburg Garment Co. v. Equal Employment Opportunity Comm’n, 434 U.S. 412, 422, 98 S.Ct. 694, 701, 54 L.Ed.2d 648 (1978)).² A fee award to a prevailing defendant is also appropriate if the plaintiff brought the case in subjective bad faith. Christiansburg, 434 U.S. at 419, 98 S.Ct. at 699. The award of attorney’s fees under these standards is discretionary, and our review is thus for an abuse of discretion. Tarter v. Raybuck, 742 F.2d 977, 986 (6th Cir.1984), cert. denied, 470 U.S. 1051, 105 S.Ct. 1749, 84 L.Ed.2d 814 (1985). As we have previously noted, “[ajpplication of these standards requires inquiry into the plaintiffs’ basis for filing suit. Awards to prevailing defendants will depend on the factual circumstances of each case.” Smith v. Smythe-Cramer Co., 754 F.2d 180, 183 (6th Cir.), cert. denied, 473 U.S. 906, 105 S.Ct. 3530, 87 L.Ed.2d 654 (1985).

In the present case, the district court applied Christiansburg and found that Fair Housing Contact Service induced the Brooks couple to file a groundless lawsuit. Insofar as can be determined from its opinion, the court based this conclusion solely on the above-mentioned results of pretrial investigations conducted by Fair Housing and the United States Department of Housing and Urban Development. An award of attorney’s fees to a prevailing defendant, however, necessarily requires specific factual findings, as contemplated by this Court in Smith, with respect to the basis for the award. Here, the district court did not make sufficient factual findings to allow us to review either the award or the allocation of liability among the parties. Accordingly, we vacate the district court’s award of attorney’s fees to Center Park, and remand for farther factual findings regarding the plaintiffs’ basis for filing suit.

For the foregoing reasons, we vacate the district court’s award of attorney’s fees, and remand for further proceedings consistent with this opinion.

1 . A motion for a directed verdict is now called a motion for judgment as a matter of law. Fed. R.Civ.P. 50.

2 . 42 U.S.C. § 3613(c)(2), as amended in 1988, provides that “the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee and costs.” The term “prevailing party” is defined in 42 U.S.C. § 3602(o) as "having the same meaning as such term has in [42 U.S.C. § 1988].” In Hughes v. Rowe, 449 U.S. 5, 101 S.Ct. 173, 66 L.Ed.2d 163 (1980), the Supreme Court applied the Christiansburg standard in interpreting the "prevailing party” fee-shifting provision of 42 U.S.C. § 1988. As this Court concluded in Barilow, the Christiansburg standard thus applies to attorney's fee awards under Section 3613(c)(2) of the Fair Housing Act. Barilow, 6 F.3d at 408.