Department of Civil Rights v. Beznos Corp.

Boyle, J.

This action arises under the Michigan civil rights act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., and focuses upon the policies and practices of the private owners of an apartment complex as they relate to and affect the civil rights of families with children. The issue we must resolve in this appeal is whether the owner of a multi-building apartment complex may lawfully restrict families with children to certain designated areas.

I

Facts and Procedural Background

The Beznos Corporation is a privately held Michigan corporation which owns and operates a 928-unit apartment complex known as "Muirwood Apartments” in Farmington Hills, Michigan.

Proceedings in this matter were initiated in the summer of 1978 by the Michigan Department of Civil Rights in response to the complaints of three families residing at Muirwood Apartments.¹ The residents filed complaints with the department alleging that their children had been denied access to the swimming pool, and two of the families complained that eviction proceedings had been commenced against them because they had taken their children to the pool in violation of the landlord’s policy. The department filed a complaint in the Oakland Circuit Court, as provided by MCL 37.2603; MSA 3.548(603), to enjoin the eviction proceedings as well as enforcement of the rule prohibiting the children’s use of the pool facilities.

Following a hearing on August 11, 1978, the Oakland Circuit Court issued a temporary injunction halting the eviction proceedings and modifying the pool rule to permit use by children of age four or older, pending a complete investigation by the department and a full hearing and determination by the Michigan Civil Rights Commission.

The department proceeded to conduct an investigation of defendant corporation, and filed a "charge” against it with the commission on May 21, 1979, alleging in pertinent part that defendant’s practice of setting aside certain designated buildings for families with children, and restricting use of the pool facilities violated the age discrimination provisions of the Michigan civil rights act, MCL 37.2502 et seq.; MSA 3.548(502) et seq.

After various administrative proceedings,² on February 26, 1980, the commission issued an opinion finding defendant’s policies restricting children’s use of the pool facilities and designating certain buildings for families with children violative of the age discrimination provisions of the civil rights act. Defendant was ordered to give up those policies and practices at Muirwood Apartments and all other rental complexes it operated and to pay damages and attorney fees to the individual complainants. The order also imposed detailed reporting requirements upon defendant for a period of two years and forbade enactment or enforcement of any rule, regulation, designation, or restriction based upon age.

The Beznos Corporation then filed a timely appeal in the Oakland Circuit Court pursuant to its rights under MCL 37.2606; MSA 3.548(606). Prior to trial, the circuit judge ordered submission of the issue of damages awarded to the individual claimants by the commission to a mediation panel, whose recommendation was accepted by all parties. Plaintiff and defendant also agreed upon a swimming pool rule that was not based upon age. Therefore, both parties agreed, and stipulated, that the only issue remaining for determination by the circuit court was:

"May the owner of a multi-building apartment complex lawfully restrict families with children to certain designated buildings?”

After a trial de novo on November 25, 1981, the Honorable Francis X. O’Brien of the Oakland Circuit Court, noting that he was restricting himself to the issue presented, held that:

"The restriction — or restricting of families with children to certain designated buildings within a multibuilding complex, in this Court’s opinion, is not per se unlawful under the [Michigan] Civil Rights Act.

"It’s the Court’s opinion that the legislative intent is to apply a practical, rational reasoning. However, on the facts of a given case, the reasons for the restriction and the manner of application may violate the Statute.”

"The Court’s ruling in the first instance with regards to not being per se violative, is if the action is taken by the landlord in the interest of the comfort and safety of all of the tenants.”

Pursuant to its holding, in an order entered February 11, 1982, the circuit court dissolved the order of the Michigan Civil Rights Commission and dismissed proceedings against defendant by the Michigan Department of Civil Rights.

The department filed a timely claim of appeal, and on May 4, 1983, the Court of Appeals, in a 2-1 decision, affirmed the decision of the circuit court. 125 Mich App 500; 336 NW2d 494 (1983). The majority concluded that because the statute did not by clear terms prohibit disparate treatment of families with children, it could not imply a legislative intent to do so. Id., p 503. The dissenting judge disagreed, arguing that the statutory inclusion of "age” as a category, precluded any ambiguity or search for legislative intent, and provided a sufficiently clear basis for proscribing defendant’s practices in this case. Id., pp 506-510 (Mackenzie, J., dissenting).

On February 28, 1984, this Court granted the department’s application for leave to appeal. 418 Mich 949 (1984).

II

Analysis of the Trial Court and Court of Appeals Opinions

We think Judge O’Brien’s narrow decision on the question before him was correct, but granted leave because we do not subscribe to the analysis of the issue by the Court of Appeals, and believe that further guidance from this Court is required.

It is important to note at the outset the precise contours of the trial court’s holding. In answering the stipulated question the trial court ruled that

"[t]he restriction — or restricting of families with children to certain designated buildings within a multibuilding complex ... is not per se unlawful under the [Michigan] Civil Rights Act.”

The court did not hold that such designation could never be violative of the act, or even that the designations of defendant at Muirwood Apartments could not be found to be a violation of the act. It merely held, in answer to the question presented by the parties, that the designation itself does not necessarily constitute a violation of the statute per se.

In fact, after answering the question presented, Judge O’Brien went on to explain that "on the facts of a given case, the reasons for the restriction and the manner of application may violate the Statute.”

In affirming the trial court decision, the Court of Appeals analyzed the statute in question, and distinguished discrimination on the basis of chronological age from disparate treatment of families with children. See 125 Mich App 503. The Court of Appeals refused to imply legislative intent to prohibit discriminatory treatment of families with children in the absence of clear language to that specific question. Id., p 505. Thus, in affirming the decision of the trial court, the Court of Appeals issued a much broader ruling than the trial court issued or even had before it. Indeed, the Court of Appeals ruling could be used to support the proposition that the discriminatory treatment of families with children could never be a violation of the statute in question. We do not agree, but find it unnecessary in the context that this case is presented to address such considerations. Our review is restricted to the issue as stipulated by the parties:

"May the owner of a multi-building apartment complex lawfully restrict families with children to certain designated buildings?”

As Justice Levin has so aptly observed: "Often the answer to a question is determined by the way it is asked.” Smith v ER Squibb & Sons, 405 Mich 79, 98; 273 NW2d 476 (1979) (Levin, J., dissenting). The stipulated question presupposes, of course, that defendant does in fact restrict families with children to certain designated buildings within its multi-unit apartment complex and that such restrictions do not constitute complete exclusion.³ However, it does not raise questions as to the number or proportion of units so designated, or of the need for family housing within the general geographic area. Therefore, the circuit court did not consider evidence or make findings on these matters, as they would have been irrelevant to answering the question presented. Our review on appeal is of the circuit court decision, not that of the commission, under the "clearly erroneous” standard of GCR 1963, 517.1. See Civil Rights Comm v Chrysler Corp, 80 Mich App 368, 372-373; 263 NW2d 376 (1977). Thus, the commission cannot now ask us to go beyond the issue it agreed to in the lower court and to review its evidence and findings to determine whether defendant’s particular practices may be violative of the statutes in question. In the context that this case is presented to us, we cannot now decide what designations or restrictions of families with children may be permissible, but only whether any such restrictions and designations may ever be permissible. Furthermore, if our answer to the latter question is in the affirmative, our inquiry in this case must end, for we will have answered the question presented.

Ill

Statutory Analysis

The pertinent section of the statute in question, MCL 37.2502; MSA 3.548(502) prohibits both refusing "to engage in a real estate transaction,” MCL 37.2502(1)(a); MSA 3.548(502)(1)(a), and discrimination "in the terms, conditions, or privileges of a real estate transaction or in the furnishing of facilities or services in connection therewith,” MCL 37.2502(1)(b); MSA 3.548(502)(1)(b), whenever such practices are based on the "religion, race, color, national origin, age, sex, or marital status of a person or a person residing with that person.” MCL 37.2502(1); MSA 3.548(502)(1).

Refusing to rent to a protected class of prospective tenants is proscribed by subsection (a). It constitutes refusal "to engage in a real estate transaction.” See Shaw v Cassar, 558 F Supp 303 (ED Mich, 1983). Restricting a protected class of tenants to particular apartments violates both subsections (a) and (b). It not only constitutes discrimination "in the terms, conditions, or privileges of a real estate transaction,” it also amounts to a refusal "to engage in a real estate transaction” with respect to those apartments from which members of the protected class are excluded. See United States v Mitchell, 580 F2d 789 (CA 5, 1978). We agree with the amicus curiae, the American Civil Liberties Union Fund of Michigan, that if a landlord were to restrict persons of a particular religion or race to particular buildings, there would be absolutely no doubt that members of these protected classes, who had been told they could only rent in a particular building reserved for persons of their "sort,” would be entitled to complain about refusal to rent other available apartments as discrimination "in the terms, conditions or privileges of a real estate transaction.” MCL 37.2502(1)(b); MSA 3.548(502)(1)(b). The Michigan civil rights act also proscribes housing discrimination when based on the religion, race, color, national origin, age, sex, or marital status of a person or a person residing with that person. MCL 37.2502(1); MSA 3.548(502)(1) (emphasis added). Again, we agree that it would clearly violate the statute to refuse to rent to a prospective tenant living with other persons of a particular religion or race, or to segregate tenants living with other persons of a particular religion or race. Id. See also 1976 Journal of the House 1322.

We do not agree, however, that the position is necessarily the same where a landlord segregates tenants on the basis of the age of a child living with a parent or guardian. Although we do not dispute that minors are within the protection of the act, we do not agree that the act requires identical treatment of children and adults in every situation.

A "literal application of the [statutory] prohibition against age discrimination would outlaw many regulations, rules, laws and policies designed to protect children.”⁴ It would, for instance, require landlords to rent apartments to minor children. Such a requirement would overrule the long-established rule that minors, lack the legal capacity to contract. Moreover, it would drastically alter the norms relating to the role and functions of children in our society. It defies reason that the Legislature would so radically alter traditional practice and law without extensive study and debate. Yet, the legislative history of the civil rights bill contains no reference to such a requirement, let alone any debate on the merits or desirability of such a rule. Given this, we do not believe that the Legislature intended such a result.

We believe that the Legislature intended to apply a practical rule of reason to the prohibition of discrimination on the basis of age. As we have often stated, construction of a statute in a way that would produce absurd and undesirable results should be avoided. See, e.g., Salas v Clements, 399 Mich 103; 247 NW2d 889 (1976). It has been said that "[i]n prohibiting age discrimination, the act contemplates only that 'similarly situated people’ be treated equally,” Cheeseman v American Multi-Cinema, Inc, 108 Mich App 428, 440; 310 NW2d 408 (1981), lv den 413 Mich 890 (1982). There are circumstances in which children and adults are not "similarly situated” — as in their mental and emotional capacity to assume the obligations and responsibilities involved in contracts — and here the act does not prohibit distinctions based on age. As we have pointed out, "[s]pecial rules for children are not unusual,” Moning v Alfono, 400 Mich 425, 445; 254 NW2d 759 (1977). This fact is the result of the inescapable reality that children are, in many respects, different from adults. Where such differences are relevant, and the special nature and characteristics of children reasonably require such "special rules,” the act does not prohibit them. Thus, the civil rights act does not prohibit differential treatment of minors per se where such treatment is reasonably necessitated by the special nature and characteristics of children.

Clearly, then, the requirement that one "engaging in a real estate transaction” not discriminate based on the "age ... of a person” does not require landlords to enter into rental contracts with children, due to their mental and legal incapacities. Had the Legislature intended a more stringent and absolute prohibition to apply with respect to "a person residing with that person” than applies to the contracting party itself, it surely would have made this intention manifest. Yet this section of the act contains no indication whatsoever that a more stringent rule should apply here. Indeed, where the main party protected by the section — the contracting party — is subject to reasonably necessary differential treatment on the basis of age, it is unlikely that the Legislature would intend a more absolute and stringent prohibition to apply with respect to "a person residing with that person.” We therefore conclude that the Legislature intended the same practical rule of reason to apply with respect to "person[s] residing with,” as to the contracting "person[s]” themselves. Thus, this section of the act does not prohibit per se, in real estate transactions, differential treatment of persons reasonably necessitated by the special nature and characteristics of children residing with such persons.

IV

Conclusion

In concluding, we express again our agreement with the trial court’s finding that the Legislature intended "to apply a practical rational reasoning” to the interpretation of the age discrimination provisions of article 5 of the Michigan civil rights act.

Such reasoning recognizes that children and adults are not the same for all purposes and that what might otherwise be unlawful age discrimination is permitted by law where it represents a reasonable method of accommodating other common-law, statutory, or constitutional duties⁵ with the rights of families with children to nondiscriminatory treatment in access to rental housing. Therefore, we hold that the conclusion of the circuit court that "restricting of families with children to certain designated buildings within a multi-building complex ... is not per se unlawful” is not clearly erroneous.

The decision of the Court of Appeals is affirmed. No costs, as the determination of a public question is involved._

Williams, C.J., and Kavanagh, Levin, Brickley, and Cavanagh, JJ., concurred with Boyle, J.

1 The complaint of a fourth family residing at another complex owned and operated by the defendant was dismissed by stipulation of the parties prior to administrative proceedings herein. See fn 2.

2 An administrative hearing was conducted on June 8, 19, 20, 22, and July 11, 1979 before a hearing referee of the Michigan Civil Rights Commission, who took testimony of various witnesses and other evidence related to Muirwood Apartments. The referee issued an opinion which included proposed findings of fact and recommendations on November 6, 1979. After defendant filed objections to the opinion of the referee, the matter was heard by the Michigan Civil Eights Commission on December 18, 1979.

3 Cf. Marina Point Ltd v Wolfson, 30 Cal 3d 721; 180 Cal Rptr 496; 640 P2d 115 (1982); O’Conner v Village Green Owners Ass’n, 33 Cal 3d 790; 191 Cal Rptr 320; 662 P2d 427 (1983) (involving complete exclusions).

4 Cheeseman v American Multi-Cinema, Inc, 108 Mich App 428, 433; 310 NW2d 408 (1981), interpreted the age discrimination prohibitions in the context of the public accommodations provisions of the act. MCL 37.2301(a); MSA 3.548(301)(a). Although the public accommodations provisions contain an express exemption limiting protections where the prohibited acts are "otherwise permitted by law,” we do not think the Legislature intended the housing provisions to be interpreted irrationally merely because they did not include such an express exemption.

5 See, e.g., Cheeseman, supra, and eases cited therein; Moning v Alfono, supra, and cases cited therein discussing special duties owed children in the context of the attractive nuisance doctrine, negligent entrustment, and sale of potentially dangerous instrumentalities; Quinliven v Great Atlantic & Pacific Tea Co, 395 Mich 244, 267; 235 NW2d 732 (1975), Kreiner v Yezdbick, 22 Mich App 581; 177 NW2d 629 (1970), and Butler v Watson, 193 Mich 322, 329; 159 NW 507 (1916), discussing duties of landlords to those on their property. See, also, Home Life Ins Co v Breslerman, 168 Misc 117; 5 NYS2d 272 (1938), discussing duties of landlord to residential tenants who disturb each other.