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Giles v. Alto Partners, LLLP

United States District Court, D. Colorado

September 12, 2019

SAMUEL K. GILES, Plaintiff,


          R. Brooke Jackson United States District Judge

         In this housing discrimination lawsuit, defendant Alto Partners, LLLP moves for summary judgment. ECF No. 67. For the reasons stated herein, the motion is GRANTED.


         Samuel K. Giles, an African-American individual, rents an apartment in Terrace Gardens Apartments that is owned and operated by the Adams County Housing Authority (“ACHA”). ACHA provides subsidized housing for qualified residents of Adams County as part of the Low Income Housing Tax Credit Program (“LIHTC”). In October 2017 ACHA informed Terrace Gardens residents that they might be displaced by construction of a new housing development on the site. However, they could apply to relocate to another new development called Alto Apartments and avoid any future displacement. Alto Apartments is owned by defendant Alto Partners LLLP (“Alto”) and operated by ACHA. Alto and ACHA appeared and are represented together, so I refer to them collectively as defendant.

         Mr. Giles applied and designated unit #215 as his unit of choice, but his application was not accepted. For housing complexes participating in LIHTC, ACHA generally must determine that applicants' income falls between a certain maximum and minimum.[1] ECF No. 67-21. Mr. Giles, who is self-employed, completed his initial application and submitted a number of documents. ACHA told Mr. Giles that they could not verify that he had the minimum required income and requested additional documents, some of which Mr. Giles provided, some of which he chose not to provide. ACHA eventually denied Mr. Giles' application, citing inability to verify that he met the income requirements. ECF No. 67.

         Mr. Giles filed this lawsuit on February 26, 2018, seeking to prevent defendants from leasing or selling unit #215. In his Amended Verified Complaint he asserts seven claims for relief: (1)-(4) violations of the Fair Housing Act of 1968, brought under Title VIII of the Civil Rights Act of 1968; (5) breach of contract; (6) breach of the covenant of good faith and fair dealing; and (7) unlawful and unfair housing practices under Colo. Rev. Stat. § 24-34-502. ECF No.8. All of Mr. Giles' claims ultimately incorporate and depend on his allegation that ACHA discriminated against him because of his race, and that their reasons for denying his application were pretexts for racial discrimination.

         This Court held a hearing on Mr. Giles' request for a temporary restraining order or preliminary injunction preventing defendants from leasing or selling unit #215. The request was denied. ECF No. 13. On appeal the Tenth Circuit affirmed the denial, finding that Mr. Giles had not demonstrated a “clear and unequivocal right to relief.” Giles v Alto Partners, LLLP, 762 Fed.Appx. 505, 509 (10th Cir. 2019) (unpublished). Among other things the court noted that Mr. Giles had been a tenant at Terrace Gardens for years without incident, and that Alto stated in court that it will accept Mr. Giles' application when a unit opens, provided that he qualifies. Id.

         Mr. Giles also filed two additional suits, one in the Adams County District Court and the other in this district, seeking the same equitable relief.[2] On April 20, 2018 defendants filed a motion to dismiss Mr. Giles' complaint claiming it was precluded by Mr. Giles' voluntary dismissal of his second and third lawsuits. ECF No. 20. This Court found that though Mr. Giles' voluntary dismissal operated as an adjudication on the merits, this did not preclude Mr. Giles' original claim. ECF No. 37.

         Now defendant has moved for summary judgment. They argue that there is evidence that Mr. Giles was not financially qualified for residence in Alto Apartments, and that he has presented no evidence other than conclusory statements showing that his application was denied for discriminatory or pretextual reasons. ECF No. 67.


         A court may grant summary judgment if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the burden to show that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The nonmoving party must “designate specific facts showing that there is a genuine issue for trial.” Id. at 324. A fact is material “if under the substantive law it is essential to the proper disposition of the claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. The Court will examine the factual record and make reasonable inferences therefrom in the light most favorable to the party opposing summary judgment. Concrete Works of Colo., Inc. v. City and Cty. of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994).

         Mr. Giles has brought five out of seven of his claims under the Fair Housing Act (FHA). 42 U.S.C.A. § 3601. The Tenth Circuit evaluates FHA discrimination claims under the three-part McDonnell Douglas analysis. Asbury v. Brougham, 866 F.2d 1276, 1279 (10th Cir. 1989) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). Though McDonnell was an employment discrimination case, courts apply the McDonnell standard to claims under other statutory antidiscrimination laws. See, e.g., Boykin v. KeyCorp, 521 F.3d 202, 213 (2d Cir. 2008); Miller v. Poretsky, 595 F.2d 780, 795 (D.C. Cir. 1978); Asbury, 866 F.2d at 1279.

         Under the McDonnell standard the plaintiff must first offer proof of a prima facie case of discrimination. Id. The burden then shifts to the defendant to show that the refusal to rent or negotiate was motivated by legitimate, non-racial considerations. Id. Then the burden shifts back to the plaintiff to show that these reasons were pretextual. Id. At this third step, to avoid summary judgment, the plaintiff need only show that “there is a genuine dispute of material fact” as to whether the “proffered reason for the challenged action is pretextual.” Randle v. City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995) (applying McDonnell to employment discrimination).

         To show pretext a plaintiff has several options open to him. First, he may demonstrate that the proffered reason for the action is factually false. DePaula v. Easter Seals El Mirador, 859 F.3d 957, 970 (10th Cir. 2017). Second, he may demonstrate that “discrimination was a primary factor” in the defendant's decision. Id. This can often be achieved “by revealing weaknesses, implausibilities, inconsistencies, incoherences, or contradictions” in the defendants' proffered reason “such that a reasonable fact finder could deem the employer's reason unworthy of credence.” Id. Finally the plaintiff may also show pretext by demonstrating that the defendant “acted contrary to written company policy, an unwritten company policy, or a company practice.” Id.

         Aside from the FHA Mr. Giles has two other claims. He claims defendant's discrimination breached the Land Use Restriction Agreement between Alto Partners and Colorado Housing and Finance Authority (CHFA). He also claims defendant violated the Colorado Unfair Housing Practices Act. Colo. Rev. Stat. § 24-34-502. As the Tenth Circuit noted, because these claims are predicated on discriminatory housing practices, they depend on Mr. Giles' allegations of race-based discrimination and need not be addressed separately from the FHA claims.[3]


         Defendant raises three arguments in its motion: (1) Mr. Giles' housing application was denied because ACHA could not verify that he met the minimum income requirements; (2) Mr. Giles' refusal to produce his 2017 tax returns and profit and loss statement justifies his denial, and that once the documents were produced, they showed he was not income-qualified for Alto Apartments, and (3) Mr. Giles has presented no evidence of race-based discrimination. ECF No. 67. The first two arguments address defendant's burden to show their action has a legitimate, non-racial justification. The third argument attempts to counter Mr. Giles' claim that these reasons are pretextual.

         A. Mr. Giles' Application Was Denied Because ACHA Could Not Verify His Income Met the Minimum Income Requirements.

         Defendant claims that ACHA neutrally applied their income verification requirements to Mr. Giles' application. ECF No. 67. ACHA relies on a manual published by the Colorado Housing and Finance Authority (CHFA) for LIHTC administrators in order to help them comply with the Land Use Restriction Agreement and the IRS Code. Low-Income Housing Tax Credit Compliance Manual (“CHFA Compliance Manual”). To comply with IRS Code, the CHFA Compliance Manual requires LIHTC administrators to get third-party verification of applicants' income. CHFA Compliance Manual, § 3.18.

         CHFA Compliance Manual § 3.18(B), “Self-Employment Income, ” lists what self-employed applicants must provide for third-party income verification. The list includes a “Certification of Income for Self-Employed Persons” form, a “business plan summary, ” “year-to-date profit and loss statement, ” and applicant's “most recent federal tax return, ” including IRS forms 1040 and Schedule C. CHFA Compliance Manual § 3.18(B). § ...

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