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Wang v. Lake Maxinhall Estates Inc.

decided: March 12, 1976.

DAVID Y. H. WANG AND LILLIAN Y. WANG, PLAINTIFFS-APPELLANTS,
v.
LAKE MAXINHALL ESTATES, INC., HALL-HOTTEL CO., INC., LAKE MAXINHALL CLUB, WILLIAM P. GOODMAN, JR., MAX BARNEY, MILLARD L. HALL, RICHARD E. MCDONALD AND GEORGE T. PURVES, DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division No. IP 74 660 C JAMES E. NOLAND, Judge.

Stevens, Circuit Justice,*fn* Tone, Circuit Judge, and Kunzig, Judge.*fn**

Author: Stevens

STEVENS, Circuit Justice.

Plaintiffs claim that they were denied the opportunity to purchase a vacant lot in an all white development because they are not Caucasians. They submitted a written offer for the full asking price of $18,000. Defendants neither accepted nor rejected the offer before it expired, but decided thereafter that plaintiffs were not acceptable purchasers and so notified them. Without considering whether plaintiffs' race was a factor in defendants' decision, the district court entered summary judgment on the ground that the case had been mooted by the fact that plaintiffs' offer expired before defendants responded to it. On appeal, plaintiffs correctly argue that the case is not moot, that discriminatory negotiations may be actionable, and that the record contains sufficient evidence of discrimination to preclude the entry of summary judgment. Accordingly, we reverse and remand for trial.

For the purpose of this appeal we accept as true the undenied factual allegations in plaintiffs' verified complaint*fn1 and the uncontradicted statements in defendants' affidavits. All inferences, of course, must be drawn in plaintiffs' favor since the summary judgment was entered against them. Even though matter called to the court's attention in support of Plaintiffs' Motion For Relief From Judgment and Order tends to support their claim,*fn2 we confine our statement to facts in the record when the District Court first entered summary judgment in favor of defendants.

Plaintiffs are qualified purchasers. David Y. H. Wang is a staff consultant for the Indiana Bell Telephone Company; Lillian Y. Wang is employed by the Department of Medicine and Genetics of the Indiana University Medical School. They are married and have three children. Their financial responsibility is unchallenged. They are United States citizens of Chinese descent.

The defendants include the corporate owner of vacant land in Lake Maxinhall Estates, Indianapolis, Indiana,*fn3 the owner's broker,*fn4 an association of lot owners (hereinafter "the Club"),*fn5 and members of the Club's so-called "Lot Owners Committee."*fn6 The defendants had agreed that before any lot in the subdivision was sold, the proposed purchaser must receive the written approval of the Lot Owners Committee. The record does not disclose the criteria on which the Committee bases its approval or disapproval of prospective purchasers.*fn7

In their complaint, plaintiffs allege that the defendants, acting individually or in concert, refused to negotiate with them for the sale of a lake lot, refused to sell them a lake lot, and refused to approve them as purchasers, all because they are of Chinese descent.

Some time prior to June 8, 1974, the defendant corporation placed its lake lot 21 on the market for sale at an asking price of $18,000. On June 8, plaintiffs offered to buy lot 21 for $15,250. That offer was rejected on June 12; on the same day, plaintiffs submitted a new offer at the full asking price. By its terms that offer was to expire on June 18; however, since plaintiffs received no response to their offer on June 18, they extended its duration until June 21.

On June 21 the president of the defendant broker phoned the plaintiffs and told them that the Lot Owners Committee had not yet met to consider their offer, but probably would do so that weekend. Plaintiffs did not at that time extend their offer; however, there is nothing in the record to suggest that they were no longer interested in purchasing the lot, that they gave any such indication to the broker, or that the broker asked them to extend their offer again. Without further communication between the parties, the Lot Owners Committee met on June 29 and voted unanimously to disapprove plaintiffs as purchasers. In a letter dated July 3, 1974, the Committee advised the plaintiffs of that action. The basis for the disapproval was not explained.

On July 19, 1974, a third party made an offer of $17,500 for Lot 21. On July 22, the Lot Owners Committee was advised of that offer and approved it the next day. The offer was accepted on July 24, 1974.

On the preceding day, July 23, the Marion County Court had dismissed an action brought against defendants by the Indianapolis Marion County Human Rights Commission. That action had been commenced as a result of the complaint filed with the Commission by plaintiffs. Until the action was dismissed, a temporary restraining order had prevented defendants from selling the lot. The dismissal was based on the state judge's determination that the action was "moot" because plaintiffs permitted their offer to expire.*fn8

This mootness rationale was also adopted by the federal district judge as the basis for the entry of the summary judgment before us for review. He stated that the "inability of the defendant to act on the June 18 offer was due to plaintiffs' acts in allowing it to expire . . . and not to any racial animus on the part of the defendants."*fn9 We cannot accept the District Court's mootness rationale, or the factual conclusion that there is no basis for inferring that racial animus on the part of the defendants played a part in frustrating plaintiffs' obvious desire to purchase a vacant lot in Lake Maxinhall Estates.

Our task when reviewing a summary judgment is, of course, quite different from the review of a judgment entered after a full trial. We must view the evidence, and the inferences which may be drawn therefrom, most favorably to the party against whom the summary judgment was entered. Moreover, when the ultimate factual issue may turn on an appraisal of the defendants' motivation, it is especially important not to foreclose cross-examination and the adversary testing of the evidence in front of the trier of fact who can observe the demeanor of the witness. Conrad v. Delta Air Lines, Inc., 494 F.2d 914, 918 (7th Cir. 1974); cf. Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 7 L. Ed. 2d 458, 82 S. Ct. 486 (1962). We ...


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