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02/26/87 John L. Rackow, Jr., Et Al v. the Human Rights

February 26, 1987





504 N.E.2d 1344, 152 Ill. App. 3d 1046, 105 Ill. Dec. 826 1987.IL.244

Appeal from the Circuit Court of Lake County; the Hon. Jack Hoogasian, Judge, presiding.


JUSTICE REINHARD delivered the opinion of the court. NASH and DUNN, JJ., concur.


Plaintiffs, John L. Rackow, Jr., Lois Rackow, Century 21/Grant Associates, Inc., an Illinois corporation, Alan Nisenbaum, and Joseph Karwowski, appeal from the November 4, 1985, order of the circuit court of Lake County affirming the decisions of the Illinois Human Rights Commission, a named defendant, which found that plaintiffs violated section 3-104of the Illinois Human Rights Act (Ill. Rev. Stat. 1981, ch. 68, par. 3-104) by refusing to lease an apartment to Myron Podgurski, also a named defendant, because he would have one or more of his children who were less than 14 years old residing with him.

On February 22, 1984, plaintiffs filed a complaint for review of the November 22, 1982, and January 30, 1984, administrative decisions of the Human Rights Commission under the Administrative Review Law (Ill. Rev. Stat. 1983, ch. 110, par. 3-101 et seq.) pursuant to section 8-111(1) of the Illinois Human Rights Act (Ill. Rev. Stat. 1983, ch. 68, par. 8-111(1)). The complaint identified the plaintiffs Nisenbaum and Karwowski as the beneficiaries of a certain land trust, commonly known as trust Nos. 40375 and 40588, which owned a two-building apartment complex in Lake Zurich known as Water's Edge Apartments, and the plaintiffs John L. Rackow, Jr., and Lois Rackow as employed by this land trust to manage, administer, and maintain Water's Edge. The plaintiff Century 21/Grant Associates, Inc., was not identified. The complaint stated that the November 22, 1982, order reflected the Commission's finding that plaintiffs had discriminated against Myron Podgurski based upon the number and ages of his children, awarded Podgurski $300 in compensatory damages and ordered plaintiffs to offer him a lease, and that the January 30, 1984, order awarded Podgurski $4,644.75 as reasonable attorney fees. The complaint alleged that judicial review was sought because the November 22, 1982, decision of the Commission is against the manifest weight of the evidence, adversely affects plaintiffs' right to place meaningful and reasonable restrictions upon the use of their rental property to prevent the premises from being inhabited by an absolutely unlimited number of tenants in an exceptionally small and confined area, and is based upon an unconstitutional statute in that it is unduly broad, vague, and unreasonably ambiguous with reference to the number of tenants to be allowed in a particular apartment, thereby depriving plaintiffs of the use of their property without due process of law.

The record of the administrative proceedings was filed in the circuit court and reveals the following. On October 16, 1980, Myron Podgurski filed a grievance with the Department of Human Rights claiming that he was refused a lease at Water's Edge Apartments by Lois Rackow and John L. Rackow, Jr., because his children under the age of 14 years would be visiting him. He later filed two additional grievances.

In response to these grievances, the Department of Human Rights filed a three-count complaint with the Human Rights Commission alleging in count I that Podgurski was aggrieved by plaintiffs' policy of not allowing children in one-bedroom apartments or of allowing only one child, under five years old, in a two-bedroom apartment, which is prohibited by section 3 -- 104of the Illinois Human Rights Act; alleging in count II that Podgurski was refused a lease at Water's Edge because he

Certain uncontested facts submitted in a prehearing memo to the administrative law Judge prior to hearing testimony stated, in part, that: on October 9, 1980, Podgurski completed a written application for a two-bedroom apartment in the Water's Edge Apartments; the application was presented to Lois Rackow, who, along with John L. Rackow, Jr., was responsible for showing the apartments in the complex, collecting rents, and paying the bills and debts of the complex; Grant Associates, Inc., is an Illinois corporation licensed to sell real estate, with John L. Rackow, Jr., as its president and majority stockholder; Alan Nisenbaum and Joseph Karwowski are the beneficial owners of Water's Edge Apartments under a land trust; Water's Edge Apartments is a housing accommodation as defined by section 3 -- 101of the Illinois Human Rights Act; John L. Rackow, Jr., is a real estate broker or salesman as defined by section 3 -- 101of the Illinois Human Rights Act; as of October 9, 1980, Water's Edge Apartments had a policy under which no children at all were permitted in the one-bedroom units and only one child under the age of five years was permitted in the two-bedroom units; the above-stated policy is still in effect; as of October 8, 1980, Podgurski was separated from his wife, and his children did not live with him although he had visitation rights; when Podgurski completed his rental application, he placed a "O" after the section entitled "number of children"; Podgurski verbally informed Lois Rackow that he had children who would not be living with him permanently, but that he had visitation rights as to those children; Podgurski informed Lois Rackow that he might pick up two or three of the youngest children for a weekend each month, and that occasionally, in the summer, a couple of the youngest children might stay with him for part of the summer; plaintiffs denied a rental unit to Myron because plaintiffs viewed the visitation rights as constituting residence of children over five years of age in violation of the rental policy; on October 16, 1980, Jose Trevino, an investigator for the Department of Human Rights, telephoned Grant Associates, Inc., and spoke with Lois Rackow; and during this conversation, Trevino inquired about the status of Podgurski's rental application, and Lois Rackow denied she had refused to rent the apartment to Podgurski but stated that she would now refuse to rent it to him.

Plaintiffs' answers to interrogatories revealed, in pertinent part, that Lois and John L. Rackow, Jr., were the two individuals who are responsible for showing the apartments in the complex, paying the complex's bill and debts, and collecting the rents; that Grant Associates, Inc., an Illinois corporation licensed to sell real estate, with John L. Rackow, Jr., as its president and majority shareholder, had no managerial or management responsibilities in Water's Edge Apartments whatsoever; that although Podgurski indicated on his written application that there were no children to be residing in the unit, it was learned by management that he would have two or three children staying with him for two- to three-month periods of time, he was recently divorced and had eight or nine children, the custody of whom was awarded to his former wife, he received rights of liberal and reasonable visitation which he planned to exercise vigorously; that under these circumstances, management would view this as children over 5 years of age and less than 18 years of age residing in the complex; and that as of October 9, 1980, the unwritten policy of the management, still in full force and effect, was that no children at all were permitted in the one-bedroom units and only one child under the age of five years was permitted in the two-bedroom units.

On January 20, 1982, testimony was presented to James Gerl, an administrative law Judge of the Human Rights Commission, which revealed the following. Myron Podgurski testified that in September 1980, he lived in Lake Zurich, but decided to move to larger living quarters because he had a small one-bedroom apartment with only 500 to 700 square feet of living space. He was earning approximately $43,000 per year as a manager of real estate and marketing services for Union Oil Company of California. Podgurski initially called a Century 21 office and inquired about the availability of a unit at Water's Edge Apartments. He spoke to a woman who instructed him to contact one of their agents to be shown a unit. He then contacted Harold Giese, a Century 21 agent and Podgurski's landlord in the unit he was then renting. Giese showed him a unit at Water's Edge, and he liked it very much and wanted to rent one. Podgurski filled out an application on October 9, 1980, for the apartment and took it to the Century 21 office, where he met Lois Rackow. Upon examining the lease application, he noted that three items bothered him which he brought to her attention, but only after he had filled out the application in its entirety.

Two of these items were the questions concerning his marital status, as he was recently separated from his wife although he checked the block indicating that he was divorced, and the number of children which he had, as he marked that he had no children although he had eight children, none of whom lived with him. He stated that he specifically told Lois Rackow that he was not divorced but only separated, although she did not tell him to change the application.

Podgurski also testified that he indicated on the application that he had no children because none of his children were living with him, but were living with their mother in Wisconsin; however, he told Lois Rackow that there were times when his children would visit him. The names and ages of his children at the time he filled out the rental application were: Rebecca, age 6; Pamela, age 12; Myron, Jr., age 14; Barbara, age 16; Diane and Donna, age 18; Linda, age 20; and Kathleen, age 21. He told Lois Rackow that some of his children would come to visit him once or twice a month, Saturday through Sunday; that Myron, Jr., spent time with him over the summer, approximately 1 1/2 months; that his smaller three children spent time with him on the weekends; and that the older children did not visit for any extended period of time. Lois Rackow advised him that children were not permitted in the apartments, and that even though the children would not be living with him but only visiting on weekends, she advised him that it did not make any difference because the apartment complex had a rule that children over five years of age were not permitted in the buildings. She indicated to him that children were a nuisance and that they ran around the halls causing problems. She also indicated that she very seriously doubted whether he could rent an apartment at Water's Edge. He was seeking a two-bedroom apartment renting at $330 per month.

Podgurski next testified that he contacted a private lawyer and his company lawyer and that both lawyers provided him with a copy of the Illinois Human Rights Act. He then called Lois Rackow and stated that he thought they could be in violation of the law by refusing to rent him an apartment. Her response was that he should not "push it" and then hung up on him. He contacted the Department of Human Rights, where he was referred to a Mr. Trevino.

Lois Rackow, initially called as an adverse witness, testified that she had no subsequent conversation with Myron Podgurski where he allegedly told her that a refusal to rent an apartment would be a violation of the law. She testified that although she had told Trevino during a telephone conversation on October 16, 1980, that no determination had been made on Myron Podgurski's rental application, she told Trevino this because she did not know to whom she was speaking and she does not discuss her clients with just anybody over the telephone. She did not recall mentioning to Trevino the rental policy of the apartment complex.

Lois Rackow was later recalled and testified that the first time she had met Myron Podgurski was on October 9, 1980, when he filled out his rental application. She stated that she asked him if he had any children because of the fact that he had indicated on his application that he was divorced. He responded that he did have eight children and that his children occasionally would be staying with him on weekends and also during summer vacation. He further indicated that he was divorced at this time. He never indicated that he was separated and only in the process of becoming divorced. Four or five days later, she received a telephone call from Trevino. She testified that at the time of this call, a determination had been made on his application, which was that he would not be allowed to rent an apartment. She also noted that Podgurski had indicated to her that he might possibly have three or four of his children staying with him for the whole summer and that she recalled telling him that there would be problems renting to him because of the visitation rights he had with his younger children.

John L. Rackow, Jr., testified that he is the manager of Water's Edge Apartments. He stated that as of October 1980, he had managed the Water's Edge Apartments for 8 1/2 years. Mr. Rackow also indicated that the property consisted of five acres of land located in Lake Zurich, with two buildings having 33 units each.

Rackow also testified that in October 1980, only he had authority to review and pass upon applications for tenancy in the buildings and that the sales force of his Century 21 office would show apartments as independent contractors and receive a leasing fee for doing so. He testified that he and his wife, Lois Rackow, would show apartments as well as his sales force, although it was he who had authority to take and ...

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