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January 4, 1995


The opinion of the court was delivered by: JOHN A. NORDBERG

 Gwendolyn Woods, Adrienne Greene and Lavonne Harmon (collectively "Plaintiffs") allege that Calvin Foster, Robert House, the New Life Outreach Ministries of Chicago ("the Ministries") and the New Life Baptist Church of Chicago ("the Church") (collectively "Defendants") violated the Fair Housing Act ("FHA"), breached a contract with the City of Chicago to the detriment of the Plaintiffs, and negligently caused the Plaintiffs to suffer emotional distress. Plaintiffs seek a declaration that Defendants violated several provisions of the FHA, compensatory and punitive damages, and attorneys' fees.

 The case is now before the Court on the motion to dismiss the First Amended Complaint filed by the Ministries and the Church. The Court allowed Defendants Foster and House to adopt the motion to dismiss of the corporate defendants. *fn1"


 The facts, as alleged by Plaintiffs in their First Amended Complaint, *fn2" are as follows.

 The Ministries is a not-for-profit Illinois corporation that operates a residential facility for otherwise homeless families in Chicago ("the Shelter"). The Church is also a not-for-profit Illinois corporation. Plaintiffs allege that the Ministries functions at the direction of the Church. Calvin Foster is the executive director of the Ministries. Robert House is the Chairman of the Board of Directors of the Ministries and the pastor of the Church. In July, 1992, the Ministries entered into a contract with the City of Chicago Department of Human Services (the "DHS Contract"). The DHS Contract provided that the Ministries would house otherwise homeless families and assist such families in obtaining other services, including permanent housing. Plaintiffs allege that the Church was also a party to the DHS Contract, although it is not clear whether the Church was a signatory. The DHS Contract was signed on behalf of the Ministries by Foster and House. The Ministries received $ 125,000 pursuant to the DHS Contract, which was funded by the United States Department of Housing and Urban Development ("HUD").

 Plaintiffs are women who resided at the Shelter during 1993. The Plaintiffs range in age from 23 to 34 years. Plaintiffs Woods, Greene, and Harmon have three, four, and five children, respectively. All three Plaintiffs allege that they were subjected to sexual advances, lewd touching of their bodies, sexually suggestive remarks and requests for sexual favors by Defendant House. One Plaintiff alleges similar mistreatment by Defendant Foster. All three Plaintiffs allege that House and Foster made it known to them that their ability to stay at the Shelter and receive the other assistance that the Shelter provided was dependent upon their willingness to provide sexual favors to House, Foster, or both. Plaintiffs further allege that the activities of House and Foster were known amongst other residents of the Shelter.

 One Plaintiff alleges that, shortly after her arrival at the Shelter, Defendant Foster told her she "looked nice" and stated, "we have to get together." A few days later, Plaintiff went to Foster's office to request a withdrawal of funds from the savings account she had been required to open. Rather than immediately grant her request, Defendant Foster allegedly locked the door, kissed and fondled Plaintiff. Defendant Foster allegedly told Plaintiff to "keep your business to yourself." A few days later, Foster gave Plaintiff a ride from a court appointment to a motel where he pressured her to engage in sex. Plaintiff alleges that she submitted because she was fearful that she would be forced to leave the Shelter if she did not. Plaintiff further claims that, on a different occasion, Defendant House called her to his office, locked the door, and kissed and fondled Plaintiff. Plaintiff claims that House told her that he and Foster would help her obtain permanent housing. On another occasion, House took Plaintiff to a motel and promised to get her housing if she engaged in sex with him. Plaintiff claims she submitted under pressure of a feared loss of housing if she refused. Plaintiff refused a further advance by House, inquiring about the promised assistance in obtaining permanent housing. Plaintiff alleges that both House and Foster subsequently "became cool towards her." Plaintiff alleges that shortly thereafter, she was falsely accused of stealing and was forced to leave the Shelter with her children by Defendant Foster.

 A third Plaintiff alleges that, shortly after coming to the Shelter, Defendant House asked her to come to his office and there asked her if she could get a babysitter for her children so that he could take her out. After the Plaintiff informed a staff member of this conversation, House allegedly called her into his office and told her she should not tell the staff about him. Plaintiff further alleges that House told her that he would help her find housing if she cooperated with him and told her to come to his office after her children had gone to sleep. Plaintiff did not do so, but was in House's office several days later to deposit part of a check in her Shelter savings account, as required by Shelter policy. House allegedly locked the door, kissed Plaintiff, grabbed Plaintiff, and pressed himself against her. Plaintiff ran from the office and left the Shelter that day. Plaintiff alleges that she believed she could not stay at the Shelter unless she complied with House's demands. Plaintiff experienced a period of homelessness after leaving the Shelter and did not receive any assistance from the Shelter in obtaining permanent housing.

 All three Plaintiffs claim that the advances of Foster and House were unwelcome. Furthermore, all three claim that the alleged acts of Foster and House created a pervasively offensive and hostile atmosphere at the Shelter.


 Defendants move to dismiss Plaintiffs' five count First Amended Complaint. Defendants argue that the first three counts, based on the FHA, should be dismissed because the Shelter does not qualify as a "dwelling" as the term is used in the FHA. Defendants also rely on the language of the FHA to argue for the dismissal of counts I and II, insisting that the Defendants' alleged actions are beyond the scope of the FHA as Defendants did not engage in the "sale or rental" of any property. Defendants also argue that, if the FHA claims are dismissed, the state law claims should be dismissed for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1367(c)(3). Defendants argue, in the alternative, that Plaintiffs cannot sustain a third party action for breach of contract and that Plaintiffs' negligence claim fails because Plaintiffs have not alleged that Defendants owed Plaintiffs a duty that was breached. Lastly, the corporate defendants argue that they are not liable for the acts of the individual defendants.

 A. The Standard on a Motion to Dismiss

 The purpose of a Rule 12(b)(6) motion is to test the legal sufficiency of a complaint. See Adams v. Cavanagh Communities Corp., 847 F. Supp. 1390, 1396 (N.D. Ill. 1994). In order to survive a motion to dismiss, a complaint must allege sufficient facts to outline a cause of action. Davis v. Frapolly, 747 F. Supp. 451 (N.D. Ill. 1989). The complaint "must state either direct or inferential allegations concerning all of the material elements necessary for recovery under the relevant legal theory." Carl Sandburg Village Condominium Ass'n No. 1 v. First Condominium Dev. Co., 758 F.2d 203, 207 (7th Cir. 1985).

 The Court must accept as true all well pleaded factual allegations in the complaint and view them, along with the reasonable inferences to be drawn from them, in the light most favorable to the plaintiff. Cornfield v. Consolidated High School District No. 230, 991 F.2d 1316, 1324 (7th Cir. 1993). However, the Court need not accept as true conclusory legal allegations. Vaden v. Village of Maywood, Illinois, 809 F.2d 361, 363 (7th Cir.), cert. denied, 482 U.S. 908, 107 S. Ct. 2489, 96 L. Ed. 2d 381 (1987). Furthermore, the Court need not strain to find inferences from the complaint's allegations. P & P Mktg., Inc. v. Ditton, 746 F. Supp. 1354, 1357 (N.D. Ill. 1990). When evaluating the legal sufficiency of a plaintiff's factual allegations, courts are held to a strict standard. A motion to dismiss may be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); Cushing v. City of Chicago, 3 F.3d 1156, 1159 (7th Cir. 1993).

 B. "Dwelling" for the Purposes of the FHA

 Defendants argue that Plaintiffs cannot state a claim against them under the FHA because the sections of the FHA under which Plaintiffs seek to recover apply only to "dwellings" and the Shelter does not fall within the FHA's definition of "dwelling." The FHA provides:

"Dwelling" means any building, structure, or portion thereof which is occupied as, or designed or intended for occupancy as, a residence by one or more families, and any vacant land which is offered for sale or lease for the construction of location thereon of any such building, structure, or portion thereof.

 42 U.S.C. § 3602(b). Plaintiffs argue that the Shelter should be considered a "dwelling" as defined by the FHA.

 A structure, or a portion thereof, is a "dwelling" if it is designed or intended for occupancy as a residence by one or more families. The FHA does not define "residence." The issue before the Court is whether a shelter for homeless people is a residence, particularly in light of its goal of locating permanent housing for its tenants. The Seventh Circuit has not addressed this question. Most courts that have considered the scope of the term "dwelling" in the FHA have cited the analysis of United States v. Hughes Memorial Home, 396 F. Supp. 544, 548-49 (W.D. Va. 1975) with approval. See United States v. Columbus Country Club, 915 F.2d 877 (3d Cir. 1990), cert. denied, 501 U.S. 1205, 115 L. Ed. 2d 971, 111 S. Ct. 2797 (1991); Baxter v. City of Belleville, 720 F. Supp. 720 (S.D. Ill. 1989); Patel v. Holley House Motels, 483 F. Supp. 374 (S.D. Ala. 1979). The Hughes court resorted to the "ordinary meaning" of a residence as:

a temporary or permanent dwelling place, abode or habitation to which one intends to return as distinguished from the place of ...

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