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United States v. Shanrie Co.

March 30, 2007


The opinion of the court was delivered by: Herndon, District Judge


I. Introduction

On April 25, 2005, the United States filed this action in this Court alleging that Defendants violated the Fair Housing Act, as amended, 42 U.S.C. §§ 3601-3619 ("FHA") by failing to design and construct the Applegate Apartments ("Applegate") in Swansea, Illinois in compliance with the FHA's requirements regarding accessibility for persons with disabilities. On June 23, 2006, the United States filed a motion for partial summary judgment. (Doc. 79.) On that same day, Defendants Shanrie Co., Inc. ("Shanrie), Dan Sheils ("Sheils"), and Netemeyer Engineering Associates, Inc. ("Netemeyer") filed a motion for partial summary judgment (Doc. 80) and Defendant Thouvenot, Wade & Moerchen, Inc. ("TWM") filed a motion for summary judgment (Doc. 81). Because the issues are so intertwined, this memorandum will address all three motions.

In addition, Defendants Shanrie Co., Inc. and Dan Sheils filed a motion for oral argument (Doc. 91) on their motion for partial summary judgment (Doc. 80). The Court was able to resolve the motion without the assistance of oral arguments; therefore, Defendants motion for oral argument is DENIED. (Doc. 91.)

II. Background

The United States contends that each of the Defendants played some role in the design or construction of Applegate. The following is undisputed: Shanrie built and has owned Applegate since construction began. Sheils is the president of Shanrie. Sheils oversaw all aspects of the design and construction of Applegate. Netemeyer prepared architectural plans for Applegate. TWM had a contract with OC Development, the developer who prepared the site and sold it to Shanrie. TWM never had a contract with Shanrie, but provided assistance during the zoning process.

Construction of the first building at Applegate was completed in the fall of 2002. As of September 30, 2004, Applegate consisted of five apartment buildings with 20 ground floor units. None of the ground floor units in the first five units have an accessible entry, even today. The ground floor units are accessible only by stairs. Building 6 was completed in the fall of 2005. After this lawsuit was filed in October 2004, Sheils modified the plans for Building 6 to include a ramp to the ground floor units. However, the United States alleges that even this ramp is not in compliance with the FHA. In June of 2006, Building 7 was under construction; construction on Building 8 had not yet begun.

III. Summary Judgment Standard

Summary judgment is proper where the pleadings and affidavits, if any, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); Oats v. Discovery Zone, 116 F.3d 1161, 1165 (7th Cir. 1997) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). The movant bears the burden of establishing the absence of fact issues and entitlement to judgment as a matter of law. Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997) (citing Celotex, 477 U.S. at 323). In reviewing a summary judgment motion, the Court does not determine the truth of asserted matters, but rather decides whether there is a genuine factual issue for trial. Celex Group, Inc. v. Executive Gallery, Inc., 877 F. Supp. 1114, 1124 (N.D. Ill. 1995) (Castillo, J.). The Court must consider the entire record, drawing reasonable inferences and resolving factual disputes in favor of the non-movant. Regensburger v. China Adoption Consultants, Ltd., 138 F.3d 1201, 1205 (7th Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

In response to a motion for summary judgment, the non-movant may not simply rest on the allegations in his pleadings. Rather, she must show through specific evidence that an issue of fact remains on matters for which she bears the burden of proof at trial. Walker v. Shansky, 28 F.3d 666, 670-71 (7th Cir. 1994), aff'd, 51 F.3d 276 (citing Celotex, 477 U.S. at 324). No issue remains for trial "unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted); accord Starzenski v. City of Elkhart, 87 F.3d 872, 880 (7th Cir. 1996); Tolle v. Carroll Touch, Inc., 23 F.3d 174, 178 (7th Cir. 1994). However, when all the Court has before it are the diametrically opposed statements of the parties on the critical and ultimate issues of fact, the Court, not in a position to make credibility findings, must pass the case to the next phase of litigation.

IV. Analysis

A. The Fair Housing Amendments Act of 1988

The Fair Housing Amendments Act of 1988 ("FHAA") added "handicap"as another form of discrimination outlawed by the original Fair Housing Act, which was passed in 1968. The "FHAA" made it unlawful to "discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap of-- (A) that buyer or renter, (B) a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or (C) any person associated with that buyer or renter." 42 U.S.C. § 3604(f)(1). In addition, Section 3604(f)(2) makes it unlawful to "discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling, because of a handicap of--(A) that person." The accessibility requirements include making the public use and common use portions of such dwellings readily accessible, ensuring that all doors are wide enough for wheelchairs to pass through and that all premises have certain "features of adaptive design." Id. at § 3604f(3)(C).*fn1

Congress granted the Secretary of HUD the authority to promulgate regulations to implement the FHA and provide technical assistance to help achieve the Act's accessibility requirements. Id. at §§ 3601, 3604(f)(5)(C). HUD issued implementing regulations in 1989, which discussed the FHA's design and construction requirements. 24 C.F.R. § 100.200. Guidelines setting minimum standards for compliance with the design and construction requirements were issued two years later. 56 Fed. Reg. 9473-9515.

Although the FHAA was enacted nearly 20 years ago, few cases have addressed some of the issues presented in this case. Therefore, as background, the Court begins by considering the intent of Congress in its enactment of the FHAA. According to the House of Representatives Committee Report ("House Report"), Congress intended that the FHAA be a "clear pronouncement of a national commitment to end the unnecessary exclusion of persons with handicaps from the American mainstream." H.R. Rep. 100-711, 18. In addition, the House Report on the FHAA provides, "[b]ecause persons with mobility impairments need to be able to get into and around a dwelling unit (or else they are in effect excluded because of their handicap), the bill requires that in the future covered multifamily dwellings be accessible and adaptable . . . These modest requirements will be incorporated into the design of new buildings, resulting in features which do not look unusual and will not add significant additional costs." Id. The House Report makes it clear that the FHAA prohibits acts that have the effect of causing discrimination, not just intentional discrimination.*fn2 Furthermore, the United States Supreme Court has found that when interpreting the Fair Housing Act, courts are to give effect to the "broad remedial intent of Congress embodied in the Act." Havens Realty Corp. V. Coleman, 455 U.S. 363, 380 (1982).

B. Motions for Summary Judgment

This matter comes before the Court on three pending motions for summary judgment. (Docs. 79, 80, 81.) The United States' motion for partial summary judgment asserts that the design and construction of Applegate violates the FHA and that each of the Defendants is liable for the violations. (Doc. 79.) The United States is seeking summary judgment on the issue of liability only. The United States essentially argues that 1) Applegate is subject to the accessibility requirements mandated by the FHA; 2) Applegate was not designed and constructed in compliance with the FHA; 3) Defendants are not entitled to the site impracticality defense; 4) each Defendant is liable for the violations; and 5) Defendants have engaged in a pattern or practice of discrimination and/or a denial of rights to a group of persons pursuant to 42 U.S.C. ยง 3614. (Doc. 79.) Defendants Shanrie, Sheils, and Netemeyer's motion for partial summary judgment argues that the Defendants are entitled as a matter of law to the site impracticality defense. (Doc. 80.) Finally, Defendant TWM's motion for summary judgment maintains that TWM's role in the design and construction of Applegate was so limited that it should not be held liable for any elements of the design and construction that are not in compliance with the FHA. (Doc. 81.) For the following reasons, the United States' motion (Doc. 79) is granted in part and denied in part, Defendants Shanrie, Sheils, and Netemeyer's motion is denied (Doc. 80), and Defendant TWM's motion is denied (Doc. 81). Aside from a few peripheral arguments addressed below, it is basically undisputed that the Applegate ...

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