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Maria Luis and Lucy Gomez v. Smith Partners & Associates

October 18, 2012


The opinion of the court was delivered by: Judge Feinerman


Plaintiffs Maria Luis and Lucy Gomez brought this lawsuit against Defendants Smith Partners & Associates, Ltd., Smith REO Properties, Coya Smith, and Andy Horn, alleging violations of Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988 ("Fair Housing Act"), 42 U.S.C. § 3601 et seq., the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., and Illinois law. Doc. 1. Defendants have moved to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6). Doc. 13. The motion is granted in part and denied in part.


The complaint's well-pleaded factual allegations, though not its legal conclusions, are assumed to be true on a Rule 12(b)(6) motion. See Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012); Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). In evaluating a motion to dismiss, the court must consider "the complaint itself, documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice." Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The court also must consider additional facts set forth in the plaintiff's opposition brief or supported by attachments to the brief, so long as those facts "are consistent with the pleadings." Ibid. The following sets forth the facts as favorably to Plaintiffs as permitted by the complaint and the other materials that may be considered on a Rule 12(b)(6) motion.

Plaintiffs reside at 5818 North Spaulding in Chicago, Illinois ("Property"). Doc. 1 at ¶ 5. Smith Partners and Associates, Ltd., which operates under the assumed name Smith REO Properties, is a corporation that owns and manages residential properties. Id. at ¶ 6. Smith Partners managed the Property throughout the relevant time period. Id. at ¶ 8. Smith owns and operates Smith Partners. Id. at ¶ 6. Horn is an agent of Smith Partners. Id. at ¶ 7.

Beginning in Winter 2010, Defendants undertook a campaign of threats and harassment intended to force Plaintiffs to leave the Property. Id. at ¶ 10. Defendants targeted Plaintiffs because they are Hispanic and in the belief that Hispanics are unwilling to defend themselves through the legal system. Id. at ¶¶ 22-27. Horn entered the Property's basement at some point in Winter 2010 and removed the furnace, causing the pipes to freeze. Id. at ¶ 11. In November 2010, Horn padlocked the front door, which prevented Plaintiffs from entering the residence. Id. at ¶ 12. In Spring 2011, Horn banged on the windows and doors and removed letters from the mailbox that were addressed to Plaintiffs. Id. at ¶ 13. In May 2011, Horn entered the basement and removed most of its contents, including the furnace that Plaintiffs bought to replace the one that Horn had removed. Id. at ¶ 14. In August 2011, Horn had the electricity and water disconnected; while doing so, Horn entered the Property and struck Gomez with the intent of intimidating Plaintiffs into vacating the property. Id. at ¶¶ 16-17, 43. In March 2012, Horn broke the locks to the front doors of each apartment at the Property. Id. at ¶ 15. Horn did all of this at the request of Smith, his boss. Id. at ¶¶ 18-19. On April 17, 2012, the City of Chicago turned off the water due to non-payment by Defendants. Id. at ¶ 20.


I. Fair Housing Act (Count I)

The Fair Housing Act prohibits discrimination 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 therewith, because of race, color, religion, sex, familial status, or national origin."

42 U.S.C. § 3604(b). The Act also makes it unlawful to "coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed, or on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by section 3603, 3604, 3605, or 3606 of this title."

42 U.S.C. § 3617. The Act governs conduct regardless of whether it occurs before or after a tenant or owner has acquired a property interest in a dwelling. See Bloch v. Frischolz, 587 F.3d 771, 780-82 (7th Cir. 2009) (en banc).

To survive a motion to dismiss, a Fair Housing Act claim must allege discrimination related to the terms, conditions, privileges, or provisions of services of a dwelling. See Mehta v. Beaconridge Improvement Ass'n, 432 F. App'x 614, 616 (7th Cir. 2011); Bloch, 587 F.3d at 776. A claim also must plead the type of discrimination that occurred, by whom, and when. See McCauley v. City of Chicago, 671 F.3d 611, 617 (7th Cir. 2011); Estate of Davis v. Wells Fargo Bank, 633 F.3d 529, 533 (7th Cir. 2011); Swanson v. Citibank, 614 F.3d 400, 405 (7th Cir. 2010). Here, Plaintiffs allege the type of discrimination that occurred (race or national origin), by whom (Smith, Horn, and Smith Partners), and when (from Winter 2010 through April 2012). Doc. 1 at ¶¶ 22-25, 27. These allegations are sufficient to survive a Rule 12(b)(6) motion. See Swanson, 614 F.3d at 405 ("Swanson's complaint identifies the type of discrimination that she thinks occurs (racial), by whom (Citibank, through Skertich, the manager, and the outside appraisers it used), and when (in connection with her effort in early 2009 to obtain a home-equity loan). This is all that she needed to put in a complaint.").

Defendants contend that the Fair Housing Act claim is barred by the Act's statute of limitations, which provides that a plaintiff may bring suit "not later than 2 years after the occurrence or the termination of an alleged discriminatory housing practice." 42 U.S.C. § 3613

(a)(1)(A). The complaint, which was filed on April 19, 2012, alleges that Defendants engaged in an ongoing course of discriminatory conduct between "Winter 2010" and April 17, 2012. Doc. 1 at ¶¶ 10, 20. Although the term "Winter 2010" in the complaint is ambiguous, Plaintiffs' brief clarifies that they mean November 2010 and not, say, January or February 2010. Doc. 25-1 at 23. Because each alleged discriminatory act took place within two years of the complaint's filing, no part of the Fair Housing Act claim is even arguably barred by the statute of limitations. If discovery reveals that some of the alleged discriminatory conduct in fact took place before April 19, 2010, the court will determine whether damages for that conduct are nonetheless recoverable. See Tyus v. Urban Search Mgmt., 102 F.3d 256, 265 (7th Cir. 1996) ("In a suit claiming that the defendant engaged in a continuous course of conduct that causes damages, . a plaintiff can recover for damages that preceded the limitations period if they stem from a persistent process of illegal discrimination.").

II. RICO (Count II)

Section 1962(c) of RICO, on which Count II is based, prohibits any individual or entity "employed by or associated with" an "enterprise" engaged in interstate commerce "to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity." 18 U.S.C. § 1962(c). To state a § 1962(c) claim, a plaintiff must allege "(1) conduct (2) of an enterprise (3) through a pattern of racketeering activity." DeGuelle v. Camilli, 664 F.3d 192, 199 (7th Cir. 2011) (internal quotation marks omitted); see also United States v. Shamah, 624 F.3d 449, 454 (7th Cir. 2010). To properly plead the third element, "a pattern of racketeering activity," a complaint must allege the commission of at least two predicate acts of racketeering over a ten-year period. See DeGuelle, 664 F.3d at 199 (citing 18 U.S.C. § 1961(5)). The Seventh Circuit has noted that "no single formula is required for a RICO pattern," which means that the ...

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