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H.O.P.E., Inc. v. Lake Greenfield Homeowners Association

United States District Court, N.D. Illinois, Eastern Division

April 26, 2017



          Rebecca R. Pallmeyer United States District Judge

         Plaintiffs Andrew Johnson, Carrie Masquida, Osvaldo Masquida, and Nancy Masquida[1](collectively, the Individual Plaintiffs) purchased vacant land in a housing development, on which they intended to build a residence. As an initial step, Plaintiffs planned to build an “outbuilding” (as the court understands it, a storage shed) on their property, and sought permission to do so from Defendants, the homeowners association and its board members. Plaintiffs allege that Defendants denied this request, though they had allowed other, non-Hispanic, residents to build similar outbuildings. Plaintiffs also complain that they were subjected to a different approval-seeking process and different requirements for obtaining permits for their planned residence. The Individual Plaintiffs, along with H.O.P.E. Fair Housing Center (“HOPE”) have brought this suit for violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq, and the Civil Rights Act, 42 U.S.C. § 1982. Defendants have moved to dismiss the Fair Housing Act portion of the complaint for failure to state a claim. As explained below, the motion is denied.


         The allegations in Plaintiffs' amended complaint are presumed true for the purposes of this motion. Estate of Davis v. Wells Fargo Bank, 633 F.3d 529, 533 (7th Cir. 2011). Plaintiffs allege that Lake Greenfield Estates is a housing development in Gardner, Illinois. (Am. Compl. [20] ¶ 10.) In 2011, Plaintiffs Andrew Johnson and Carrie Masquida, who are married, purchased a 12.7 acre lot within Lake Greenfield Estates, known as Lot 15. (Id. at ¶¶ 8, 15.) They intended to build a residence where they would live with their children and with Carrie's parents, Plaintiffs Osvaldo and Nancy Masquida. (Id. at ¶ 15.) Osvaldo and Carrie are Hispanic; Osvaldo was born in Cuba and speaks with a “distinct accent.” (Id. at ¶¶ 8-9, 18.)

         After Andrew and Carrie purchased Lot 15, Osvaldo worked to clear the land, using a tractor to move large pieces of limestone, mowing the lawn with a riding mower, and planting and irrigating dozens of trees. (Id. at ¶¶ 21, 23, 25-27.) Andrew and Carrie wanted to build an outbuilding to store the tractor and mower, as well as the equipment and materials they would need to build the residence itself. (Id. at ¶¶ 21, 28.) Their non-Hispanic next-door neighbor had built a similar outbuilding before building a residence. (Id.)

         In fact, many non-Hispanic neighbors had outbuildings on their property. (Id. at ¶ 20.) These neighbors had built their outbuildings and other improvements with the informal approval, or lack of objection, of Defendant Bertrand Ludden. (Id. at ¶¶ 16, 20.) Ludden was one of three developers who initially purchased the land that became Lake Greenfield Estates and established the Defendant Lake Greenfield Homeowners Association (“LGHA”). (Id. at ¶ 16.) Plaintiffs allege that Ludden himself “acted for the developers” by approving the improvements made by others who owned land in Lake Greenfield Estates (id. at ¶¶ 20, 29); the court assumes this means that Ludden acted on behalf of the LGHA.

         Andrew and Carrie requested approval from Ludden to build their outbuilding, but Ludden refused. (Id. at ¶¶ 28-29.) Plaintiffs allege that Ludden assumed that Andrew and Carrie wanted to live in the outbuilding, “reflect[ing] Ludden's racial prejudice and stereotyping.” (Id. at ¶ 29.) Andrew and Carrie “decided not to press the issue” of the outbuilding and instead continued to pursue their overall plan of building a residence. (Id.)

         Plaintiffs also allege that Osvaldo also experienced racial prejudice. On June 17, 2014, Defendant Al Jackman stopped Osvaldo as he was leaving the property with brush he had cleared from it. (Id. at ¶ 30.) Jackman asked Osvaldo where he got the trees that had been planted on Lot 15, implying, Plaintiffs believe, that Osvaldo was acted unlawfully. (Id.) Osvaldo asked Jackman, “Do you have an issue with me?” (Id.) Jackman responded by telling Osvaldo that he was the son of one of the developers. (Id.)

         The LGHA had its first meeting on July 12, 2014. At that meeting, four individuals (Defendants Henderson, Jackman, Bidus, and Rachke) were “identified” to be the next board members of LGHA; they began serving sometime between August and December 2014. (Id. at ¶¶ 31, 36.) Prior to this meeting, the LGHA board members were the original developers, including Ludden. (Id. at ¶¶ 16, 19.) At the July 12 meeting, Andrew and Osvaldo “approached Ludden” and again requested permission to build an outbuilding before construction of a residence, as one of their neighbors had done. (Id. at ¶ 34.) After Andrew complained that they were being treated differently, Ludden orally approved their plan to construct an outbuilding. (Id.)

         Another LGHA meeting took place on August 16. (Id. at ¶ 32.) One of the agenda items at that meeting was selection of “successors” to the Architectural Review Committee (ARC). The court is uncertain of the precise role played by the ARC, but it appears that it was involved in approving owners' plans for improvements to their land. Plaintiffs allege that “Ludden continued to act and represent himself as the ARC through at least December 2014.” (Id. at ¶ 33.) At some point before July 2015, Henderson, Bidus, Rachke, and potentially others, began acting as the ARC. (Id. at ¶ 37.)

         The Individual Plaintiffs proceeded with their plans to build an outbuilding and residence. They hired an architect and builder, and obtained a permit for the outbuilding. (Id. at ¶¶ 35, 38.) On August 7, 2015, Defendants Henderson and Rachke approached Andrew and Osvaldo on Lot 15 “in a hostile manner” about the work being done-presumably construction of the outbuilding. (Id. at ¶ 41.) Andrew and Osvaldo told them that Ludden had approved the outbuilding, and Rachke acknowledged that if Ludden had approved it, “‘there is nothing we can do' because Plaintiffs' project would be “‘grandfathered in.'” (Id.) Rachke and Henderson then drove directly to Ludden's residence and remained there “for some time.” (Id. at ¶ 42.)

         Two days later, the ARC sent Andrew and Carrie an e-mail message denying that Ludden had approved the outbuilding plan. (Id. at ¶ 43.) Andrew unsuccessfully tried to contact Rachke and a lawyer who was noted as having received a copy of the e-mail. (Id. at ¶ 44.) On August 24, the Individual Plaintiffs received another e-mail from someone on the ARC (the name of the individual[s] who sent these messages is not stated), demanding that Plaintiffs provide proof in writing that they had approval to proceed with the outbuilding. (Id. at ¶ 45.)

         Eventually, the LGHA (meaning presumably the new board members) required the Individual Plaintiffs to undergo a new approval process, though no non-Hispanic homeowners had been required to do so. (Id. at ¶ 46.) Andrew and Carrie did so, even though non-Hispanics were not required to use the new process. (Id.) This new process required Andrew and Carrie to provide significantly more information than non-Hispanics had been required to provide to construct their outbuildings. (Id. at ¶ 47.)

         After the Individual Plaintiffs submitted their information, the ARC denied their request to build the outbuilding for the stated reason that the outbuilding would decrease Lake Greenfield Estates property values. (Id. at ¶ 48.) The refusal notice also cited the Lake Greenfield Estates Declaration of Covenants, Conditions, and Restrictions (which had been filed in 1995) as the basis for the decision, but Plaintiffs claim that those reasons are pretextual. (Id. at ¶¶ 48-49, 51.) Plaintiffs allege that other residents were allowed to construct similar outbuildings and to construct outbuildings before constructing a residence. (Id. at ¶¶ 51-53, 55.) Plaintiffs also allege, without specifics, that LGHA did not adhere to the Illinois Common Interest Community Association Act. (Id. at ¶ 54.)

         After rejecting their proposal, the LGHA also told Andrew and Carrie that they were required to purchase several permits within twelve months: (1) a primary home dwelling permit, (2) a water permit, and (3) a septic tank permit. (Id. at ¶ 56.) Non-Hispanic residents were not subject to this timing requirement, Plaintiffs allege. (Id.) They assert, further, that the permits would cost them thousands of dollars and that “the inconsistent, shifting, false and discriminatory demands and justifications of the HOA operated as a moving target and were untrustworthy and unacceptable.” (Id.)

         Plaintiffs claim that they needed to take steps to protect the materials and equipment already on their property, that their outbuilding permit expired, that it was “impractical and impossible” to construct anything on their property “without a court order or supervision by an impartial authority[, ]” and that they felt unwelcome and fearful in Lake Greenfield Estates. (Id. at ¶¶ 57-59.) On November 10, 2015, Carrie filed a Charge of Discrimination in housing with the Illinois Department of Human Rights (IDHR). (Id. at ¶ 60.) In their response to the charge, Defendants asserted that “The Architectural Rules ...

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