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

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

July 31, 2018




         Defendant Lake Greenfield Homeowners Association (the “Association”) has authority to control construction in a housing development in Grundy County, Illinois. Plaintiff H.O.P.E., Inc. is an Illinois non-profit corporation that advocates for persons who claim unlawful housing discrimination. In this lawsuit, H.O.P.E. alleges that the Association has exercised its authority in a biased or retaliatory fashion against the individual Plaintiffs, two of whom are of Hispanic ancestry. The individual Plaintiffs purchased a vacant lot in the subdivision known as Lake Greenfield Estates, and proposed to build a small “outbuilding” for the purpose of storing the equipment they would need to construct a residence on the property. Multiple white property owners in the subdivision had received permission to construct similar outbuildings prior to building homes on their lots, but Defendants-the Association and certain members of its “Architectural Committee” and Board of Directors-denied such permission to the individual Plaintiffs. Plaintiff Carrie Masquida filed a charge of discrimination with the Illinois Department of Human Rights, and the Architectural Committee subsequently adopted rules that, among other things, prohibit the construction of “outbuildings” prior to residences. Plaintiffs then filed suit in this court, alleging violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq., and the Civil Rights Act of 1866, 42 U.S.C. § 1982. Defendants have moved for summary judgment. For the reasons explained here, Defendants' motion is granted in part and denied in part.


         I. Governance of Lake Greenfield Estates

         Lake Greenfield Estates is a residential subdivision located in Grundy County, Illinois, approximately 50 miles southwest of Chicago. The subdivision dates to July 1995, when PBR Real Estate Development Company, LLC imposed a “Declaration of Covenants, Conditions, Restrictions, Reservations, Equitable Servitudes, Grants and Easements” (hereafter “Covenants”) on a 320-acre parcel it owned surrounding a small lake. (Covenants 1, Ex. 1 to Defs.' Statement of Facts (hereafter “DSOF”) [63].) These Covenants remained in effect throughout the time period relevant to this lawsuit. (DSOF ¶ 13.)

         The Covenants were imposed for the purpose of ensuring “that the property will be developed as a desirable private exclusive rural residential living area.” (Covenants 1.) Under the Covenants' terms, PBR Real Estate would divide the 320-acre parcel into no more than 75 lots, each having “access to the common area lake.” (Id.) Purchasers of these lots would be limited to constructing one single-family home on each lot. Each home would be required to have at least 1850 square feet of “living area”, not including garages, basements, and porches. (Id. at 1, 8-9.)

         Section 4 of the Covenants outlined a series of prerequisites for the construction or reconstruction of “any building fence, dock, boat lift, or improvement whatsoever.” (Id. at 5.) These prerequisites included submission of “two (2) complete sets of construction plans, ” as well as a detailed “site plan, ” for approval by an “Architectural Committee.” (Id. at 5-6.) This Committee had broad discretion to approve or disapprove of the plans based on factors such as the “acceptab[ility]” and “suitab[ility]” of the proposed materials and color scheme, as well as the Committee's subjective beliefs about whether the proposed structure would “depreciate or adversely affect the values of other buildings sites or building in the development.” (Id. at 8.) PBR Real Estate would retain control over the Architectural Committee until July 2015, at which point membership on the Committee would be determined by a majority vote of land owners in the subdivision. (Id. at 6.)

         Section 5(c) of the Covenants addressed the permissibility of non-residential “outbuildings, ” such as free-standing garages and tool sheds. Specifically, this section stipulated that “[n]o outbuilding may exceed 1, 200 square feet, ” and that each outbuilding's “roof line and architectural style shall conform to the construction standards and general architectural appearances of the dwelling structure.” (Id. at 9.) Section 5(c) also stated that “[a]ny outbuildings proposed to be erected must be approved by the Architectural Committee.” (Id.)

         The record shows that on several occasions, the Architectural Committee declined to rigidly enforce the rules governing construction of outbuildings. In 2004, for example, the Committee-through Defendant Bertrand Ludden, a member of PBR Real Estate who led[1] the Architectural Committee from its inception through July 2015-gave verbal approval to Donald Crater to construct an outbuilding prior to building a residence on the same lot, and to construct that outbuilding with metal and wood even though the residence would be built of brick and wood. (Crater Dep. 8, 23-24, Ex. 2 to PSOF.) At some point (neither party says when), Ludden also gave Defendant Tim Bidus permission to build a detached garage that occupies approximately 1, 400 square feet-nearly two hundred square feet more than the 1, 200 square-foot limit set in the Covenants. (PSOF ¶ 66; Defs.' Resp. to PSOF ¶ 66; Bidus Dep. 19, Ex. 1 to PSOF.) And in 2016, Defendant Chuck Rachke constructed a garage on his property that is, according to a building permit Rachke signed and filed with Grundy County, approximately 1, 300 square feet in area. (PSOF ¶ 71; Defs.' Resp. to PSOF ¶ 71.) Crater, Bidus, and Rachke are all white and/or “non-Hispanic.” (Johnson Dep. 19, Ex. 8 to PSOF; Osvaldo Masquida Decl. ¶ 4, Ex. 28 to PSOF; Defs.' Resp. to PSOF ¶ 74.)

         Rachke himself has been a member of the Architectural Committee since July 2015, when Defendant Ludden and the other members of PBR Real Estate assigned their interests in Lake Greenfield Estates to Defendant Lake Greenfield Homeowners Association. (DSOF ¶ 23; Second Am. Decl. for Lake Greenfield Estates, Ex. B to Defs.' Resp. to PSOF.) Ludden had previously approached Rachke, in approximately 2013 or 2014, and invited him to become involved with the Association and to serve on the Architectural Committee. (Rachke Dep. 25-26.) Ludden also approached two other residents of the subdivision, Defendants Scott Henderson and Tim Bidus, and asked them to serve on the Association's Board of Directors. (Henderson Dep. 10-11, Ex. 3 to PSOF.) At a Board meeting on July 17, 2015, Defendant Bidus was elected President of the Association, Defendant Henderson was elected Vice President, Defendant Rachke was elected Secretary, and Defendant Al Jackman was elected Treasurer.[2] (Minutes of July 17 Meeting, Ex. C to DSOF.) At the same meeting, the Board nominated Rachke, Henderson, and someone named Dean Cunning (who is not a party here and whom neither party identifies) to serve on the Architectural Committee. (Id.)

         II. Plaintiffs' Attempts to Develop Property in Lake Greenfield Estates

         Plaintiffs Carrie Masquida and Andrew Johnson met in Chicago in 2005. (Carrie Masquida Dep. 5, 18.) They married in 2009, had at least two children (the record is unclear on the exact number), and developed a close relationship with Carrie's parents, Plaintiffs Osvaldo (“Ozzie”) and Nancy Masquida, who lived in Gardner, Illinois, a few miles northwest of Lake Greenfield Estates. (C. Masquida Dep. 5, 10, 18; Johnson Dep. 15, 95.) Carrie and Andrew visited the area frequently, as a “getaway” from their residence “downtown.” (Johnson Dep. 15.) Andrew became particularly close to his father-in-law Ozzie, a boisterous Cuban immigrant who loves to waterski barefoot. (C. Masquida Dep. 13; Johnson Dep. 19, 95, 99; Ozzie Masquida Dep. 16, Ex. 12 to PSOF.) Carrie-who “strongly and openly identifies as Cuban” and drives a car with the license plate “Cubana”-often suggested to Andrew that they move to the area around Gardner and build a house where they and Carrie's parents could live together. (PSOF ¶ 103; C. Masquida Dep. 18; Johnson Dep. 96.)

         In 2011, Carrie and Andrew paid approximately $150, 000 for a vacant, 12.7 acre lot in Lake Greenfield Estates that includes 800 feet of lake frontage. (C. Masquida Dep. 18.) A man named Ron Chovan owned the lot at the time, and Carrie and Andrew made their offer on Chovan's property through a realtor named Doug Geisler. (Id. at 19-20.) Nothing in the record suggests that PBR or any of the Defendants in this case were involved in the transaction in any way.

         At some point prior to November 2012, Carrie, Andrew, and their children moved to Arizona. (Johnson e-mail to Ludden, Nov. 11, 2012, Ex. D to DSOF.) (The record does not disclose exactly when, or why, the family moved.) In their absence, Ozzie began working to improve the lot in Lake Greenfield Estates.[3] He recalls “pick[ing] up all the debris that the previous owner have [sic] left behind, ” picking up “every single rock on 12 acres, ” cutting the grass, “mov[ing] big boulder rocks in strategic places so it will look nice, ” and “plant[ing] trees, ” among other tasks. (O. Masquida Dep. 25-26.) Andrew and Carrie purchased “a backhoe with a bushwhacker” to assist Ozzie with his work, as well as a water tank, a “grasshopper” riding mower, a small four-wheel-drive utility vehicle, and “tools like rakes and post drivers.” (Id. at 27.)

         In November 2012, Andrew Johnson wrote an e-mail to Defendant Ludden requesting permission to construct a 1000-square-foot storage building on the property. (Johnson to Ludden, Nov. 11, 2012, Ex. D to DSOF.) Johnson promised in this e-mail that the building would “only have one use-storage.” (Id.)[4] He explained that the building would be “similar to what Donny Crater has built, ” would be located on “the far east side of the property away from the lake, ” and would not be connected to any electrical, water, gas, or other utilities. (Id.) Johnson's message noted that, although he and his family were living in Arizona, it was “only a matter of time that my wife and I will be building a home on the property, ” because “[o]ur intention is for [their children] to have a ‘lake place' to grow up and for our family to enjoy for a long time.” (Id.) Johnson concluded the e-mail by offering to discuss his request further, and by inviting Ludden to contact him or Ozzie Masquida by phone. (Id.)

         The parties agree that Ludden denied Johnson's November 2012 request, but they dispute what else Ludden said to Johnson. Johnson has testified that Ludden “stat[ed] that he didn't want me or my family living in the building.” (Johnson Dep. 52.) Defendants deny that Ludden mentioned Johnson's family or anyone other than Johnson himself. (Defs.' Resp. to PSOF ¶ 23.) Defendants maintain that no “buildable plans” for the outbuilding or for a residence were attached to Johnson's e-mail, though they do not suggest that Ludden specifically asked Johnson for such plans. (DSOF ¶¶ 15-16.) Johnson later wrote that he was “puzzled” by Ludden's decision, but “respectfully shelved the project” anyway. (Johnson to Lake Greenfield Homeowners Association, Aug. 15, 2015, Ex. 16 to PSOF.)

         At some point during the next two years, Johnson returned to Illinois from Arizona. (Id.) It is not clear exactly when or why Johnson returned, or how long he remained in Illinois. According to Johnson, he “continue[d] to improve and care for” the property in Lake Greenfield Estates ...

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