Hamburger, Maxson, Yaffe, Knauer & McNally, LLP February 11, Original Content

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1 HMYLAW Hamburger, Maxson, Yaffe, Knauer & McNally, LLP February 11, 2014 Original Content Village s Discriminatory Zoning Change Enjoined Broker Earned Commission Despite Seller s Resistance Workplace Harassment Of Interracial Couple Village s Discriminatory Zoning Change Enjoined In 2002, Nassau County commenced an initiative to sell off certain County owned properties that were no longer needed, in an effort to raise much needed revenue. One of the parcels encompassed acres located in the Incorporated Village of Garden City (the Village ), and has been the subject of contentious litigation, culminating in a recent decision issued by the United States District Court for the Eastern District of New York. The parcel is currently home to the Nassau County Supreme Court Building, the Social Services Building, and the parking lot areas accompanying, among other areas, and is currently zoned as Public. As part of the sale, the Village retained the right to zone the property. In June 2002, at the County s request, the Village created a subcommittee charged with reviewing zoning options for the entire acre parcel. Garden City retained the firm of Buckhurst Fish and Jacquemart ( BFJ ) to assist in this process, and provide a recommendation as to how it should be zoned. After many months of consideration, BFJ recommended applying multifamily residential group ( R-M ) zoning controls to the residential component of the land. This classification would permit about 311 multi-family affordable housing units to be built a proposal supported by the County and the Village, who specifically noted the need for affordable housing in the area. After the announcement of the proposal, public opposition became abundantly clear. Although the Village took almost two years deliberating and considering the R-M zoning, in only a few weeks after the public opposition became clear, BFJ and the Village reversed course, even contradicting their earlier assertion by stating that neither the County nor the Village is looking to create a so-called affordable housing. The Village and BFJ now endorsed a new proposal, to zone the residential area as Residential-Townhouse ( R-T ),

2 which limited construction to one dwelling for each 6,000 square feet, and also prohibited multi-family housing absent a special permit, and even then, only on a small tract of land. Plaintiff, a not-for-profit community-based developer of affordable housing, sued the Village alleging that it discriminatorily re-zoned certain land from R-M to R-T to prevent developers from building low and middle income housing, in violation of the Fair Housing Act ( FHA ), as well as the Equal Protection Clause of the Fourteenth Amendment. Mhany Mgt. Inc. v. Inc. Village of Garden City, F.Supp.2d (E.D.N.Y. 2013). The FHA provides generally that it shall be unlawful to refuse to sell, rent or negotiate with any person, with respect to a dwelling, because of race, color, religion, sex, familial status or national origin. Subsumed within this statute is the prohibition against discriminatory zoning practices. See, Fair Hous. In Huntington Comm. Inc. v. Town of Huntington, N.Y., 316 F.3d 357, 366 (2d Cir. 2003). A Claimant may demonstrate that discriminatory zoning practices were employed by presenting either proof of disparate treatment or disparate impact. The Court held that both were present, and ruled in favor of the plaintiffs. A plaintiff can demonstrate disparate treatment by demonstrating that animus against the protected group was a significant factor in the position taken by the municipal decision-makers themselves or by those to whom the decision-makers were knowingly responsive. The Village and Board claimed that there was no discrimination, and the switch in zoning was a legitimate response to concerns about traffic, taxes and school children. The Court held that these were valid non-discriminatory justifications, and thus looked at the evidence as a whole to determine whether prohibited discrimination had occurred. The Court stated: [I]t is clear from the record that there were many different factors some of which reflected race-based opposition surrounding the enactment of R-T zoning. *** Given (1) the sequence of events involved in the Board s Decision to adopt R T zoning instead of R M zoning after it received public opposition to the prospect of affordable housing in Garden City and (2) the considerable impact that this zoning decision had on minorities in that community, the Court finds that the Garden City Defendants acted with discriminatory intent. The defendants could now only escape liability by demonstrating that the Village and Board would have shifted from R-M to R-T zoning even absent the impermissible considerations. The Court held that they could not. The figures relied upon concerning traffic by the defendants were given after the increase in public opposition, and also did not make clear that traffic would be any worse under R-M than R-T. Further, although the zoning was shifted to R-T which allows for the construction of residential townhomes, prior to the public opposition there was no indication that the Village and Board had any desire to make townhomes available. As a result, the Court held that defendants discriminatorily re-zoned the property.

3 As to plaintiffs cause of action under the FHA for disparate impact, the Court held that the plaintiffs again met their burden of demonstrating that the zoning ordinance, although facially neutral, had a significantly adverse or disproportionate impact on persons of a particular type here, intent was not the issue. Certain glaring statistics supported this conclusion. The current zoning ordinance blocks affordable housing, including section 8 housing. Minority households comprised 41.4% of very-low income renters in need of affordable housing in Nassau County, even though they comprised only 14.8% of all households in Nassau County. Moreover, African American and Hispanic households comprised 88% of the Section 8 housing waiting list in Nassau County, even though they comprised only 14.8% of the households in Nassau County. Since the R-T zone largely eliminated the potential for the type of housing that minorities were disproportionally likely to need namely affordable rental units, the Court found that minorities bore the brunt of the negative impacts of the R-T zone. [T]he R-T zone s restriction on development of multi-family housing perpetuates segregation generally because it decreases the availability of housing to minorities in a municipality where minorities constitute only 4.1% of the overall population,... and only 2.6% of the population living in households. The Court then rejected the defendants attempt to demonstrate that no alternative would serve the government s interests with less discriminatory effect. As a result, the Court ruled in favor of the plaintiffs, and issued an injunction against the Village, prohibiting future FHA violations, and ordered the plaintiffs to submit a proposed remedial plan to the Court within 30 days. Broker Earned Commission Despite Seller s Resistance A New York Appellate Court recently ruled in favor of a real estate broker, reversing the lower court, and awarding her the $10,000 commission she claimed due. Miranda v. Aliotta, N.Y.S.2d, 2013 WL (2d Dept. App. Term 2013). The defendant offered his house for sale through an internet advertisement which specifically stated no brokers, and also placed a sign outside his house which stated for sale by owner. The plaintiff-broker had entered into an agreement with the buyers, and contacted the owner. She showed his house to the buyers and negotiated the sale. The broker testified that she advised the owner that she expected him to pay her a $10,000 commission for brokering the sale, and forwarded him a proposed commission agreement explaining such, but he refused to sign the agreement. The contract of sale stated, in relevant part, that seller shall pay broker any commission earned pursuant to a separate agreement between seller and broker, and listed plaintiff as the only broker for the deal.

4 When the owner refused to pay the broker her commission, she sued. The trial court dismissed the broker s complaint, noting that defendant refused to sign any brokerage agreement, his internet advertisement indicated he had no intent to hire an agent, and the contract of sale indicated that he would have to pay pursuant to a separate written agreement, indicating the need for a signed agreement, of which there was none. The Appellate Court reversed. First, the trial judge erred by stating that the contract called for a written agreement it did not. Instead, the contract merely called for an agreement, and an oral agreement would suffice, according to the Court. The evidence demonstrated that the plaintiff did indeed render brokerage services which resulted in the sale of the house, and found that the language of the contract of sale constituted an admission that plaintiff was due a broker s fee from defendant. The Court did note that because there was no signed written agreement, plaintiff was not entitled to any specific amount, but only a reasonable amount. However, the Court found that plaintiff s demand for $10,000, or % of the purchase price, fell within the parameters of reasonable and thus awarded that sum. Workplace Harassment Of Interracial Couple A former employee of the Erie County Water Authority (the Authority ) sued the Authority and certain former coworkers for wrongful termination and discrimination, under State and federal statutes. The former employee, Scott Matusick, who is white, claimed that he was harassed, assaulted and ultimately terminated from his position at the Authority because of his romantic relationship with an African-American woman, Anita Starks, now Anita Starks- Matusick. The Authority maintained that he was terminated for multiple instances of misconduct, including blocking surveillance cameras and watching television on duty. Matusick was afforded a full hearing after charges of misconduct were brought, and the hearing officer ultimately recommended Matusick be terminated, finding that his employment threatened the integrity of the County s water system ; the Authority adopted this recommendation. Matusick v. Erie Cnty. Water Auth., 739 F.3d 51 (2d Cir. 2014). Although never presented by Matusick at his termination hearing, the trial in federal court revealed that Matusick s co-workers and supervisors subjected him to severe harassment as a result of his relationship with Starks. The Authority did not act to stop the discrimination after it was reported. Matusick suffered physical and verbal abuse, and was repeatedly called racial slurs as a result of his intimate relationship with Starks. The jury found in part for Matusick, and the Authority appealed. The majority of a divided Second Circuit held that although the hearing officer s determination that Matusick had failed to perform [his position] satisfactorily was binding, there was more than ample

5 evidence in the record to support the jury s conclusion that racial animus tainted the investigation. The Court stated: There was evidence in the record that both [individual] defendants knew about the harassment, did nothing to respond to it, and then participated directly in the investigation and termination. More: The jury had before it evidence that [] the employee relations specialist[] had himself taunted Matusick based on Starks s race. It was for the jury to evaluate the credibility of these defendants testimony and weigh it, along with the other evidence before it, to determine whether racial animus in part motivated the decision to terminate. Thus, Matusick s supervisors as well as the Authority were held liable for unlawful termination. The Court also held that Matusick's engagement to Starks constituted an intimate association and as such was entitled to protection under the First Amendment. The First Amendment s right to intimate association protects a citizen s right to maintain certain intimate human relationships without undue intrusion by the State. As for the individual defendants, the Second Circuit held that they were subject to a qualified immunity, which could not be overcome by plaintiff. A plaintiff can only overcome a State official s right to qualified immunity if he demonstrates that the State actor violated his clearly established constitutional rights. Here, although the Court held that Matusick and Starks s relationship was subject to First Amendment protection, the law was not sufficiently clear to overcome the privilege afforded to his supervisor and co-workers. As for the Authority, however, no such protection is afforded. Municipal entities are liable if the deprivation of the plaintiff s rights under federal law is caused by a governmental custom, policy or usage of the municipality. Although isolated acts of non-policymaking employees are rarely sufficient to demonstrate a custom or policy, the Second Circuit in Jones v. Town of E. Haven recently held that liability can attach if the actions are sufficiently widespread and persistent, and supervisors were aware. Here, the Second Circuit concluded that a reasonable fact-finder could conclude, as the jury did, that the verbal and physical harassment of Matusick on the basis of his intimate association with Starks rose to the level of a custom, policy, or practice at the [Authority], and thus, held the Authority liable. Original Content