Giebeler v. M & B Associates

• Citation: 343 F.3d 1143
• Decision Date: 15 September 2003
• Docket Number: No. 00-17508.,00-17508.
• Parties: John GIEBELER, individually and on behalf of the General Public, Plaintiff-Appellant, v. M & B ASSOCIATES, a limited partnership; Alan Rubnitz; Robert Krandel; ABL Management Co.; Jay Duffus; Jan Duffus, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

343 F.3d 1143

John GIEBELER, individually and on behalf of the General Public, Plaintiff-Appellant, v. M & B ASSOCIATES, a limited partnership; Alan Rubnitz; Robert Krandel; ABL Management Co.; Jay Duffus; Jan Duffus, Defendants-Appellees.

No. 00-17508.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 12, 2002 — San Francisco, California.

Filed September 15, 2003.

Elizabeth Brancart, Brancart & Brancart, Pescadero, California, for the appellant.

David R. Sylva and David S. Hoffman, David R. Sylva, Inc., Campbell, California, for the appellee.

Appeal from the United States District Court for the Northern District of California; Ronald M. Whyte, District Judge, Presiding. D.C. No. CV-98-20405-RMW.

Before: David R. THOMPSON, WILLIAM A. FLETCHER and Marsha S. BERZON, Circuit Judges.

OPINION

BERZON, Circuit Judge:

John Giebeler has AIDS. Because he has AIDS, he is disabled and can no longer work, although he had worked and earned an adequate living until he became ill. Once he was no longer earning a salary, his former apartment became too expensive for him. In addition, he needed assistance with daily matters because of his illness and so wanted to live closer to his mother.

Giebeler's lack of an income stream meant that he could not meet the minimum financial qualifications of the apartment complex where he sought an apartment. Giebeler's mother, however, did meet those standards, and offered to rent the apartment so that her son could live in it. The owners of the apartment complex refused to rent either to Giebeler or to his mother, citing a management company policy against cosigners.

The question in this case is whether the Fair Housing Amendments Act (FHAA), 42 U.S.C. § 3601 et seq. (1995), required the apartment owners reasonably to accommodate Giebeler's disability by assessing individually the risk of nonpayment created by his specific proposed financial arrangement, rather than inflexibly applying a rental policy that forbids cosigners. Concluding that the statute does so require, we reverse the district court's grant of summary judgment and remand the case for further proceedings.

BACKGROUND

John Giebeler had worked as a psychiatric technician for approximately five years before becoming disabled by AIDS. At the time Giebeler had to leave work because of his disability, he was earning approximately $36,000 per year. Since 1996, Giebeler has supported himself through monthly disability benefits under the Social Security Disability Insurance (SSDI) program and housing assistance from the Housing Opportunities for People with AIDS program (HOPWA).

In May 1997, Giebeler sought to move from his two-bedroom apartment at the Elan at River Oaks complex (Elan) to an available one-bedroom unit at the Park Branham Apartments (Branham), a rental property owned by defendants (M & B). Giebeler wanted to move to the Branham unit because the rent, $875 per month, was less expensive than the $1,545 per month rent at Elan, and the Branham unit was closer to his mother's home. At the time Giebeler inquired about the Branham unit, he was receiving $837 from SSDI per month, $300 to $400 per month in a HOPWA subsidy, and varied amounts of financial support from his mother. He had a record of consistent and prompt payment of rent during his six years of residency at Elan, and his credit record contained no negative notations.

Branham resident manager Jan Duffus informed Giebeler that he did not qualify for tenancy at Branham because he did not meet the minimum income requirements. Duffus stated that Branham required prospective tenants to have a minimum gross monthly income equaling three times the monthly rent. For the apartment Giebeler wished to rent, the minimum required income was $2,625 per month, an amount less than Giebeler had earned before he became ill.

After he was informed of his ineligibility, Giebeler asked his mother, Anne Giebeler, to assist him in renting the apartment. Anne Giebeler went to the Branham office the next day for the purpose of renting an apartment that would be occupied by her son.

Like her son, Anne Giebeler had a credit record with no negative entries. Anne Giebeler had owned the same home for 27 years and had completely paid off her mortgage. The home was located less than a mile from Branham. Anne Giebeler's income was $3,770.26 per month.

Both John Giebeler and Anne Giebeler filled out application forms for the one-bedroom Branham apartment, indicating that John Giebeler would be the only resident. On his rental application, Giebeler listed his current gross income as $837 and his present occupation as "disabled." The Branham property manager rejected the applications on the basis that M & B considered Anne Giebeler a cosigner and has a policy against allowing co-signers on lease agreements.

Following the denial of his rental application, Giebeler contacted AIDS Legal Services for assistance. Attorney John Doherty wrote a letter to the Branham property manager on Giebeler's behalf, stating that Giebeler was disabled and that, under 42 U.S.C. § 3604(f)(3)(B) of the FHAA, unlawful discrimination against disabled persons in housing includes "a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling." Doherty's letter requested a reasonable accommodation for Giebeler, suggesting use of a cosigner or other alternative arrangements to meet the financial requirements for tenancy.

Branham's attorney responded to Doherty's letter by confirming the rejection of Giebeler's rental application and denying that federal law required them to grant Giebeler's request for reasonable accommodation. Branham management never checked Giebeler's references or his rental or credit history nor inquired into Anne Giebeler's financial qualifications or connections to the area. Nor did the Branham management ever ask Giebeler about any additional sources of income or discuss with him any alternatives to the minimum income requirement.

In February 1998, Giebeler filed an action under the federal FHAA, the California Fair Employment and Housing Act (FEHA), the California Business and Professions Code, the California Civil Code section 54.1, and common law negligence. Giebeler's FHAA claim advanced three theories of discrimination: disparate impact, intentional discrimination, and failure to reasonably accommodate Giebeler's disability through refusal to waive the no-cosigner policy. The district court held that Giebeler had made out a prima facie case of intentional discrimination under the FHAA, violation of the California Business and Professions Code, and violation of the FEHA. The court granted summary judgment for M & B, however, on Giebeler's state law negligence claim and his FHAA disparate impact and reasonable accommodation claims. In ruling on Giebeler's reasonable accommodation claim, the district court held that "an accommodation which remedies the economic status of a disabled person is not an `accommodation' as contemplated by the FHA." Only the grant of summary judgment for M & B on Giebeler's reasonable accommodation claim is before us on appeal.¹

DISCUSSION

The FHAA provides that it is unlawful to discriminate against disabled persons²

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).

The FHAA's definition of prohibited discrimination encompasses "a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling." 42 U.S.C. § 3604(f)(3)(B). Thus, the FHAA "imposes an affirmative duty upon landlords reasonably to accommodate the needs of handicapped persons," United States v. California Mobile Home Park Mgmt. Co., 29 F.3d 1413, 1416 (9th Cir.1994) ("Mobile Home I"), not only with regard to the physical accommodations, see 42 U.S.C. § 3604(f)(3)(A) & (C), but also with regard to the administrative policies governing rentals.

To make out a claim of discrimination based on failure to reasonably accommodate, a plaintiff must demonstrate that (1) he suffers from a handicap as defined by the FHAA; (2) defendants knew or reasonably should have known of the plaintiff's handicap; (3) accommodation of the handicap "may be necessary" to afford plaintiff an equal opportunity to use and enjoy the dwelling; and (4) defendants refused to make such accommodation. United States v. California Mobile Home Park Mgmt. Co., 107 F.3d 1374, 1380 (9th Cir.1997) ("Mobile Home II").

A. Giebeler's Disability

The defendants do not dispute that Giebeler is disabled for the purposes of the FHAA and that they knew of his disability, nor do they deny that they refused to make the accommodation Giebeler requested. The defendants contend, rather, that the accommodation Giebeler requested is not one the FHAA requires them to accord. For the purposes of our analysis of the scope of the accommodation to which Giebeler may have been entitled, however, it is important to understand precisely why Giebeler's disability entitled him to the protections of the FHAA.

The FHAA defines "handicap" as "a physical or mental impairment which substantially limits one or more of such person's major life activities." 42 U.S.C. § 3602(h)(1). Infection with HIV, the virus that causes AIDS, qualifies as a "physical or mental impairment" for the purposes of the FHAA. 24 C.F.R. § 100.201(a)(2); Bragdon v. Abbott, 524 U.S. 624, 639-642, 118 S.Ct. 2196, 141 L.Ed.2d 540 (1998) (HIV infection is a disability under the ADA because it...