Department of Human Rights v. Spiten, C0-88-131
| Decision Date | 07 June 1988 |
| Docket Number | No. C0-88-131,C0-88-131 |
| Citation | 424 N.W.2d 815 |
| Parties | DEPARTMENT OF HUMAN RIGHTS, State of Minnesota, by Stephen W. Cooper, Commissioner, Dept. of Human Rights, Respondent, v. Sharon SPITEN, Relator. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
1. The agency decision that relator violated Minn.Stat. Sec. 363.03, subd. 2(1)(a) by refusing to rent to a person because of her race will be upheld where there was ample evidence to support the judge's conclusions on damages and on questions (1) whether the complainant was a qualified tenant; (2) whether the defendant rejected her application; and (3) whether relator had a nondiscriminatory reason for rejecting the application.
2. Admission of transcripts of telephone conversations of defendant in a civil proceeding under the Human Rights Act was not reversible error where an agency investigator was a party to the communication and was acting under color of law making the recording.
3. A counterclaim alleging violations of the Privacy of Communications Act was not within the subject matter jurisdiction of an administrative law judge considering a violation of the Human Rights Act.
Hubert H. Humphrey, III, Atty. Gen., Andrea Mitau Kircher, Sp. Asst. Atty. Gen., St. Paul, for respondent.
Peter D. Plunkett, Austin, for relator.
Heard, considered and decided by CRIPPEN, P.J., and LANSING and SCHULTZ, JJ. *
This is an appeal from the Minnesota Department of Human Rights finding that relator Sharon Spiten engaged in an unfair discriminatory practice in violation of Minn.Stat. Sec. 363.03, subd. 2(1)(a) (1986) by effectively refusing to rent to or withholding real property because of complainant Renee Larson's color and race. The administrative law judge awarded $3000 to Larson for mental anguish and suffering, $2600 in punitive damages and a $2000 civil penalty to the state. Relator appeals, contending (1) the decision and damage award was arbitrary and capricious and unsupported by the record; (2) the administrative judge erred in admitting transcripts of tape recorded telephone conversations between an agency investigator and relator; and (3) the judge erred in ruling that the commission does not have jurisdiction to decide relator's counterclaim.
This case arises from an attempt made by Renee Larson to rent a house from relator Sharon Spiten in Austin, Minnesota. It was not disputed that Larson was a minority person and the premises were available for rent. A hearing was conducted to determine (1) whether Larson was a qualified tenant and (2) whether Spiten rejected her application, and if so, whether the rejection was for good or pretextual reasons.
Larson testified that she was taken to see the house on October 1, 1986, by Linda Waterman, a realtor who was engaged by Spiten to sell or rent the house. Larson liked the house and wanted to rent the property at the asking price of $300 per month. She and Waterman returned to the realty office where Larson provided her with employment, credit, and other reference information. Waterman called Spiten to arrange a meeting between the parties so that Spiten could sign the lease which Waterman gave Larson.
After Larson left her office, Waterman checked Larson's credit references and found that a waste removal bill of approximately $50.00 had not been paid and that the Larsons voluntarily relinquished a car on which approximately $350 was still owing. Waterman telephoned Spiten with the credit information and also advised Spiten that Larson was black. Waterman told relator that she could not discriminate by not showing her home to Larson; to do so could result in the revocation of Waterman's real estate license. Spiten later claimed that the credit information was a reason for denying rental. On the other hand, evidence indicated that Spiten sought no more credit information from Larson and specifically did not seek information on her income. Moreover, Spiten subsequently rented the home to a white man who was not required to supply such information.
Spiten also claimed she did not directly refuse to rent the property to Larson. The evidence indicates that Spiten failed to appear for a critical meeting. Larson testified that she went to meet Spiten at the appointed time and place with her husband and children. Don Bauers, Spiten's next door neighbor, confirmed that the Larsons appeared and that Spiten never showed up for the 4:00 p.m. meeting.
In addition, there was evidence that Spiten tried to scare away Larson. On October 2, 1986, relator called Larson and told her that a neighbor who shared a common driveway was a drinker and a violent man, and that the neighbor's son had murdered a young girl. Spiten also commented about Larson's bravery in remaining in the area when the P-9ers were on strike. Noting these unusual comments, Larson asked Spiten if she had a problem renting to her because she was black. Initially, Spiten didn't respond, then she said "Well, it's not me, it's the neighbors." Spiten later told a neighbor "that she was not going to rent to a nigger."
Spiten claims that if a prima facie case of discrimination was established, she demonstrated good reasons to turn down the prospective tenant. She points again to the credit reference issue, and also claims that respondent refused to rent the property. This was denied by respondent. Spiten also said on several occasions that her reason for refusal was the neighbors. There is no evidence her neighbors objected to minorities in the neighborhood; Spiten's next door neighbor testified to the contrary. Further, Spiten acknowledged to a department investigator that her decision was "mainly because [the Larsons] were black" which is consistent with her similar statement to her neighbor.
Following the hearing, the administrative law judge found in favor of Larson, ordering Spiten to pay her $3000 for mental anguish and $2600 for punitive damages, and $2000 to the State of Minnesota as a civil penalty. Relator Sharon Spiten appeals.
1. Was the judge's decision arbitrary and capricious or unsupported by substantial evidence in view of the entire record?
2. Did the judge err in admitting transcripts of tape recorded conversations between an agency investigator and relator?
3. Did the judge err by ruling that he did not have jurisdiction to hear and decide relator's counterclaim?
The scope of judicial review of an administrative agency's decision is narrow and the reviewing court must not substitute its judgment for that of an agency. Gibson v. Civil Service Board, 285 Minn. 123, 126, 171 N.W.2d 712, 715 (1969). See Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn.1977) ().
It is an unfair discriminatory practice
(1) For an owner * * * or other person having the right to sell, rent or lease any real property, or any agent of any of these:
(a) to refuse to * * * rent or lease or otherwise deny to or withhold from any person or group of persons any real property because of race, color * * * *
Minn.Stat. Sec. 363.03, subd. 2(1)(a) (1986). There are no Minnesota appellate cases construing these provisions of the Minnesota Human Rights Act. In the employment discrimination context, the Minnesota Supreme Court has stated that due to the substantial similarities in the language on purposes of the Human Rights Act and Title VII of the 1964 Civil Rights Act it would apply similar principles. Danz v. Jones, 263 N.W.2d 395, 398-99 (Minn.1978).
First, the Department of Human Rights must establish a prima facie case of discrimination. The elements of a prima facie case under the Civil Rights Act are as follows:
1. That [the charging party] is a member of a racial minority;
2. That [the charging party] applied for and was qualified to rent or purchase certain property or housing;
3. That [the charging party] was rejected; and
4. That the housing or rental property remained available thereafter.
Selden Apartments v. United States Department of Housing & Urban Development, 785 F.2d 152, 159 (6th Cir.1986) (citations omitted). Once the prima facie case is established, a presumption of discrimination arises and the burden shifts to the defendant to show the conduct was motivated by a legitimate nondiscriminatory reason. Lamb v. Village of Bagley, 310 N.W.2d 508, 510 (Minn.1981).
Relator concedes that Larson met the prima facie case for elements one and four. Larson is black and the property remained available thereafter. Further, with respect to the second element, there is no dispute that Larson applied for rental of the subject property. Relator argues that respondent fell short of establishing elements two and three. There was conflicting evidence on these two elements.
It was not error for the judge to find Larson was qualified to rent the property. Spiten never stated income requirements to Larson and never asked Larson about her income. Although there is evidence of a small outstanding bill and surrender of a vehicle without making an outstanding payment, these minor credit flaws in Larson's history do not make her unqualified for purposes of the Human Rights Act. Larson's net income was $900 without her husband's income and the rent was only $300. She was able to rent an apartment shortly after her experience with Mrs. Spiten for approximately the same amount and there is no evidence of her failure to pay. Further, the disparate treatment given a subsequent renter, a white male not subjected to the credit check, indicates that Larson met the requirement of qualification.
Relator also contends that the evidence does not support the conclusion that Larson was denied rental. Primarily, relator contends that she never unequivocally stated she would not rent to Larson. Nevertheless, Larson was refused rental through implication and Spiten's actions.
Upon hearing that Larson was black, Spiten telephoned her and told her that ...
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