Budnick v. Town of Carefree

• Decision Date: 11 March 2008
• Docket Number: No. 06-15841.,06-15841.
• Citation: 518 F.3d 1109
• Parties: F.G. BUDNICK, a married man; Tempo Inc., a Michigan corporation, Plaintiffs-Appellants, v. TOWN OF CAREFREE, a body corporate; Edward C. Morgan, personally and in his official capacity as Mayor and Town Councilmember; Bob Coady; Mike Eicher; Wayne Fulcher, personally and in their official capacities as Town Councilmembers, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

518 F.3d 1109

F.G. BUDNICK, a married man; Tempo Inc., a Michigan corporation, Plaintiffs-Appellants, v. TOWN OF CAREFREE, a body corporate; Edward C. Morgan, personally and in his official capacity as Mayor and Town Councilmember; Bob Coady; Mike Eicher; Wayne Fulcher, personally and in their official capacities as Town Councilmembers, Defendants-Appellees.

No. 06-15841.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 13, 2008.

Filed March 11, 2008.

Elliot L. Bien, Bien & Summers LLP, Novato, CA, for the plaintiffs-appellants.

C. Brad Woodford, Moyes Storey Ltd., Phoenix, AZ, for the defendants-appellees.

Appeal from the United States District Court for the District of Arizona; Stephen M. McNamee, District Judge, Presiding.

Before: WILLIAM C. CANBY, JR., DAVID R. THOMPSON, and MILAN D. SMITH, JR., Circuit Judges.

MILAN D. SMITH, JR., Circuit Judge:

Plaintiffs-Appellants, F.G. Budnick, and the development company of which he is the chief executive officer, Tempo, Inc. (collectively, Budnick), sued Defendants-Appellees, the Town of Carefree and four Town Council members¹ (collectively, Carefree) after Carefree denied Budnick's request for a Special Use Permit (SUP) to build a multi-level continuing-care retirement community in Carefree. Budnick claimed that by denying the SUP, Carefree had violated the Fair Housing Amendments Act of 1988 (FHAA), the Americans with Disabilities Act (ADA), 42 U.S.C. § 1983, the Rehabilitation Act, and Budnick's rights to due process and equal protection under the Fourteenth Amendment. The district court granted summary judgment in Carefree's favor on all claims. Budnick now appeals the district court's grant of summary judgment on his FHAA claim.² We affirm the decision of the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

In August 2003, Budnick filed an application for Site Plan Approval and a SUP with the Town of Carefree. Budnick sought the SUP to build the Residences at Carefree (RAC), which, according to Budnick, would be a "luxurious, age restricted, senior retirement residential community" that would "primarily serv[e] the active and independent discerning senior populace." The RAC was to be located on approximately forty-acres of property that was zoned for multiple-family residences (zone R-3) and detached single-family residences (zones R1-10 and R1-35). The proposed RAC did not comply with the applicable zoning ordinances because it would provide "healthcare, meal, laundry, housekeeping" and other services that constitute "special uses," and it was to include "attached dwelling units rather than detached" units and a two-story apartment building that would exceed height limitations in the zone. The RAC plans provided for a number of other amenities, including swimming pools, interior and exterior dining areas, a café, a library, a salon, and recreation areas.

Budnick's SUP application stated that the RAC would be a "village-like community" consisting of upscale apartments (83), exclusive casitas (60), and opulent single-family homes (18). The RAC would also include an "ancillary healthcare component" consisting of six assisted-care units (four beds per unit) and four skilled-nursing units (six beds per unit). Though the residents would not own their housing, Budnick's application explained that they would enter into life care contracts upon entry and would be guaranteed housing and care for the rest of their lives, including the provision of in-home healthcare, assisted living, and skilled-nursing care "if and when such assistance becomes necessary." The application also stated that potential residents would be evaluated before acceptance and only individuals capable of independent living upon entry into the community would be accepted.

On October 13, 2003, the Town of Carefree Planning and Zoning Commission held a hearing on Budnick's application. During this hearing, representatives of Budnick indicated that RAC residents would be "active, vibrant members of the community." Budnick made similar representations in a letter to the Mayor and Town Council members on November 26, 2003; in that letter, Budnick emphasized that RAC "entry [would be] restricted to healthy, active, independent seniors who will be impossible to tell apart from many of their neighbors throughout Carefree as they drive, walk, bike, shop, attend, participate, volunteer, teach, learn and enjoy life. . . ." (Emphasis added.) The letter further stated that the skilled nursing component "will be held in reserve for temporary acute needs." (Emphasis added.) The Commission voted four to one, with one abstention, to deny the SUP.

The Commission's denial of the SUP was appealed to the Town Council, which held a public hearing on the appeal on December 2, 2003. At that meeting, the Town's legal counsel explained that under his reading of Arizona Revised Statute § 9-462.04,³ the Town Council needed a supermajority vote to grant the SUP because at least 20% of the owners surrounding the proposed community had filed written protests.⁴ Budnick was informed of this supermajority requirement a few hours before the meeting. The Town Council voted four to three to deny the SUP.

On December 30, 2003, an attorney sent a letter on behalf of those developing the RAC and, for the first time, asserted that the RAC would serve "disabled residents" in the skilled-nursing and assisted-living units. The letter stated that the laundry, kitchen, healthcare, and restaurant facilities were necessary to provide services to those disabled residents and requested reasonable accommodation under 42 U.S.C. § 3604(f)(3)(B).

Carefree and Budnick met in January 2004, and Carefree offered a variety of options to Budnick so that the RAC might still be built, including: (1) helping Budnick to locate the project on a piece of land to be sold by the State Land Department that would be appropriately zoned; (2) reconsidering the application if commercial features were moved across the street to commercially zoned property; and (3) reconsidering the application if commercial features were scaled back to a size that would accommodate only the RAC's disabled residents. Budnick did not accept any of these alternatives and subsequently filed this lawsuit.

II. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to hear this appeal under 28 U.S.C. § 1291. We review a district court's grant of summary judgment de novo. Hardage v. CBS Broad., Inc., 427 F.3d 1177, 1183 (9th Cir.2005).

III. DISCUSSION

The FHAA forbids discrimination in the sale or rental of housing, which includes making unavailable or denying a dwelling to a buyer or renter "because of a handicap of . . . a person residing in or intending to reside in that dwelling after it is sold, rented, or made available." 42 U.S.C. § 3604(f)(1)(B).⁵ Title VII discrimination analysis is used to examine claims under the FHAA; thus, a plaintiff may establish discrimination in violation of the FHAA under a theory of disparate treatment or disparate impact. Gamble v. City of Escondido, 104 F.3d 300, 304-05 (9th Cir.1997) (citing Pfaff v. U.S. Dep't of Hous. & Urban Dev., 88 F.3d 739, 745 & n. 1 (9th Cir.1996) & Ring v. First Interstate Mortgage, Inc., 984 F.2d 924, 926 & n. 2 (8th Cir.1993)). Under § 3604(f)(3)(B) of Title 42, a plaintiff may also sue on the theory that a local municipality failed to make reasonable accommodations for housing for the disabled. Id. at 305. Budnick asserted its discrimination claim under all three of these theories. We consider each theory in turn.

A. Disparate Treatment

When disparate treatment is claimed as a result of the denial of a special use permit, the plaintiff must establish that: (1) the "plaintiff is a member of a protected class"; (2) the plaintiff "applied for a [special] use permit and was qualified to receive it;" (3) the permit was denied despite plaintiff's qualification; and (4) "defendant approved a[special] use permit for a similarly situated party during a period relatively near the time" it denied plaintiff's request. See id. at 305 (setting forth the elements of a prima facie case for disparate treatment claim based on a denial of a conditional use permit). The burden then shifts to the defendant to articulate "a legitimate, nondiscriminatory reason for its action." Id. at 305; see also Sanghvi v. City of Claremont, 328 F.3d 532, 536 n. 3 (9th Cir.2003) (noting that McDonnell Douglas framework developed in the Title VII context extends to FHA and ADA claims). The plaintiff must then prove by a preponderance of the evidence that the defendant's asserted reason is a pretext for discrimination. Gamble, 104 F.3d at 305.

In lieu of satisfying the elements of a prima facie case, a plaintiff may also "simply produce direct or circumstantial evidence demonstrating that a discriminatory reason more likely than not motivated" the challenged decision. McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1122-23 (9th Cir.2004) ("[I]t is not particularly significant whether [a plaintiff] relies on the McDonnell Douglas presumption or, whether he relies on direct or circumstantial evidence of discriminatory intent to meet his [initial] burden"); see also Metoyer v. Chassman, 504 F.3d 919, 931 (9th Cir.2007) (stating that a plaintiff suing under 42 U.S.C. § 1981, like a plaintiff bringing a suit for disparate treatment, may proceed under the McDonnell Douglas framework or by producing direct or circumstantial evidence showing that a discriminatory reason "more likely than not" motivated the employer) (citing McGinest, 360 F.3d at 1122); Lowe v. City of Monrovia, 775 F.2d 998, 1006 (9th Cir.1985), amended on other grounds by 784 F.2d 1407 (9th Cir.1986) ("[A] plaintiff can establish a prima facie case of disparate treatment without satisfying the McDonnell Douglas test.").⁶ Under either method, however, the plaintiff must counter the defendant's explanation with some evidence suggesting that the challenged...