Espinoza v. Hillwood Square Mut. Ass'n

• Decision Date: 13 January 1982
• Docket Number: Civ. A. No. 81-0303-A.
• Citation: 532 F. Supp. 440
• Parties: Celia and Enrique ESPINOZA, et al., Plaintiffs, v. HILLWOOD SQUARE MUTUAL ASSOCIATION, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

532 F. Supp. 440

Celia and Enrique ESPINOZA, et al., Plaintiffs, v. HILLWOOD SQUARE MUTUAL ASSOCIATION, et al., Defendants.

Civ. A. No. 81-0303-A.

United States District Court, E. D. Virginia, Alexandria Division.

January 13, 1982.

COPYRIGHT MATERIAL OMITTED

Bradley Stetler, Alexandria, Va., Philip G. Sunderland, Robert S. Blacher, Washington, D. C., for plaintiffs.

Brian P. Gettings, Arlington, Va., for defendants.

MEMORANDUM OPINION

RICHARD L. WILLIAMS, District Judge.

The plaintiffs, Celia and Enrique Espinoza and Vinod Rajpal, move for an award of attorney's fees and costs under 42 U.S.C. § 1988 (1976). On November 2, 1981, the plaintiffs filed a brief requesting attorney's fees of $35,358.75, expenses of $1,573.62, local counsel fees of $1,238.90, and costs of $206.00. The plaintiffs later submitted a supplementary filing seeking an additional $6,402.50 in attorney's fees and $222.71 in expenses. These additional amounts are attributable to preparation of the motion for fees and costs. The total award requested by the plaintiffs is $45,002.48 plus a 15-25% contingency bonus.

I. FACTUAL BACKGROUND

Defendant Hillwood Square Mutual Association (Hillwood) is a cooperative housing association incorporated in Virginia. It owns a townhouse subdivision in Falls Church, Virginia. The residents of Hillwood's subdivision do not own the townhouses in which they live. They, instead, are members of the association, which in turn owns all of the dwelling units. The association itself pays the subdivision's expenses. It raises the necessary funds by assessing each of its members a pro rata share of the expenses. Defendant Joan Fling has been the manager of Hillwood's subdivision at all times relevant to this case.

In September, 1977, Hillwood adopted a policy of refusing membership to aliens. See Minutes of Special Meeting of Board of Directors, Hillwood Square Mutual Association, September 12, 1977, at 1. Celia and Enrique Espinoza, alien residents of the United States, attempted to apply for membership in Hillwood on April 7, 1980. Fling denied them an application. A few days later, Fling again refused to give the Espinozas an application.

Vinod Rajpal, an alien resident of the United States, first attempted to become a member of Hillwood on June 25, 1980. At that time, Fling told him that he could not become a member due to his foreign citizenship. Hillwood subsequently denied membership to Rajpal on three more occasions. These refusals occurred on October 16, 1980, December 10, 1980, and February 12, 1981.

On April 6, 1981, the Espinozas and Rajpal filed a complaint against Hillwood in this court. The plaintiffs asserted that Hillwood's citizenship policy violated both section 1981, 42 U.S.C. § 1981 (1976), and the Fair Housing Act, id. §§ 3601-3619. The first and third claims of the complaint were founded on section 1981. In these counts, the plaintiffs alleged that Hillwood's denial of membership qualified as alienage discrimination. The second and fourth claims were based on the Fair Housing Act. See id. § 3604(a). The plaintiffs there asserted that Hillwood's conduct constituted discrimination on the basis of national origin. The complaint concluded by requesting the following forms of relief: (1) declaratory and injunctive relief against Hillwood; (2) actual damages of $100,000; (3) punitive damages of $200,000; and (4) attorney's fees and costs.

On July 31, 1981, the plaintiffs moved under Rule 56(a) for partial summary judgment on their section 1981 claims. See Fed.R.Civ.P. 56(a). Hillwood countered with a Rule 12(b)(6) motion to dismiss the plaintiffs' Fair Housing Act claims. See id. 12(b)(6). On September 16, 1981, the court issued a memorandum opinion denying these two motions on the ground that material factual issues remained unresolved. See Espinoza v. Hillwood Square Mutual Association, 522 F.Supp. 559 (E.D.Va.1981). The court, however, did rule in this opinion that section 1981 prohibits private alienage discrimination. See id. at 564. In addition, the court held that the Fair Housing Act proscribes alienage discrimination only if it is part of a scheme to discriminate on the basis of ancestry. See id. at 568.

After the court issued its opinion, three significant events occurred. First, on October 9, 1981, Hillwood attempted to open settlement negotiations. The defendant's attorneys claim that they offered to settle the case for $5,000. The plaintiffs deny that this offer was made. They assert that, on October 15, 1981, Hillwood's lawyers mentioned a figure of $2,000 in damages plus $10,000 in attorney's fees. In any case, the plaintiffs rejected this offer. Hillwood contends that the plaintiffs' attorneys later indicated that they would recommend a settlement of $20,000 in damages and $15,000 in attorney's fees. The plaintiffs allege that the figure was $10,000 in damages plus their attorneys' fees to date. Second, Hillwood's board of directors voted to repeal its citizenship policy on October 15, 1981. Third, the plaintiffs decided before trial to drop their Fair Housing Act claims.

On October 20, 1981, the parties went to trial. The plaintiffs sought emotional, economic, and punitive damages against defendants Hillwood and Fling. Before the case went to the jury, the court dismissed Fling from the case. The jury returned a verdict against Hillwood, but awarded only $500 to each plaintiff. After trial, the plaintiffs filed the motion that is now before the court. The plaintiffs also requested an injunction prohibiting Hillwood from discriminating against aliens in the future. The court has granted this latter motion in the order attached to this opinion.

II. THE ISSUE OF WHETHER TO AWARD ATTORNEY'S FEES

Section 1988 provides that "the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee as part of the costs" in an action under section 1981. 42 U.S.C. § 1988 (1976). The Fourth Circuit has interpreted this provision so as to constrain narrowly the district court's discretion in deciding whether to award fees. In Bonnes v. Long, 599 F.2d 1316 (4th Cir. 1979), the Fourth Circuit held that "a prevailing plaintiff `should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust.'" Id. at 1318 (citations omitted). See also McManama v. Lukhard, 616 F.2d 727, 729 (4th Cir. 1980). Thus, the court will award fees in this case if two conditions are met: First, the plaintiffs must be the prevailing party; and, second, there must be no special circumstances that would make the award inequitable.

The Espinozas and Rajpal clearly qualify as the prevailing party in this case. They were successful in obtaining both injunctive relief and nominal emotional damages under section 1981. Despite the fact that the plaintiffs dropped their Fair Housing Act claims before trial, they still were able to establish that Hillwood's citizenship policy was illegal. Under Wallace v. King, 650 F.2d 529 (4th Cir. 1981), a plaintiff need not receive all of the relief that he seeks in order to qualify as the prevailing party. It is only necessary that he be successful on a significant issue in the case. See id. at 531. Accord Familias Unidas v. Briscoe, 619 F.2d 391, 405-06 (5th Cir. 1980); Iranian Students Association v. Edwards, 604 F.2d 352, 353 (5th Cir. 1979). The fact that a plaintiff fails on some claims or receives only nominal damages is irrelevant to the question of whether he has prevailed for the purpose of attorney's fees. See Wallace v. King, 650 F.2d at 530-31. Accord Familias Unidas v. Briscoe, 619 F.2d at 405-06. As a consequence, the court must hold that the Espinozas and Rajpal are prevailing parties.

The question of whether special circumstances are present in this case is a troublesome one. The courts have construed the special circumstances exception narrowly. The Fourth Circuit has explicitly stated that a plaintiff's ability to pay attorney's fees is not a valid ground for denying an award. See Bills v. Hodges, 628 F.2d 844, 847 (4th Cir. 1980). Accord Milwe v. Cavuoto, 653 F.2d 80, 83 (2d Cir. 1981); International Society for Krishna Consciousness, Inc. v. Collins, 609 F.2d 151 (5th Cir. 1980). In addition, the weight of authority holds that a defendant's good faith or lack of scienter does not qualify as a special circumstance. See, e.g., Ellwest Stereo Theatre, Inc. v. Jackson, 653 F.2d 954, 955 (5th Cir. Unit B 1981); Love v. Mayor of Cheyenne, 620 F.2d 235, 236 (10th Cir. 1980); Morrow v. Dillard, 580 F.2d 1284, 1300 (5th Cir. 1978). These restrictions leave this court wondering what factors would justify a refusal to award fees.¹

Despite the narrow view of the special circumstances exception that the courts have taken, the plaintiffs' entitlement to fees in the present case is still not free from doubt. Several aspects of the case prevent the Espinozas and Rajpal from qualifying as the archetypal civil rights plaintiffs. First, the fact that they had sufficient funds to purchase a membership in Hillwood indicates that they are not destitute. Second, the plaintiffs failed to press for class certification. Thus, they prosecuted the suit for their own benefit, rather than on behalf of a large class. Finally, the plaintiffs sought a monetary award of $300,000. They, therefore, must have expected a substantial pecuniary return from the suit.

The court also notes that Hillwood is not the typical civil rights defendant. The members of the association believed in good faith that their conduct was lawful. The murkiness of the law involved in the case supports this finding. In addition, Hillwood's citizenship policy could not have been an attempt to discriminate on the basis of national origin, because several of the association's members were born in foreign countries.² Finally, a large award of fees would impose a substantial hardship on the approximately 160 members of the association. Almost half of the...