Hogar Agua y Vida en el Desierto, Inc. v. Suarez-Medina

Decision Date07 June 1994
Docket NumberSUAREZ-MEDINA,No. 93-2017,93-2017
Citation36 F.3d 177
PartiesHOGAR AGUA Y VIDA EN EL DESIERTO, INC., et al., Plaintiffs, Appellants, v. Jorge, etc., et al., Defendants, Appellees. . Heard
CourtU.S. Court of Appeals — First Circuit

Nora Vargas Acosta, with whom Sabana Litigation & Civil Rights Project, Ruth E. Harlow, William B. Rubenstein and American Civil Liberties Union Foundation were on brief for appellants.

David W. Roman, with whom Ramon A. Alfaro was on brief for appellee Suarez.

Peter J. Porrata, for appellee Dolittle.

Before CYR and STAHL, Circuit Judges, and PIERAS, * District Judge.

CYR, Circuit Judge.

Hogar Agua y Vida en el Desierto, Inc. ("HAVED"), a nonprofit organization which operates group homes for persons infected with the Human Immunodeficiency Virus ("HIV"), brought a civil action in the United States District Court for the District of Puerto Rico alleging discriminatory conduct by defendants-appellees in violation of the Fair Housing Act, 42 U.S.C. Secs. 3601-3617 (1993) ("FHA"). The district court ruled that the principal defendants, Jorge Suarez Medina and Baudilla Albelo Suarez (hereinafter: "Suarez" or "Suarezes"), were exempt from liability under the FHA by virtue of the "private individual owner" provision which applies to persons who own less than four "single-family houses," see id. Sec. 3603(b)(1). For the reasons discussed in this opinion, we vacate the district court judgment and remand for further proceedings.


In September 1992, appellant HAVED entered into an oral agreement with Suarez to rent, with option to buy, two houses located on an undivided lot in the Los Llanos section of Corozal, Puerto Rico. Upon learning that HAVED intended to use the site as a group home for persons infected with HIV, defendants Milton Dolittle and Antonio Padilla organized neighborhood opposition and threatened and coerced Suarez into reneging on the rental-sale agreement. HAVED, along with its directors and a prospective resident of the proposed group home, initiated the present action charging defendants Suarez, Dolittle and Padilla with violations of FHA Secs. 3604 and 3617, and Suarez with breach of contract under P.R.Laws Ann. tit. 31, Secs. 3371-3589 (1993). 1 HAVED demanded declaratory and injunctive relief as well as compensatory and punitive damages.

Suarez moved to dismiss the complaint for lack of subject matter jurisdiction, citing FHA Sec. 3603(b)(1):

(b) Nothing in ... [section 3604 of this title] (other than subsection (c)) shall apply to--

(1) any single-family house sold or rented by an owner:

Provided, That such private individual owner does not own more than three such single-family houses at any one time:

Provided further, That in the case of the sale of any such single-family house by a private individual owner not residing in such house at the time of such sale or who was not the most recent resident of such house prior to such sale, the exemption granted by this subsection shall apply only with respect to one such sale within any twenty-four month period:

Provided further, That such bona fide private individual owner does not own any interest in, nor is there owned or reserved on his behalf, under any express or voluntary agreement, title to or any right to all or a portion of the proceeds from the sale or rental of, more than three such single-family houses at any one time:

Provided further, That after December 31, 1969, the sale or rental of any such single-family house shall be excepted from the application of this title only if such house is sold or rented

(A) without the use in any manner of the sales or rental facilities or the sales or rental services of any real estate broker, agent, or salesman, or of such facilities or services of any person in the business of selling or renting dwellings ... and

(B) without the publication, posting or mailing, after notice, of any advertisement or written notice in violation of [section 3604(c) of this title]....

42 U.S.C. Sec. 3603(b)(1) (emphasis added; clause numbers added; indentation altered from original).

A. The Suarez Properties

At the time of the September 1992 rental-sale agreement with HAVED, Suarez owned four separate parcels of land on which were located five structures. First, the "Los Llanos Property," the subject of the abortive rental-sale agreement, consists of one undivided lot containing two unattached residences. Suarez holds undisputed title to the entire lot and one residence (House A) where the Suarezes once resided. Their son built the second house on the lot (House B) as a residence for his own family. However, Mr. Suarez, Sr., was robbed while residing in House A, and the Suarezes and their son moved away from Los Llanos. Houses A and B remained unoccupied at the time of the HAVED-Suarez rental-sale agreement.

Second, the "Guarico Residence," located in the Guarico section of Corozal, was designed as a two-story house with a separately equipped, single-family apartment on each floor. Suarez held title to the lot and the house. At the time of the rental-sale agreement, the Suarezes resided primarily in the second-floor apartment, and the son and his family resided in the first-floor apartment. Due to his physical impairments, however, Mr. Suarez, Sr., sometimes lived "interchangeably" with his son's family in the first-floor apartment. The district court ruled that the Guarico Residence constituted one single-family house.

Third, the "Guarico Rental" is a two-story, single-family structure located near the Guarico Residence but on a separate lot. At the time of the rental-sale agreement, Suarez held title to the house and the lot, and the house was being rented to a single family.

The fourth real estate parcel, the "La Aldea Rental," is a single lot in the La Aldea section containing a one-story structure which Suarez purchased in April 1991, and rented to a single family (Apartment 1). Prior to the rental-sale agreement, however, Suarez renovated the basement of the building into a separate apartment (Apartment 2), and it was rented to another tenant.

B. The District Court Proceedings

Following an evidentiary hearing, the district court dismissed the HAVED complaint for lack of "subject matter jurisdiction," citing Fed.R.Civ.P. 12(b)(1) and (6). Pursuant to Provisos 1 and 3 of FHA Sec. 3603(b)(1), the court ruled that at the time of the rental-sale agreement with HAVED in September 1992, Suarez had a bona fide ownership interest in only three "single-family houses" (hereinafter: "SFH" or "SFHs"): (i) the Guarico Rental, (ii) the La Aldea Rental (Apartment Thus, the district court explicitly declined to treat three abodes as SFHs. First, the court ruled that the Guarico Residence is not a SFH under FHA Sec. 3603(b)(1) because only SFHs that are "sold or rented" can be counted toward the four-SFH threshold. In other words, in the district court's view a defendant's current residence is not counted as an SFH under Provisos 1 and 3 unless it is the subject of the sale or rental transaction giving rise to the cause of action under the FHA, or it is "on the market" at the time of the challenged transaction. See Hogar Agua y Vida en el Desierto, Inc. v. Suarez, 829 F.Supp. 19, 22 (D.P.R.1993) (citing Lamb v. Sallee, 417 F.Supp. 282, 285 (E.D.Ky.1976)). Second, since Suarez, Sr., had been forced to vacate House A at the Los Llanos Property after the robbery, and to acquire the Guarico Residence, the district court concluded that it would be "inequitable" to treat House A as a SFH under either Proviso 1 or 3. Id. at 22-23. Finally, relying on the same equitable grounds noted in relation to House A, the district court ruled that House B on the Los Llanos Property should not be treated as a SFH. The court ruled, in the alternative, that House B should not be treated as a SFH because the Suarezes's son, who constructed House B, was its bona fide owner under Puerto Rico law; whereas the Suarezes simply held an unexercised "right of accession" based on their ownership of the land on which House B is situated. Id. at 23 (citing Castro Anguita v. Figueroa, 103 P.R.Dec. 847, 850-51, 3 Official Translations 1188-89 (1975)). 3

1), and (iii) the La Aldea Rental (Apartment 2). 2


Since the only dispute on appeal concerns the legal sufficiency of undisputed jurisdictional facts, we review the Rule 12(b)(1) dismissal de novo. See Heno v. FDIC, 20 F.3d 1204, 1205 (1st Cir.1994). We conclude, as a matter of law, that the Suarezes's claim to exemption is precluded by the FHA. See FDIC v. Keating, 12 F.3d 314, 316 (1st Cir.1993) (statutory interpretations reviewed de novo ).

We employ traditional tools of statutory interpretation, particularly the presumption that ambiguous language in a remedial statute is entitled to a generous construction consistent with its reformative mission. See, e.g., Cia. Petrolera Caribe, Inc. v. Arco Caribbean, Inc., 754 F.2d 404, 428-29 (1st Cir.1985) (noting that this canon of construction represents an "especially reliable and legitimate" indicator of congressional intent); see generally 3 Norman J. Singer, Sutherland on Statutory Construction Sec. 60.01 (5th ed. 1992) [hereinafter Sutherland ]. This presumption has been relied on consistently by the courts in interpreting the omnibus remedial provisions of the Civil Rights Act of 1968, which prominently include the Fair Housing Act itself. See Casa Marie, Inc. v. Superior Court of Puerto Rico, 988 F.2d 252, 257 n. 6 (1st Cir.1993) (citing Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 211-12, 93 S.Ct. 364, 367-68, 34 L.Ed.2d 415 (1972)); see also City of Edmonds v. Washington State Bldg. Code Council, 18 F.3d 802, 804 (9th Cir.1994). An important corollary for present purposes is that ambiguous exemptions from FHA liability are to be narrowly construed. See, e.g., id.; Elliott v. City of Athens, Georgia, 960 F.2d 975, 978-79 (11th Cir.)...

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