Huertas v. East River Housing Corp.

• Decision Date: 02 July 1987
• Docket Number: No. 77 Civ. 4494 (RLC).,77 Civ. 4494 (RLC).
• Citation: 674 F. Supp. 440
• Parties: Julio HUERTAS, Carmen Melendez, Francisco Garcia, Rosaria Esperon, Raphael Negron, Angelo Vasquez, Maria Sanchez, Joyce Johnson, and Betty Johnson, individually and on behalf of all other persons similarly situated, and the Lower East Side Joint Planning Council On Housing and It's Time, Inc., Plaintiffs, v. EAST RIVER HOUSING CORP., Seward Park Housing Corp., Hillman Housing Corp., Amalgamated Dwellings, Inc., Ralph Lippman, as President and a member of the board of directors of East River Housing Corp., President of Hillman Housing Corp., and President of Amalgamated Dwellings, Inc., and Harold Ostroff, as President and a member of the board of directors of Seward Park Housing Corp., Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

674 F. Supp. 440

Julio HUERTAS, Carmen Melendez, Francisco Garcia, Rosaria Esperon, Raphael Negron, Angelo Vasquez, Maria Sanchez, Joyce Johnson, and Betty Johnson, individually and on behalf of all other persons similarly situated, and the Lower East Side Joint Planning Council On Housing and It's Time, Inc., Plaintiffs, v. EAST RIVER HOUSING CORP., Seward Park Housing Corp., Hillman Housing Corp., Amalgamated Dwellings, Inc., Ralph Lippman, as President and a member of the board of directors of East River Housing Corp., President of Hillman Housing Corp., and President of Amalgamated Dwellings, Inc., and Harold Ostroff, as President and a member of the board of directors of Seward Park Housing Corp., Inc., Defendants.

No. 77 Civ. 4494 (RLC).

United States District Court, S.D. New York.

July 2, 1987.

Kenneth Kimerling, Puerto Rican Legal Defense and Educ. Fund, Inc., New York City, for plaintiffs.

Szold & Brandwen, P.C., New York City, for defendants; Alan G. Blumberg, of counsel.

OPINION

ROBERT L. CARTER, District Judge.

This ten-year-old case must be decided, an eventuality I had hoped and sought to avoid. My studied effort to forestall a court-mandated resolution of this controversy did not result from any anticipated difficulties in reaching a proper and just determination. The case, tried to the court February 9-19, 1981, conclusively established a pattern and practice of intentional racial discrimination by defendants in allocating apartments in buildings under their control. However, I sought to avoid the community tension that might result from a court-ordered solution. My conviction is that community tension caused by racial controversies is more easily alleviated if the disputing parties can be persuaded to agree among themselves on a solution.

In this case the parties agreed in principle to settle the basic issues which spawned the litigation. They cannot agree, however, on what is to the court a peripheral and insubstantial question — the amount of plaintiffs' attorneys' fees to be taxed against defendants. In any event, the prolonged delay, first in reaching a settlement of the basic controversy, and now resulting from the attorneys' fees issue, continues to defer relief to the deserving class on whose behalf the lawsuit was instituted. Accordingly, despite the court's preference for an out-of-court settlement, the rights of the plaintiff class require that the court resolve the matter without further delay.

I

This 1977 housing discrimination case was brought pursuant to Title VIII, the Fair Housing Act of 1968, 42 U.S.C. § 3601 et seq., as well as 42 U.S.C. §§ 1981 and 1982.

The plaintiffs, Julio Huertas, Carmen Melendez, Francisco Garcia, Rosaria Esperon, Rafael Negron, Angelo Vasquez, Maria Sanchez, the Lower East Side Joint Planning Council on Housing and It's Time, Inc., sued on their own behalf and on behalf of a certified class of individuals defined as follows:

(a) all Puerto Rican, other Hispanic and Black homeseekers who have completed or will complete applications for occupancy in the cooperative apartments owned by defendants and who have been or may be denied the opportunity to purchase those apartments because of their national origin or race; and

(b) all Puerto Rican, other Hispanic and Black homeseekers who have had or will have an interest in buying a cooperative apartment owned by defendants but have been discouraged and dissuaded from completing an application to do so by any act of defendants prohibited by 42 U.S.C. §§ 1981 and 1982 and/or by 42 U.S.C. §§ 3601-3619.

Defendants Amalgamated Dwellings, Inc. ("Amalgamated"), Hillman Housing Corp. ("Hillman"), East River Housing Corp. ("East River"), and Seward Park Housing Corp. ("Seward Park") are four low-cost housing cooperatives located on Grand Street and extending from Essex Street eastward to the F.D.R. Drive.

The four cooperatives are adjacent to each other. For the most part, they are managed from one central office located at 570 Grand Street. Applications for apartments are dispensed, received and processed at that office and inquiries about apartment allocations are received and responded to there. A small branch office is located at 425 Grand Street and applications for apartments are available at that office as well.

Amalgamated, constructed pursuant to the New York Limited-Dividend Housing Companies Law, now Article IV of the Private Housing Finance Law, opened for occupancy in 1930. The three other cooperatives were constructed under the New York Redevelopment Companies Law, now Article V of the Private Housing Finance Law. Hillman opened for occupancy in 1949-51. East River opened for occupancy in 1955-56, and Seward Park opened for occupancy in 1960. The total number of residential apartments contained in the four cooperatives is 4,432.¹

Defendant Ralph Lippman has been the Executive Manager of the Cooperatives since 1956, overseeing and controlling all administrative and management functions for the four buildings. His responsibilities include supervision of all aspects of the application process. Mr. Lippman resided in the Amalgamated cooperative from 1941 to 1952, in the Hillman cooperative from 1952 to 1958, and has resided in the East River cooperative since 1958. He is a tenant-stockholder in that cooperative. Over the six years prior to the time of trial, he held the following positions as officer or director of the cooperatives: Vice President and Director of Amalgamated, President and Director of Hillman, President and Director of East River, and Vice President of Seward Park.

Defendant Harold Ostroff is now and has been a director of Seward Park since December, 1966. He was President of Seward Park from December, 1966 to May, 1977, and has held the title of President Emeritus of Seward Park since May, 1977. He does not now, and never has, resided in or owned stock in any of the four cooperatives, and has never been employed in the Administrative Office of the cooperatives.

Records of the rate of vacancy and turnover of apartments in the cooperatives have been researched by the parties from 1960 forward. Since 1960, apartments in the cooperatives have been vacated at an average rate of approximately 103 apartments per year, which represents an average annual turnover rate of approximately 2.3%. These figures do not include internal transfers — moves by residents from one apartment to another within the four cooperatives. When a vacancy occurs, residents who wish to transfer to different apartments are accorded priority over nonresident applicants. This has meant that virtually all vacated three-bedroom apartments are taken by residents, leaving none for outside applicants.

Since approximately 1960, the four cooperatives have received a total of approximately 10,000 applications for apartments, of which (a) almost 6,000 have become inactive, (b) approximately 2,000 have received apartments, and (c) approximately 2,000 have remained on the active waiting list as of September, 1978.

Since 1960, the cooperatives have not advertised the availability of their cooperative apartments. Indeed, the sign next to the door at the main office at 570 Grand Street reads as follows:

COOPERATIVE VILLAGE ADMINISTRATIVE OFFICES

AMALGAMATED DWELLINGS, INC. EAST RIVER HOUSING CORP. HILLMAN HOUSING CORP. SEWARD PARK HOUSING CORP.

The sign does not contain the words "Sales Office" or "Applications Office."

In April, 1978, the racial composition of the 4,432 apartments in the four cooperatives was 96.8 percent white, 1.6 percent black, 0.8 percent Hispanic, 0.5 percent Asian, and 0.4 percent mixed. See Table 1, infra, Appendix A.

As of September, 1978, the racial composition of the 2,113 applicants for apartments whose applications remained active was 75.8 percent white, 8.5 percent black, 10.2 percent Hispanic, 5.2 percent Asian, and 0.4 percent mixed. The racial composition classified by requested apartment size is set out in Table 2, infra, Appendix A.

As of September, 1978, according to defendants, the racial composition of the applicants in the inactive application files was 90.7 percent white, 3.5 percent black, 3.5 percent Hispanic, 2.0 percent Asian, and 0.3 percent mixed. Racial composition classified by apartment size is set out in Table 3, infra, Appendix A.

The racial composition of the 1,985 apartments occupied by individuals who moved into the four cooperatives during the period January 1, 1960, through December 31, 1978, was 94.8 percent white, 1.8 percent black, 1.7 percent Hispanic, 0.7 percent Asian, and 1.0 percent mixed. Racial composition is classified in Table 4 according to the size of the apartment allocated. See Table 4, infra, Appendix A.

Plaintiff Carmen Melendez applied for a one-bedroom apartment on April 9, 1973. She was offered an apartment by defendants in July, 1978, after the lawsuit had commenced, which she refused because the bedroom was too small. She was offered another apartment in August, 1978, which she accepted. She is now residing in East River.

Plaintiff Francisco Garcia applied for a two-bedroom apartment on April 28, 1969. He also was offered an apartment in July, 1978, which he refused because defendants prohibit dogs in the apartments. Garcia has agreed that his application should be treated as inactive until he notifies the defendants that he no longer has a dog.

Plaintiffs Maria Sanchez and Julio Huertas each applied for two-bedroom apartments on November 10, 1976. From the date of their applications to the filing of this lawsuit on September 12, 1977, two-bedroom apartments were offered to four white applicants and one Hispanic applicant, all of whose applications postdated the applications of Sanchez and Huertas. Three white applicants rejected the offers, while the remaining white and the Hispanic applicant accepted.

Plaintiff Rosaria Esperon applied for a three-bedroom apartment on September 27, 1976; plaintiff Raphael Negron applied for a...