Knutzen v. Nelson

• Decision Date: 20 September 1985
• Docket Number: Civ. A. No. 84-C-753.
• Citation: 617 F. Supp. 977
• Parties: Ardis KNUTZEN, Plaintiff, v. Melinda NELSON, et al., Plaintiffs-Intervenors, v. EBEN EZER LUTHERAN HOUSING CENTER, Defendant.
• Court: U.S. District Court — District of Colorado

617 F. Supp. 977

Ardis KNUTZEN, Plaintiff, v. Melinda NELSON, et al., Plaintiffs-Intervenors, v. EBEN EZER LUTHERAN HOUSING CENTER, Defendant.

Civ. A. No. 84-C-753.

United States District Court, D. Colorado.

September 20, 1985.

Glenn Meyers, Denver, Colo., Jacquelyn Higinbotham, Fort Morgan, Colo., for plaintiff.

Neil Quigley, Denver, Colo., Helena Schultz, Brush, Colo., for defendant.

ORDER

CARRIGAN, District Judge.

Before me are various motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), for summary judgment and partial summary judgment pursuant to Fed.R. Civ.P. 56, and for class certification pursuant to Fed.R.Civ.P. 23. Jurisdiction is based on 28 U.S.C. § 1331 (1982). The parties have briefed the issues, and oral argument would not assist in resolving them.

I. Introduction.

A. Parties and Claims for Relief.

Plaintiffs, Ardis Knutzen, Melinda Nelson, Dorotea Herrera, and Dolly Wagner, are handicapped individuals who seek admission to the defendants' housing project. Defendants are the owners, managers, and directors of the Tabor Apartments (the "project"), a thirty-three unit building located in Brush, Colorado. Construction of the Tabor Apartments was financed through a loan administered by the Department of Housing and Urban Development ("HUD") pursuant to § 202 of the National Housing Act, 12 U.S.C. § 1701q (1982).

Plaintiffs complain that they were illegally excluded by the defendants from residing in the Tabor Apartments because of their respective handicaps. Two of the four plaintiffs, Knutzen and Nelson, were admitted as residents at the project but subsequently vacated their apartments, allegedly because of the treatment they received from certain of the defendants. All of the plaintiffs seek the opportunity to live at the project.

Plaintiffs assert claims for relief (not all of which are common to each of their complaints) based upon alleged: 1) violations of their rights to equal protection and due process under the Fifth Amendment to the United States Constitution; 2) violations of their rights to free exercise of religion under the First Amendment to the United States Constitution; 3) violations of § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1982); and 4) violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq. (1982). They also assert various pendent state law theories, including breach of a covenant of quiet enjoyment, breach of contract, slander and defamation, and outrageous conduct.

Plaintiffs seek declaratory and injunctive relief: 1) enjoining the defendants from engaging in the allegedly unlawful conduct; 2) enjoining the defendants from using any practice, policy, or procedure that has the purpose or effect of discriminating against any applicant on the basis of his or her handicap or religious affiliation; 3) ordering the defendants to commence an outreach program to fill vacancies at the Tabor Apartments with non-elderly handicapped persons until such time as those persons are proportionally represented at the project; 4) ordering the defendants to revise their tenant selection rules and policies and to submit the proposed rules and policies to the court; and 5) ordering the appointment of an "impartial master" at the defendants' expense to review tenant selection procedures and to be consulted by the defendants before they act on any application for admission. Plaintiffs also seek compensatory and punitive damages.

B. Procedural History.

Plaintiff Ardis Knutzen initially filed her complaint on April 6, 1984. On that same date, I granted a temporary restraining order ordering the defendants to hold one apartment open for her until further order of the Court. On April 16, 1984, I approved a stipulation by the parties that the defendants would continue obeying the restraining order pending a decision by this Court on Knutzen's application for residency.

Since that time, I have allowed Melinda Nelson, Dorotea Herrera, and Dolly Wagner to intervene as plaintiffs. At a hearing on April 19, 1985, I ordered the parties to file motions for summary judgment.

Before me are the following motions: 1) motions to dismiss each of the intervenor's complaints; 2) a motion for class certification; 3) motions to dismiss all class action claims; 4) a motion by the defendants for summary judgment; and 5) a motion by the plaintiffs for partial summary judgment. In light of my disposition of the summary judgment motions, I need not address the others.

C. Undisputed Facts.

The Eben Ezer Lutheran Housing Center was incorporated in 1982 with the intent of creating a housing project for the elderly and physically handicapped with federal funds obtained under § 202 of the National Housing Act, 12 U.S.C. § 1701q (1982). After the project was commenced, the defendants submitted to HUD their proposed tenant selection criteria, as required under 24 C.F.R. § 277.8. These criteria were initially rejected because they specified that only the elderly and the physically handicapped would be considered for residency. The local HUD office took the position that all handicapped persons, including the chronically mentally ill and the developmentally disabled, were eligible to occupy the project. Defendants did as advised by HUD and accepted tenants with handicaps that were not physical. During this period of time, the defendants admitted Knutzen and Nelson. Nelson resided in the project until August, 1984, and Knutzen stayed until September, 1984. Dorotea Herrera applied for admission in July, 1984. She never moved into the project; the parties dispute the reasons why she did not. Dolly Wagner applied for admission in February, 1984. Her application was denied, allegedly on the grounds that she had problems living in such a project and because she gave incomplete and evasive answers on her application form.

In late 1984, the local HUD office apparently reversed its position with regard to who was eligible to occupy the Tabor Apartments. By letter dated January 2, 1985, Mr. Larry Sidebottom, Chief of the Loan Management Branch of the Denver Regional Office of HUD stated:

"This Office concurs with your position that the Tabor Apartments have consistently requested that the project be permitted to serve only the elderly or physically handicapped (mobility impaired) persons in residency. We also accept your statement that the project does not have the expertise or facilities to serve the developmentally disabled and the chronically mentally ill.

In view of the project's request and its limited expertise and facilities, we will approve changes to paragraph C of the Admissions Policies and Procedures submitted with your letter of December 3, 1984, to exclude mentally impaired and developmentally disabled persons."

In order to apply for an apartment in the project, each plaintiff was required to fill out an application form. Under Section Five of that form, entitled "Emergency Notification," they were asked, among other things, to answer the questions, "Member of what church" and "Pastor's name (minister, priest, rabbi.)" Completion of this section was not a prerequisite to admission, and at least two of the plaintiffs, Nelson and Herrera, left this section blank.

II. Motions for Summary Judgment and Partial Summary Judgment.

A. The Statutory Scheme of § 202.

Congress initially enacted § 202 of the National Housing Act, 12 U.S.C. § 1701q (1982), in response to the need for housing for the elderly. Subsequent amendments have expanded the statute's scope "to provide housing and related facilities for elderly or handicapped families." 12 U.S.C. § 1701q(a)(1) (1982). The statute functions as follows:

"Section 202 of the Housing Act of 1959, 12 U.S.C. § 1701q (1976) allows HUD to make 3% loans for 50 year terms to eligible developers to provide housing facilities for elderly or handicapped families with inadequate income to pay private market housing rentals. To start the program, Congress set up a revolving fund, id. at § 1701q(a)(4), which depends upon repayment of mortgages or Congressional appropriations for its continued success. Section 202 makes money available for mortgages which is otherwise unavailable. Id. at section 1701q(a)(2)(A). In order to assure that section 202 objectives are met, HUD requires an applicant to enter into a regulatory agreement providing that the Secretary of HUD shall establish rental levels and tenant eligibility." City of Boston v. Harris, 619 F.2d 87, 89-90 (1st Cir.1980). (footnotes omitted.)

Under § 202 (d)(4):

"The term `elderly or handicapped families' means families which consist of two or more persons and the head of which (or his spouse) is sixty-two years of age or over or is handicapped, and such term also means a single person who is sixty-two years of age or over or is handicapped. A person shall be considered handicapped if such person is determined, pursuant to regulations issued by the Secretary, to have an impairment which (A) is expected to be of long-continued and indefinite duration, (B) substantially impedes his ability to live independently, and (C) is of such a nature that such ability could be improved by more suitable housing conditions. A person shall also be considered handicapped if such person is a developmentally disabled individual as defined in section 102(5) of the Developmental Disabilities Services and Facilities Construction Amendments of 1950. The Secretary shall prescribe such regulations as may be necessary to prevent abuse in determining, under the definitions contained in this paragraph, the elegibility of families and persons for admission to and occupancy of housing constructed with assistance under this section."

Pursuant to the authority granted to the Secretary under this section, HUD has interpreted the statute to delineate four separate categories of persons who are eligible to receive funding under a § 202 program: the elderly, the physically handicapped, the chronically mentally ill, and...