Levitt & Sons, Inc. v. Division Against Discrimination in State Dept. of Ed.

• Decision Date: 09 February 1960
• Docket Number: A--64,Nos. A--63,s. A--63
• Citation: 158 A.2d 177,31 N.J. 514
• Parties: LEVITT AND SONS, INCORPORATED, a New York Corporation, Plaintiff-Appellant, v. DIVISION AGAINST DISCRIMINATION IN STATE DEPARTMENT OF EDUCATION, Willie R. James and Franklin D. Todd, Defendants-Respondents. GREEN FIELDS FARM, INC., a New Jersey Corporation, Plaintiff-Appellant, v. DIVISION AGAINST DISCRIMINATION IN STATE DEPARTMENT OF EDUCATION and Yuther Gardner, Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 514

31 N.J. 514

158 A.2d 177

LEVITT AND SONS, INCORPORATED, a New York Corporation, Plaintiff-Appellant, v. DIVISION AGAINST DISCRIMINATION IN STATE DEPARTMENT OF

EDUCATION, Willie R. James and Franklin D. Todd,

Defendants-Respondents.

GREEN FIELDS FARM, INC., a New Jersey Corporation, Plaintiff-Appellant, v. DIVISION AGAINST DISCRIMINATION IN STATE DEPARTMENT OF

EDUCATION and Yuther Gardner, Defendants-Respondents.

Nos. A--63, A--64.

Supreme Court of New Jersey.

Argued Dec. 22, 1959.

Decided Feb. 9, 1960.

Harold E. Kohn, Philadelphia, Pa., argued the cause for plaintiffs-appellants (Pitney, Hardin & Ward, Newark, attorneys for plaintiff-appellant Levitt & Sons, Inc.; Sidney S. Jaffe, Newark, attorney for plaintiff- appellant Green Fields Farm, Inc.; William P. Reiss, Newark, and Clyde A. Szuch, East Orange, on the brief).

David D. Furman, Atty. Gen., argued the cause for defendant-respondent Division Against Discrimination in State Dept. of Education (Lee A. Holley, Deputy Atty. Gen., of counsel).

Julius Wildstein, Newark, argued the cause for all individual defendants-respondents (Kapelsohn, Lerner, Leuchter & Reitman, Newark, and Emerson L. Darnell, Mt. Holley, attorneys for defendant-respondent Willie R. James; Herbert H. Tate and Jerome C. Eisenberg, Newark, attorneys for defendant-respondent Franklin D. Todd; Julius Wildstein, Newark, attorney for defendant-respondent Yuther Gardner, and of counsel for all other individual defendants-respondents; Julius Wildstein, Newark, Joseph B. Robison, and Ruth Blumrosen, on the brief).

The opinion of the court was delivered by

BURLING, J.

The plaintiff Levitt and Sons, Incorporated, a New York corporation authorized to do business in New Jersey, (hereinafter referred to as Levitt) is the developer of a single home housing project called Levittown, located in Levittown Township, Burlington County, New Jersey. The plaintiff Green Fields, Inc., a New Jersey Corporation, (hereinafter referred to as Green Fields) is the developer of a similar project called Green Fields Village, located in West Deptford Township, Gloucester Couny, New Jersey. Defendants Todd and James allegedly were rejected by Levitt as purchasers of houses in Levittown because of their color; both are Negroes. Defendant Gardner, also a Negro, allegedly was rejected by Green Fields as a purchaser of a house in Green Field Village because of his color. All three, Todd, James and Gardner, filed individual complaints with the New Jersey Division Against Discrimination (hereinafter referred to as DAD) charging the plaintiffs with refusals to sell to the individual defendants in violation of the New Jersey Law Against Discrimination, N.J.S.A. 18:25--1 et seq., and seeking an order of the DAD requiring the plaintiffs to cease and desist their discrimination against the complainants. Findings of probable cause for the complaints were made by the DAD pursuant to N.J.S.A. 18:25--14, and attempts at conciliation pursuant to the same statute were unsuccessful. Each of the individual defendants then filed amended complaints, Todd and James naming William J. Levitt, an officer of Levitt, as an additional respondent to their complaints, and Gardner naming Robert A. Budd and Horace B. Peters, officers of Green Fields, as additional respondents to his complaint. The complaints were set down for hearings (Gardner's complaint was to be heard separately from Todd's and James') but postponed to a later date.

Before they could be held, however, Levitt and Green Fields instituted independent suits in lieu of prerogative writs in the Superior Court, Law Division, challenging the jurisdiction of the DAD to hear the discrimination complaints and attacking the constitutionality of the New Jersey Law Against Discrimination. The suits were consolidated for hearing and on defendants' motion were dismissed by the trial court on the grounds that an appeal from any action of the DAD must be taken to the Superior Court, Appellate Division, as provided in R.R. 4:88--8(b) and that in any event plaintiffs had failed to exhaust their administrative remedies, R.R. 4:88--14. Plaintiffs appealed to the Superior Court, Appellate Division. That court agreed to hear the matter as if leave had been requested and granted to appeal from the DAD's setting down of the discrimination complaints for hearing and then decided the cause of its merits. 56 N.J.Super. 542, 153 A.2d 700 (App.Div.1959). It held the Law Against Discrimination, N.J.S.A. 18: 25--1 et seq., to be constitutional and affirmed the jurisdiction of the DAD to consider the discrimination complaints. It dismissed, however those complaints insofar as they related to the individual respondents, William J. Levitt, Robert A. Budd and Horace B. Peters, holding that as to these persons the discrimination complaints were not filed within the time required by the statute, from which determination no appeal has been taken. Levitt and Green Fields appealed to this court from that part of the Superior Court, Appellate Division's decision applicable to them. The appeal is made to this court as a matter of right because of the substantial constitutional questions involved. R.R. 1:2--1(a). Since the filing of the actions in lieu of prerogative writs, the hearings in the DAD on the discrimination complaints have been stayed by successive orders, first by the trial court, then by the Superior Court, Appellate Division. Before the arguments in this court, however, we granted the DAD's motion to permit the hearings in the DAD to continue.

Levitt's single home housing project, Levittown, in which approximately 2,000 houses have been built to the present time, will contain 16,000 houses when completed, according to original plans. Green Fields' project, Green Fields Village, comprises approximately 550 houses, all of which have been sold. Originally 700 units were to have been constructed in Green Fields Village, but all houses constructed to date have been sold, and apparently no new construction has begun. Both projects have been planned and constructed in order that they might qualify for purchase money loans insured by the Federal Housing Administration (FHA), a process which requires attention to the desired end from the very earliest beginnings of the development.

Before construction has begun, a housing project developer who seeks to have FHA insured loans available to purchasers of his houses must contact an FHA office in the region in which the project will be located to obtain FHA approval of the site selected for the project. Once a site approval is given, the developer will submit detailed subdivision information to the FHA office, on a form prepared by the FHA, together with certain exhibits, such as a topographic map, photographs, detailed development plan and like items; frequently these are amended or completely revised to accord with suggestions made by the FHA. When the subdivision information and exhibits are satisfactory to the FHA, that agency issues a subdivision report, giving FHA requirements concerning street layouts, curb and sidewalk specifications, utilities, drainage, open spaces, lot improvements and similar matters. House plans are submitted to determine if they meet FHA requirements; the FHA architectural section will often recommend changes in these plans. Upon receiving the subdivision report, the developer arranges with an FHA-approved lending institution to submit individual applications for commitments for FHA insurance on any loan which be made by the institutions. These individual applications are reviewed by the architectural, valuation and mortgage credit sections in addition to the Chief Underwriter's office, after which commitments are issued to the approved lending institution covering the individual properties contemplated in the application. These commitments take various forms. One is a conditional commitment, an agreement between the FHA and the approved lending institution that, subject to the conditions stated in the commitment and subject to the approved lending institution's submitting a proposed purchaser whose qualifications are satisfactory to the FHA, a loan made to finance the purchase of the property in question will be insured. Another form of commitment is an 'Operative-Builder Firm Commitment,' which differs from a conditional commitment primarily in that the former also contemplates loans being made directly to the developer, prior to sale, if requested.

Once the commitment is issued, the developer may commence construction. As construction progresses, the developer or the approved lending institution through which the FHA commitment was made arranges for an FHA inspection. Normally three such inspections are made during the course of construction. In some larger developments, such as Levittown, an FHA inspector is stationed at the project. Often the inspector, or other FHA personnel wll meet with the developer to discuss problems that have arisen during construction affecting compliance with FHA requirements. As the houses are sold by the developer to purchasers interested in obtaining an FHA insured mortgage loan, an application for approval of the purchaser is submitted to the FHA by the approved lending institution to whom the conditional commitment was made. If the qualifications of the purchaser are satisfactory to the FHA, an individual firm commitment is issued to the approved lending institution in the name of the purchaser. After title is closed, the approved lending institution submits the mortgage bond to the FHA along with copies of the bond, the mortgage and the original commitment. When these are approved, the FHA endorses the bond for insurance, which comprises the contract between the FHA and the lender.

Having received conditional commitments, the developer advertises the availability of FHA financing to purchasers. By using FHA insured loans, a purchaser needs only a 3% Downpayment on a...