Samaritan Inns, Inc. v. District of Columbia

• Decision Date: 06 June 1997
• Docket Number: Nos. 96-7105,96-7106 and 96-7109,s. 96-7105
• Citation: 114 F.3d 1227,325 U.S. App. D.C. 19
• Parties: , 22 A.D.D. 752 SAMARITAN INNS, INC., Appellee/Cross-Appellant, v. DISTRICT OF COLUMBIA, et al., Appellants/Cross-Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1227

114 F.3d 1227

325 U.S.App.D.C. 19, 22 A.D.D. 752

SAMARITAN INNS, INC., Appellee/Cross-Appellant, v. DISTRICT OF COLUMBIA, et al., Appellants/Cross-Appellees.

Nos. 96-7105, 96-7106 and 96-7109.

United States Court of Appeals District of Columbia Circuit.

Argued March 31, 1997.

Decided June 6, 1997.

Appeals from the United States District Court for the District of Columbia (No. 93cv02600).

Lutz Alexander Prager, Assistant Deputy Corporation Counsel, Washington, DC, argued the cause for appellants/cross-appellees, with whom Charles F.C. Ruff, Corporation Counsel, and Charles L. Reischel, Deputy Corporation Counsel, were on the briefs.

John R. Risher Jr., Washington, DC, argued the cause for appellee/cross-appellant, with whom James P. Mercurio was on the briefs.

Before WALD, ROGERS and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

The District of Columbia and two of its employees, Hampton Cross and Patricia A. Montgomery (collectively "the District") appeal a judgment awarding approximately $2.4 million in compensatory damages, $1,000 in punitive damages, and $684,624 in attorney's fees and costs to Samaritan Inns, Inc., for violations of the Fair Housing Act, 42 U.S.C. §§ 3601-3631. The District does not contest the district court's finding that it violated the Act by issuing an illegal stop-work order that temporarily prevented Samaritan Inns from completing renovations to a residential housing facility for former drug and alcohol abusers, and by initiating proceedings to revoke the facility's construction permits. Rather, the District contends that the record does not support the district court's award of compensatory damages for "lost" and "delayed" charitable contributions to Samaritan Inns, approximately $2.3 million, or the award of punitive damages against Cross and Montgomery. Samaritan Inns cross-appeals the district court's denial of relief on its claim that the District violated the Fair Housing Act by failing to make reasonable accommodations in its zoning laws.

We hold that because Samaritan Inns did not establish with reasonable certainty that the District's actions caused any potential contributors to refrain from making donations to its capital campaign, it is not entitled to recover damages for "lost" contributions. We further hold that Samaritan Inns may recover damages for "delayed" capital contributions, but that the district court's findings as to the duration of the delay are clearly erroneous. We affirm the award of punitive damages against Cross and Montgomery. Accordingly, we reverse the awards of compensatory damages for "lost" and "delayed" capital contributions, and we remand the case for recalculation of the award for "delayed" contributions and for reconsideration of the attorney's fees award.

I.

Samaritan Inns is a tax-exempt charitable corporation that provides below-market rental housing to former drug and alcohol abusers in the District of Columbia. It operates three "Inns" that provide short-term transitional housing, and two "Houses"--Lazarus House and Tabitha's House--that provide longer-term housing. As a condition of living in either the Inns or the Houses, all tenants must have completed an approved substance abuse program, must obtain and maintain gainful employment, and must refrain from using drugs and alcohol. A.

Background to the litigation. Lazarus House opened in 1991. Within two years, it received nearly 800 applications from men and women who met the criteria for living there. Because it was unable to meet this demand, Samaritan Inns decided to open a second House modeled after Lazarus House and, in 1992, purchased the building now known as Tabitha's House. In 1993, the District issued the demolition and building permits necessary to allow Samaritan Inns to renovate Tabitha's House and operate it as a boarding house. ¹ Shortly after work on the project began, however, residents of the surrounding community began to express opposition to the housing facility. On September 22, 1993, David Erickson, the president of Samaritan Inns, met with community residents to discuss the Tabitha's House project. Also attending the meeting were appellant Cross, then the Acting Director of the D.C. Department of Consumer and Regulatory Affairs; Joseph Bottner, the D.C. Zoning Administrator; and the Honorable Charlene Drew Jarvis, D.C. Council Member for Ward 4, in which Tabitha's House is located. At the meeting, community residents argued that Tabitha's House could not be considered a boarding house under the zoning laws because it would not serve meals, and demanded that Cross issue an order stopping all work on the project.

Erickson subsequently met with the Zoning Administrator and community residents in an effort to resolve issues relating to the Tabitha's House meal plan. Opponents of the project, including the Ward 4 Council Member, continued to press for a stop-work order. On October 7, 1993, the Zoning Administrator issued an order requiring Samaritan Inns to stop all construction work on Tabitha's House. The order contained no discernible explanation of why it had been issued. Although the Zoning Administrator shortly thereafter recommended to Cross that the order be vacated, Cross refused to rescind it, claiming that the Mayor had decided to support the protesters. On October 18, 1993, appellant Montgomery, the Acting Director of the D.C. Building and Land Regulation Administration in the Department of Consumer and Regulatory Affairs, sent Erickson a letter purporting to revoke the building and demolition permits for Tabitha's House on the ground that Samaritan Inns had misrepresented to the District that the building would be used as a boarding house.

The District later acknowledged that the October 18 revocation order was invalid because Samaritan Inns had not received a hearing. On November 19, 1993, Montgomery issued a Notice of Intent to Revoke Permit, reiterating the charge that Samaritan Inns had falsely represented in its permit applications that it intended to operate the Tabitha's House property as a "boarding house." The notice also charged that Lazarus House, the model for Tabitha's House, was being operated as a "community-based residential facility," rather than a boarding house. ² At Cross's direction, a citation charging that Lazarus House had violated its certificate of occupancy was also issued, but not served. Samaritan Inns requested an expedited hearing, and on December 28, 1993, an administrative law judge found that the District had not proven any false statements in the permit applications for Tabitha's House. The judge also found that there was no evidence that Lazarus House was being operated as a community-based residential facility or that Samaritan Inns intended to provide counseling or residential services at Tabitha's House that would make it a community-based residential facility under the zoning laws. The judge further found that even if Samaritan Inns did not intend to provide meals, Tabitha's House would still qualify as a "rooming house," rather than a "boarding house." ³ Under the zoning regulations, both boarding houses and rooming houses are uses that are permitted as of right in the area where Tabitha's House is located, an R-5 residential zone. D.C. Mun. Regs. tit. 11, §§ 330.6, 350.4(a) (1995). If Tabitha's House had been classified as a community-based residential facility, the number of occupants permitted in the facility would have been limited, and Samaritan Inns would have been required to obtain permission from the Board of Zoning Adjustment ("BZA") to operate the facility. ⁴

During the course of this controversy, the stop-work order remained in effect. On December 20, 1993, Samaritan Inns filed the instant lawsuit alleging violations of District of Columbia law, the Civil Rights Act of 1871, the Fair Housing Act, and the Due Process Clause of the Fifth Amendment. On January 12, 1994, the District rescinded the stop-work order, and on March 15, 1994, the parties entered into a consent order, pursuant to which the District agreed not to:

revoke or seek to revoke plaintiff's building permits relating to Tabitha's House, nor issue a stop-work order pertaining to work being done on Tabitha's House pursuant to those permits, except as may be necessary either to protect the public from a dangerous physical condition arising at Tabitha's House or on the basis of information not of record which would warrant revocation or a stop-work order under the law....

Despite this agreement, Cross subsequently caused the citation against Lazarus House to be served on March 21, 1994. The District canceled that citation on April 6, 1994.

The construction and renovation of Tabitha's House was completed in June 1994. In July, the Zoning Administrator issued a certificate of occupancy for its use as a rooming and boarding house. Opposition from the surrounding community continued, and residents appealed the issuance of the certificate of occupancy to the BZA. In September 1996, the BZA denied the appeal.

After a bench trial in February 1995, the district court entered judgment for Samaritan Inns on most of its Fair Housing Act claims. The district court found that the tenants of Tabitha's House and Lazarus House were persons with a "handicap" under § 802(h) of the Act, 42 U.S.C. § 3602(h), ⁵ and that the District's actions were motivated by discriminatory intent, had a discriminatory effect, and "coerced or intimidated" Samaritan Inns from continuing its efforts to complete and open Tabitha's House, in violation of §§ 804 and 818 of the Act, 42 U.S.C. §§ 3604, 3617. ⁶ The district court found however, that Samaritan Inns had failed to present persuasive evidence that the District had violated the "reasonable accommodations" provision of the Fair Housing Act. ⁷ In light of its disposition, the court declined to address Samaritan's Due Process claim. The...