Sentell v. Rpm Management Co., Inc.

• Decision Date: 13 July 2009
• Docket Number: No. 4:08CV00629 JLH.,4:08CV00629 JLH.
• Citation: 653 F.Supp.2d 917
• Parties: Wanda SENTELL, Plaintiff v. RPM MANAGEMENT COMPANY, INC., Defendant/Third Party Plaintiff v. Robert J. Bailey, Third Party Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

653 F.Supp.2d 917

Wanda SENTELL, Plaintiff v. RPM MANAGEMENT COMPANY, INC., Defendant/Third Party Plaintiff v. Robert J. Bailey, Third Party Defendant.

No. 4:08CV00629 JLH.

United States District Court, E.D. Arkansas, Western Division.

July 13, 2009.

Edward I. Zwilling, Schwartz Zweben & Slingbaum LLP, Birmingham, AL, for Plaintiff.

Daniel Lee Herrington, Ellen Owens Smith, Friday, Eldredge & Clark, LLP, Little Rock, AR, for Defendant/Third Party Plaintiff.

OPINION AND ORDER

J. LEON HOLMES, District Judge.

Wanda Sentell commenced this action against RPM Management Company, Inc., on July 23, 2008, alleging violations of the Fair Housing Act (FHA). On February 5, 2009, RPM filed a third party complaint against Robert Bailey, alleging that his architectural designs constituted violations of the FHA, breach of contract, and negligence. Bailey has moved for summary judgment, and RPM has responded. On June 16, 2009, Sentell filed a motion for leave to file a first amended complaint to add Bailey as a defendant. For the following reasons, Sentell's motion for leave to amend is denied, and Bailey's motion for summary judgment is denied.

I.

RPM operates the Village Square Apartments in Cabot, Arkansas. Wanda Sentell, who claims to have a qualified disability, filed a complaint with the Department of Housing and Urban Development (HUD) via the Arkansas Fair Housing Commission on December 19, 2006, alleging violations of the FHA. The commission determined that the property did not meet the FHA's accessibility requirements, that the doorways were too narrow, and that the bathrooms did not allow for installation of grab bars. The commission found that approximately 378 interior doors and 108 bathrooms were not in compliance. In this action, Sentell alleges that it was RPM's duty to design and construct the apartment complex in accordance with the FHA and implementing regulations.

RPM has filed a third party complaint against Robert Bailey alleging that it contracted with Jim Etters, sole proprietor of Tree House Developers, LLC, to manage and supervise the architectural plans and the construction of the apartment complex. Etters and Tree House Developers then entered into a contract with Bailey, a licensed architect, to design the apartment plans. It is undisputed that the apartments were substantially complete in June 2004. In the third party complaint, RPM alleges that Bailey is directly liable for any FHA violations as he was responsible for the design, and that RPM is entitled to contribution from Bailey for any damages awarded under Sentell's FHA claim and for RPM's costs in defending the lawsuit. RPM also alleges that it was a third party beneficiary of the contract between Etters and Tree House Developers and Bailey, that Bailey breached the contract with Etters and Tree House Developers, and that RPM sustained damages as a proximate result of that breach. Finally, RPM makes a claim for negligence, alleging that Bailey breached his duty to use ordinary care in designing the apartment complex.

Sentell has now filed a motion for leave to file a first amended complaint. In her proffered first amended complaint, Sentell includes Bailey as a defendant with RPM, making essentially the same claims for violation of the FHA as she made against RPM in the pending complaint.

II.

A. MOTION FOR LEAVE TO AMEND

The Court first considers whether to grant Sentell's motion for leave to amend. A court should freely give leave to amend when justice so requires. Fed. R Civ. P. 15(a)(2). A district court can refuse to give leave to amend where it will result in "undue delay or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Dennis v. Dillard Dep't Stores, Inc., 207 F.3d 523, 525 (8th Cir.2000) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). A court can deny leave to amend as futile where the amended pleading would not survive a motion to dismiss. See Owen v. General Motors Corp., 533 F.3d 913, 921 (8th Cir. 2008).

In his objection to Sentell's motion for leave to amend, Bailey argues that granting her leave to amend would be futile because the applicable statute of limitations bars her claim against him, so her first amended complaint could not survive a motion to dismiss. The FHA prohibits discrimination in connection with the design and construction of covered multifamily dwellings. 42 U.S.C. § 3604(f)(3)(C). A plaintiff must commence a civil action within two years after the occurrence or termination of the allegedly discriminatory practice. 42 U.S.C. § 3613.

Although the Eighth Circuit has not yet ruled on when the statute of limitations accrues under the FHA for an action for improper design and construction, Bailey cites the Court to a line of cases supporting the conclusion that the continuing violation doctrine does not apply to FHA design and construction cases. Garcia v. Brockway, 526 F.3d 456, 462-64 (9th Cir. 2008) ("Although the ill effects of a failure to properly design and construct may continue to be felt decades after construction is complete, failing to design and construct is a single instance of unlawful conduct."); Taxi Connection v. Dakota, Minn. & Eastern R.R. Corp., 513 F.3d 823, 825-26 (8th Cir.2008) (distinguishing between discriminatory acts and discriminatory effects in refusing to apply the continuing violation doctrine to allegations of termination of a contract); Nuetzman v. Con-Way Transp. Serv., Inc., 2007 WL 2908112, at *6 (D.Minn.2007) ("A plaintiff cannot assert a continuing violation based on isolated instances of discrimination in the past, even if effects of the discrimination continue into the present."); Moseke v. Miller & Smith, Inc., 202 F.Supp.2d 492, 506, 507 (E.D.Va.2002) ("[I]t is clear that the continuing effects of a previous discriminatory act do not constitute a continuing violation" because the proper emphasis must be on the defendant's "acts (i.e., the design and construction of non-compliant buildings), rather than the continuing effects (i.e., the continuing inaccessible features) that those acts caused.").

Several district courts have adopted the reasoning in Garcia and Moseke. In Fair Housing Council, Inc. v. Village of Olde St. Andrews, Inc., 250 F.Supp.2d 706, 719 (W.D.Ky.2003), the district court stated:

The continuing violation doctrine does in fact apply so long as there is some ongoing act being performed as it pertains to the design and construction of the development. The mere existence of a non-compliant building, however, is not an act. The statute of limitations ... begins to run in design and construction cases as to the entire development when the last unit is sold because this is the last occurrence of discrimination.

In United States v. Taigen & Sons, Inc., 303 F.Supp.2d 1129, 1141 (D.Idaho 2003), the court reviewed the cases and concluded "that the continuing violations theory is not applicable for purposes of design and construction cases pursuant to the Fair Housing Act" because the failure to design and construct in compliance with the Act has a continuing effect rather than constituting a continuing violation. In Kuchmas v. Towson University, 553 F.Supp.2d 556, 562-63 (D.Md.2008), the court relied on Moseke to distinguish between building managers and architectural designers in applying the FHA statute of limitations. But see Silver State Fair Housing Council, Inc. v. ERGS, Inc., 362 F.Supp.2d 1218, 1222 (D.Nev.2005) (holding that the continuing violation doctrine may apply to FHA statute of limitations for construction claims). Relying on the reasoning in these cases, Bailey argues that the statute of limitations on Sentell's claim against him began to run at the time that the construction was completed in June 2004, so her claim against him is time barred.

Sentell responds that the FHA statute of limitations on her claim against Bailey was tolled pursuant to 42 U.S.C. § 3613(a)(1)(B), which provides for tolling during a pending administrative proceeding. Sentell argues that the statute of limitations was tolled from December 19, 2006, when she filed her administrative complaint with HUD, until July 21, 2008, when she voluntarily withdrew her complaint from the administrative proceeding. Therefore, Sentell concludes, her amended complaint is being brought within the two-year limitations period.

Sentell also takes issue with Bailey's argument that the continuing violation doctrine does not apply in FHA design and construction cases. Bailey cites to the Fair Housing Act Design Manual developed for HUD:

With respect to the design and construction requirements, complaints could be filed at any time that the building continues to be in noncompliance, because the discriminatory housing practice—failure to design and construct the building in compliance—does not terminate.

FAIR HOUSING ACT DESIGN MANUAL 22 (1998). HUD takes a different view from the cases to which Bailey cited: "A complainant aggrieved because [a building] was not designed and constructed to meet the Fair Housing Accessibility Guidelines, may allege a continuing violation regardless of when construction of the building was completed." TITLE VIII COMPLAINT INTAKE, INVESTIGATION, AND CONCILIATION HANDBOOK, Chapter 3: Jurisdiction, at 3-5 (1995) (available at http://www.hud.gov/offices/adm/hudclips/handbooks/fheh/80241/index.cfm).

Bailey replies that Sentell fails to cite any case or statutory law holding that the continuing violation doctrine applies to FHA design and construction cases. Bailey also argues that the two-year limitations period was not tolled by Sentell's administrative proceeding because he was not made a respondent in that proceeding. Bailey cites to several cases supporting the argument that because Bailey was not a respondent in Sentell's administrative...