Smith v. Sol D. Adler Realty Company

• Decision Date: 18 February 1971
• Docket Number: No. 17568.,17568.
• Citation: Smith v. Sol D. Adler Realty Company, 436 F.2d 344 (7th Cir. 1971)
• Parties: Gloria SMITH and Albert Brooks Friedman, Plaintiffs-Appellants, v. SOL D. ADLER REALTY COMPANY, a corporation, Sol D. Adler, Mr. and Mrs. John C. Rasulis, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

436 F.2d 344 (1970)

Gloria SMITH and Albert Brooks Friedman, Plaintiffs-Appellants, v. SOL D. ADLER REALTY COMPANY, a corporation, Sol D. Adler, Mr. and Mrs. John C. Rasulis, Defendants-Appellees.

No. 17568.

United States Court of Appeals, Seventh Circuit.

November 27, 1970.

Rehearing Denied February 18, 1971.

Sherman, Schachtman & Stein, Chicago, Ill., for plaintiffs-appellants; Albert Brooks Friedman, Jack G. Stein, Seymour J. Mansfield, Chicago, Ill., of counsel.

Edward J. Hladis, Robert J. Nolan, Patrick W. Dunne, Chicago, Ill., for defendants-appellees; Nolan, O'Malley & Dunne, Chicago, Ill., of counsel.

Before SWYGERT, Chief Judge, HASTINGS, Senior Circuit Judge, and CUMMINGS, Circuit Judge.

HASTINGS, Senior Circuit Judge.

On this appeal we are concerned with the charge of a racially motivated refusal to sublease a rental apartment to a Negro citizen.

A complaint was filed by plaintiffs-appellants in the United States District Court for the Northern District of Illinois on January 20, 1969, seeking a declaratory judgment, together with equitable and other appropriate relief against defendants-appellees.

The complaint is grounded on the Civil Rights Act of April 9, 1866, 14 Stat. 27, as amended and presently appearing in Title 42, U.S.C.A. § 1982, which provides: "All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold and convey real and personal property."

The complaint is further brought under the provisions of the recently enacted Civil Rights Act of 1968, Pub.L. 90-284, Title VIII, § 801 et seq., April 11, 1968, 82 Stat. 81 et seq., 42 U.S.C.A. § 3601 et seq. Title VIII is the Fair Housing Title, and the relevant part is set out in the margin herein.¹

The complaint further grounds jurisdiction on the result reached by the Supreme Court in Jones v. Alfred H. Mayer Co., 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968).

As of January 9, 1969 the relationship of the parties to this subsequent litigation follows. Plaintiff Albert Brooks Friedman, a lawyer, was a lessee-tenant residing in apartment 1A at 1959 West Hood Street, Chicago, Illinois. His lease ran until September 30, 1969 and called for a monthly rental of $155. He desired to sublet his apartment beginning January 31, 1969, that being the date he was moving into a newly purchased home.

Plaintiff Gloria Smith, a Negro, 22 years of age, resided in an apartment in Maywood, Illinois in a building owned by her mother-in-law. She was married to but separated from her husband and had a divorce action pending in court which she had filed against him. They were the parents of an eleven months old son and Gloria had his care and custody. Her estranged husband lived apart from her in another apartment with his mother in his mother's building. No further action had been taken in the pending divorce proceeding during the trial of the instant case. Her husband was a computer programmer with Peoples Gas Company and had agreed to pay her $35.00 monthly child support when she moved from her apartment. Gloria was graduated from Xavier University in Louisiana with a B.S. degree. She was employed in the Military Section of the Defense Department at O'Hare Airport at an annual salary of $7000.00.

Defendant Sol D. Adler was president and active head of corporate defendant Sol D. Adler Realty Company in Chicago, the managing agent for the apartment building in which the Friedman apartment was located.

Defendant John C. Rasulis was employed by the Adler Company as a janitor and engineer at the apartment building in question.

Defendant Rose Rasulis, wife of John C. Rasulis, was not a salaried employee of the Adler Company. However, she assisted her husband in his work about the building. She interviewed the applicants for rental apartments, and either she or her husband were required to "see" or "meet" all applicants before they were given an application. She showed prospects the apartments to be rented and forwarded completed applications to Adler. Neither she nor her husband had authority to accept or reject rental applications.

In their complaint, plaintiffs specifically sought a declaration of Gloria's right to rent the Friedman apartment at $155 per month until the termination of the sublease and thereafter at a monthly rental of $170 or whatever rent white tenants paid for similar accommodations. They sought temporary and permanent injunctive relief against defendants from the denial of such civil rights together with a judgment for damages for loss of civil rights and mental anguish in the sum of $1000 and for additional punitive damages of $1000.

Following a trial to the court and the filing of findings of fact and conclusions of law, a final judgment and decree was entered by the trial court adverse in all respects to plaintiffs. Plaintiffs were thereby denied injunctive relief and damages and their complaint was dismissed for want of equity. Plaintiffs appealed. We reverse.

The following additional facts, largely undisputed, seem conclusively established by our review of the entire record in this case.

In early December, 1968, Schwartz, a tenant of a two bedroom apartment in the subject building, desired to move into a one bedroom apartment and heard of the imminent Friedman vacancy. After viewing the Friedman apartment, Schwartz expressed a desire to take it over as soon as he could sublet his own apartment. About this time Friedman had advised Adler of his plans to sublet and move and Alder promised to assist him and have Rasulis and his wife assist, but warned Friedman that the rental obligation was his and recommended that he advertise. Schwartz also talked to Adler about it. Adler suggested he contact Rasulis.

Friedman told Schwartz he would delay advertising for about a month so that Schwartz might attempt to find a sublessee. Schwartz was not then nor was he at the time of trial ready and able to rent from Friedman. On January 8, 1969, Friedman again talked to Adler by telephone and told him he was moving, wanted to sublease and that Schwartz had not been able to sublet his own apartment. Adler replied that this was their (Friedman's and Schwartz's) problem and that he was still liable on his lease. Adler advised Friedman that the rent on his apartment would increase to $170 per month after his lease expired on September 30, 1969, and that there had been no outside applications to rent it.

Friedman had been acting as attorney for Gloria in her pending divorce action. Susan Mansfield, a cousin of Friedman who lived two blocks away from him, worked at the same place as Gloria and was her friend. Gloria learned of the approaching Friedman apartment vacancy from Friedman and Mrs. Mansfield about January 6, 1969.

During the evening of January 9, 1969, Gloria and Mrs. Mansfield called at the Friedman apartment. While there Friedman met Schwartz in the hall and told him he had a prospect for his apartment. Schwartz told Friedman he had not rented his own apartment.

Friedman then went to the Rasulis apartment and told Mrs. Rasulis he had a prospect for his apartment and asked her for an application. She replied: "I have to see the applicant. I want you to bring her here to me. I have to see her. I can't give you a blank application."

Friedman left and then returned to Mrs. Rasulis with Gloria. After an introduction by Friedman, Mrs. Rasulis said to Gloria: "You can't afford to rent this apartment." Upon being advised of Gloria's $7000 salary, Mrs. Rasulis repeated her statement to Gloria and added that the rent was going up to $185 and she wouldn't be able to afford it after that. After Friedman quoted Adler's statement that the rent increase, after expiration of the present lease would be to $170, Mrs. Rasulis countered with the statement that the Friedman apartment had already been rented. When Friedman replied that Adler had told him the day before there were no prospective tenants for the apartment, she permitted Gloria to fill out an application. Mrs. Rasulis again stated she would not accept the application and that the apartment was already rented. On Friedman's insistence, Mrs. Rasulis sent the application to the Adler Company office and three days later Gloria mailed a rental deposit check of $310 to the Adler Company.

On January 13, 1969, Friedman telephoned Alder and inquired of the status of Gloria's application. Adler replied that he had already rejected Gloria as a tenant. When Adler expressed doubt that her income was adequate, Friedman offered to guarantee the rental for the balance of the lease or to place the balance in escrow for Adler. Adler then stated that his company had "a policy of not renting to individuals who, because of employment, could not provide proper parental care to small children." Adler also said on occasion that he did "not rent to 21 year old divorcees with an infant of ten months of age where the woman has to be away at work to earn a living;" that since 1941 they had "followed a personal policy of not renting to employed mothers with infant children;" and that there "are no people renting there with infant children where the mother and father are employed."

On trial, after plaintiffs were granted leave to inspect tenant applications on file with the Adler Company, it was shown that two present married white tenants, the Murrays and the Rothchilds, each had an infant child and both parents were employed. Adler then explained that he "must of had evidence of how the infant child was to be taken care of to accept them."

We deem the following continuing record to be of significant interest:

"Q. Now, Mr. Adler, knowing * * * that her Gloria Smith\'s child will be well taken care of by a reliable tenant and a mother of two children in your building referring to Mrs. Judy Stern, a tenant of the building and knowing that any money that you want, that you require as security so

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