Torres v. Rothstein
| Decision Date | 26 December 2020 |
| Docket Number | Case No.: 2:19-cv-00594-APG-EJY |
| Parties | CANDY TORRES, Plaintiff v. ALLAN ROTHSTEIN and KYLE PUNTNEY, Defendants |
| Court | U.S. District Court — District of Nevada |
Order Granting in Part Plaintiff's Motion for Partial Summary Judgment
Plaintiff Candy Torres sues defendants Allan Rothstein and Kyle Puntney for discrimination and harassment. Torres alleges that Rothstein sexually harassed her when she rented a home that Rothstein managed for Puntney, the property owner. She alleges that Rothstein requested she perform a sexual act on him and that he conditioned her rental of the property on her signing a "Direct Consent for Sexual Intercourse" form. Torres moves for partial summary judgment on the following claims and defenses: (1) Rothstein's violations of the federal Fair Housing Act (FHA) and the Nevada Fair Housing Law (FHL); (2) Puntney's vicarious liability for Rothstein's conduct; (3) Puntney's affirmative defense that he was unaware of Rothstein's actions; and (4) the defendants' affirmative defense of waiver.1
I deny Torres's motion for summary judgment on the sexual harassment claims and Puntney's vicarious liability because there are genuine disputes over material facts. I grant Torres's motion as to Puntney's affirmative defense that he was unaware of Rothstein's conduct because that fact does not allow Puntney to escape vicarious liability if the fact finder determinesthat Rothstein acted within the scope of employment or was aided by the agency relationship. I also grant Torres's motion for summary judgment on the defendants' affirmative defense of waiver, but only to the extent that the defense is based on Torres signing rental documents containing waiver and hold harmless language.2
The Southern Nevada Regional Housing Authority (SNRHA) approved Torres and her five children for a Section 8 housing choice voucher (HCV). ECF No. 68-2 at 39-40. The HCV would subsidize a four-bedroom rental costing $1,550 or less per month. Id. at 40. Rentals paid with HCV vouchers are subject to the Housing and Urban Development (HUD) regulations, a housing assistance payments (HAP) contract, and a HUD tenancy addendum to the lease. ECF No. 68-4 at 22. The HAP contract requires the landlord to "not discriminate against any person because of race, color, religion, sex, national origin, age, familial status, or disability in connection with the HAP contract." Id. at 27.
Rothstein managed a house at 11893 Wedgebrook Street in Las Vegas (the Wedgebrook House) for the owner, Puntney. ECF No. 70-2 at 34. Puntney signed a Property Management Agreement for the Wedgebrook House with RX Realty as the broker and Rothstein as the agent beginning in July 2010. Id. Under the agreement, Rothstein was authorized to negotiate, prepare, and sign leases; collect rents, security deposits, and other charges; and manage the property and maintenance. Id. at 36-37. Because Puntney lived out of state, he did not speak to his tenants directly and left Rothstein to handle responsibilities related to the home. ECF No. 68-2 at 138-39. Puntney did not give Rothstein guidance on managing the property aside from requesting he rent the property for 18-to-24-month leases. Id. at 142-45. Rothstein managed the Wedgebrook House on Puntney's behalf during the time Torres leased it. ECF No. 68-3 at 4, 9, 16, 22.
The exact timeline of the following events is unclear from the record. In September 2018, Torres found the listing for the Wedgebrook House online. ECF No. 68-2 at 6. She contacted Rothstein about renting the property and he responded that he loved working with Section 8 clients and said he would be willing to work with her. Id. at 7-8. She subsequently met Rothstein at his home and submitted a rental application per his request. Id. at 16. Part of that application included a document indicating that Rothstein was the "agent representing" her. ECF No. 70-2 at 60. She also provided three money orders totaling $785 to serve as the deposit to take the house off the market. ECF No. 68-2 at 54.
Later, Rothstein indicated that he required more money for the deposit, but Torres could not afford it. Id. at 57. She therefore offered to clean and repair the house to make up the difference, which would also help ensure the Wedgebrook House would pass the HUD's housing quality standards. Id. at 13-14, 58. Rothstein agreed to waive the cleaning fee and to reduce the balance Torres owed on the deposit. Id. at 58-59. Torres then worked to fix up the house, and Rothstein allowed her to stay there without a lease during that time. Id. at 12-13; ECF No. 70-2 at 31-32.
Torres visited Rothstein's home multiple times to complete the necessary steps get her application approved and to go through the SNRHA approval process. ECF No. 70-2 at 16-18. Upon Rothstein's instruction, Torres typed up a document stating that she found the Wedgebrook House on the internet and that she chose Rothstein to represent her because "a friend recommended him" based on his experience helping SNRHA clients. ECF Nos. 68-5 at 64; 70-2at 23. Rothstein became involved in the SNRHA process directly, which included communicating to the SNRHA office on Torres's behalf when the office challenged her ability to rent the Wedgebrook House. ECF No. 68-5 at 56-62. On November 17, after Torres fixed up the Wedgebrook House, SNRHA inspected and approved it. ECF No. 68-2 at 23.
At some point, Torres alleges that Rothstein demanded she give him a "hand job" in exchange for a lower deposit amount. Id. at 18-19. Torres refused and she left Rothstein's house. Id. at 20. Rothstein disputes that he propositioned Torres. He alleges Torres is the one who offered to give him a "hand job" or "blow job" if he helped her get the Wedgebrook House. Id. at 100. Torres decided to carry on with the leasing process despite her alleged experience with Rothstein because she believed she would lose her ability to use her HCV voucher on another property once the Wedgebrook House had been approved. Id. at 24-25. She had also signed a lease for the partial month of November, which included a provision stating that if the lease contract was not completed, she would owe Rothstein $500. ECF No. 70-2 at 30.
Torres signed the final lease on November 23, 2018 at Rothstein's house. Id. at 82. Rothstein presented her with the lease and other required forms all together. ECF No. 68-2 at 95-96. One document was a "Hold Harmless Agreement," which excused the owner and agent of the property from "any and all liability as to the location, physical and aesthetic condition, use, value, and conditions affecting the property." ECF No. 70-2 at 83. Other documents included a smoke detector disclosure, an illegal activity form, and a Nevada real estate licensee form. ECF No. 68-5 at 2-22.
Included in this packet of forms was also a document entitled "Direct Consent for Sexual Intercourse and or Fellatio or Cunnilingus" (Direct Consent form). Id. at 23. The form states that Torres "hereby and freely gives their total consent" to Rothstein "to engage in sexualactivities . . . with the understanding that sexual intercourse as defined by the State of Nevada will occur." Id. at 24. It also states that Torres "does not currently have a boyfriend/girlfriend/parent who is larger, meaner, and more physically aggressive, owns firearms and/or is more possessive than the [Rothstein]." Id.
Rothstein testified at his deposition that when Torres questioned the form, he told her, "if [you] don't want to sign it, then I'm not interested in going any further with you." ECF No. 75-3 at 5. Rothstein further testified that Torres "wasn't forced to sign the consent agreement" and he continually asserted that there was nothing wrong with presenting it to her. ECF No. 68-2 at 95-96, 102-12. He explained that he wanted her to sign it because Torres had previously stated that she would "do anything" for Rothstein if he helped her get the house. Id. at 99. "I was worried and scared that, you know, bad things may happen, and it has been happening a lot in the newspaper, all these people that come back 20 years later and say that person did something that wasn't nice." Id. Torres signed the form, believing she had to in order to secure her lease on the Wedgebrook House. Id. at 41.
Summary judgment is appropriate if the movant shows "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a), (c). The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying the portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). I view the evidence and reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Hebert Schenk, P.C., 523 F.3d 915, 920 (9th Cir. 2008).
The FHA prohibits discrimination based on sex in the terms and conditions of the rental of a dwelling and in the making of discriminatory statements with respect to the rental of a dwelling. 42 U.S.C. §§ 3604(b)-(c). When interpreting the FHA, courts analogize to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., which prohibits employment discrimination. Gamble v. City of Escondido, 104 F.3d 300, 304 (9th Cir. 1997). Although sexual harassment is not explicitly addressed in the FHA, "it is beyond question that sexual harassment is a form of discrimination." Beliveau v. Caras, 873 F. Supp. 1393, 1397 (C.D. Cal. 1995); see also Noah v. Assor, 379 F. Supp. 3d 1284, 1288-89 (S.D. Fla. 2019) (collecting cases); 24 C.F.R. § 100.600 (...
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