Walnut Creek Manor v. Fair Employment & Housing Com.

• Decision Date: 29 August 1991
• Docket Number: No. S015131,S015131
• Citation: 814 P.2d 704,284 Cal.Rptr. 718,54 Cal.3d 245
• Parties: , 814 P.2d 704 WALNUT CREEK MANOR et al., Plaintiffs and Appellants, v. FAIR EMPLOYMENT AND HOUSING COMMISSION, Defendant and Appellant.
• Court: California Supreme Court

Page 718

284 Cal.Rptr. 718

54 Cal.3d 245, 814 P.2d 704

WALNUT CREEK MANOR et al., Plaintiffs and Appellants, v. FAIR EMPLOYMENT AND HOUSING COMMISSION, Defendant and Appellant.

No. S015131.

Supreme Court of California In Bank.

Aug. 29, 1991.

Capps, Staples, Ward, Hastings & Dodson, William H. Staples and Marsha L. Stephenson, Walnut Creek, for plaintiffs and appellants.

John K. Van de Kamp and Daniel E. Lungren, Attys. Gen., Andrea Sheridan Ordin, Chief Asst. Atty. Gen., Marian M. Johnston and M. Anne Jennings, Deputy Attys. Gen., for defendant and appellant.

PANELLI, Justice.

Pursuant to section 12987 of the California Fair Employment and Housing Act (Gov.Code, § 12900 et seq.) (the act), the Fair Employment and Housing Commission (the commission) is authorized to order a respondent who is found to have violated the housing provisions of the act to pay "punitive damages in an amount not to exceed one thousand dollars ($1,000) ... and the payment of actual damages." (Gov.Code, § 12987.) ¹ We granted review in this case to construe and determine the constitutionality of the damages provision of the act.

We conclude that while section 12987 authorizes the commission to award compensatory damages, an administrative award of compensatory damages for emotional distress violates the judicial powers clause of the California Constitution (art. VI, § 1; see McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, 261 Cal.Rptr. 318, 777 P.2d 91 [hereafter McHugh ] ). We further conclude, however, that the section is severable in its applications. We thus agree with the Court of Appeal that the emotional distress compensatory damages part of the award in this case must be stricken. Finally, we determine that pursuant to section 12987, the act authorizes only one punitive damages award against a respondent for a course of discriminatory conduct against the same individual on the same unlawful basis.

I. FACTS

This case arises from a complaint for housing discrimination filed with the Fair Employment and Housing Department (the department) by Robert Cannon, an unmarried Black man, alleging that Walnut Creek Manor (Manor) had discriminated against him by refusing to rent him a one-bedroom apartment. Following an investigation, the department issued an accusation charging Manor, owner Marilyn Boswell, and rental manager Edith Indridson with violating section 12955, subdivisions (a) and (d) of the act by refusing to rent to Cannon on grounds of race and marital status. After a hearing before an administrative law judge (ALJ), the commission made the following findings of fact.

Manor is a 418-unit apartment complex. In November 1979, when Cannon first applied for a one-bedroom apartment, Manor was consistently full and had a waiting list. Cannon was told the waiting period was one to one and a half years and that he should check back every six months to see where he stood on the waiting list. For the ensuing two and one-half years Cannon called back approximately twice a year to determine his position on the waiting list.

In August 1981, more than one and a half years after Cannon first applied, Edith Indridson assumed the position of rental manager. At that time she believed Cannon had waited the normal time and "was thus ready to be rented to." Nevertheless, Indridson made no attempt to offer Cannon available one-bedroom apartments, but did call other non-Black applicants who had applied after Cannon.

Following her first meeting with Cannon in November 1981, Indridson marked his name with the code designation Manor used for undesirable tenants, but after the department commenced its investigation in June of 1982, she altered the code rating to desirable. In April 1982 Cannon was first on the waiting list, but when he visited the rental office on April 5, Indridson refused to tell him where he stood. After this encounter, Indridson wrote owner Marilyn Boswell for advice on how to treat Cannon. In response, Boswell sent Indridson a copy of an October 9, 1980, opinion letter written by her attorney after a race discrimination complaint was filed against Phoenix Manor, a housing development Boswell owned in Arizona. The letter recommended that applicants be required to fill out a questionnaire on their interests and activities and that the rental agents be instructed to look to the questionnaire information for "other, nondiscriminatory reasons" for refusing to rent to "undesired" applicants. After receiving the letter, Indridson asked Cannon to fill out a questionnaire, although she made no similar request of anyone else then on the waiting list. After Cannon had completed the questionnaire, Indridson told him she did not have any rentals available.

In May 1982, while checking the availability of mobilehomes for rent at a Contra Costa County mobilehome park, Cannon met a non-Black man who told Cannon he had applied to Manor a few months before and had moved in the same month. The next day Cannon called Manor and again asked where he stood on the waiting list. Indridson refused to tell him. On the following Wednesday, Indridson's day off, Cannon called Manor without identifying himself and asked how long the waiting list was. He was told the list was one year long and encouraged to apply. Cannon thereupon filed his complaint with the department.

From November 1981 until June 28, 1982, the date of Cannon's complaint, Indridson rented 18 apartments to later, non-Black applicants. Eleven of these were rented between March and June; of these, three were rented to married couples. From June 1982 to July 1983, Indridson rented another 24 one-bedroom apartments to later, non-Black applicants.

The ALJ found Cannon's claim of racial discrimination meritorious and awarded Cannon $1,500 in unspecified compensatory damages and $650 in punitive damages assessed against rental manager Edith Indridson. The commission did not adopt the ALJ's proposed decision; rather, after considering additional written argument, the commission found that Cannon had been discriminated against on the basis of marital status as well as race. The commission awarded Cannon special damages for the cost of his rent and utilities in excess of what he would have paid at Manor, $162.50 in attorney fees, and $50,000 in compensatory damages for emotional distress. In addition, the commission awarded Cannon $40,635 in punitive damages (calculated at $1,000 for each of 35 apartment rentals made to others while his application was pending and within the 120-day jurisdictional time period [§ 12980] from February 28, 1982, forward, as adjusted, plus interest). The commission determined that Manor, owner Marilyn Boswell, and rental manager Indridson were jointly and severally liable for the punitive damage award. Finally, the commission issued a cease and desist order and ordered affirmative relief, which required Manor to offer Cannon the first available one-bedroom apartment, post certain notices, and conduct training sessions for employees to educate them about housing discrimination law.

On petition for writ of administrative mandamus (Code Civ.Proc., § 1094.5), the trial court remanded the case to the commission with directions to reconsider the finding of marital status discrimination and limit punitive damages to $1,000, as adjusted. All parties appealed.

The Court of Appeal affirmed in part and reversed in part. The Court of Appeal interpreted the statute as authorizing the commission to award unlimited compensatory damages for housing discrimination. The court held, however, that while the commission's award of special damages was valid, the award of general compensatory damages for emotional distress constituted an unconstitutional exercise of judicial power by a nonjudicial body in violation of the judicial powers clause of the California Constitution (art. VI, § 1) (hereafter article VI, section 1 or the judicial powers clause). ² The Court of Appeal thus determined that the $50,000 compensatory damage award for emotional distress should be stricken.

The Court of Appeal reversed the trial court's ruling that the statute limits the punitive damages award against Manor, Boswell and Indridson to a total of $1,000. The Court of Appeal held that section 12987 authorizes the commission to order a separate award of punitive damages for each act of discrimination within the jurisdictional period. The court determined, however, that as to Indridson the $40,635 punitive damages award was excessive as a matter of law, because the amount exceeded 80 percent of her net worth of $50,000. (People v. Grocers Wholesale Co. (1989) 214 Cal.App.3d 498, 514-516, 262 Cal.Rptr. 689.) The court directed that the punitive damages award be remanded to the commission for determination of whether each of the 35 rentals to later non-Black applicants was the rental of a one-bedroom apartment to one person (rather than a couple), and for reconsideration, in light of her net worth, of Indridson's liability for such punitive damages as the commission should find appropriate.

The commission and respondents Manor, Boswell and Indridson each petitioned for review. ³

II. DISCUSSION

A. The Award of Actual Damages

Section 12987 authorizes the commission to order a respondent who has violated the housing provisions of the act to pay "actual damages." Neither party disputes that the term "actual damages" as used in section 12987 means compensatory damages, and the Court of Appeal so held. This conclusion follows from the legal as well as the common and usual meaning of the term. (See 22 Am.Jur.2d (rev.), Damages, § 24, p. 50; Oleck, Damages to Person and Property (rev. ed. 1961) § 12, p. 22 [hereafter Oleck]; see also Webster's New Internat.Dict. (2d ed. 1958) p. 27, col. 3 [defining "actual" as "[e]xisting in act or reality; ... in fact; real;--opposed to ... speculative"].) Although most cases construing the term have done so in the context of a judicial rather than...