United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON DEFENDANTS' MOTION FOR JUDGMENT ON THE
J. McKINNEY, JUDGE
matter comes before the Court on Defendants', Grandville
Cooperative Inc. (“Grandville”), Karen Mitchell,
and Kirkpatrick Management Company, Inc.
“Defendants”), Second Motion for Judgment on the
Pleadings (“Motion”) pursuant to Federal Rule of
Civil Procedure 12(c) (“Rule 12(c)”) (Dkt. 72) on
Plaintiffs', Fair Housing Center of Central Indiana
(“Fair Housing Center”), Virginia Morton, Sharna
McFarland, and Lindsay Adams (collectively
“Plaintiffs”), Third Amended Complaint
(“Amended Complaint”). The Amended Complaint
alleges that the Defendants (1) committed discriminatory
housing practices in violation of both the Fair Housing Act
(“FHA”), 42 U.S.C § 3601, et seq.,
and the Indiana Fair Housing Act (“IFHA”), Ind.
Code § 22-9.5; (2) discriminated against the Plaintiffs
in the operation of Grandville in violation of the
Rehabilitation Act, 29 U.S.C. § 794; and (3) committed
negligence by failing to adequately train, monitor, and
supervise employees to ensure compliance with the FHA, IFHA,
and Rehabilitation Act. Dkt. 62. For the reasons set forth
below, the Court GRANTS IN PART AND DENIES IN PART
is a 156-unit housing complex located in Indianapolis,
Indiana. Id., ¶ 16. It receives federal housing
funds as well as financing and was constructed using the
United States Department of Housing and Urban Development
(“HUD”) Section 236 mortgage program.
Id., ¶ 17. Grandville has a Section 8
Project-Based Rental Assistance contract, which it utilizes
to make rent affordable to lower income tenants. Id.
is a cooperative corporation property, which provides each
member of the cooperative one share and one vote in the
cooperative. Id., ¶ 18. The cooperative holds
title to the property. Id. Grandville members elect
a Board of Directors that establishes policies, sets forth
rules, and determines how money is spent. Id.,
¶ 19. Prospective residents must meet the standards set
forth by the Grandville Board of Directors. Id.,
is a property management company in Indianapolis.
Id., ¶ 21. Kirkpatrick provides services to
Grandville and is identified as the property manager on
Grandville's materials. Id., ¶ 22.
Kirkpatrick has provided onsite staff to direct the
management and direction of Grandville. Id.
Kirkpatrick is responsible for ensuring that Grandville's
board and staff act in compliance with fair housing laws.
Id., ¶ 23. Kirkpatrick also provides guidance
for screening and selecting prospective residents, including
the creation of forms used by Grandville. Id.,
¶ 24. Kirkpatrick's name is prominently displayed on
a variety of Grandville materials, including Grandville's
SHARNA MCFARLAND AND VIRGINIA MORTON
is quadriplegic. Id., ¶ 26. Morton relies on
her daughter, McFarland, as well as a part-time at-home nurse
for assistance. Id., ¶ 27. In December 2014,
McFarland visited the Grandville front office and expressed
an interest in living there. Id., ¶ 28.
Specifically, McFarland sought a two-story townhouse, with
three bedrooms upstairs and the living space downstairs,
including a half bathroom, kitchen, dining room, and living
room. Id., ¶ 29. McFarland and her two children
intended to use the upstairs bedrooms while Morton planned on
staying in the downstairs living room because she is largely
confined to a hospital bed due to her paralysis. Id.
During the visit in December 2014, McFarland was informed
that she needed to fill out an application and pay $20.00 to
secure a spot on the waitlist, which she did. Id.,
months later, Grandville inquired as to whether McFarland was
still interested in a residence and she responded that she
was. Id., ¶ 31. McFarland visited Grandville
once more and asked if Grandville required Morton to fill out
a separate application. Id. ¶ 32. Camille
Mitchell, one of Karen Mitchell's daughters who works as
a leasing agent for Grandville, informed McFarland that she
needed to fill out a separate application on Morton's
behalf and submit another $20.00, which she did. Id.
A few weeks later, McFarland received a letter from
Grandville that stated: “This Letter is to notify you
that Grandville Cooperatives' Board of Directors has
scheduled a mandatory New Member Orientation, time listed
below.” Id., ¶ 33.
August 5, 2015, McFarland attended the orientation.
Id., ¶ 36. Karen Mitchell and two other board
members were also in attendance. Id., ¶ 37.
During the meeting, McFarland mentioned that Morton could not
climb stairs. Id., ¶ 38. McFarland was then
asked why and she explained that Morton was quadriplegic.
Id. The directors then asked several questions about
Morton's disability, including how Morton became
quadriplegic, how long she had quadriplegia, and who takes
care of her. Id. Karen Mitchell then told McFarland
that this was not a “New Member Orientation” but
a “Pre-Interview” meeting. Id. ¶
same day as the “New Member Orientation Meeting,
” Karen Mitchell circled “rejected” on the
“Grandville Coop Application Cover Page” for
Morton and McFarland's application. Id. ¶
74. The document provides check boxes corresponding to
various reasons for denying an application. Id.
¶ 75. Neither the box for “We are not accepting
applications for the unit size your household requires”
nor the box for “You have provided insufficient or
inaccurate information on your application” is checked.
Id. The form does not state why Morton and
McFarland's application was rejected. Id.
days after the meeting, McFarland received a letter from
Grandville dated August 5, 2015, the same day as the meeting.
Id. ¶ 40. The letter was signed by Camille
Mitchell and identified Camille as “Office Staff,
Property Manager / Agent for Owner.” Id. The
letter read: “We are sorry to let you know that we must
reject your application. At this time, Grandville Cooperative
is not handicap accessible and it will be a liability to
offer you a unit that is not accommodating to everyone in the
Mitchell discussed the rejection of McFarland and
Morton's applications with her daughter Tia Mitchell.
Id. ¶¶ 63, 65. Karen Mitchell told Tia
that she rejected McFarland and Morton's applications
because Morton needed a hospital bed in the living room,
which she believed was “tacky.” Id.
¶¶ 66, 67.
Mitchell also discussed McFarland and Morton's
application with Bill Kersey, a maintenance employee and
resident of Grandville. Id. ¶¶ 69, 70.
Mitchell inquired with Kersey as to what would be required
for a quadriplegic person to move in. Id. ¶ 72.
He believed they might need to widen doorways or install a
ramp, to which Mitchell responded, “no, that's not
going to work” and also stated that “with her
living downstairs in the living room and her daughter
upstairs, we don't want that around here.”
Id. ¶¶ 71, 72.
THE FAIR HOUSING CENTER OF CENTRAL INDIANA
receiving the rejection letter, McFarland contacted the Fair
Housing Center. Id. ¶ 44. The Fair Housing
Center is a private, non-profit corporation that seeks to
ensure equal hosing opportunities by eliminating housing
discrimination. Id. ¶ 6. After interviewing
McFarland, the Fair Housing Center sent a letter to