United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON DEFENDANTS' MOTIONS TO DISMISS
BAKER UNITED STATES MAGISTRATE JUDGE
issue are Defendants' motions to dismiss. [Filing
Nos. 38, 40, and 42.] Plaintiffs Art
Small, Lynette Small, and Executives, LLC, allege Defendants
Trudy and F. Bradford Johnson conspired with Defendant The
Anchorage Homeowners Association, LLC, to constructively
evict the Smalls. In sum, Plaintiffs allege “[t]he
Johnsons, with the active support and participation of [the
AHOA], embarked on a campaign of constructive eviction, which
included directly and indirectly harassing the Smalls, with
the intention of removing the Smalls from [their home]”
because the Johnsons “perceived [the Smalls] to be
Jewish.” [Filing No. 35, at ECF p. 4,
¶¶ 15, 18.] Plaintiffs contend that in this
campaign, the Johnsons and the AHOA violated the Fair Housing
Act and committed other wrongs under Indiana law.
Specifically, Plaintiffs allege the Johnsons erected a
“spite fence, ” tortiously interfered with their
quiet enjoyment of the property, and defamed Mr. Small.
Plaintiffs further allege that Defendant SGA Enterprises,
Inc., as Ms. Johnson's employer, is vicariously liable
for her defamatory statements, and that the AHOA failed to
turn over records to which the Smalls are entitled.
Defendant asserts Plaintiffs' complaint fails to state a
claim upon which relief may be granted. In addition, the AHOA
argues Plaintiffs failed to properly serve process on it, so
the Court lacks jurisdiction. The Johnsons argue that
Plaintiffs fail to meet their pleading burden under any of
the four provisions of the FHA on which Plaintiffs base their
federal claims, 42 U.S.C. §§ 3604(a), 3604(b),
3604(c), and 3617. The Johnsons contend those FHA provisions
generally apply to pre-acquisition discrimination, and only
apply to post-acquisition conduct in narrow, extreme
circumstances that are not present here. By the Johnsons'
reckoning, Plaintiffs are trying to make a federal case out
of a simple neighborly quarrel. As for the state law claims,
the Johnsons argue Plaintiffs either fail to meet their
pleading burdens or fail to establish the existence of the
cause of action. SGA's position is that Plaintiffs fail
to allege the necessary elements of respondeat
superior in order for it to be vicariously liable for
Ms. Johnson's alleged actions.
the Court accepts as true all plausibly pleaded facts and
draws all reasonable inferences in Plaintiffs' favor,
Teamsters Loc. Union No. 705 v. Burlington N.
Santa Fe, LLC, 741 F.3d 819, 823 (7th Cir. 2014), the
majority of Plaintiffs' claims fail to state grounds on
which relief may be granted. SeeFed. R. Civ. P.
12(b)(6). The Court grants the AHOA's motion [Filing
No. 42] because the Court lacks personal jurisdiction
over it. Likewise, the Court grants SGA's motion
[Filing No. 38] because Plaintiffs fail to plead
facts that could sustain vicarious liability. However, one
claim survives, and the Johnsons' motion [Filing No.
40] is granted in part and denied in part. As explained
below, the insufficiently pleaded claims are dismissed
without prejudice. If Plaintiffs can do so within the
limitations of Rule 11(b), Plaintiffs may file an amended
complaint to address the shortcomings outlined below, but
they must do so within 14 days.
which Ms. Small owns, purchased the property at 10396
Treeline Court, Fishers, Indiana, in May of 2015, and the
Smalls moved in. When Executives purchased the 10396
property, it was subject to covenants and restrictions,
including the AHOA's rules. The Johnsons are the
Small's next-door neighbors. Mr. Johnson is an attorney
and Ms. Johnson was a licensed real estate agent when the
alleged acts occurred.
to Plaintiffs, the Johnsons were rude to the Smalls from the
beginning and went out of their way to make the Smalls feel
unwelcome because the Johnsons “perceived that the
Smalls were renters . . . and that the Smalls are
Jewish.” [Filing No. 35, at ECF p. 4, ¶
14.] Plaintiffs allege the AHOA actively supported and
participated in the Johnsons' efforts, which amount to
constructive eviction. The alleged campaign began in July
2015, when the Johnsons used stakes to mark the boundary of
their property that borders the 10396 property. Later that
July, the Johnsons made the demarcation even more unsightly
by adding a rope that stretched the entire length of the east
side of the Johnson's property. In September, the AHOA
notified the Smalls that the Johnsons had complained to the
AHOA about some landscaping stone in the yard of the 10396
property. Plaintiffs allege this not only continued the
Johnson's campaign, but is also the point at which the
AHOA joined it.
assert the Johnsons' next effort in their campaign to
constructively evict the Smalls was to attempt to amend the
covenants and restrictions of the AHOA to prohibit renters.
Plaintiffs claim the Johnsons thought the Smalls were
renters, so banning renting would force out the Smalls. The
amendments were discussed at a special AHOA meeting in
Plaintiffs do not allege the AHOA adopted any rental
restrictions, and the complaint does not include the result
of the discussions at the special AHOA meeting. The
Johnsons' next effort, Plaintiffs claim, was to complain
to the AHOA that the Smalls had suspicious cars parked at the
10396 property, and Ms. Johnson even complained to the
Fishers police. The AHOA's president informed the Smalls
of the complaint, exchanging emails with the Smalls in early
May of 2016.
allege things took an overtly anti-Semitic turn on May 28,
2016. Mr. Small was working in his yard with two
African-American friends and potential clients when he
attempted to start a friendly conversation with Ms. Johnson.
Mr. Small claims Ms. Johnson responded by “accus[ing]
him of begin a racist, of engaging in Fair Housing Act
violations, and repeatedly called him an extremely offensive
anti-[S]em[i]tic slur (‘Jew Face') in front of his
friends and potential clients.” [Filing No. 35, at
ECF pp. 4-5, ¶ 21.] Mr. Small further claims that,
during this exchange, Mr. Johnson physically threatened him.
A few days later, the Johnsons installed a “large
wooden wall” with the AHOA's approval. [Id. at
ECF p. 5, ¶ 22.] The wall obstructs the Smalls'
view, which they assert interferes with their enjoyment of
the 10396 property. Plaintiffs further contend the AHOA
approved the wall despite the fact that it does not comply
with AHOA and Hamilton County restrictions.
Small claims he contacted the AHOA regarding the proposed
renting restriction, the May 28 incident, and the wall. Mr.
Small requested the AHOA board look at the wall and provide
him with “[a]ll documents, phone logs, emails, faxes,
minutes or notes of any meetings and/or discussion, and
correspondence of any and all kind between [the AHOA],
officers, residen[ts], general public, members, committees,
and/or any of [his] family and/or any company [his family is]
associated with.” [Id. at ¶ 24.] The AHOA
did not provide unredacted copies of the requested
Court dismisses Plaintiffs' claims against the AHOA
because Plaintiffs failed to properly serve that entity.
Federal courts lack personal jurisdiction over defendants
that are not properly served with a summons.
Mid-Continent Wood Prods., Inc. v. Harris, 936 F.2d
297, 299-300 (7th Cir. 1991). Because the AHOA is an LLC,
service of the summons may be completed “by delivering
a copy of the summons and of the complaint to an officer, a
managing or general agent, or any other agent authorized by
appointment or by law to receive service of process and-if
the agent is one authorized by statute and the statute so
requires-by also mailing a copy of each to the
defendant.” Fed.R.Civ.P. 4(h)(1)(B). Federal courts
also permit service of the summons according to state rules.
Fed.R.Civ.P. 4(h)(1)(A) (citing Fed.R.Civ.P. 4(e)(1)). The
relevant Indiana rule permits service of an LLC by serving
“an executive officer thereof, or if there is an agent
appointed or deemed by law to have been appointed to receive
service, then upon such agent.” Ind. R. Civ. P.
4.6(A)(1). Plaintiffs failed to serve an officer or
authorized service agent of the AHOA. Rather, they served
attorney Peggy Little, who is not an executive of the AHOA,
not authorized to receive service on the AHOA, and is not a
registered service agent of the AHOA.
service on Little is insufficient. Failure to serve a summons
cannot be overcome by the defendant's actual knowledge of
the suit, the plaintiff's substantial compliance via
diligent attempts to serve, or equitable considerations,
absent clear examples of evasion. Mid-Continent, 936
F.2d at 300-03. The Seventh Circuit specifically noted in
Mid-Continent that serving a defendant's
non-agent lawyer does not satisfy Rule 4, even when that
attorney participates in out-of-court settlement discussions
with the plaintiff. Id. at 301 (discussing facts and
affirming outcome of Bennett v. Circus U.S.A., 108
F.R.D. 142, 148 (1985)). Plaintiffs are not saved by the fact
that the AHOA obviously knows about this litigation or the
fact they merely served the wrong attorney. Little happens to
represent the AHOA in some matters, including this one, but
she lacks the authority to accept service on behalf of the
AHOA did not waive its lack of personal jurisdiction defense.
Defendants waive personal jurisdiction if they fail to assert
the defense in their first responsive pleading or by making
substantive arguments without pressing the lack of
jurisdiction argument. Blockowicz v. Williams, 630
F.3d 563, 566 (7th Cir. 2010). The AHOA did not file an
answer to Plaintiffs' initial complaint, and have not
filed one for Plaintiffs' amended complaint. The AHOA
asserted the defense that the Court lacks personal
jurisdiction in its motion to dismiss following
Plaintiffs' initial complaint. [Filing No. 23, at ECF pp.
8, 13-14.] The AHOA's attorney appeared for a pretrial
conference, but asserted the appearance served only to assert
the lack of personal jurisdiction defense and other Rule 12
defenses, so it was not a waiver. [See Filing No.
43, at ECF p. 8.] In its instant motion to dismiss, the AHOA
presented lack of personal jurisdiction as its first argument
for dismissal under Rule 12. [Id.] The fact that the
AHOA also addressed the merits of Plaintiffs' claims does
not operate as a waiver of its lack of personal jurisdiction
argument. Compare Fed. R. Civ. P. 12(b) (“No
defense or objection is waived by joining it with one or more
other defenses or objections in a responsive pleading or in a
motion.”) with Blockowicz, 630 F.3d at 566
(finding defendants waived their personal jurisdiction
defense by merely asserting it in a footnote and proceeding
to address the merits). Without proper service of a summons
or a waiver of service by the AHOA, the Court lacks
jurisdiction and dismisses Plaintiffs' claims against it.
Fair Housing Act Claims
Plaintiffs allege the Johnsons and the AHOA waged a campaign
of constructive eviction in an effort to force Plaintiffs out
of the neighborhood because the Johnsons perceived the Smalls
to be Jewish. Plaintiffs bring their claims under subsections
(a), (b), and (c) of 42 U.S.C. § 3604 and under 42 U.S.C
§ 3617 of the FHA. The Johnsons move to dismiss these
claims, arguing that Plaintiffs rely on conclusory statements
that at best establish a quarrel between neighbors, which is
not covered by the FHA.
first claim Defendants violated § 3604(a) of the FHA,
which makes it unlawful:
To refuse to sell or rent after the making of a bona fide
offer, or to refuse to negotiate for the sale or rental of,
or otherwise make unavailable or deny, a dwelling to any
person because of race, color, religion, sex, familial
status, or national origin.
allege the Johnsons have waged a campaign of constructive
eviction against the Smalls, which falls into the
“otherwise make unavailable” portion of the
statute. The Johnsons argue Plaintiffs fail to state a claim
under this subsection because they merely plead attempted
constructive eviction, which the Seventh Circuit held is
Bloch v. Frischolz, 587 F.3d 771, 776 (7th Cir.
2009), the Seventh Circuit explained that § 3604(a) is
largely designed to prohibit pre-sale or pre-rental
discrimination, but the phrase “or otherwise make
unavailable or deny” means the subsection also applies
to “post-acquisition discriminatory conduct that makes
a dwelling unavailable to the owner or tenant, somewhat like
a constructive eviction.” To show constructive
eviction, a plaintiff “must show her residence is
‘unfit for occupancy,' often to the point that she
is ‘compelled to leave.'” Id. at 778
(quoting Black's Law Dictionary 594 (8th ed. 2004)). The
Seventh Circuit noted that “constructive eviction
requires surrender of possession by the tenant, ” and
“[i]f the tenant fails to vacate within a reasonable
time, she waives her claim for constructive eviction.”
Id. However, the opinion stopped short of saying
that a plaintiff must vacate the premises to establish a
claim of post-acquisition discrimination under §
the crucial fact that prevented § 3604(a) from applying
in Bloch is also present here-Plaintiffs have
remained at the 10396 property for years since the conduct
that is alleged to have made the property unavailable. In
Bloch, the plaintiff gave no reason why she failed
to vacate and instead stayed put for over a year.
Id. The Seventh Circuit held that, because the
plaintiff was able to stay put for that long, there was
“no possibility that a reasonable jury could conclude
that the defendants' conduct rendered [the property]
‘unavailable' to [the plaintiff.]”
Id. Plaintiffs allege discriminatory conduct from
July 2015 through May 2016. Plaintiffs did not file this suit
until May 2018, and they do not allege they have vacated the
10396 property. Therefore, Plaintiffs fail to plead the 10396
property is unavailable, so the Court grants the
Johnsons' motion with respect to Plaintiffs' §
their second count, Plaintiffs allege Defendants violated
§ 3604(b), which makes it unlawful:
To discriminate against any person in the terms, conditions,
or privileges of sale or rental of a dwelling, or in the
provision of services or facilities in connection therewith,
because of race, color, ...