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ALLEN v. CITY OF YONKERS

April 15, 1992

WILBERT ALLEN, Plaintiff, against CITY OF YONKERS; YONKERS COMMUNITY DEVELOPMENT AGENCY; ANGELO R. MARTINELLI, MAYOR; DR. SAL PREZIOSO; MICHAEL EDELMAN; HAROLD PETERSON; ELEANOR KLEINE; ALL IN THEIR INDIVIDUAL CAPACITIES AND AS MEMBERS OF THE BOARD OF DIRECTORS OF THE COMMUNITY DEVELOPMENT AGENCY, Defendants.


The opinion of the court was delivered by: VINCENT L. BRODERICK

 VINCENT L. BRODERICK, U.S.D.J.

 I.

 This action arises from plaintiff Wilbert Allen's termination in October 1982 as director of the City of Yonkers Community Development Agency and as commissioner of the City of Yonkers Department of Community Development ("YCDA"). Plaintiff alleges that these terminations violated 42 U.S.C. § 1981, 42 U.S.C. and § 1983, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, and also alleges breach of an employment contract entered into between him and the board of directors of the Yonkers Community Development Agency in November 1981.

 Defendants are the City of Yonkers (the "City" or "Yonkers") and the YCDA (collectively sometimes the "institutional defendants"); and the following in their individual capacities and as members of the YCDA board in October 1982: Angelo Martinelli, Sal Prezioso, Michael Edelman, Harold Peterson and Eleanor Kleine (sometimes the "individual defendants").

 The case was tried to the court without a jury and the following are my findings of fact and conclusions of law under Rule 52, Federal Rules of Civil Procedure.

 II.

 I find that the institutional defendants discriminated against plaintiff because of race in contracting in violation of 42 USC 1981 and in employment in violation of 42 USC 2000-e, and in violation of plaintiff's civil rights under federal law in violation of 42 USC 1983, and also breached plaintiff's contract, but find no liability on the part of the individual defendants.

 There are various reasons for the differential treatment of the institutional and individual defendants.

 As to the Title VII claims under 42 USC 2000-e, the institutional defendants are the employers under the statute and the individuals do not qualify as such in their individual capacities.

 As to the 42 USC 1981 and 1983 claims, individuals may be held liable, and indeed culpability on the part of the ultimate policy makers is a prerequisite to municipal liability. Jett v. Dallas Independent School District, 491 U.S. 701, 105 L. Ed. 2d 598, 109 S. Ct. 2702 (1988); City of St. Louis v. Praprotnik, 485 U.S. 112, 99 L. Ed. 2d 107, 108 S. Ct. 915 (1988); Pembrauer v. City of Cincinnati, 475 U.S. 469, 89 L. Ed. 2d 452, 106 S. Ct. 1292 (1986). Respondeat superior does not apply to the liability of municipal entities under these provisions, in order to insure that only the actual policy of the entity and not violations of policy or independent actions at lower levels lead to recourse to the deep pockets of taxpayers of political subdivisions of the state.

 Here, the ultimate policymaking authority rested, as to Yonkers, with the mayor, the city manager, and the city council, and as to the YCDA, with its board, as described in greater detail below, based on both written sources of legal authority under state law, and "'custom or usage' having the force of law," Jett at 737, quoting Praprotnik at 124.

 As also outlined in greater detail below, these ultimate policymakers or "decisionmakers" acted intentionally in an unconstitutional and illegal discriminatory manner. However, pinpointing those with such authority is not the end of the road. As indicated in Praprotnik at 126:

 "We are also aware that there will be cases in which policymaking responsibility is shared among more than one official or body."

 In the present case there was no videotape of discussions between the mayor and city manager behind closed doors or between those officials and various council and board members; subsequent recollection and oral testimony about what was said in the course of numerous and at times acrimonious arguments is not particularly reliable at a sufficiently fine-tuned level of detail to permit a conclusion whether A and B agreed and conspired, A rather than B was the moving force acting deliberately while B acquiesced, or vice versa. This difficulty is increased because not merely the decisionmakers initiating an action but final policymakers embracing the council and board must be considered. Id. at 127. Those bodies as such acted deliberately and unconstitutionally, but it is as impossible to determine who had what share of the blame for this as it would have been had those bodies acted by secret ballot and no one remembered who said what during the debate.

 In sum, from all the evidence it is clear that the authorized Yonkers city and Community Development Agency decisionmakers as a group acted deliberately and unconstitutionally and thus the institutional defendants are liable without resort to respondeat superior or cognate concepts, even though it is not possible by a preponderance of the evidence to subdivide the culpability of individuals within the group of decisionmakers or to say that all acted deliberately.

 I find from all of the evidence including demeanor of the witnesses and absence of detail supporting the explanations given for plaintiff's treatment, that the discrimination was brought about because plaintiff's race, combined with his position in implementing city policy with regard to housing at the time involved in Yonkers history, made plaintiff a target for resentment against national policy in that field, which he would not have been but for his race.

 Evaluating the asserted reasons for defendants' conduct and plaintiff's performance on the job necessitates a somewhat extended analysis of plaintiff's dealings with defendants.

 III.

 Before setting forth the particular facts surrounding plaintiff's termination, a brief explanation of the organization of the Yonkers city government, the Yonkers Department of Development ("DCD") and the YCDA is important.

 The government of the city of Yonkers consists of a city council which is comprised of thirteen members. Twelve of these members are elected from the different city wards. The mayor of the city is the thirteenth member and is elected from the city at large. City council members are elected for a term of two years. A non-elected city manager is appointed by the city council and serves at the will of the city council. The city manager is the chief executive officer of the city.

 The DCD is a city department, administered by a commissioner who is appointed by the city manager and serves at the manager's pleasure. The commissioner of DCD is responsible for coordinating community planning and development projects and for overseeing the functions of the Planning Bureau and the Bureau of Housing and Buildings.

 The YCDA is an entity created under the laws of New York State by the Yonkers city council for the purpose of developing community projects. The YCDA has the power to plan, undertake, and effectuate urban renewal projects subject to the approval of the city council. The YCDA receives its funding from the United States Department of Housing and Urban Development ("HUD") through the community development block grant ("CDBG") program. *fn1" It is run by a board which consists of seven members. The membership of the YCDA board is set by law; the city manager and mayor of Yonkers are the chairman and vice-chairman of the board. The other members of the board are the city planning director, the city corporation counsel, the city comptroller, and two citizens appointed by the mayor with the advice and consent of the city council. *fn2" The role of the YCDA director is to implement policy as set by the board. The director's duties primarily entail administering federal funds received through the CDBG and Urban Development Action Grant ("UDAG") Programs *fn3" for housing and community projects, and administering the YCDA's leased housing programs. *fn4" The director has no independent, ultimate or decisive powers and no policymaking authority or duties, but instead - as also confirmed by instances cited below - carries out the instructions of the manager, mayor and council, albeit at a high level of subordinate authority.

 IV.

 Plaintiff, who is black, had studied and worked in the fields of architecture and urban planning for over 20 years. Plaintiff holds a B.A. in architecture from Hampton Institute and a M.A. in urban and regional planning from the University of Illinois. Plaintiff also studied real estate development and architecture at Harvard University and New York University.

 During the early 1970's, plaintiff worked as an urban planner for the city of Newark. In 1973 plaintiff was promoted to the position of special assistant to the executive director of the office of policy and development of the mayor of Newark. Some time later he became city planning director for the city of Newark, and in 1978 he was again promoted to the post of executive director of the office of policy and development of the mayor of Newark. In Newark, Allen secured ten UDAG's *fn5" for the city of Newark and became familiar with the numerous federal programs relating to housing and community development.

 In the latter part of 1979, plaintiff left the job with the city of Newark and began his own consulting business, Urban Development and Management, Inc.

 In early 1980, plaintiff applied for a job with the City of Yonkers as commissioner of DCD and as director of YCDA. Plaintiff was interviewed for the positions on several occasions. During the course of these interviews he met with the commissioner of personnel, the mayor, the city manager, the assistant city manager, and the acting director of YCDA.

 During the interview process plaintiff learned generally of the problems that the YCDA was encountering in its relationship with HUD. In 1980, HUD had conducted an audit of YCDA covering the period from July 1, 1978 through June 30, 1980. HUD took the position in the audit that YCDA had made many expenditures which were improper under HUD's guidelines and that the City of Yonkers had misspent approximately six million dollars. Plaintiff was informed by the city manager that the City of Yonkers sought, as director of the YCDA, someone who had experience with CDBG and UDAG programs and who was qualified to develop immediately a comprehensive response to the problems raised by HUD's audit of YCDA.

 After Yonkers city officials reviewed many applications they offered plaintiff the two positions, which he accepted. In June 1980, the city hired plaintiff as commissioner of DCD; YCDA by resolution of its board of directors appointed plaintiff as director. His annual salary as commissioner of DCD was fixed at $ 1,000 and his annual salary as director of the YCDA was set at $ 39,500. Plaintiff was the first nonwhite to hold these positions. *fn6"

 V.

 Mr. Allen initially devoted most of his attention to analyzing, and then to formulating a response to, HUD's audit of the YCDA. Plaintiff began by reviewing the HUD audit, as well as other audits of YCDA which had been conducted by a private accounting firm, Seidman & Seidman. For the years 1978 and 1979, HUD had found 23 instances of money being spent improperly by the YCDA. HUD had noted that YCDA had no system to insure that persons paid by YCDA were working on YCDA related projects. According to HUD's findings, the City of Yonkers might be obliged to refund six million dollars to HUD. Mr. Allen learned that the YCDA was in jeopardy of losing previously acquired UDAG funds and of being terminated from the CDBG program. Plaintiff's review of the Seidman & Seidman audits revealed that the YCDA had not complied with previous accounting recommendations suggested to improve the agency's control of expenditures.

 Plaintiff hired Anthony LaBreglio, a former HUD employee, to work on developing and implementing accounting and financial management systems seeking to correct some of the problems with the administration of YCDA noted in the audits. Plaintiff installed a system which put controls in place before funds were disbursed, and which provided mechanisms for tracking the financial status of YCDA projects and activities.

 After completing his analysis of the HUD and Seidman & Seidman audits, plaintiff prepared a response to each of the findings articulated in the HUD audit. His central objective was to avert the loss of federal funding by the CDBG and UDAG programs. These responses seem to have satisfied HUD, which never, while plaintiff was employed in Yonkers, requested clarification from YCDA of its responses to the audit findings. *fn7" The City of Yonkers has not been required to pay the six million dollars to HUD, which HUD had cited in its audit. Nor did HUD prohibit Yonkers from participating further in the CDBG or UDAG programs.

 Another matter which commanded plaintiff's immediate attention at the outset of employment as director of the YCDA was to see to it that the City of Yonkers complied with nine conditions imposed by HUD in 1980 for the receipt of 4.6 million dollars in CDBG funds. These conditions included, among others, that the YCDA provide monthly status reports on the development of its projects and its expenditures, that it develop a homesteading program, and that it develop a housing complaint process. HUD officials had stressed that Yonkers' participation in the UDAG and CDBG programs would be terminated if the city failed to meet these conditions. All of these requirements were satisfied by the YCDA under plaintiff's direction.

 HUD had also directed Yonkers to take a number of steps to expand housing opportunities for racial minorities in east Yonkers, an area of the city with a low concentration of minority population. In fact, less than four weeks after Mr. Allen commenced employment, HUD expressly conditioned YCDA's receipt of CDBG funds upon YCDA's pledge on behalf of Yonkers -

 (a) to construct 100 units of assisted housing for families in east Yonkers;

 (b) to prepare and submit to HUD an inventory of available east Yonkers sites which could be used for the construction of subsidized housing;

 (c) to develop and implement a fair housing strategy; and

 (d) to enact a fair housing ordinance.

 Mr. Allen undertook measures to help the city to comply with these conditions. Thus under Mr. Allen's supervision the planning director, Phil Pistone, prepared a list of 14 potential sites in east Yonkers for low and moderate income assisted housing.

 The issue of federally funded low and moderate income scattered-site housing in east Yonkers was a hotly debated subject in Yonkers. City council members from the east and north sections of Yonkers were in general hostile to the development of such housing, whereas the city council members from southwest Yonkers were not opposed to it. Thus the submission to HUD of possible sites for such housing was vehemently opposed by many members of the city council. Despite this opposition City Manager Fox submitted to HUD the inventory of sites developed under Mr. Allen's direction. HUD initially found three of the proposed sites to be suitable for developing subsidized housing; it determined that the other 11 sites were unacceptable for topographical or environmental reasons.

 Mr. Allen also addressed the problem of implementing a Fair Housing strategy. After consulting with the city manager, the city director of human rights, Mr. Scott, and representatives of HUD's fair housing program, Mr. Allen recommended that $ 20,000 of YCDA's budget be appropriated for such purpose. Mr. Allen and Mr. Scott undertook to establish an outreach program, directed toward educating and counseling minority persons about their rights as tenants, and toward encouraging landlord receptivity to minority tenants.

 Mr. Allen also urged the adoption by the city council of a fair housing ordinance, which would announce Yonkers' commitment to providing housing to minorities. City Manager Fox raised the topic with the city council, but it refused to adopt it. Plaintiff later apprised HUD of the steps which he and the city manager had taken with respect to a fair housing ordinance, and of the city council's position.

 Shortly after assuming his positions in Yonkers plaintiff undertook supervision of the development of the 1980 application for CDBG funds. This annual application, the preparation of which Mr. Allen also supervised in 1981 and 1982, set forth proposals for the expending of CDBG funds to be allotted to Yonkers.

 Its preparation required familiarity with federal guidelines, consistent with which it was necessary to designate target areas in Yonkers which had high percentages of low and moderate income persons. Contact with diverse community groups was necessary to develop projects which were consistent with federal standards as to purpose and as to cost, efficiency, and manageability, and to develop a proposed funding level with respect to each of those projects. The amount of money sought in the application depended, in turn, upon funds made available to HUD for CDBG purposes: for 1980, YCDA was allocated $ 4,603,000 in CDBG funds; for 1981, it was allocated $ 4,328,000; for 1982, it was allocated slightly less than $ 4,000,000.

 To keep apprised of community developments Mr. Allen attended every city council meeting and often spoke at community meetings.

 Plaintiff had responsibility, as director of YCDA and commissioner of DCD, for the administration of the housing programs subsidized by HUD for the benefit of the poor. This responsibility was competently discharged, as reflected in favorable reviews by HUD of YCDA while plaintiff administered it, *fn8" as well as in favorable assessments by members of the city council representing those areas of Yonkers where such subsidized housing was prevalent.

 HUD regularly monitored YCDA's activities. In particular, it supervised the agency to insure that funds were expended on HUD-approved activities. Under Mr. Allen's tenure, HUD's evaluation of YCDA improved. By the end of 1981, it was considered one of the better development agencies in the Region 2 area, which consisted of three States. In March 1982, a HUD report concluded:

 On the whole the Agency is a very good one. All documentation is on file, well organized and easily obtainable. Without question the Program has made very positive strides over the course of these past 2 1/2 years since I was first involved in Yonkers. I would like to commend the staff for a job well done . . .

 The progress that YCDA made under plaintiff's leadership is confirmed as well by an audit of YCDA by Seidman & Seidman.

 Plaintiff also competently administered the DCD. On at least a monthly basis, he met with the directors of each department and received monthly reports from them, which he passed along to the city manager. He also provided the city manager with executive reports of the department at regular intervals.

 VI.

 In June 1980, plaintiff approached City Manager Ravo to request an employment contract. He wanted a contract to enable him to correct the extensive and somewhat politically sensitive problems raised by the HUD audit without fearing for his job security. Mr. Ravo felt that before they discussed a contract, plaintiff should resolve the issues surrounding HUD's audit of YCDA. Plaintiff's race was already at least a factor underlying reluctance to give him a contract at the outset, despite his obvious qualifications.

 Plaintiff again requested a contract in May 1981 with Mr. Ravo's successor, Eugene Fox. At this time, plaintiff's desire for a contract stemmed from a specific desire to evaluate alternative opportunities which had been suggested to him. A few months later, in the fall of 1981, negotiations were initiated between plaintiff and YCDA concerning an employment contract for plaintiff as YCDA director.

 On November 4, 1981, city-wide elections were held resulting in election of a new mayor and a different majority on the city council. Mr. Martinelli, who had served as Mayor of Yonkers from January 1, 1974 through December 31, 1979, defeated Mayor Loehr for the term beginning January 1, 1982.

 In the latter part of November 1981, City Manager Fox brought the issue of plaintiff's contract to the YCDA board. By a four to two vote, the board approved a two year employment contract for plaintiff, extending to November 30, 1983. The contract provided for an annual salary of $ 44,900.00. It also set forth procedures, including provisions for notice and a hearing, to be followed in the event that the board wanted to terminate Mr. Allen. The board's resolution declared that a contract was in order because of plaintiff's excellent job performance. *fn9" However, by contrast to offers later made to others who were not more qualified, within a sufficiently short time to be comparable, the Allen contract failed to provide for any severance pay in the event of termination.

 Thus, although a contract was granted with frank recognition of plaintiff's excellent performance, it was not on a par with comparable Yonkers offers during a relevant time period. The resistance, which became obvious to me during the trial and from the entire history of the relationship between Yonkers and plaintiff as discussed below, to a nonwhite incumbent in plaintiff's position was thus overcome at that time sufficiently to permit a contract to be granted, albeit under less favorable conditions offered to others within a relevant time span.

 The evidence, primarily that subsequently set forth (see particularly Part IX below), leads to the clear conclusion that reluctance to commit Yonkers to a nonwhite in the position involved, while temporarily overcome sufficiently for the contract to issue, was not overborne sufficiently to grant a contract equal to that offered during the relevant period to other equally or less qualified applicants. During the entire period covered by the events described here, having a nonwhite in the position involved was considered by Yonkers decisionmakers to be problematic, leading to differentially less favorable treatment.

 The minutes of the board meeting reflect that Mr. Allen's fine job performance was the reason for awarding him a contract. With the change of administration in Yonkers city government in January 1982, the membership of the YCDA board changed dramatically, and plaintiff's contract - already delayed initially despite plaintiff's obvious qualifications - became a far more intense issue. Mr. Cola, who had been appointed in 1979 a citizen member of the YCDA board, and who in 1982 was a newly-elected city council member, wrote in late November 1981 to HUD's area manager questioning the propriety of plaintiff's contract with YCDA. He suggested that the vote of the board authorizing the contract was improper; he contended that the vote of one board member, Mr. Pistone, was compromised. Plaintiff in his capacity as commissioner of DCD supervised Mr. Pistone, the planning director of DCD. Mr. Pistone had been planning director for at least 15 years. He had been appointed by the city manager and could only be fired for cause by the city manager. The position of planning director qualifies as a civil service position. However, absent evidence that this board member's vote would have been decisive, its relevance appears minimal and the objection to the contract appears pretextual, masking its motivation by other factors.

 In March 1982, after making inquiries into the vote and the relationship between Mr. Pistone and plaintiff, HUD responded in a letter to the Yonkers authorities:

 This is in response to your question regarding a possible conflict of interest in the approval of an employee contract between Mr. Wilbert Allen and the Yonkers Community Development Agency. Your inquiry raised the question as to whether such a conflict of interest existed when the Planning Director, who is under Mr. Allen . . . voted for approval of ...


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