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RAGIN v. HARRY MACKLOWE REAL ESTATE CO.

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK


August 25, 1992

LUTHER M. RAGIN, JR., DEBORAH FISH RAGIN, RENAYE B. CUYLER, JEROME F. CUYLER, OPEN HOUSING CENTER, INC. and NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE, Plaintiffs, against HARRY MACKLOWE REAL ESTATE COMPANY, INC., THE HARRY MACKLOWE ORGANIZATION, HARRY MACKLOWE, WILSON MACKLOWE and ELFON REALTY, Defendants.

SWEET

The opinion of the court was delivered by: ROBERT W. SWEET

Sweet, D.J.

The plaintiffs, Luther M. Ragin, Jr., Deborah Fish Ragin, Renaye B. Cuyler, Jerome F. Cuyler (collectively, the "Individual plaintiffs") and the Open Housing Center, Inc., (the "OHC") (the OHC and the Individual Plaintiffs are referred to collectively as the "plaintiffs") seek declaratory and injunctive relief and compensatory and punitive damages against defendants The Harry Macklowe Real Estate Co. ("HMRE"), Harry Macklowe ("Macklowe"), and Elfon Realty Co. ("Elfon") (collectively, the "Defendants") arising out of their involvement in the publication of advertisements allegedly violative of § 804(c) of Title VIII (Fair Housing) of the Civil Rights Act of 1968, 42 U.S.C. § 3604(c) (1982) (the "Act" and "§ 3604(c)"). After a 14-day trial in which an advisory jury verdict was rendered in favor of the plaintiffs and against HMRE, upon the facts and conclusions set forth below, judgment will be entered against Macklowe and HMRE jointly in favor of the plaintiffs.

 This is the first case of its kind to proceed to trial within this circuit, and, as far as it can be determined, only the third to reach this stage within the country. See Fenwick-Schafer v. Sterling Homes, No. R-90-1376 (D. Md.); Saunders v. General Servs Corp., 659 F. Supp. 1042 (E.D. Va. 1987). It is also one of ten cases filed by the plaintiffs in this district charging various defendants with violations of § 3604(c) and other sections of the Act on the basis of housing advertisements for which those defendants are allegedly responsible.

 The case illustrates the intersection between two significant aspects of life in New York City: the advertising and obtaining of an apartment and the quest for racial integration. The question presented is whether the Defendants' real estate ads displaying exclusively white models indicated a preference as to race or color in violation of the Act and whether the Plaintiffs were injured by such a violation. Whereas a number of courts have grappled with and attempted to refine the legal contours of the Act, this court is now faced with the difficult task of applying these principles in the areas of liability, statute of limitations, injury, standing and damages.

 Prior Proceedings

 The complaint in this action was filed on August 12, 1988 (the "Complaint") and the amended complaint was filed on September 12, 1988 (the "Amended Complaint"). Discovery proceeded, but its progress was dependent on the resolution of a dispositive motion in a companion case, Ragin v. New York Times Co., No. 89 Civ. 0228 (CSH). Pursuant to a ruling on a pretrial motion, discovery of the Defendants' net worth was deferred pending a jury determination as to the Plaintiffs' entitlement to punitive damages.

 At the time of trial, the National Association for the Advancement of colored People (the "NAACP"), which was originally named as a plaintiff, had not formally discontinued its action. Reference to it in the voir dire resulted in a mistrial and upon motion by the Plaintiffs it was dismissed with prejudice. The motion was granted on the condition that if it were later determined that the Plaintiffs are entitled to attorneys' fees, further inquiry would be made into the good faith nature of the motion. Wilson Macklowe, originally named as a defendant, was dismissed with prejudice, as were The Harry Macklowe Organization, a/k/a/ The Macklowe Organization, and Elfon. The plaintiffs' claims under 42 U.S.C. § 3604(a), 42 U.S.C. § 1981 and 42 U.S.C. § 1982 were voluntarily dismissed with prejudice.

 The trial was commenced on May 14, 1992 with a panel of nine jurors. In the course of the proceedings, it was necessary to discharge all but six of the jurors for cause. At this point, the wife of one of the remaining jurors suffered a serious illness requiring his support and assistance. In hopes that her condition would improve, the trial was adjourned for two weeks.

 On June 23, 1992, the parties stipulated to be bound by a verdict of five jurors if another juror was lost and to a verdict by the court acting with an advisory jury if less than five jurors survived. Upon resumption of the trial with five jurors (the illness of the missing juror's wife having gotten worse rather than better), it was discovered that one of the remaining jurors, a lawyer, had failed to disclose that he had been disbarred. The juror was excused, and the trial thus proceeded before the court with an advisory jury. The advisory jury rendered its verdict on June 29, 1992, *fn1" finding that HMRE had violated § 3604(c) and that it was liable for compensatory damages of $ 25,000 to each of the Individual Plaintiffs and $ 100,000 to the OHC. The advisory jury also found HMRE liable for punitive damages in the amount of $ 62,500. Macklowe was not found liable.

 Federal Rule of Civil Procedure 52(a) provides that, "in all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately its conclusions of law thereon. . . ." Thus, although the verdict of the advisory jury may enlighten the court in discharging its ultimate responsibility, the "findings of fact [of the advisory jury] are not binding upon the trial court. Indeed the court is free to adopt its findings in whole or in part or to disregard them altogether." Sheila's Shine Prods., Inc. v. Sheila Shine Inc., 486 F.2d 114, 122 (5th Cir. 1973).

  Final argument was held after briefing on July 17, 1992. Upon all of these proceedings, I reach the following findings of fact and conclusions of law.

 Findings of Fact

 The Parties

 The Individual Plaintiffs are black residents of New York City.

 Luther Ragin, 36, grew up in the Bronx, New York. He received a bachelor's degree from Harvard College and later completed a joint degree program in law and public policy at the Harvard Law School and the John F. Kennedy School of Government. In 1980 he joined the Chase Manhattan Bank in New York and in 1982 was sent to Chase's London office until 1985, when he returned to New York. Since January 1989, he has been Chief Financial Officer of Earl Graves Ltd., a minority-owned company. As CFO, Mr. Ragin is responsible for financial matters and operations of the company and its six subsidiaries. During the years relevant to this lawsuit, the Ragins' household income varied from $ 100,000 in 1986 to $ 130,000 in 1989.

 Deborah Fish Ragin, 35, was born and raised in Cleveland, Ohio. Ms. Ragin graduated from Vassar College and received masters and doctorate degrees from Harvard University. After returning to New York from London with her husband, Ms. Ragin sought housing from late October 1985 through June 1986. Since late 1986, Mr. and Ms. Ragin have lived in a cooperative apartment located at 160 Cabrini Boulevard, New York in an apartment complex known as Castle Village. Mr. Ragin contracted to purchase the Castle Village apartment in March 1986. Ms. Ragin presently works at Beth Israel Medical Center.

 Renaye Cuyler, 43, and Dr. Jerome Cuyler, 48, residents of Brooklyn since 1980, have been married for 20 years. Ms. Cuyler grew up in Williamsburg, Virginia, and came to New York to attend Adelphi University, from which she graduated in 1970. She received a masters degree in speech pathology from George Washington University in 1971, worked for several years as a speech pathologist at Harlem Hospital, and then as an administrator and teacher at Adelphi University. She received a J.D. degree from Fordham Law School and has been a practicing attorney ever since her graduation. In 1986 she established her own law firm specializing in personal injury litigation.

 Jerome Cuyler was born and raised in Bayonne, New Jersey. He is a graduate of Marist College in Poughkeepsie, New York and received a degree in chemistry and a masters degree in biochemistry from Adelphi University while working full-time as a teacher of chemistry at CCNY and as a high school chemistry teacher in New York City. In 1976 he received his medical degree from Cornell University Medical College. After serving his residency at Harlem Hospital, Dr. Cuyler completed a post-doctoral fellowship at Albert Einstein college of Medicine in the Bronx. Presently, he is employed by Brooklyn Jewish Hospital as its Associate Director.

 The OHC is a not-for-profit corporation headquartered in New York City. OHC provides a wide range of services with respect to housing in the New York metropolitan area, which include providing information, outreach, and investigation of complaints with respect to discriminatory practices in housing, producing approximately fifteen booklets dealing with housing opportunities and housing, conducting Fair Housing seminars throughout the New York City area, primarily among professionals and civil rights groups, and testifying before governmental agencies and meetings of various groups.

 The OHC uses various methods in investigating discrimination. For instance, it conducts telephone interviews and investigates the ownership of certain buildings as well as pattern and practice cases. The "mission" of the OHC is to reduce the level of segregation in the residential housing market and to have a housing market free from discrimination of any kind. Phyllis Spiro ("Spiro") has served as the deputy director of the OHC for approximately fifteen years.

 Defendant HMRE is engaged in management, construction and development of real estate. At all relevant times, HMRE was the leasing agent and managing agent for the buildings Riverbank West and Riverterrace, as described infra. The defendant Harry Macklowe is, and at all relevant times has been, the sole owner and president of HMRE. Macklowe is also a general partner of Elfon, originally a defendant in this action, which owned Riverbank West until 1991, and of York 72 Associates, the owner of Riverterrace. Both Riverbank West and Riverterrace continue to be managed by HMRE.

 The Buildings

 The advertising at issue relates to two luxury rental complexes in Manhattan. The first, "Riverbank West," is located at 555 West 42nd Street and was owned by Elfon at the time the building was promoted. *fn2" Advertisements for Riverbank West appearing in The New York Times were paid for by Elfon. The second building, "Riverterrace," is located at 515 East 72nd Street, New York and is owned by York 72 Associates, a limited partnership of which Macklowe is general partner. Both buildings were and are managed by HMRE.

 The Advertisements

 Display advertising for Riverterrace commenced in early 1985 with the "Instant Landmark" series of advertisements published in The New York Times. These advertisements featured eight photographs, seven of the building itself and one of a view to the river, as well as text describing the architecture and the services and amenities offered by the building. They did not use any human images. The message conveyed was that the building was of architectural significance and offered extraordinary services and amenities. Advertisements for Riverterrace continued to convey this message, but beginning in May 1986 and continuing until April 1987, the ads also featured photographs of white models. The following Riverterrace advertisements, all of which were either one-half or full-page ads, were published in The New York Times on the following dates: Date Image Jan.-May 1985 Instant Landmark May 11, 1986 HOME Jan. 4, 1987 New Year at 5:15 Feb. 8, 1987 Live It Up at 5:15 Feb. 15, 1987 5:15 is the Time Mar. 22, 1987 5:15 is the Time Apr. 5, 1987 5:15 is the Time

19920825

© 1992-2004 VersusLaw Inc.



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