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RAGIN v. HARRY MACKLOWE REAL ESTATE CO.

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).

 Findings of Fact

 The Parties

 The Individual Plaintiffs are black residents of ...


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