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November 1, 2002


The opinion of the court was delivered by: Thomas C. Platt, United States District Judge.


Defendants Sheila and Harvey Shane (the "Shanes") move (i) pursuant to Rule 56 of the Federal Rules of Civil Procedure, for summary judgment on Clarence and Aisha Mitchell's (the "Mitchells" or "Plaintiffs") claims for housing discrimination under the Fair Housing Act, 42 U.S.C. § 36021 et seq., 42 U.S.C. § 1981 & 1982, and New York Executive Law § 296(5)(a)(1); (ii) to cancel the Notice of Pendency filed by the Mitchells, and (iii) for sanctions and attorneys' fees against the Mitchells and their counsel Stephen Mitchell ("SM").

Defendants Century 21 Rustic Realty ("Century 21") and Mathew Ryan ("Ryan") have submitted supporting affidavits and seek summary judgment sua sponte as well as sanctions and attorney's fees. For the reasons stated below, summary judgment is GRANTED as to all Defendants and the Notice of Pendency is CANCELLED. The Court declines to decide Defendants' motions for sanctions and attorney's fees at this time, but will consider such motions after the Mitchells have exhausted any right to appeal.

The Mitchells have also requested that this Court and Magistrate Judge William D. Wall recuse themselves from this case. That request is DENIED.


This action commenced when the Mitchells, who are African American, filed a complaint alleging that they were improperly denied the opportunity to purchase the Shane's property in Southampton, New York (the "Subject Property") because they were discriminated against based on their race. In January 2002, the Shanes contracted to sell the Subject Property to Michael Selieck ("Selleck") but have been unable to close on the transaction due to the Notice of Pendency filed in this case. The facts of this action have been laid out in great detail in three prior court opinions, familiarity of which is presumed, and will not be restated in great detail here.

The prior decisions include this Court's 49-page Memorandum and Order dated April 29, 2002, which denied Plaintiffs' motion for a preliminary injunction (the "Order") and adopted Magistrate William D. Wall's 11-page Report and Recommendation dated March 25, 2002 (the "Report"). Judge Wall's Report, decided after an evidentiary hearing that produced a 344-page record, held that "there is not a shred of evidence to support or even suggest that discrimination played any part in this transaction." Mitchell v. Century 21 Rustic Realty, No. 02-CV-1162, slip op. at 6 (E.D.N.Y. March 25, 2002). The Court of Appeals for the Second Circuit subsequently affirmed this Court's Order in a Summary Order dated September 6, 2002, (the "Decision") and held that defendants had "failed to adduce any evidence of discriminatory intent, nor did they offer evidence sufficient to raise an issue of fact as to whether the defendants' stated reasons were not in fact the true reasons for declining the Mitchells' opinion." Mitchell v. Century 21 Rustic Realty, No. 02-7495, Summary Order at 3 (2nd Cir. September 6, 2002).

These prior decisions were based on a thoroughly developed factual record, including the three-day evidentiary hearing before Magistrate Judge Wall in which the Plaintiffs called six witnesses with direct knowledge of the relevant facts and in which the Mitchells were specifically afforded the opportunity to depose the Shanes.*fn1 (Tr. at 284.) After the Second Circuit's Decision, Plaintiffs made no attempt to obtain additional discovery despite the fact that discovery had never been stayed in this case. The Shanes, who are still waiting to close on the Selleck transaction after nine months, brought the instant motion by an Order to Show Cause on October 11, 2002.

At the show cause hearing before this Court on October 18, 2001, the Mitchells argued that they needed further discovery, including the deposition of the Shanes who now reside in Florida. This is despite the fact that Judge Wall afforded SM the opportunity to depose the Shanes on two separate occasions during the evidentiary hearing and notwithstanding the fact that SM could have taken the deposition subsequent to the Second Circuit's Decision.*fn2 (Tr. 284-85, 342-33.) At the show cause hearing, this Court gave the Mitchells until October 25, 2002, to obtain any further discovery it requested as required by Rule 56(c) of the Federal Rules of Civil Procedure, including the opportunity once again to depose the Shanes in Florida. (Tr. of October 18, 2002, hearing at 5, 9.)

SM again passed on the opportunity to take the Shane's deposition in Florida and instead sought to have the depositions taken telephonically. At the evidentiary hearing on October 29, 2002, Magistrate Judge Wall stated that he would grant the Mitchells' request for the telephone deposition as long as it was conducted in accordance with the Federal Rules of Civil Procedure, including the requirement that the Court reporter be in Florida. (Tr. of October 24, 2002, hearing at 6.) SM once again elected not to take the Shanes deposition. (Id. at 7.) SM did receive complete discovery responses from Ryan and Kara Bak ("Bak"), the Shanes real estate attorney, and did conduct telephone depositions of these witnesses. Defendants also turned over any documents in their possession that had not already been turned over and which were requested by the Mitchells. On October 29, 2002, the Mitchells filed their responsive papers to this motion, which included, inter alia declarations from Richard Crosier, a real estate appraiser and Wendy Tilton, a licensed real estate broker, along with small portions of the deposition testimony from Ryan and Bak.

The material facts in this case remain indisputable. On January 3, 2002, Bak sent the contract of sale to the Mitchell's real estate attorney, Marie Ongioni ("Ongioni"), with a letter stating that the contract had to be returned to Bak within ten days of their receipt or the "offer shall be considered terminated" and requesting that Bak be contacted before any changes were made to the contract. (Defs. Evidentiary Hearing Ex. 3.) Ongioni received the contract on January 4, 2002. On January 14, 2002, Robin Kaplan, the broker who communicated with the Mitchells, called Ryan to negotiate a price reduction based on the engineer's report. (Tr. at 104.) After some coaxing from Ryan, the Shanes agreed to an $8,000 price reduction and agreed to extend the time for the signed contracts until January 17, 2002. (Tr. at 106.)

On January 18, 2002, the Mitchells changed the contract price to $677,000 and the mortgage contingency clause from 80% to 90% and forwarded the contract to Ongioni. (Defs. Evidentiary Hearing Ex. 5.) Ongioni did not send the unilaterally altered contract to Bak until January 22, 2002. Bak received the contract on January 23, 2002, which was six days after the extended deadline. (Tr. at 269-70.)

Meanwhile, on January 23, 2002, Selleck had conveyed to the Shanes an offer for $685,000 with a 42% mortgage contingency. The Shanes indicated to Bak that they would prefer the Selleck offer if it could be accomplished immediately. Mitchell v. Century 21 Rustic Realty, No. 02-CV-1162, slip op. at 5 (E.D.N.Y. March 25, 2002). On January 24, 2002, Bak forwarded a contract of sale ...

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