The opinion of the court was delivered by: Spatt, District Judge.
MEMORANDUM OF DECISION AND ORDER
This case arises from claims by Plaintiffs Ennis Johnson and Sharon Johnson ("the Plaintiffs") that 51 Smith Street L.L.C. and its owner Jay Levy (collectively "the Defendants") violated federal and housing discrimination laws by denying them the opportunity to rent an apartment based on Ennis Johnson's HIV-positive status. This Court previously dismissed the Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") for failure to state a claim upon which relief can be granted, but did so without prejudice to the Plaintiffs' right to serve an amended complaint within twenty days of the dismissal.
The Plaintiffs have filed an Amended Complaint and the Defendants again have filed a motion to dismiss the Plaintiffs' housing discrimination claims pursuant to Rule 12(b)(6) for failure to state a claim. In addition, the Defendants have filed a motion for sanctions pursuant to Federal Rule of Civil Procedure 11 ("Rule 11"). For the reasons set forth below, the Court grants the Defendants' motion to dismiss the Amended Complaint, and denies the Defendants' motion for sanctions.
The following facts are a condensed version of the facts as set forth in the Plaintiffs' Amended Complaint. A more detailed recitation of the facts is set forth in the Court's previous decision Johnson v. Levy ("Johnson I"), 812 F. Supp. 2d 167 (E.D.N.Y. 2011). The Court assumes the parties familiarity with that decision.
The Plaintiffs Ennis and Sharon Johnson are a married couple. Ennis Johnson is HIV-positive and receives public assistance from the Department of Social Services ("DSS") in the areas of medical and food services and housing accommodations, and also receives Social Security Disability ("SSD") income in the amount of $1,496.00 per month.
In or about November 2008, there was a fire in the Johnson's then current apartment, rendering them homeless. After temporarily living in a hotel, in January of 2009, the Johnsons attempted to rent an apartment in a building located at 51 Smith Street, Merrick, New York ("51 Smith Street apartment building"), which is owned by defendants 51 Smith Street L.L.C. and Jay Levy. Although not clear from the complaint, the Plaintiffs state in their submissions to the Court that, as a result of the fire, the DSS "became involved with supplying emergency aid". Specifically, the Plaintiffs state that "DSS agreed to provide a 'one shot deal' to the Plaintiffs, in which DSS provides first months rent, the security deposit and brokers fee in order to aid Plaintiffs in moving into a dwelling". (Pls.' MTD Br. at 3.)
According to the Plaintiffs, Sharon contacted Levy on January 14, 2009 expressing her interest in two available units. In this conversation, the Plaintiffs contend that Sharon informed Levy that Ennis was a recipient of DSS and SSD governmental public assistance and that they were in need of immediate housing. Initially, the Johnsons indicated that they wanted the more expensive unit, and Levy provided them with an offer letter setting forth the conditions for leasing that unit. However, according to the Plaintiffs, a DSS caseworker named "Mrs. Pearson", contacted Levy and informed him that Ennis only qualified for $1,275 per month in DSS rental payments and therefore the Johnsons would only qualify for DSS funding for the less expensive apartment, Unit C-3. As a result, Levy revised the initial offer letter to reflect the same conditions, but for Unit C-3. Levy provided the typed version of this letter to DSS on January 27, 2009 for their review and approval (the "Offer Letter"). The Offer Letter provided:
This is to confirm that I will provide you one-year lease for apartment C-3 at 51 Smith Street, Merrick, NY at the monthly rental of $1275. The conditions are two months security and the first month's rent must be paid at the lease signing and the rent must be guaranteed by a governmental agency. (Am. Compl., ¶ 38.)
That same day, after receiving the Offer Letter, DSS, with the knowledge and consent of Levy, performed a health and safety inspection of Unit C-3 and approved the apartment as inhabitable. On February 5, 2009, Sharon met with one of Levy's employees, defendant Sue Campbell ("Campbell"), at the DSS offices in Hempstead in order to acquire a document reflecting that DSS would pay for the security deposit and first month's rent.
Subsequently, Campbell drove Sharon to get the DSS document notarized. According to Sharon, during the course of this drive, she informed Campbell that Ennis was HIV-positive. Sharon claims that immediately after she revealed this information, she overheard Campbell call Levy and tell him that Ennis was HIV-positive. Thereafter, at a time unspecified in the complaint, Levy allegedly advised Ennis "that he would not rent to anyone who was HIV positive because children and elderly persons resided at the apartment building located at 51 Smith Street, Merrick, New York". (Am. Compl., ¶ 53.) Later, after "numerous verbal requests", again, at an unspecified time, Levy allegedly told the Johnsons that he denied their application to lease Unit C-3 because Ennis had misrepresented his employment status. (Compl., ¶¶ 57 & 58.)
On February 10, 2009, attorney Robert Halpern ("Halpern") of Nassau Suffolk Law Services, Inc. ("NSLS"), contacted Levy on the Johnsons behalf to discuss the denial of the Johnsons application. According to the Johnsons, when Halpern asked Levy why he had denied their apartment application, Levy allegedly replied "[Ennis] has AIDS . . . I can't have that in my building". (Am. Compl., ¶ 68.) Based on his belief that Levy had discriminated against him, and that housing discrimination was a matter of public concern, Ennis expressed his version of the above-stated facts to various news outlets.
As a result, on February 18, 2009, Levy commenced an action against the Johnsons, Halpern, and various media outlets in New York State Supreme Court, Nassau County for defamation, among other causes of action ("the Defamation Action"). See Levy v. Johnson, No, 2851/09 (N.Y. Sup. Ct., Nassau Cnty).
On July 14, 2009, the Johnsons commenced the instant action against Jay Levy, his wife Diane Levy, Sue Campbell, and 51 Smith Street, L.L.C. asserting sixteen causes of action for violations of federal and state statutes as well as state common law based on alleged housing discrimination and the subsequent Defamation Action ("the Initial Complaint").
On September 30, 2010, the Defendants collectively moved to dismiss the complaint in its entirety pursuant to Rule 12(b)(6) for failure to state a claim. Prior to the Court ruling on the motion, the Plaintiffs voluntarily dismissed a number of causes of action, including their claims against Sue Campbell.
By order dated September 19, 2011, the Court granted the Defendants' motion to dismiss the Initial Complaint in its entirety. First, because the Plaintiffs had failed to allege any individual misconduct by Diane Levy, or assert any causes of action against her directly, the Court dismissed the complaint as against Diane Levy. The remaining causes of action subject to the first motion to dismiss alleged that: (1) Levy and 51 Smith Street L.L.C. were liable for housing discrimination based on disability in violation of the Fair Housing Amendments Act, 42 U.S.C. §§ 3604(f)(2)(a), 3604(f)(1), & 3617; Title III of the ADA, 42 U.S.C. § 12182; § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; and the NYHRL, N.Y. Exec. Law § 296(2-a) (the "housing discrimination claims"); (2) Levy and 51 Smith Street L.L.C. violated the New York State Anti-SLAPP statute, N.Y. Civil Rights Law §§ 70-a & 76-a by commencing the Defamation Action; and (3) Levy was liable for breach of contract.
With respect to the housing discrimination claims, the Court set forth the law governing disability discrimination claims under all four of the statutes, and noted that, "common to all housing discrimination claims under the FHA, NYHRL, ADA, and the Rehabilitation Act is the requirement that 'a plaintiff show that he was qualified for an available benefit and was denied that benefit'". Johnson I, 812 F. Supp. 2d 167, 180 (E.D.N.Y. 2011) (quoting Passanante v. R.Y. Mgmt. Co., Inc., No. 99-CV-9760, 2001 WL 123858, at *5 (S.D.N.Y. Feb. 13, 2001)). Because the Plaintiffs premised their argument that they were otherwise qualified to rent the apartment on the rental criteria set forth in the Offer Letter, the Court held that "in order to state a valid housing discrimination claim, the Plaintiffs were required to plead that they met the Defendants' objective requirements for the lease." Id. at 181. Ultimately, the resolution of the first motion to dismiss turned on an interpretation of the Offer Letter.
In this regard, the parties disputed the meaning of the following sentence in the Offer Letter, which the Court referred to as the "lease conditions provision": "The conditions are two months security and the first month's rent must be paid at the lease signing and the rent must be guaranteed by a governmental agency." According to the Plaintiffs, "the requisite qualifications for a one-year lease of Unit C--3 were: (1) two months security ("security deposit") and the first month's rent to be paid at the lease signing, and (2) a guarantee by a government agency for the security deposit and first month's rent". Id. at 181. By contrast, the Defendants argued "that the required "guarantee[ ] by a governmental agency" was for the ongoing rent payments, not the initial amounts due." Id.
Applying the principles of contract construction, the Court held that the lease conditions provision in the Offer Letter was unambiguous, and that "the only reasonable interpretation of the lease conditions provision is that the Plaintiffs were required to obtain a guarantee from a government agency for the remaining rent due for the one-year lease period." Id. at 184. Although the Plaintiffs had alleged that they obtained a guarantee from DSS for the security deposit and initial month's rent, the Court noted that "the complaint is devoid of any facts from which the Court can infer that, if given the opportunity, the Plaintiffs could have provided a guarantee from a governmental agency for the ongoing rent payments." Id. As a result, the Court held that "because the Plaintiffs have failed to plausibly allege that they were qualified to rent Unit C--3, they have failed to state valid housing discrimination claims under the FHA, ADA, Rehabilitation Act, and NYHRL." Id. Having dismissed the Plaintiffs' federal claims, the Court declined to exercise supplemental jurisdiction over the state law causes of action.
Although the Court dismissed the Plaintiffs housing' discrimination claims, the Court granted the Plaintiffs an opportunity to amend the complaint, stating:
First, while the Offer Letter is not ambiguous as to the necessary conditions for a lease agreement, it is silent as to when the conditions needed to be met. Although the Plaintiffs have not alleged that they could have obtained a governmental guarantee for the ongoing rent, such an allegation could, if properly pled, plausibly ...