North Carolina Human Relations Council ex rel. Leach v. Weaver Realty Co.

HEDRICK, Chief Judge. This is the first case brought under the North Carolina State Fair Housing Act to reach the Appellate Division of the North Carolina General Court of Justice. Our Legislature modeled the key provisions of the State Fair Housing Act after provisions of the federal Fair Housing Act. Compare G.S. 41A-4 with 42 U.S.C. Sec. 3604. In light of the similarity between the two acts, the body of federal cases interpreting the federal Fair Housing Act is useful, although not controlling, in interpreting the North Carolina State Fair Housing Act. Federal Courts have held that violations of the federal Fair Housing Act may be shown under two different theories. First, housing policies and practices motivated by racial discrimination violate the act. See, e.g. United States v. West Peachtree Tenth Corp., 437 F. 2d 221 (5th Cir. 1971). To prove discriminatory intent under the federal standard, a plaintiff need not show that race is the sole or dominant motive behind the challenged policies or practices. Under the federal standard, it is sufficient for the plaintiff to show that race was a factor or a significant factor. Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed. 2d 450 (1977); Woods-Drake v. Lundy, 667 F. 2d 1198 (5th Cir. 1982). The second way of establishing violations of the federal Fair Housing Act is showing that policies and practices have a racially discriminatory effect, even absent evidence of a racially discriminatory motive. See, e.g. Robinson v. 12 Lofts Realty, Inc., 610 F. 2d 1032 (2d Cir. 1979). Plaintiff urges us to adopt the entire body of federal law interpreting the federal Fair Housing Act when interpreting our State Fair Housing Act. We refuse to do so. The “adverse” or “disparate impact” theory through which a plaintiff may show a violation of the federal Fair Housing Act using statistics, without showing racially biased motivation, is contrary to the ordinary meaning of the terms in the North Carolina State Fair Housing Act. The North Carolina Act prohibits any person from refusing to engage in a real estate transaction “because of race, color, religion, sex or national origin.” We hold that to prevail, plaintiff must show defendant refused to engage [715] in a real estate transaction with plaintiff due to plaintiffs race, color, religion, sex or national origin. Statistics describing the disparate impact of practices or policies may be circumstantial evidence of prohibited biased conduct. However, if the finder of fact reasonably finds that a particular housing practice or policy is not motivated by considerations of race, color, religion, sex or national origin, then the particular housing practice or policy is not a violation of the State Fair Housing Act no matter how “disparate” the impact of the practice or policy. We also refuse to adopt the peculiar standard of causation adopted by federal courts in federal Fair Housing Act cases. We see no reason not to adopt the traditional proximate cause standard which the courts of our State have ample experience in applying. Thus race, color, religion, sex or national origin must be more than a mere factor in a defendant’s decision not to engage in a real estate transaction. The only question for review in the present case is whether the evidentiary matter offered in support and opposition to the motion for summary judgment raises a genuine issue of material fact in relation to plaintiffs claim for relief under G.S. 41A-4(a)(l), which in pertinent part provides: (a) It is an unlawful discriminatory housing practice for any person in a real estate transaction, because of race, color, religion, sex, or national origin, to: (1) Refuse to engage in a real estate transaction. G.S. 41A-3(7) provides that “ ‘[r]eal estate transaction’ means the sale, exchange, rental or lease of real property.” Plaintiff contends on appeal that the evidentiary matter considered by Judge Bailey raises a genuine issue of material fact as to whether defendants refused to rent a two- or three-bedroom apartment to Patty Leach because she is black. The evidence in the record discloses that the defendant, Weaver Realty Company, has two special rules regarding the rental of its two- and three-bedroom apartments. One rule, required by the Farmers Home Administration as a condition of financing construction of the apartments, provides that families with fewer than four members may not rent three-bedroom apartments without Farmers Home Administration approval. The other [716] rule provides that single parents who have children of opposite sexes, at least one of whom was over six, could not qualify for a two-bedroom apartment. The record discloses that Patty Leach is a divorced black single parent with two minor children of opposite gender, both of whom are over six. In an affidavit, Mrs. Cottle describes a conversation with Lee Anne Watson, Weaver Realty’s resident manager at Wakefield Apartments. Mrs. Cottle states Ms. Watson told her that the family composition rules were weapons to keep out undesirable blacks. Plaintiff may meet her burden of proof by showing that the facially neutral family composition rules used to deny her application were promulgated to discriminate against blacks. Mrs. Cottle also reports statements by Ms. Watson indicating that Ms. Watson would try to get the family composition rules waived for Mrs. Cottle, a white woman. Plaintiff may also meet her burden of proof by showing that she could have leased the apartment if she were of another race. The evidence presented by plaintiff is sufficient to raise a genuine issue of material fact as to whether defendants discriminated against plaintiff in the leasing of an apartment because plaintiff is black. For the reasons stated, summary judgment must be reversed and the case remanded. Reversed and remanded. Judges WEBB and PARKER concur.