IN THE DISTRICT COURT FOR POLK COUNTY
JON BATESOLE and JOHN PATRICK, Petitioners,
VS.
IOWA CIVIL RIGHTS COMMISSION, Respondent.
AA No. 1121
DECISION OF APPEAL
STATEMENT
This is an action for judicial
review of a contested case decision and involves an appeal from
the final decision of the Iowa Civil Rights Commission (hereinafter
"Commission"). The decision of the Commission was filed
on October 9, 1986, and reversed the decision of the Hearing Officer
and found that Terry and Danielle Wells were discriminated against
on the basis of race when they were refused the opportunity to
rent a duplex located at 4118 Franklin in Des Moines, Iowa. From
said decision, the petitioners have filed this Administrative
Appeal.
The Court, after reviewing
the entire record made before the Agency, hearing the statements
and arguments of the attorneys, reviewing the briefs filed by
the attorneys, and being fully advised, States:
1. The Court has jurisdiction
over the subject matter of this action and over the parties hereto.
2. This is an application for judicial review of an adverse decision in a contested case after all administrative remedies have been exhausted.
FINDINGS OF FACT
1. Terry Wells, a white
male, and Danielle Foster Wells, a black female, were married
in November 1985. During the preceding summer, they were moving
from Ames and in search of housing in Des Moines, with intended
occupancy by July 15, 1985.
2. On approximately June
17, 1985, the Wells' saw a "for rent" sign on the lawn
of the property at 4118 Franklin in Des Moines. Terry made an
appointment to view the duplex on his way to work on following
day and was shown the property by John Patrick, maintenance manager.
3. Mr. Patrick pointed out
all the advantages of the duplex such as the closet space and
track lighting, discussed the items for which the tenant was responsible,
described the neighborhood, and gave him an application to complete
which asks for information concerning personal references, credit
references, length of employment, length of occupancy in previous
rentals, and other objective information.
4. Terry told Mr. Patrick
that he wanted Danielle to view the apartment before they decided
whether to take it or not, and he made an appointment to return
to view the duplex with Danielle.
5. Jon Batesole owns the
rental unit in question. Although Mr. Patrick shows the units
for Mr. Batesole, he has no authority to lease any of the properties
owned by Mr. Batesole. As a general rule, Mr. Batesole requires
that a prospective tenant have two years continuous employment
with the same employer before that person could receive favorable
consideration as a tenant.
6. On approximately June
24, 1985, Terry returned to the duplex with Danielle. Both noted
that Mr. Patrick seemed shocked when he saw that Danielle was
black. Although Mr. Patrick has shown Terry through the apartment,
he remained in the kitchen while Terry showed Danielle through
the duplex. The Wells' decided they wanted to rent the property
and completed the application form and offered to place a deposit
on the duplex. Mr. Patrick stated that he would have to check
with the owner and show him the application and the decision whether
or not to rent rested with the owner.
7. Mr. Patrick originally
indicated that he wanted to rent the duplex by July 1, and the
Wells' had agreed to begin renting on July 10. Sometime after
July 4, the Wells' noticed that the property was still for rent,
and Terry called Mr. Patrick to see if they could rent the duplex.
He again was told by Mr. Patrick that he, Mr. Patrick, would have
to check with the owner and that he had not been able to reach
him because "He was in Alaska".
8. Several days later Terry
again contacted Mr. Patrick, and Mr. Patrick stated that his application
was being turned down because he did not have two years of continuous
employment with his current employer.
9. The Wells' then sought other housing in Des Moines. The duplex was subsequently rented to a non-minority.
STATEMENT OF ISSUES
ISSUE NO. 1: Was the decision of the Iowa Civil
Rights Commission supported by substantial evidence when the record
is reviewed as a whole?
ISSUE NO. 2: Did the Commission's award of damages constitute the imposition of punitive damages?
RULING
Judicial review of final
agency action is governed exclusively by the Iowa Administrative
Procedure Act. Iowa Code Section 17A. 19 (1985). In reviewing
agency action a district court exercises only appellate jurisdiction.
The petitioners contend
that the Commission's decision is not supported by substantial
evidence in the record. Judicial review of the Agency's decision
is governed by the "substantial evidence" rule of Section
17A. 19(8)(f). In accordance with this rule, this Court must determine
whether the Agency decision is supported by substantial evidence
when the record is viewed as a whole. The Court is not free to
interfere with an Agency's findings where there is a conflict
in the evidence or when reasonable minds might disagree about
the inferences to be drawn from the evidence, whether disputed
or not. Evidence is substantial if a reasonable person would find
it adequate for reaching a decision. The question is not whether
there is sufficient evidence to warrant a decision the Agency
did not make, but rather whether there is substantial evidence
to warrant the decision it did make.
The complainants must first
establish a prima facie case of discrimination by a preponderance
of the evidence. They must prove that (1) they are a member of
a protected class, (2) They applied for and were qualified to
rent the unit involved, (3) That they were rejected by the petitioners,
and (4) that a non-minority was accepted as a tenant.
Evidence supporting the
elements of a prima facie case establishes a legally mandatory
presumption, and both the Hearing Officer and the Commission determined
that the complainants had established a prima facie case of racial
discrimination, and this Court agrees.
Once the presumption has
been created, the petitioners have the burden of producing admissible
evidence showing a 'legitimate, non-discriminatory reason"
for the challenged action. In other words, there must be a non-discriminatory
reason for not renting the duplex to the complainants.
Again in this case, both
the Hearing Officer and the Commission recognized that there is
a legitimate business reason for imposing the requirement of
two years continuous employment. It then developed upon the complainants
to establish by a preponderance of the evidence that the proffered
justification for not renting to them was merely pretextual. This
can be done by two ways: (1) directly by persuading the Court
that a discriminatory reason likely motivated the petitioners
or (2) indirectly by showing that the petitioners' proffered explanation
is unworthy of credence.
The Commission found such
evidence that the reason for the rejection of the complainants
was merely pretextual for racial discrimination.
In the case entitled Woodbury
County v. Iowa Civil Rights Commission , 335 N.W. 2d, the
Supreme Court, citing a Federal Court opinion, stated:
"Employer's stated
legitimate reason must be reasonably articulated and non-discriminatory,
but does not have to be a reason that the judge or jurors would
act on or approve. An employer is entitled to make his own policy
and business judgement, as long as this is not a pretext for discrimination.
The reasonableness of the employer's reasons may be probative
whether they are pretext. The more idiosyncratic or questionable
the employer's reason, the easier it will be to expose it as a
pretext, if, indeed it is one."
The Court Finds that the
Commission was correct in determining that the complainants established
by a preponderance of the evidence that the reason was merely
a pretext of discrimination.
The answer to Issue No.
1, therefore, is "yes". The second Issue concerns the
Commission's award of damages.
Iowa Code Section 601A.15(8)
provides in part as follows: "Payment to the complainant
of damages for an injury caused by the discriminatory or unfair
practice which damages shall include but are not limited to actual
damages, court costs and reasonable attorney fees. " "Actual
damages" is defined as "The amount awarded to a complainant
in compensation for his actual and real loss or injury."
Under the "Chauffeurs"
case, 394 N.W. 2d 375, damages for emotional distress, unaccompanied
by any physical trauma, can be awarded where the discriminatory
act is intentional or willful. However, an administrative agency
cannot award punitive damages absent express statutory language
allowing such an award. The Iowa Civil Rights Act does not give
the Commission the express authority to award punitive damages,
hence no punitive damages in Iowa.
Although damages for emotional
distress are allowed in Iowa, the evidence on behalf of the complainants
did not show any economic loss, nor did the parties complain of
any symptoms indicative of emotional distress such as headaches,
nausea, loss of appetite, tension, depression, or loss of time
from work. There is no evidence offered by the complainants that
they have sustained emotional distress; therefore, the damages
awarded by the Commission are illegal and punitive in nature.
Additionally, there is no
basis in law or in fact to require the petitioners to pay $100
per month to the complainants; therefore, that award is declared
void and invalid.
The complainants were humiliated,
surprised, and frustrated by the actions of the petitioners; and
the petitioners shall Pay to the complainants, Danielle and Terry
Wells, for actual damages, the sum of $500 each.
IT IS THEREFORE THE ORDER
OF THE COURT that the decision of the respondent Agency is affirmed
in that the petitioners have violated the Iowa Civil Rights Act
by denying each complainant housing because of race.
IT IS THE FURTHER ORDER
OF THE COURT that the decision of said Agency is reversed as to
the amount and kind of damages and that all damages awarded in
said decision are illegal and totally unsupported by the facts
and are declared void an held for naught.
IT IS THE FURTHER ORDER OF THE COURT that the petitioners shall pay to the complainants, Terry Wells and Danielle Foster Wells, as actual damages, the sum of $500 each.
Costs of this Appeal are charged to the petitioners.
Dated this 5th day of October, 1988.
Ray A. Fenton
JUDGE OF THE FIFTH JUDICIAL DISTRICT OF IOWA
Copies to:
Eugene E. Olson/Douglas A. Fulton
Teresa Baustian