IN THE IOWA DISTRICT COURT FOR SCOTT COUNTY

FISHERCREST APARTMENTS,

Petitioner,

VS.

IOWA CIVIL RIGHTS COMMISSION,

Respondent.

No.75450

ORDER AND JUDGMENT

This matter comes on before the Court for judicial review of a final order of the Iowa Civil Rights Commission, wherein the petitioner was found to be in violation of Iowa Code Section 601 A.8 (1987) in discriminating against one Otis Payton on the basis of race in the rental of apartments of the petitioner. Among other things, the Iowa Civil Rights Commission ordered the petitioner herein to pay to the complainant before the Commission the amount of $5,000, plus ten percent interest per annum from March 23, 1987. The final order was filed September 14, 1988, and the petition for judicial review was filed October 13, 1988, and for reasons unknown to the Court, submission there of was delayed until April 19, 1990.

The petitioner complains that the respondent agency was in error in determining that the testimony of the petitioner was not credible and failing to give any reason for that determination, in deterimining the nature and extent of the injuries which the complainant sustained, and in finding that anything that the petitioner did was the proximate cause of any injuries sustained by the complainant. There was further complaint that the commission erred by failing to require the complainant to mitigate damages by moving out of the Fishercrest Apartments, that all the damages were excessive under the circumstances and were punitive in nature rather than compensatory. All of these things, it is claimed, violate Iowa laws, are unsupported by substantial evidence in the record, and are unreasonable, arbitrary and capricious or characterized by an abuse of discretion or a clearly unwarranted exercise of descretion.

The underlying case involves an attempt on the part of a black couple to rent an apartment from the petitioner. The complainant had seen a vacancy sign at the apartment complex, and his daughter called to ask about the vacancy. The daughter was told there was a two-bedroom apartment open, and, on the next day, the complainants went to see the apartment. They were shown an apartment and were told that the rental agent was out of town and they'd have to talk to him the next day. The next day, the complainants called the rental agent and were told that the rental agent had received a deposit from a Chinese couple the night before. The complainants suspected they were being discriminated against because of race, and had their daughter-in-law, who was white, go see about renting an apartment, and she was told that an apartment was open and available. There was evidence from the record viewed as a whole that there never was a Chinese couple interested in renting the apartment, and that it was their purpose of the rental agent to keep any more black people from renting apartments in the complex. Through the subterfuge of having their white daughter-in-law make the deposit and secure the availability of the apartment, the complainants were able to execute a one-year lease and did actually move into the apartment complex.

The complainants testified at length concerning the emotional distress caused to them by this act of discrimination. The Court finds from the record viewed as a whole that the award of damages for this emotional distress was well supported by the evidence and is not an abuse of descretion, nor is it the imposition of a penalty, even though there were no other compensatory damages claimed by the complainants.

With respect to the contention that the complainant should have moved out, the Court does not understatnd any reason for imposing this burden on a black man. It was through subterfuge that he got the apartment in the first place, which he had been denied because of racial discrimination, and the Court finds no lawful or factual basis for requiring him to move out because he wasn't wanted.

The Court finds error in the award of interest at the rate of ten percent. The Commission has authority to award compensatory damages. The award of ten percent interest is out of line. The Commission is not governed by section 535.3 of the Iowa Code, since that section refers to judgments and decrees of a court. Interest is for the use of money and can properly be considered by an administrative agency in awarding damages. However, the Court cannot find any authority for permitting an administrative agency of the state government to violate Iowa's usury laws. The Commission, in filing an additional brief in response to the Court's request, has claimed authority to add interest under the theory that it is for the use of money due, that is the damages were due for the injury done to the complainants at the time of the acts complained of, and therefore the complainant was entitled to interest. This brings the case then squarely under Section 535.2(l )(b) and limits the rate of interest to five percent.

It was an unliquidated indebtedness, and by case law of long standing, unliquidated indebtedness does not bear interest until it was fixed. It appears to the Court that the final order of the Commission, which fixed the amount of damages for the mental and emotional distress, can only charge interest from that date, and then only at the rate of five percent per annum, from September 14, 1988, the date of the final order.

Neither does the Court believe that the petition for judicial review changes the situation, and raises the interest rate to the statutory rate now established under Section 535.3. This Court has no authority to enter any independent judgment based upon the proceedings below.

The Court concludes then that the Iowa Civil Rights Commission has exceeded its authority under the law and has imposed an illegal interest rate in this case, and that it should modify its final Judgment to provide interest at the rate of five percent annum. The Court further concludes that the commission cannot have the interest retroactive to any time prior to its final order, inasmuch as it is only the final order that liquidated the amount of damages for mental and emotional distress.

NOW THEREFORE, this case is remanded to the Commission for modification of its order according to this opinion. In all respects other than the rate of interest and the time of its imposition, the final order of the Commission is affirmed.

JUDGE, SEVENTH JUDICIAL DISTRICT