The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
HORIZON HOUSE, INC. : CIVIL ACTION
:
v. :
:
EAST NORRITON TOWNSHIP : NO. 19-1252
MEMORANDUM
Bartle, J. November 7, 2022
On July 25, 2022, the court granted summary judgment
on liability in favor of plaintiff Horizon House, Inc. and
against defendant East Norriton Township, on plaintiff’s claim
that defendant violated the Fair Housing Amendments Act
(“FHAA”), 42 U.S.C. §§ 3601 et seq.1 On October 11, 2022, the
court held a nonjury trial on the issue of damages. The
following includes a summary of the undisputed liability
evidence as well as the court’s findings of fact and conclusions
of law on damages.
Plaintiff is a nonprofit organization that provides
supportive services to individuals in Pennsylvania with
intellectual disabilities. In December 2018, plaintiff entered
into an agreement to purchase a single-family home on Stoney
Creek Road in East Norriton Township in Montgomery County,
Pennsylvania. Plaintiff at all times planned to use the
1. The court also held that defendant violated the Americans
with Disabilities Act, 42 U.S.C. §§ 12132 et seq., and the
Rehabilitation Act, 29 U.S.C. §§ 794 et seq., as both claims are
property to house up to three individuals with disabilities and
provide them with supportive services.
Defendant repeatedly refused to issue plaintiff a
certificate of use and occupancy, which was a prerequisite to
plaintiff’s ability to occupy the Stoney Creek Road property.
In December 2018, defendant denied plaintiff’s first application
for a certificate of use and occupancy on the ground that
plaintiff’s proposed use constituted a “group home” under the
East Norriton Township zoning ordinance. The ordinance would
have required plaintiff to apply for a special exception and
comply with a series of regulations that are both financially
and logistically burdensome.
Despite the initial denial of the certificate of use
and occupancy, plaintiff completed the purchase of the property
in January 2019. Plaintiff twice again applied for the
certificate in March and July 2019. Defendant denied
plaintiff’s second and third applications. Plaintiff appealed
defendant’s third denial to the Township’s Zoning Hearing Board
(“ZHB”). After a public hearing before the Township’s Planning
Commission, the ZHB denied plaintiff’s appeal. Meanwhile, on
March 25, 2019, plaintiff filed the complaint that initiated
this action.
In December 2019 plaintiff appealed the ZHB’s denial
to the Court of Common Pleas of Montgomery County. In September
2020 the Court of Common Pleas held that the ZHB erred in
finding that plaintiff’s proposal was not a single-family
dwelling and ordered the ZHB to issue a use and occupancy
certificate for the property. The ZHB appealed the decision to
the Commonwealth Court of Pennsylvania, and defendant later
moved to intervene in support of the ZHB. The Commonwealth
Court quashed the appeal in July 2021. On September 29, 2021,
defendant issued the certificate of use and occupancy to
plaintiff.
Plaintiff in its amended complaint sought injunctive
relief and compensatory damages. The parties agree that the
September 2021 issuance of the certificate of use and occupancy
rendered moot plaintiff’s request for injunctive relief.
Plaintiff nonetheless continued to seek damages over the period
during which it was unable to use the property because of
defendant’s denial of its use and occupancy certificate.
In May 2022 the parties filed cross-motions for
summary judgment on liability under the FHAA. The court granted
plaintiff’s motion for summary judgment and denied defendant’s
motion for summary judgment. See Horizon House, Inc. v.
E. Norriton Twp., Civ. A. No. 19-1252, 2022 WL 2916680, at *5
(E.D. Pa. July 25, 2022), reconsideration denied, 2022 WL
4119778 (E.D. Pa. Sept. 8, 2022). The court held that
defendant’s zoning ordinance was facially discriminatory because
it imposed significant financial and logistical burdens on those
who sought to provide housing for individuals with disabilities.
However, the court deferred ruling on defendant’s argument that
plaintiff failed to adduce sufficient proof of damages. Id.
at *6 n.2.
At the damages trial, plaintiff called a single
witness, Jeffrey Wilush, the President and Chief Executive
Officer of Horizon House and its Rule 30(b)(6) witness. Wilush
testified to the losses that plaintiff asserted were proximately
caused by defendant’s denials of its application for a
certificate of use and occupancy. The defendant called no
witnesses.
The Supreme Court has held that a successful plaintiff
in an action under the Fair Housing Amendments Act may recover
damages for injuries proximately caused by the illegal conduct.
Bank of America Corp. v. City of Miami, 137 S. Ct. 1296 (2017).
The harm for which damages are sought must have “a sufficiently
close connection to the conduct the statute prohibits.” Id. at
1305 (quoting Lexmark Int’l, Inc. v. Static Control Components,
Inc., 134 S. Ct. 1377, 1390 (2014)).
Plaintiff, it must be emphasized, does not seek to
recover as damages the revenue payments which it would have
received from the Commonwealth of Pennsylvania for housing three
individuals in the house on Stoney Creek Road had defendant not
violated the Fair Housing Amendments Act. Throughout the
discovery period as well as at the damages trial plaintiff made
this point clear that it was not suing for lost revenue. In
fact, during the deposition of Wilush, plaintiff’s counsel
instructed him not to answer any questions about the
Commonwealth’s method of compensating Horizon House and
threatened to adjourn the deposition if defendant’s counsel
continued with this line of inquiry.
Prior to trial, plaintiff’s counsel advised
defendant’s counsel that plaintiff was seeking as damages only
its costs related to the delay in occupying the Stoney Creek
property caused by defendant’s misconduct. Plaintiff described
its damages as follows:
1. Mortgage and related costs (such as
taxes paid) for the house.
2. Legal fees for the zoning appeal that
went to the Zoning Board, the Court of
Common Pleas and the Commonwealth Court.
3. Lost Revenue damages, which consist of
those amounts that HHI paid out that it
cannot recoup because it was not able to
open the house.
Lost revenue damages were specifically described as
mortgage and related costs, allocated costs, and administrative
costs, all attributable to the unoccupied Stoney Creek property.
In a September 16, 2021 email, plaintiff’s counsel
told defendant’s counsel that the latter had “all the documents
that exist related to damages that Horizon House is actually
claiming.” Plaintiff had produced no documents related to the
revenue stream that Horizon House would have received from the
Commonwealth for the occupants of the Stoney Creek property had
defendant not withheld the proper use and occupancy permit.
The damages trial was scheduled to begin on Tuesday
morning, October 11, 2022 (Monday being a Federal holiday). It
was not until Friday, October 7, 2022, that plaintiff’s counsel
forwarded to defendant’s counsel documents related to how the
Commonwealth calculates payments to Horizon House and other
similar entities for the residents of group homes such the
Stoney Creek property. According to plaintiff’s counsel,
plaintiff intended to establish from these documents the revenue
it would have been paid. When plaintiff’s counsel at trial
sought to question Wilush about the documents, defendant’s
counsel objected as not having been provided the documents in a
timely manner. In response to questioning by the court,
plaintiff’s counsel conceded that the documents were produced at
the eleventh hour, long after the discovery period had closed.
His only response for failing to do so earlier was that the
documents were all in the public domain. The court deferred
ruling on defendant’s objection at the trial. The court now
rejects the response of plaintiff’s counsel and sustains
defendant’s objection. There is no rule that relieves a party
from its obligation to identify and produce relevant documents
simply because they are somewhere available to the public.
These documents will not be received as evidence.
In addition, plaintiff’s counsel as noted had
repeatedly advised defendant’s counsel that plaintiff was not
seeking as damages the amount of revenue not received from the
Commonwealth. Instead it was seeking mortgage and related
costs, allocated costs, and administrative costs attributable to
the Stoney Creek property during the time it would have occupied
the property and was not receiving what it considered to be
offsetting income from the Commonwealth. However, the only way
to prove these costs as damages is to establish that the revenue
from the Commonwealth would have totally offset these costs. To
prove what it would have received, plaintiff needed to establish
the method used by the Commonwealth to calculate the amount that
would have been due and then calculate that amount. Plaintiff
could do so only through these documents at issue. Plaintiff
was attempting to use these documents for this purpose, after
having denied defendant’s counsel the opportunity to question
the Horizon House Rule 30(b)(6) witness on this very subject
during his deposition, after misleading defendant’s counsel
weeks before the trial that he had all documents relevant to
plaintiff’s damages claim, and after then changing course and
supplying defendant’s counsel with the documents only on the eve
of trial.
Plaintiff cannot have it both ways. It sought to
engage in trial by ambush. Since plaintiff cannot prove damages
attributable to mortgage and related costs, allocated costs, and
administrative costs without these documents providing proof of
what the Commonwealth would have paid, the court rejects
plaintiff’s claim for such damages.
Plaintiff also claims as damages its legal fees and
costs in the amount of $29,943.91 related to challenging the
action of the defendant before the Zoning Board of Adjustment,
the Court of Common Pleas of Montgomery County, and the
Commonwealth Court. At that time defendant was pursuing its
objective to deny the issuance of the Use and Occupancy permit
for the Stoney Creek property. The amount of legal fees and
costs are fair and reasonable. The sum of $29,943.91 will be
awarded as it constitutes damages for harm proximately caused by
defendant’s conduct in violation of the Fair Housing Amendments
Act.2
2. Defendant asserts that plaintiff, Horizon House, Inc.,
lacks standing because it was actually plaintiff’s wholly owned
subsidiary, Horizon House Development Service, Inc., that was
slated to provide supportive services at the Stoney Creek
property. This argument is meritless. Plaintiff Horizon House,
Inc. was the owner of the house in issue on Stoney Creek Road.
Defendant’s application of its zoning ordinance clearly deprived
plaintiff of its ability to make the house available to
individuals with disabilities. Plaintiff has a constitutionally