Opinion
Index No. 154472/2022 Motion Seq. No. 005
01-09-2023
HOUSING RIGHTS INITIATIVE, INC., Plaintiff, v. DOUGLAS ELLIMAN, MARJORIE TORNATORE, MARYAM DAGHOUMI, DORIAN NASTO, TOY ONG CHEUNG, 109 CONGRESS STREET LLC, 254-125 LLC,COLDWELL BANKER RELIABLE, CHRISTIAN FLOREZ, OXFORD PROPERTY GROUP, MAY AMOS, 750 TENTH AVE REAL TY LLC, AAG MANAGEMENT, INC., REMAX EDGE, ELENA LEAL, 9430 RIDGE OWNERS CORP, KEYSTONE REAL TY USA, PAR ESH KUMAR SHAH, GLEN OAKS VILLAGE OWNERS, INC., CENTURY HOMES REAL TY GROUP LLC, JANE GAO, STEVEN CORCORAN REAL ESTATE LLC, SHERRIE MORGAN, HOMEMAX REAL TY, ERIC ZHAO, 351 MARINE OWNERS CORP, EXP REAL TY, GORDANA SKUGOR, NEW YORK CASAS, CHARLAR ACAR, RALPH FRANKEN LLC, MOMENTUM REAL ESTATE, LILY LUU, STANLEY CHEUNG, AVANGUARD REAL TY CORP, JENNY VASSILEVA, DAGINATI LLC, SARDELL REAL TY LLC, KAREN SARDELL, EDEL FAMILY MANAGEMENT CORP, JHOLEYNI PENA, REAL NEW YORK, EDWARD XU, CUCCIA EDWARD, J., CHRISTY CHOK, L & CREAL TY ASSOCIATE, INC., J SIKAR REAL TY, NELLY BERNSTEIN, AAA Y.S. REAL TY INC, FEI CHEN, NYC MODERN REAL TY, INC., HELEN LIN, GUO XIAN KAI, THE COOP CONNECTION LLC, EILEEN MASSONE, SRL MANAGEMENT LLC, VLADISLAV DAVIDOV, BROOKLYN PROPERTIES OF SEVENTH AVENUE, INC., CARLOS ARZE, 685 STERLING ASSOCIATES LLC, REALTEGRITY NY, CARYL SCHIFF, FOLEY'S 8 REAL ESTATE, TIM FOLEY, MONTGOMERY 5 ASSOCIATES LLC, J. WINTER REAL ESTATE, JEFF WINTER, Al DONIS REAL TY, MARIA Al DONIS, KELLER WILLIAMS REAL TY OF GREATER NASSAU COUNTY, JOHN ARGYROS, JOHN SILVER LLC, MACCABEE 1 REAL TY CORP, DAVID NAJAFI, ASMA BEGUM EMRAN, REAL TY PLUS GROUP, INC., DAE KIM, YOUNGGIL CORP, COMFORT PROPERTIES, INC., OSAMA GHEITH, AMERICAN REALTY AIJ 214, LLC, FUL TONEX REAL TY, EUNICE CHEN, THE PAVILION OWNERS CORP, NEW SPIRIT REAL TY, INC., FRANK DESANTIS, APTS 601 79 LLC, HOMETOWN PROPERTIES, JACK CHENG, ABBA REAL TY ASSOCIATES, ANAT ELGARISI, MENDEL BOYMELGREEN, RENAISSANCE EQUITY HOLDINGS LLC A, CONTACT REAL TY, DAY ANA ZAMORA, B. BELINDA REALTY LLC, BELINDA GILLIS, 863 STERLING LLC, IVEY NORTH LLC, AYANNA BARTON, BATRA GROUP, INC., JOHNATHAN CRUZ, 251 HIMROD LLC,OLAUSSON PARTRIDGE STEFFAN, REBEKAH GIBSON, MANHATTAN FLATS, YAEL DAVID, GUARDIAN REAL TY GROUP, DANNY DOUMANIS, 25-4112TH STREET LLC, MAYFLOWER REAL TY AND ASSOCIATES, LINDA CHENG, EVA M. DANIELS REALTY, EVA DANIELS, CITI NEST GROUP LLC, MIKE ATIA, 123 PARK, LLC, MAXIMILLION REAL TY, INC., BORIS BERYLAND, DAVID REYTBLAT, RICHARD CUFFARO, EDWARD ROZENTHAL, NIINA POOLE, PAUL NYLAND Defendants.
Unpublished Opinion
MOTION DATE 09/23/2022
PRESENT: HON. MARY V. ROSADO JUSTICE
DECISION + ORDER ON MOTION
MARY V. ROSADO, JUDGE
The following e-filed documents, listed by NYSCEF document number (Motion 005) 64, 65, 66, 67, 68, 178, 179, 180, 181, 182, 183, 184, 185, 190 were read on this motion to/for DISMISS.
Upon the foregoing documents, and after oral argument on December 13, 2022, where Randolph McLaughlin, Esq. and Casey Pearlman, Esq. appeared for Plaintiff Housing Rights Initiative, Inc. ("HRI" or "Plaintiff) and John T. Mills, Esq. appeared for Defendant AAG Management, Inc. ("AAG"), AAG's motion to dismiss pursuant to CPLR §§ 3211 (a)(3), (a)(5), and (a)(7) is denied. Plaintiffs cross-motion to amend its Complaint is granted.
I. Factual and Procedural Background
Plaintiff brought this action against real estate agents, brokerage firms, property management companies, and property owners, alleging intentional and willful source of income discrimination in violation of the New York State Human Rights Law ("NYSHRL") and New York City Human Rights Law ("NYCHRL") (NYSCEF Doc. 1). Plaintiffs Complaint was filed on May 25, 2022 (id). It is alleged that Defendants have willfully and intentionally refused to rent apartments to individuals who intend to pay rent with CityFHEPS vouchers (id. at ffl[ 4-5).
Plaintiff is a nonprofit housing group (id. at ¶ 9). Plaintiff alleges it has been injured by having to expend resources to investigate and to respond to Defendants' discriminatory practices, which not only diverted Plaintiffs resources, but frustrated Plaintiffs mission (id). Plaintiff utilized testers whose investigations allegedly revealed source of income discrimination perpetuated by Defendants who refused to accept CityFHEPS vouchers for advertised apartments.
To qualify for a CityFHEPS voucher, a household must have a gross income at or below 200% of the federal poverty level. Further, the household must (a) include a veteran who is at risk of homelessness, or (b) the New York City Department of Social Services must determine that a CityFHEPS voucher is required to avoid shelter entry, or (c) the household must be facing eviction and includes someone who lived in a shelter and has an active adult protective services case, or (d) would otherwise be eligible for CityFHEPS if they were in a shelter (NYSCEF Doc. 49). The CityFHEPS voucher is issued to some of New York City's most indigent and vulnerable citizens, helps prevent homelessness, and relieves New York City's overly burdened shelter system. Plaintiff alleges that in 2019, only 20% of New Yorkers with a CityFHEPS voucher were able to secure housing, and that one of the primary reasons for this low percentage is source of income discrimination (NYSCEF Doc. 1 at ¶ 94).
Plaintiff alleges that Defendants must comply with anti-discrimination laws under the NYSHRL and NYCHRL (id at ¶ 95). Further, Plaintiff allege that the monthly rent charged by all named Defendants at each of the investigated properties did not exceed the CityFHEPS program's maximum allowable rent (id. at ¶ 96). Moreover, Plaintiff alleges that all Defendants, their employees, or their agents, told Plaintiffs testers that Defendants would not accept CityFHEPS as a source of payment for rent at the investigated properties (id. at ¶ 97).
As to AAG, it is alleged that AAG managed an apartment located at 465 West 51st Street #4A, New York, New York 10019 (the "Apartment") and utilized the services of Defendant May Amos ("Amos"), an employee of Defendant Oxford Property Group ("Oxford") to rent the Apartment (id. at ¶ 20). The Apartment is allegedly owned by 750 Tenth Ave. Realty, LLC (id. at ¶ 104). The Apartment was advertised on StreetEasy as a one-bedroom apartment listed for $1,920 per month (id.). On October 7, 2021, an HRI tester posing as a prospective tenant called Amos and asked if the apartment was available (id). Amos confirmed the Apartment was available (id.). The tester then asked if they could use a CityFHEPS voucher, to which Amos allegedly responded "[N]o. Its rent stabilized so the landlord is looking for an excellent applicant." (Id.). It is alleged that Amos and Oxford were acting as an agent fo AAG and 750 Tenth Ave. Realty, LLC at the time of the alleged conversation (id.).
Plaintiff filed another action against different defendants in New York County Supreme Court on June 30, 2021 (see Housing Rights Initiative, Inc. v Century 21 Dawns Realty, et. al, Index No.: 156195/2021) (the "Century 21 case"). In that case, two defendants moved to dismiss the complaint. By order dated August 16,2022 (the "Century 21 Decision"), Justice William Franc Perry III dismissed the complaint against two of the defendants based on standing, although litigation continues against other defendants. On September 14, 2022, Plaintiff filed a motion to reargue Justice Perry's decision. On November 9, 2022 the New York Attorney General filed an amicus brief in support of Plaintiff s motion to reargue.
The pending motion to reargue has not been decided.
In the case at bar, AAG filed this pre-answer motion to dismiss on September 16, 2022 (NYSCEF Doc. 64). AAG believes that Justice Perry's decision collaterally estops this Court from finding Plaintiff has standing to bring this lawsuit (see NYSCEF Doc. 68). AAG also argues that even if Plaintiff does have standing to maintain this action, they have failed to state a claim under the NYSHRL and NYCHRL (id.).
In response, on October 28, 2022, Plaintiff cross-moved to amend its Complaint to specify further the alleged injuries it has suffered as a result of Defendants' alleged discrimination (NYSCEF Doc. 178). Plaintiff also asserts that collateral estoppel does not apply since dismissal in the Century 21 case was based on standing. Plaintiff further asserts that since organizations like HRI have standing to bring claims based on testing under the Fair Housing Act, and since the NYSHRL and NYCHRL are meant to provide even broader remedial protection than their federal counterparts, then Plaintiff also has standing to bring claims of housing discrimination under both the NYSHRL and NYCHRL (NYSCEF Doc. 185). Plaintiff further argues that it has stated a cause of action under the NYSHRL and NYCHRL by alleging intentional and willful violations by AAG and its agents of applicable sections of the NYSHRL and NYCHRL. On November 3, 2022, Defendant AAG opposed Plaintiffs cross-motion (NYSCEF Doc. 190).
II. Discussion
A. Collateral Estoppel and CPLR § 3211(a)(5)
The Court will first assess whether collateral estoppel binds this Court to the Century 21 Decision. Collateral estoppel applies when "(1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits" (Conason v Megan Holding, LLC, 25 N.Y.3d 1 [2015] [internal quotation marks and citation omitted], rearg denied 25 N.Y.3d 1193 [2015]). Collateral estoppel is an equitable doctrine, grounded in the facts and realities of a particular litigation, and is not to be applied rigidly. Buechel v Bain, 97 N.Y.2d 295, 303 [2001]; Tydings v Greenfield, Stein & Senior, LLP, 43 A.D.3d 680,684 ; Pustilnik v Battery Park City Authority, 71 Misc.3d 1058, 1069 [Sup Ct, New York County 2021]).
It is well established that a dismissal premised on lack of standing is not a dismissal on the merits for the purposes of res judicata and collateral estoppel (Landau v LaRossa, Mitchell & Ross, 11 N.Y.3d 8, 13 [2008] citing Parker v Blauvelt Volunteer Fire Co., 93 N.Y.2d 343 [1999]; see also Favourite Limited v Cico, 208 A.D.3d 99, 108 [1st Dept 2022] ["standing and capacity related dismissals are not on the merits"]; Selene Finance, L.P. v Coleman, 187 A.D.3d 1082 [2d Dept 2020]; Wells Fargo Bank, N.A. v Ndiaye, 146 A.D.3d 684 [1st Dept 2017]; Tap Holdings, LLC v Orix Finance Corp., 109 A.D.3d 167 [1st Dept 2013]).
Because the Century 21 Decision on standing was not a final judgment on the merits, collateral estoppel does not apply (see Conason v Megan Holding, LLC, 25 N.Y.3d 1,18 [2015] [finding that collateral estoppel cannot apply where four elements laid out by Court of Appeals were not met]; see also Zimmerman v Tower Ins. Co. of New York, 13 A.D.3d 137, 139 [1st Dept 2004] ["Collateral estoppel is a component of the broader concept of res judicata, wherein the parties to a litigation and those in privily with them are conclusively bound by a judgment on the merits...] [emphasis added]). Thus, the motion to dismiss based on CPLR § 3211(a)(5) is denied.
B. Standing and CPLR § 3211(a)(3)
Although this Court is not collaterally estopped by the Century 21 Decision, as standing is another threshold Plaintiff must surmount, this Court will conduct a CPLR § 3211(a)(3) analysis. On a motion to dismiss based on standing the burden is on the moving party to demonstrate that a plaintiff lacks standing. However, to defeat a CPLR §3211(a)(3) motion, the plaintiff merely needs to raise a triable issue of fact as to whether standing exists (DLJ Mortgage Capital v Mahadeo, 166 A.D.3d 512, 513 [1st Dept 2018] citing Deutsche Bank Natl. Trust Co. Ams. v Vitellas, 131 A.D.3d 52, 59-60 [2d Dept 2015]). AAG claims the injuries alleged are not specific enough to confer Plaintiff with standing (NYSCEF Doc. 190).
The Court disagrees with AAG and finds they have not met their burden. Specifically, Plaintiff alleges that "When HRI finds discrimination, it diverts resources to address the problem through education and outreach, advocacy, training, collaboration and, if necessary, enforcement." (NYSCEF Doc. 1 at ¶ 160). Plaintiff listed particularized measures it had to take resulting in a diversion of resources, including (1) providing educational materials to schools, churches, and other local partners concerning the responsibilities of landlords and brokers related to source of income discrimination; (2) publishing website content for HRI's website about source of income discrimination in New York; (3) outreach to elected officials and government agencies to discuss HRI's alleged findings; (4) outreach directly to Defendants themselves, and (5) publishing advertisements about source of income discrimination and rights of tenants (id. at ¶ 161). Plaintiff alleges this diversion of resources reduced HRI's ability to further its advocacy related to rent stabilization laws and tax benefit programs (id. at ¶ 162). HRI alleges that if this alleged discrimination remains unabated, it will have to continue to divert resources to the detriment of other advocacy work (id. at 163).
Plaintiff also submits a proposed amended complaint which provides other particularized injuries (NYSCEF Doc. 182). Plaintiff alleges that Defendants' discrimination led to a reduction in available safe and affordable housing which led to increased demand and need for HRI's organizing, counseling and referral services (id. at ¶ 177). Plaintiff also alleges it had to divert resources away from investigating fraudulent rent overcharge cases (id. at ¶ 179). Plaintiff quantified its injuries by alleging it was compelled to divert hundreds of hours of time to investigate, educate, and conduct outreach to address source of income discrimination (id. at It 166-167).
Plaintiff also provided guidance from the New York State Division of Human Rights ("NYSDHR") which expressly states that housing advocacy organizations, such as Plaintiff, "can file a complaint about any discriminatory policy or practice of a housing provider...which is revealed by responses of a housing provider to inquiries by the agency or its testers, or by other investigative means" (NYSCEF Doc. 181). The guidance cites a variety of cases which recognize organizational standing to seek injunctive and monetary relief based on discriminatory statements made to testers, even if the plaintiff could not show actual harm had occurred to individuals (Fair Housing Justice Center, Inc. v Allure Rehabilitation Services LLC, 2017 WL 4297237 [EDNY 2017]; Olsen v Stark Homes, Inc. 759 F.3d 140 [2d Cir. 2014]; Sherwood Terrace Apartments v NY State Div. of Human Rights, 61 A.D.3d 1333 [4th Dept 2009]). As recently held by the Court of Appeals: "courts must defer to an administrative agency's rational interpretation of its own regulations in its area of expertise." (Andreyeva v New York Health Care, Inc., 33 N.Y.3d 152, 174 [2019]). To the extent NYSDHR interprets the NYSHRL to confer standing upon organizations like Plaintiff, this Court must defer to NYSDHR's interpretation (see also Chen v Romona Keveza Collection LLC, 208 A.D.3d 152, 159-160 [1st Dept 2022]).
To the extent AAG argues that the NYSDHR guidance only applies to complaints brought before the NYSDHR, the Court finds this unpersuasive. First, the limiting language that AAG asserts is not included in the NYSDHR guidance, and second, the NYSDHR guidance cites to cases brought in Federal and State Court, not complaints brought before the NYSDHR.
Plaintiff also asserts that the proper statutory construction of the NYSHRL and NYCHRL requires a finding of standing. Indeed, New York Local Law 35 § 1 expressly instructs courts to interpret the NYCHRL liberally and independently of state and federal anti-discrimination laws in order to create an independent body of jurisprudence for the NYCHRL that is maximally protective of civil rights in all circumstances. The First Department has likewise held that the NYSHRL and -NYCHRL expands upon the rights enacted by federal legislation (Phillips v City of New York, 66 A.D.3d 170,187 [1st Dept 2009] ["Congress expects federal enactments to serve as a floor of rights below which states and localities may not fall, not a ceiling above which states and localities may not rise."]). The United States Supreme Court and Second Circuit have found that organizations such as Plaintiff have standing to bring enforcement actions under the Fair Housing Act based on alleged discrimination uncovered through the use of testers (Havens Realty Corp. v Coleman, 455 U.S. 363 [1982]; see also Nnebe v Daus, 644 F.3d 147, 157 [2d Cir. 2011] ["only a 'perceptible impairment' of an organization's activities is necessary for there to be an 'injury in fact.'"]; CNY Fair Housing Inv. V Swiss Village, LLC, 2022 WL 2643573 [NDNY 2022]).
Based on precedent and the explicit statutory mandate that the NYSHRL and NYCHRL have a broader remedial reach than the Fair Housing Act, and organizational standing based on diversion of resources is recognized under the Fair Housing Act, then organizational standing in cases of housing discrimination under the NYSHRL and NYCHRL must exist.
To the extent AAG disputes whether the diversion of resources was "sufficient" to confer standing upon Plaintiff, that constitutes a triable issue of fact warranting denial of a CPLR § 3211 (a)(3) pre-answer motion to dismiss (Chen v Romona Keveza Collection LLC, 208 A.D.3d 152, 160 [1st Dept 2022] [holding where it is unclear from the record if standing exists, dismissal is improper]). Indeed, it would be a curious occurrence if Plaintiff had standing to bring these actions in Federal Court but not in State Court (see Fair Housing Justice Center, Inc. v 203 Jay St. Associates, LLC, 2022 WL 3100557 [EDNY 2022]; CNY Fair Housing Inc. v Swiss Village, LLC, 2022 WL 2643573 [NDNY 2022]; see also Fair Housing Justice Center, Inc. v Edgewater Park Owners Cooperative, Inc. 2012 WL 762323 [SDNY 2012] [finding organizational standing for claims asserted under FHA, NYSHRL, and NYCHRL based on housing discrimination uncovered by testers]).
Where a party shows an injury "that falls within the 'zone of interests,' or concerns, which sought to be promoted or protected by [a] statutory provision" the Court of Appeals has found standing requirements to have been met (US Bank N.A. v Nelson, 36 N.Y.3d 998, 1003 [2020] [Wilson, J, concurring] quoting Society of Plastics Indus., Inc. v County of Suffolk, 77 N.Y.2d 761, 773 [1991]). Accepting the allegations as true and construing the NYSHRL and NYCHRL more broadly than their federal counterpart, Plaintiff has sufficiently alleged an injury that falls within the "zone of interests" meant to be promoted and protected by the NYSHRL and NYCHRL.
Finally, the First Department has explicitly recognized the type of organizational standing that Plaintiff seeks to assert (Mixon v Grinker, 157 A.D.2d 423 [1st Dept 1990]; Grant v Cuomo, 130 A.D.2d 154 [1st Dept 1987]). Indeed, the First Department explicitly stated "we cannot ignore the obvious fact that if organizations of this kind are denied standing, the practical effect would be to exempt from judicial review the failure of the defendants to comply with their statutory obligations" (Grant supra, at 159).
In Grant, the organizational plaintiff alleged statutory violations of the rights of suspected child abuse victims, while in Mixon the organizational plaintiff alleged violations of the rights of homeless men living with HIV/AIDS.
In the case at bar, the Plaintiff seeks to hold accountable alleged statutory violations discriminating against CityFHEPS voucher holders. The reality is that CityFHEPS voucher holders are homeless veterans, young LGBTQ+ individuals who have been kicked out of their homes, or indigent families living in crowded shelters. CityFHEPS voucher holders are akin to the vulnerable groups advocated for in Grant and Mixon. When it comes to asserting rights on behalf of these often marginalized and silenced communities in the housing or civil rights context, the First Department has made narrow exceptions related to standing for plaintiffs such as the one in the case at bar. Therefore, the CPLR § 3211(a)(3) motion is denied.
C. Failure to State a Claim and CPLR § 3211(a)(7)
AAG asserts that Plaintiff failed to state a claim under the NYSHRL and NYCHRL. When reviewing a pre-answer motion to dismiss for failure to state a claim, the Court must give Plaintiff the benefit of all favorable inferences which may be drawn from the pleadings and determine only whether the alleged facts fit within any cognizable legal theory (Sassi v Mobile Life Support Services, Inc., 37 N.Y.3d 236, 239 [2021]). All factual allegations must be accepted as true (Allianz Underwriters Ins. Co. v Landmark Ins. Co., 13 A.D.3d 172, 174 [1st Dept 2004]).
Plaintiff alleges that it fits the statutory definition of a "person" under N.Y.Exec. Law §292(1) (NYSCEF Doc. 1 at ¶ 169). Moreover, N.Y. Exec. Law §296(5)(a)(1)(a) makes it unlawful for housing owners and agents to make statements expressing limitations or discrimination based on a prospective tenant's lawful source of income. N.Y. Exec. Law §296(5)(c)(1) imposes the same requirements "for any real estate broker, real estate salesperson or employee or agent thereof." Further, N.Y. Exec. Law § 296(5)(c) states it is "unlawful discriminatory practice for any person to aid, abet, incite, compel or coerce the doing of any of the acts forbidden [by section 296(5)], or attempt to do so." Accepting the allegations as true, it is alleged that Amos, who was working as an employee or agent of AAG, told Plaintiffs tester that an apartment was available, but when asked if a voucher could be used, stated "[N]o. The apartment is rent stabilized, so the owner is looking for an excellent applicant." (Id. at ¶ 117). This statement is a prima facie violation of the NYSHRL for discrimination based on source of income.
While AAG claims that Plaintiff fails to allege facts sufficient to permit an inference that Amos was acting on behalf of AAG, at this pre-discovery stage, Plaintiff is not required to establish with specific and well-particularized facts evidence of an agency relationship. Moreover, giving Plaintiff the benefit of all favorable inferences, it can be easily inferred that a real estate agent who is showing an apartment managed by AAG is acting as an agent for AAG. Therefore, AAG's argument for dismissal on this basis is without merit.
Second, although AAG is correct that Plaintiff did not expressly plead that the tester was "qualified" to use a voucher, this argument rests on the incorrect assumption that it is the testers who are asserting claims against AAG or that Plaintiff is asserting claims on behalf of the testers. Rather, Plaintiff is alleging that Defendants have willfully and intentionally violated N.Y. Exec. Law §§ 296(5)(a)(3), 296(5)(c), and 296(6), and that these willful and intentional violations have caused Plaintiff to suffer injury (id. at ¶¶ 169-177). The source of the alleged injuries which Plaintiff is purportedly suffering was merely uncovered by the testers, and therefore it is of no import whether the testers actually qualified for a CityFHEPS voucher. Indeed, alleged willful and intentional violations of the NYSHRL and NYCHRL brought by housing advocacy non-profits uncovered through testers have survived motions to dismiss under a more stringent FRCP 12(b)(6) standard (See Fair Housing Justice Center, Inc. v JDS Development LLC, 443 F.Supp.3d 494 [SDNY 2020]; Fair Housing Justice Center, Inc. v Silver Beach Gardens Corp., 2010 WL 3341907 at *6 [SDNY 2010]).
Moreover, Plaintiffs use of fictitious applicants is no bar to Plaintiffs claims because Defendants' complete refusal to deal with any applicants using a CityFHEPS voucher removes the need for Plaintiff to plead specific violations (CNY Fair Housing, Inc. v Swiss Village, LLC, 2022 WL 2643573 [NDNY 2022]). It would be illogical and encourage forum shopping if an organizational plaintiffs claims of intentional violations of the NYSHRL and NYCHRL brought in Federal Court would survive under a more stringent pleading standard while being dismissed under the laxer pleading standard in New York State Court.
Further, although AAG argues the Complaint fails to allege actions that give rise to an inference of discrimination, the Court disagrees. On a motion to dismiss pursuant to CPLR § 3211(a)(7), the Court is required to give Plaintiff the benefit of all favorable inferences which may be drawn from the allegations (Sassi v Mobile Life Support Services, Inc., 37 N.Y.3d 236, 239 [2021]). Since the tester was told the Apartment was available but a CityFHEPS voucher could not be used, the Plaintiff is entitled on this motion to an inference of source of income discrimination emanating from Amos's alleged statement. Indeed, AAG has not produced any documentary evidence that would rebut this inference which, procedurally, the Plaintiff is entitled. It should be stressed that in response to hearing the tester wanted to use a CityFHEPS voucher, Amos denied the tester and stated the owner was "looking for an excellent applicant." (NYSCEF Doc. 1 at ¶ 104). This clearly gives rise to an inference of income-based discrimination, for it implied that those using CityFHEPS vouchers are worse applicants.
A similar analysis applies to the NYCHRL, which Courts are instructed to interpret independently of state and federal anti-discrimination laws to create an independent body of jurisprudence that is maximally protective of civil rights (See New York Local Law 35 § 1). Plaintiff alleges it is an "aggrieved person" under N.Y.C. Admin. Code §8-502(A). Further, Plaintiff alleges that the Defendants, who are owners, real estate brokers, and/or real estate salespeople are "persons" and "covered entities" under N.Y.C. Admin. Code §8-107. N.Y.C. Admin. Code § 8-107(5)(c) makes it an "unlawful discriminatory practice for any real estate broker, real estate salesperson or employee or agent thereof, to refuse to sell, rent, lease any housing accommodation....to any person or group of persons... because of any lawful source of income of such persons." N.Y.C. Admin. Code § 8-107(6) makes it "unlawful discriminatory practice for any person to aid, abet, incite, compel or coerce the doing of any of the acts forbidden [by Section 8-107(5)], or to attempt to do so." Accepting the allegations as true, Plaintiff has stated a claim, for purposes of surviving a pre-answer motion to dismiss, against AAG for intentional and willful violation of N.Y.C. Admin. Code §§ 8-107(5)(a) and (c). Therefore, AAG's motion to dismiss pursuant to CPLR § 3211(a)(7) is denied.
D. Plaintiffs Cross Motion to Amend the Complaint
Plaintiff s cross-motion is granted. Leave to amend pleadings is freely granted in the absence of prejudice if the proposed amendment is not palpably insufficient as a matter of law (Mashinksy v Drescher, 188 A.D.3d 465 [1st Dept 2020]). A party opposing a motion to amend must demonstrate that it would be substantially prejudiced by the amendment, or the amendments are patently devoid of merit (Greenburgh Eleven Union Free School Dist. V National Union Fire Ins. Co., 298 A.D.2d 180, 181 [1st Dept 2002]).
As previously stated, Plaintiffs pleadings are not patently devoid of merit. Moreover, since Plaintiff is simply specifying further their alleged injuries, the Court does not see how the Defendants could be prejudiced by the proposed amendments.
Accordingly, it is hereby, ORDERED that Defendant AAG's motion to dismiss is denied; and it is further
ORDERED that Plaintiff Housing Rights Initiative's cross-motion to amend its Complaint is granted, and the amended complaint in the proposed form annexed to the moving papers shall be deemed served upon service of a copy of this order with notice of entry thereof; and it is further
ORDERED that Defendant AAG shall serve an Answer to the Amended Complaint or otherwise respond thereto within 20 days from the date of said service; and it is further
ORDERED that within 10 days of entry, Plaintiff Housing Rights Initiative shall serve with notice of entry a copy of this Decision and Order on all parties to this action; and it is further
ORDERED that the Clerk of the Court is directed to enter judgment accordingly.
This constitutes the Decision and Order of the Court.