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Miles v. Century 21 Real Estate LLC

January 11, 2007

JOSEPH MILES AND LAWANDA LEWIS-MILES PLAINTIFFS
v.
CENTURY 21 REAL ESTATE LLC, CENTURY 21 REAL ESTATE UNLIMITED LANA KRUSE, AND CHRISTY WARD DEFENDANTS



The opinion of the court was delivered by: Garnett Thomas Eisele United States District Judge

ORDER ON MOTION FOR SUMMARY JUDGMENT

Presently before the Court is Century 21 Real Estate LLC's Motion for Summary Judgment.

I. Background

In the summer of 2003, Plaintiffs Joseph Miles and LeWanda Lewis-Miles, an African-American couple serving in the United States Air Force, were transferred to Little Rock Air Force Base. Plaintiffs allege that in advance of their move, they took leave to travel to Little Rock to find a home. Plaintiffs obtained a list of housing available for rent from the Little Rock Air Force Base, which included a home at 13 Summerset in Cabot, Arkansas. Plaintiffs state that they drove by the house, saw that the home and area met their needs, and noticed a sign indicating that Century 21 was the real estate agency renting the property. Plaintiffs state that they called the agent listed for the home, Christy Ward, to have her show them the home. Mr. Miles states that he did not observe any statement about the office being independently owned or operated on the sign, and called Ms. Ward, in part, because he believed that he would receive from any Century 21 agent quality service that was free from discrimination.

Plaintiffs allege that Ms. Ward met them at the home, did not give them a tour, and focused entirely on a white home seeker who had also arrived at the house. Plaintiffs state that they took a tour of the home on their own, and the next day, they informed Ms. Ward that they wished to rent the home. Ms. Ward responded that they would have to talk to the owner, Lana Kruse. Plaintiffs state that they were informed by Ms. Kruse that they would have to pay a deposit and begin paying rent a month before they would move into the home, but when they asked questions about the rental process, Ms. Kruse stated that she was confused and needed to talk to her realtor, Ms. Ward, and hung up. Plaintiffs state that they called Ms. Ward later that day, but she did not return their calls. Plaintiffs state that they went to the Century 21 Cabot office to speak with Ms. Ward, and after waiting for nearly an hour, were told that the house was no longer for rent because Ms. Kruse intended to sell the house. Plaintiffs state that the following day, the Miles' neighbor called Ms. Ward, who told her that the home was available for rent. However, when an individual from the Little Rock Air Force Base Housing Office inquired about the home, stating that he was calling on behalf of the Miles, he was told that the house was not for rent. Plaintiffs allege that the house was leased to white renters several weeks later.

On August 10, 2005, Plaintiffs brought this action alleging violations of federal and state anti-discrimination laws, naming Century 21 Real Estate, LLC ("Century 21") as a defendant. In its Motion for Summary Judgment, Century 21 argues that there is no actual or apparent agency relationship between Century 21 and any of the other defendants to support Plaintiff's vicarious liability theory. It is undisputed that on March 28, 2003, New Visions, LLC d/b/a Century 21 Real Estate Unlimited ("Century 21 Cabot") and Century 21 entered into the Century 21 Real Estate Franchise Agreement ("Franchise Agreement"). Plaintiffs argue that (1) the existence of an agency relationship requires factual findings and is not appropriate for resolution by summary judgment; (2) Century 21 is vicariously liable under an apparent agency theory; and (3) Century 21 may be found vicariously liable under an actual agency theory.

II. Summary Judgment Standard

Summary judgment is appropriate only when, in reviewing the evidence in the light most favorable to the non-moving party, there is no genuine issue as to any material fact, so that the dispute may be decided solely on legal grounds. Holloway v. Lockhart, 813 F.2d 874 (8th Cir. 1987); Fed. R. Civ. P. 56. The Supreme Court has established guidelines to assist trial courts in determining whether this standard has been met:

The inquiry performed is the threshold inquiry of determining whether there is a need for trial-- whether, in other words, there are genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).

The Eighth Circuit set out the burdens of the parties in connection with a summary judgment motion in Counts v. M.K. Ferguson Co., 862 F.2d 1338 (8th Cir. 1988):

[T]he burden on the party moving for summary judgment is only to demonstrate, i.e., '[to] point[] out to the District Court,'that the record does not disclose a genuine dispute on a material fact. It is enough for the movant to bring up the fact that the record does not contain such an issue and to identify that part of the record which bears out his assertion. Once this is done, his burden is discharged, and, if the record in fact bears out the claim that no genuine dispute exists on any material fact, it is then the respondent's burden to set forth affirmative evidence, specific facts, showing that there is a genuine dispute on that issue. If the respondent fails to carry that burden, summary judgment should be granted.

Id. at 1339 (quoting City of Mt. Pleasant v. Associated Elec. Coop., 838 F.2d 268, 273-74 (8th Cir. 1988)) (citations omitted)(brackets in original).

"A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] . . . which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). However, the moving party is not required to support its motion with affidavits or other similar materials negating the opponent's claim. Id.

Once the moving party demonstrates that the record does not disclose a genuine dispute on a material fact, the non-moving party may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in Rule 56, must set forth specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e). The plain language of Rule 56(c) mandates the entry of summary judgment against a non-moving party which, after adequate time for discovery, fails to make a showing sufficient to establish the existence of an element essential to its case, and on which that party will bear the burden of proof at trial. Celotex Corp., 477 U.S. at 322.

III. Motion for Summary Judgment

A franchisor may be held liable for acts of his franchisee when the actual relationship between them is that of principal and agent or master and servant. Jones v. Filler, Inc., 43 F. Supp. 2d 1052, 1055 (W.D. Ark. 1999) (citing 62B Am. Jur. 2d, Private Franchise Contracts § 491, at 406 (1990)). Thus, the essential question before this Court is whether an actual or apparent agency relationship exists between Century 21 and Century 21 Cabot. "[A]gency is a question of fact ordinarily determined by the trier of fact, [however], where the facts are undisputed, and only one inference can reasonably be drawn from them, it becomes a question of law." Jones v. Filler, Inc., 43 F. Supp. 2d 1052, 1055-56 (W.D. Ark. 1999) (citing Howard v. Dallas Morning News, Inc., 324 Ark. 91, 103, 918 S.W.2d 178 (1996)). Plaintiffs raise both federal and state law claims in their Complaint, and therefore, the question of whether an agency relationship exists is determined under federal and state law respectively.

A. Actual Agency

"[T]he [Fair Housing] Act imposes liability without fault upon the employer in accordance with traditional agency principles." Meyer v. Holley, 537 U.S. 280, 282, 123 S.Ct. 824, 827 (2003). "The Restatement ยง 1 specifies that the relevant principal/agency relationship demands not only control (or the right to direct or control) but also "the manifestation of consent by one person to another that the other shall act on his behalf (3)27, and consent by the other so to act." (Emphasis added.). Id. at 286, 123 S.Ct. at 829. Arkansas has adopted the Restatement ...


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