Harmony Haus Westlake, LLC v. Parkstone Prop. Owners Ass'n, Inc.

468 F.Supp.3d 800

HARMONY HAUS WESTLAKE, LLC, et al., Plaintiffs,

v.PARKSTONE PROPERTY OWNERS ASSOCIATION, INC., Defendant.

Civil Action No. 1-20-CV-486-XR

United States District Court, W.D. Texas, Austin Division.

Signed June 23, 2020

Sean Edward Pevsner, Mark Whitburn, Whitburn and Pevsner PLLC, Arlington, TX, for Plaintiffs.

Eric J. Hansum, Niemann & Heyer, LLP, Austin, TX, for Defendant.

ORDER ON MOTION TO DISMISS

XAVIER RODRIGUEZ, UNITED STATES DISTRICT JUDGE

On this date, the Court considered Defendant's motion to dismiss Plaintiffs’ first amended complaint (docket no. 11), Plaintiffs’ response (docket no. 12), and Defendant's reply (docket no. 16).¹ After careful consideration, Defendant's motion is GRANTED IN PART and DENIED IN PART.

BACKGROUND

This is a dispute between a sober living home and a homeowners association. Plaintiff Harmony Haus Westlake, LLC ("Harmony Haus") operates a "transitional sober living residence" located at 2105 Real Catorce Drive, Austin, Texas. Plaintiffs Ling Zhou ("Zhou") and Fenglin Du ("Du") own the residence which is located within the homeowners association operated by Defendant Parkstone Property Owners Association, Inc. ("Defendant").

This is not the parties’ first time before this Court. In October 2019, Plaintiffs filed a claim (No. 1:19-CV-1034-XR) against Defendant, complaining that Defendant had refused to grant a reasonable accommodation from its deed restrictions, in violation of the Fair Housing Act, 42 U.S.C. § 3601 et seq. ("FHA"). At issue in that case were three deed restrictions: a single-family use restriction, a noise and nuisance restriction, and a twelve-hour street parking restriction. Plaintiffs requested from Defendant an exemption from "any applicable HOA covenant, rule, or regulation relating to any restriction that would otherwise impede [Harmony Haus's] operations so that its residents can be provided an equal opportunity to use and enjoy their housing." Specifically, Plaintiffs sought for Defendant to allow up to twelve residents to live at the home and for eight cars to park on the street. In response, Defendant offered to allow up to six unrelated adults to live at the home.

A bench trial was held on January 6 and 7, 2020 after which the Court issued its Findings of Fact and Conclusions of Law. See Harmony Haus Westlake, LLC v. Parkstone Prop. Owners Ass'n, Inc. , 440 F. Supp. 3d 654 (W.D. Tex. 2020). First, the Court found that the residents were handicapped as defined under the FHA because their "addictions substantially limit their ability to live independently and to live with their families," and their inability to live independently constitutes a substantial limitation on their ability to ‘care for themselves.’ " Id. at 663. Second, the Court found that the requested accommodation was necessary in that Plaintiffs showed the accommodation would "directly ameliorate" the disability's effect. Id. at 666. The Court found persuasive Plaintiffs’ arguments that the accommodation of twelve residents was necessary for the residents to benefit from home's phasing system and to benefit from the increased accountability, structure, and support inherent in a larger number of residents. Id. at 665. The Court did not, however, find that Plaintiffs had shown the accommodation was financially necessary. Id. Third and finally, the Court found that Plaintiffs met their burden of showing that the requested accommodation was reasonable in that the accommodation did not impose upon Defendant an "undue financial and administrative burden" and did not constitute a "fundamental alteration" to the character of the neighborhood. Id. at 667. The Court agreed with other federal courts who "have made clear that single family deed restrictions cannot be used to exclude group homes for disabled persons from single family neighborhoods." Id. (citing United States v. Wagner , 940 F. Supp. 972, 979 (N.D. Tex. 1996) (collecting cases)). As a result of those findings, the Court granted Plaintiffs’ request for injunctive relief and ordered that:

Defendant is enjoined from further refusing to make a reasonable accommodation that is necessary to afford Plaintiffs an equal opportunity to use and enjoy a dwelling. Consequently, Defendant is enjoined from enforcing its Declaration against Plaintiffs, but solely with respect to the single-family housing restriction, Section 2.1.

Id. at 669 (emphasis in original). The Court explicitly did not enjoin Defendant from enforcing its other restrictions at issue—the noise/nuisance and parking provisions—finding that Defendant "may enforce those if there are violations, though any such enforcement must be applied in an evenhanded manner that treats handicapped and non-handicapped residents alike." Id. at 669. The Court noted that:

[n]othing here suggests that Harmony Haus residents have free reign to violate any provisions of the Declaration. Each resident is expected to know all relevant deed restrictions—including the parking and noise restrictions—and strictly adhere to them. Parkstone, in turn, is entitled to demand such strict adherence and, of course, may enforce the Declaration through its own enforcement mechanisms.

Id. at 669.

Despite that order² , the dispute continues. Plaintiffs’ First Amended Complaint in this case alleges that the dispute has worsened amidst the coronavirus pandemic and the various shelter-in-place ordinances imposed by state and local governments. The dispute is no longer about the number of residents Harmony Haus may maintain but, rather, about the enforcement of Defendant's parking restrictions, particularly during a pandemic which, Plaintiffs allege, has made compliance with those restrictions difficult if not practically impossible.

Plaintiffs allege that on March 3, 2020, two weeks after this Court issued its final judgment in the above case, Defendant "voted to enact newly revised restrictive covenants for the express purpose of targeting Plaintiffs." Docket no. 8 at 7. These new restrictions include new traffic and parking rules, as well as a new enforcement scheme with an escalating fine structure. Id. Plaintiffs believe that Defendant imposed these new rules and enforcement schemes "for the specific purpose of targeting Plaintiffs and individuals with disabilities in general." Id. In support, Plaintiffs allege that prior to the Court's issuance of final judgment in the previous case, Defendant made little effort to enforce the then-existing parking restrictions, "such that its post-judgment enforcement efforts clearly arose as a response to the judgment."³ In further arguing that Defendant was intentionally targeting Plaintiffs and those with disabilities, Plaintiffs allege that Defendant enacted a new provision that preemptively disallows any reasonable accommodation request with respect to the single-family use restriction for any residence within 1,000 feet of the Harmony Haus residence. Id. at 2–3. Finally, Plaintiffs allege that a "barrage of profanity" and "facially discriminatory remarks by [Parkstone] Board members" further reveal intentional discrimination and retaliation. Id. at 5.

Soon after Defendant imposed the new fine structure, the coronavirus pandemic emerged. When the City of Austin issued its shelter-in-place order on March 24, Plaintiffs allege that the Harmony Haus residents "could not go to work or engage in any other activity outside the residence" (unless expressly permitted by the shelter-in-place order) and that residents "could not take any measures" to move their vehicles off the street to avoid violating Defendant's street-parking restriction. Id. at 4. The Governor of Texas lifted that shelter-in-place order on May 1, but, Plaintiffs allege, many residents continue to work from home given the nature of their occupations and the compromised immune systems of some residents which make them particularly vulnerable to COVID-19. Id. Thus, Plaintiffs allege, the effects of the pandemic—namely, the number of residents who do not leave the house—continues despite the end of the official shelter-in-place order, such that the conclusion of that order does not moot Plaintiffs’ request for relief.

On March 31, Plaintiffs allege that they requested a reasonable accommodation from Defendant, requesting a waiver of the twelve-hour street-parking restriction during the course of the shelter-in-place order. Defendant allegedly "countered with an offer to allow four vehicles to park on the street during the pendency of the order, but only if the driveway and garage were fully utilized at all times." Id. at 5. This would require Plaintiffs to have eight cars parked in the driveway and garage at all times, meaning if one resident removed his car from the driveway, another resident would have to move his car from the street to keep the driveway at maximum "occupancy" before any more-than-twelve-hour street parking would be permissible. Plaintiffs counter that they "cannot (1) keep eight vehicles in the driveway and garage ... or (2) move all the vehicles in and out of the driveway every time a resident has to leave." Id. They point to Defendant's concern in the previous litigation that the noise involved in moving cars in and out of the driveway was bothersome to neighbors. Id. With the escalating fee structure now in place, Plaintiffs allege that as of May 17, 2020, Defendant had assessed fines totaling $23,650.00. Id. at 3. These escalating fines, Plaintiffs allege, have stymied Plaintiffs Zhou and Du's efforts to sell the property. They claim that without relief, "their inability to sell the Residence will continue unabated." Id. at 11. Those fines have also placed a wedge between the two groups of Plaintiffs—that is, between Harmony Haus on the one hand and Zhou and Du on the other—with the owners now expressing an intent to evict Harmony Haus if the residents do not "stop the parking violations." See docket no. 13-5 at 2.

On May 5, Plaintiffs sought a temporary restraining order and...