Vanderburgh House, LLC v. City of Worcester

530 F.Supp.3d 145

VANDERBURGH HOUSE, LLC, Southbridge Re, LLC, Plaintiffs,

v.The CITY OF WORCESTER, John R. Kelly, David C. Horne, and Anne S. Refelo, Defendants.

CIVIL ACTION NO. 18-40063-TSH

United States District Court, D. Massachusetts.

Filed March 30, 2021

Andrew J. Tine, Law Offices of Andrew J. Tine, Barrington, RI, for Plaintiffs.

Kevin M. Gould, City of Worcester Law Department, Worcester, MA, for Defendants.

MEMORANDUM AND ORDER

Hillman, D.J.

Background

Vanderburgh House, LLC ("Vanderburgh") and Southbridge Re, LLC ("Southbridge" and together with Vanderburgh, the "Plaintiffs") have filed suit asserting federal and state civil rights claims against the City of Worcester ("City"), John R. Kelly ("Kelly"), David C. Horne ("Horne") and Ann S. Refolo, Esq. ("Refolo" and together with the City, Kelly, and Horne, the "Defendants"). The Plaintiffs manage sober recovery housing at two locations in Worcester, MA. This complaint stems from the Plaintiffs’ request to continue operating those facilities as single-family residences rather than complying with orders to change their use classification. The Plaintiffs assert claims under the Fair Housing Act ("FHAA"), 42 U.S.C. § 3601, et seq. (Count I), discrimination under Mass.Gen. L. ch. 151B ("Chapter 151B") (Count II), violation of the Massachusetts Zoning Act ("MZA"), Mass.Gen.L ch. 40A, § 3 (Count III), intentional interference with contractual relations with Plaintiffs’ tenants (Count IV); and violation of the Massachusetts Civil Rights Act ("MCRA"), Mass.Gen. L. ch. 12, § 11H - 11I (Count V).

This Memorandum of Decision and Order addresses Plaintiffs’ motion to dismiss the complaint for failure to state claim (Docket No. 7), and Plaintiffs’ motion for preliminary injunction (Docket No. 17). For the reasons set forth below, the Defendants’ motion to dismiss is granted , in part, and denied , in part and the Plaintiff's motion for preliminary injunction is denied.

THE MOTION TO DISMISS

Standard of Review

To overcome a Rule 12(b)(6) motion to dismiss for failure to state a claim, a complaint must allege sufficient facts "to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 667, 129 S. Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 546, 127 S. Ct. 1955, 167 L.Ed.2d 929 (2007). The plausibility of a claim is evaluated in a two-step process. Manning v. Boston Med. Ctr. Corp. , 725 F.3d 34, 43 (1st Cir. 2013). First, the court must separate the complaint's factual allegations, which must be accepted as true, from its conclusory legal allegations, which are not entitled to the presumption of truth. A.G. ex rel. Maddox v. Elsevier, Inc. , 732 F.3d 77, 80 (1st Cir. 2013) ; Manning , 725 F.3d at 43. Second, the court must accept the remaining factual allegations as true and decide if, drawing all reasonable inferences in the plaintiffs’ favor, they are sufficient to show an entitlement to relief. Manning , 725 F.3d at 43. The court draws on judicial experience and common sense in evaluating a complaint but may not disregard factual allegations even if it seems that actual proof of any particular fact is improbable.

Iqbal , 556 U.S. at 667, 129 S. Ct. 1937 ; Twombly , 550 U.S. at 556, 127 S. Ct. 1955. A motion to dismiss must focus not on whether the plaintiff will ultimately prevail, but whether he or she is entitled to offer evidence to support the claims. Mitchell v. Mass. Dep't of Corr. , 190 F.Supp.2d 204, 208 (D. Mass. 2002) (quoting Scheuer v. Rhodes , 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L.Ed.2d 90 (1974) ).

Facts

On April 18, 2017, an inspector from the City visited a Vanderburgh property at 16 Germain Street, Worcester, MA ("Germain St.") following complaints from neighbors and the building's owner that the property was being used illegally as a sober house. On April 19^th, Vanderburgh sent a letter to Mayor Petty requesting accommodations under the FHAA and/or compliance with the MZA. On April 25, at a meeting at City Hall which included Hunter Foote, manager of Vanderburgh, Vanderburgh's counsel, and approximately 10 City officials, the City sought further information from Vanderburgh relating to the occupancy and use of the Germain Street property. On April 27, an assistant to State Representative John Mahoney called Vanderburgh House following a complaint from a neighbor that it was operating as a sober house. On April 28^th, Vanderburgh provided the requested documentation to the City.

On May 1, 2017, the City issued a violation notice to Vanderburgh regarding the Germain St. property asserting that a change in occupancy classification was required because the living facilities were being operated not as a single-family home, but as a "dormitory setting, congregate living facility, and/or lodging house." The notice ordered Vanderburgh to cease and desist the use of the dwelling within 24 hours or obtain permits for the proper use classification under the Massachusetts State Building Code or a Certificate of Occupancy.

On May 17, 2017, the Plaintiffs emailed Refolo, an Assistant City Solicitor, asking her to withdraw the First Violation "as it violated State Law and ignored the request for a reasonable accommodation." Specifically, Vanderburgh requested that the City withdraw its cease-and-desist letter and accommodate Vanderburgh by treating the Germain St. unit as a single-family unit. At a May 23, 2017 City Council meeting, residents protested the use of Germain St. as a sober facility, and unnamed City officials stated:

The City Commissioner has issued two enforcement orders for this property ... the [certificate of occupancy] sounds innocuous, but it's at the heart of this ... I know it's particularly fortunate that we have a three-pronged or even more approach ... the owner and the residents and the council ... I think that bodes well for our neighborhood and for our city ... I would ask our administration—I know our city solicitor is already on this and our Department of Inspectional Services—to do anything they can to have that business leave this street, leave this neighborhood. It's not the right place for them ... Anything we can do to make it sooner because the longer they stay, the more entrenched that they get, they'll be there, I hate to say it, for much too long, maybe forever. Now is the time to move [the residents of 16 Germain Street] out.

Southbridge operated a sober house at 65 Kenwood Avenue, Worcester, MA ("Kenwood Ave.)" On February 27, 2018, neighborhood residents voiced their opposition to the sober house at a City Council Meeting and City officials replied: "So that is the instruction to Commissioner Kelly and the solicitor, to come up with everything that we can do within the law to protect this neighborhood moving forward." On March 1, 2018, in an order signed by Kelly, the City Building Commissioner and Horne, the City Deputy Building Commissioner, the City ordered Southbridge to cease and desist its use as a dwelling as there had been a change in property use ("Second Violation Notice"). The order stated that Kenwood Ave. was no longer operating as a single-family residence and was unlawfully operating as a "dormitory setting, congregate living facility, and/or lodging house," and was required to cease and desist operating or obtain permits or a Certificate of Occupancy. On March 6, 2018, Southbridge sent a letter to Horne and Kelly asking the city to permit the Kenwood Avenue residence to continue its classification as a single-family home; the letter cited state laws and requested an accommodation under the FHAA.

Refolo filed a complaint in the Worcester Housing Court on behalf of the City for injunctive relief against Southbridge seeking to enforce the State Building Code. The Plaintiffs have filed a separate action in Worcester Superior Court alleging the City violated the MZA which was stayed by the Superior Court pending the disposition of the appeal in a case raising similar issues, Crossing Over, Inc., et al. v. City of Fitchburg , 1785-CV-01318, 35 Mass.L.Rptr. 432, 2019 WL 659232 (Mass. Super. Jan. 29, 2019) (" Crossing Over I "). Because that case also addressed some of the legal issues raised in this action, this case was also stayed. On November 23, 2020, the Massachusetts Appeals Court ("MAC") issued a decision, Crossing Over, Inc. v. City of Fitchburg , 98 Mass. App. Ct. 822, 161 N.E.3d 432 (2020) (" Crossing Over II "), in which it held that the prohibition on restrictions on facilities serving the disabled that are not imposed on family units of similar size under the MZA did not bar application of State health and safety laws to a sober house. Further appellate review in that case was denied. See Crossing Over, Inc. v. City of Fitchburg, 486 Mass. 1114 (2021).

Discussion

The Defendants argue that the Plaintiffs’ complaint must be dismissed for failure to state a claim because some of the claims are precluded by the Younger abstention doctrine, see Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), as they would interfere with ongoing state proceedings. Defendants also argue that Plaintiffs failed to exhaust their administrative remedies for claims relating to the MZA, Plaintiffs’ complaint lacks adequate factual support to support plausible claims against them, and the individual Defendants are entitled to immunity.

Fair Housing Act Claim

Under the FHAA, it is "unlawful .... to discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap of (A) that buyer or renter, (B) a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or (C) any person associated with that buyer or renter." 42 U.S.C. § 3604(f)(1) (A)–(C). "The FHAA contemplates three types of claims for perceived discrimination: disparate treatment, disparate impact, and failure to make reasonable accommodations." Astralis Condo. Ass'n v....