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Docket Number

Civ. A. No. 17193.

Attorney(S)

Wyatt Zagoria, Atlanta, Ga., for plaintiffs.

Judges

Sidney Oslin Smith

Acts

The Public Health And Welfare — Civil Rights — Generally — Property Rights Of Citizens
The Public Health And Welfare — Fair Housing — Generally — Enforcement By Secretary

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Smart Summary

Opinion Summary: Robert L. McNEIL and Yvonne McNeil v. P-N S, INC., et al. (N.D. Ga., Nov. 14, 1973)

Factual and Procedural Background

As trial approached, counsel for the defendants was relieved and, at the same time, the court issued an order directing the defendants to show cause why their answers should not be stricken and the case proceed in default. At the appointed time, neither the defendants nor counsel made any showing. Upon motion, the defendants' answers were dismissed and the case proceeded in default.

On the merits as established at the default proceeding, plaintiff Robert McNeil (a medical therapist with two University of Minnesota degrees and a therapist certification from Northwestern Medical School) and his wife moved to the Atlanta area in early 1971 and sought to purchase a house in the Spring Valley area of DeKalb County. They inquired about a house on Lot No. 11 in defendants' subdivision in June 1971.

The court found that defendants engaged in a series of false statements and refusals to sell—representations that certain lots or houses were sold or unsuitable when they were not, statements that a particular house was a "bad buy" when it was not, and an instance in December 1971 when defendants agreed to sell a house on Lot D10 for $46,500 but announced it was already sold on the day the contract was to be signed when it was not. Plaintiffs were also told by defendant Powell they would not be sold or built any house except "west of Candler Road," an artificial racial boundary. The court found these acts were motivated by racial discrimination.

Legal Issues Presented

Whether the defendants' conduct in refusing to sell property and making false statements was racial discrimination in violation of 42 U.S.C. § 1982 and 42 U.S.C. § 3604(a) and (d).
Whether the plaintiffs are entitled to damages, including compensatory (general) damages, punitive damages, and attorneys' fees under the Fair Housing Act and civil rights statutes, and if so, the appropriate amounts.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971)	Example authority that violations of the relevant statutes entitle plaintiffs to damages under the fair housing and civil rights laws.	The court cited Lee as an illustrative precedent supporting the proposition that violations of the statutes at issue entitle plaintiffs to damages; the opinion uses it as an example in announcing plaintiffs' entitlement to relief.

Court's Reasoning and Analysis

The court followed two strands of reasoning: procedural disposition based on default and substantive findings on liability and damages based on the evidence presented after default.

Procedural posture: Because defendants' counsel was relieved shortly before trial and the defendants made no showing in response to the court's show-cause order, the court struck the defendants' answers and proceeded on default. The default established the factual record the court relied upon.
Liability findings: The court detailed specific acts by the defendants—repeated false statements that particular lots or houses had been sold or were unsuitable, an on-the-day withdrawal of an agreed sale of the home on Lot D10, and a statement limiting sales to areas "west of Candler Road"—and explicitly found that each of these acts, individually and collectively, were motivated by racial discrimination in violation of 42 U.S.C. § 1982 and 42 U.S.C. § 3604(a) and (d).
Damages analysis:
- The court found plaintiffs suffered humiliation, embarrassment, mental suffering, marital strain, and an indirect effect on Mr. McNeil's professional standing due to defendants' discriminatory acts.
- The plaintiffs had waived certain special damages originally alleged; they sought damages for rent paid and for an "equity build up" they would have obtained had they purchased the Lot D10 house under a previously arranged mortgage.
- The court acknowledged plaintiffs' real economic injuries from inflation and high interest but found the claims for rent paid or lost equity were speculative and incapable of exact calculation; therefore, under controlling authorities (not further identified in the opinion), those special damage claims were rejected as speculative.
- The court distinguished between remedies available under the Fair Housing Act (limited to actual damages, a maximum $1,000 in punitive damages, and attorneys' fees in the court's discretion per 42 U.S.C. § 3612(c)) and remedies under the civil rights laws (which permit actual/special damages, punitive damages, and general or compensatory damages presumed to flow from the wrong without proof of a specific dollar amount).
Awards determination: Based on the established humiliation, embarrassment, and other non-economic harms, the court awarded general and compensatory damages in the sum of $2,500 jointly to the plaintiffs. The court also imposed punitive damages of $1,000 (consistent with the statutory maximum under the Fair Housing Act as referenced) and, in the exercise of its discretion, awarded attorneys' fees of $1,500. The court ordered judgment against the defendants jointly and severally for these amounts plus costs.

Holding and Implications

Holding: The court entered judgment for the plaintiffs. Specifically, the court awarded compensatory damages of $2,500.00 to the plaintiffs jointly, punitive damages of $1,000.00, attorneys' fees of $1,500.00, plus costs of suit, against the defendants jointly and severally.

Implications:

The direct effect is an award to plaintiffs for general/compensatory damages, punitive damages (subject to the statutory discussion), and attorneys' fees as specified above.
The court rejected the plaintiffs' claimed special damages for rent paid or lost equity as speculative and therefore denied recovery on those claims.
The opinion applies the statutory framework distinguishing remedies under the Fair Housing Act and the broader civil rights statutes but does not purport to create a binding new legal doctrine; it cites Lee v. Southern Home Sites Corp. as an illustrative authority. The opinion does not discuss any broader precedential effect beyond the case-specific awards and statutory application described.

Disposition: "Let judgment issue in favor of the plaintiffs and against the defendants, jointly and severally, in the sum of $2,500.00 compensatory damages, $1,000.00 punitive damages, and $1,500.00 attorneys fees, plus costs of suit." The court concluded: "It is so ordered."

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Robert L. McNEIL and Y v. nne McNeil

SIDNEY O. SMITH, Jr., District Judge.

In this case as trial approached, counsel for defendants was relieved after consideration of all the facts. Simultaneously, the court issued an order directing the defendants to show cause why the answers should not be stricken and the case proceed in default. At the appointed time, no showing was made by defendants or by counsel and, upon motion, the answers were dismissed. The case then proceeded in default. On the evidence presented, the court makes the following

FINDINGS

Plaintiff, Robert McNeil, is a medical therapist with two degrees from the University of Minnesota and his therapist certification from Northwestern Medical School. In early 1971, he and his wife moved to the Atlanta area, rented an apartment, and began a search for a house. They were particularly interested in the Spring Valley Area, located in DeKalb County near his employment. They located a house on Lot Number 11 of defendants' subdivision and inquired as to its purchase in June, 1971.

Without detailing all of the machinations of the defendants after this inquiry, the facts are clear that they committed one or more acts of racial discrimination in their persistent refusal to sell this house, building lots in the subdivision, or another house subsequently located by plaintiffs. The acts consisted of numerous false statements to the effect that Lots Number 10 and Number 9 had been sold, when they had not; that Lot Number 12 was unsuitable for building, when it was not; that the house on Lot Number B9 was a "bad buy", when it was not; and, finally in December, 1971, in first agreeing to sell for $46,500 a house then under construction on Lot D10, but announcing that it was already sold the day the contract was to be signed, when it was not. Additionally, plaintiffs were informed by defendant Powell that they would not be sold or built any house except "west of Candler Road", an artificial boundary between all-white and racially integrated neighborhoods in DeKalb County. Each of these acts individually and all of them collectively were motivated by racial discrimination in violation of 42 U.S.C. § 1982 and 42 U.S.C. § 3604(a) and (d).

DAMAGES

Plaintiff and his wife are still residing in a small apartment. The constant disappointment and inability to obtain their own home in a place of their choice has placed great strain on their marriage. Additionally, they have suffered humiliation and embarrassment from the acts of racial discrimination. Worry and anxiety over their situation has led to mental suffering on both their parts and has indirectly affected Mr. McNeil's professional standing in the community.

Presently, they pay $174.00 per month rent. If they had been permitted to buy the house on Lot Number D10 as promised and had made their payments, they would have created an equity therein of some $7,190.96 on a $35,000/30 year mortgage at eight per cent already arranged with Decatur Federal Savings Loan Association.

CONCLUSION

The violations of § 1982 and § 3604(a) and (d) on the part of defendants entitle plaintiffs to damages. E.g. Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971). Under the fair housing laws, they are limited to actual damages, a maximum of $1,000 punitive damages, plus attorneys fees in the discretion of the court. 42 U.S.C. § 3612(c). Under the Civil Rights Laws, in addition to actual or special damages, and punitive damages, there may be awarded general or compensatory damages presumed to flow from the wrong itself. These are such damages as occur to the peace and happiness of the plaintiffs without the necessity of proof of any specific amount.

Here, the plaintiffs waived certain special damages originally alleged. However, an award in the form of special damages is sought for rent paid or the so-called "equity build up" in the house agreed to be purchased. While the court recognizes that inflation and high interest have caused plaintiffs real damages, they are incapable of exact calculations. The claims for rent paid or equity lost discount the value received or sums paid out in return and they are rejected as speculative under prevailing authorities.

However, in this case the plaintiffs have suffered greatly from an unwarranted and unlawful act of discrimination. The court finds general and compensatory damages for this wrong and subsequent humiliation and embarrassment at the sum of $2,500.00 to the plaintiffs jointly. Additionally, the court imposes punitive damages under the standard set by Congress in § 3612 at $1,000.00. In the discretion of the court, it is determined that this is a proper case for the award of attorneys fees and they are fixed at $1,500.00.

Let judgment issue in favor of the plaintiffs and against the defendants, jointly and severally, in the sum of $2,500.00 compensatory damages. $1,000.00 punitive damages, and $1,500.00 attorneys fees, plus costs of suit.

It is so ordered.

McNEIL v. P-N S, INC., (N.D.Ga. 1973)